Annual Report • Mar 29, 2019
Annual Report
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| ▪ | Highlights | 03 |
|---|---|---|
| ▪ | Corporate governance policy | 04 |
| ▪ | Corporate social responsibility policy | 11 |
| ▪ | Responsibility statement | 15 |
| ▪ | Board of Directors' report | 16 |
| ▪ | Consolidated financial statements | 20 |
| ▪ | Financial statements for Hunter Group ASA | 59 |
| ▪ | Auditor's report | 75 |
Hunter Group ASA's Board of Directors approved this updated Corporate Governance Policy on 27th March 2019.
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 the Oslo Børs/Oslo Stock Exchange (Oslo Axess list) 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 17th October 2018 (www.nues.no). Where HUNT does not fully comply with the recommendations, an explanation or comment is given.
Oslo Børs/Oslo Stock Exchange prescribes that companies listed on the Oslo Børs/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) are 2 at year-end 2018. This fact 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 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.
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.
In the Article 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 main investment is Hunter Tankers AS, a wholly owned subsidiary shipping company. The fleet consists of eight identical VLCC newbuilding contracts, with options for three additional VLCC newbuilds. All the VLCCs are being built by DSME in Korea with Wärtsila scrubbers. Vessels on firm order are expected to be delivered between Q4 2019 and Q3 2020, in time for the new IMO II regime where ship-owners either must equip vessels with scrubbers or use marine gas oil (MGO).
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 2018. The cash burn is down to a bare minimum and is close to zero.
The Company's objectives and principal strategies are described in the annual report.
The development of the Group's equity up to 31 December 2018 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 and share price development. Due to developing the Groups business investments, no dividend has been proposed for 2018.
At the Company's general meeting on 31 May 2017 and in an extra ordinary meeting 6 December 2017, the Board of Directors was granted a mandate to increase the Company's share capital by up to NOK 40,000,000 as well as to acquire up to 10,000,000 of the Company's own shares to be used in connection with the Company's share incentive program as well as for certain other purposes.
The mandate granted by the Company's general meeting on 31 May 2017 (as amended by the Company's extraordinary general meeting on 6 December 2017) is valid up until the annual general meeting in 2019. The authorizations are in accordance with Norwegian Code of Practice for Corporate Governance.
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 a valuation 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.
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.
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 1.25. 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.
The shareholders exercise the highest authority in HUNT through GMs.
In 2019 the Annual General Meeting of HUNT will be held on April 25th. The Group's financial calendar has been published in a notice to the Oslo Stock Exchange and is available on HUNT's website. The AGM 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 Børs/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 GM's chairperson shall be independent. 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 Børs/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 for the fiscal year 2018 was held in Oslo on May 9th where 72.86% of all shares were represented.
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 and the Auditor attend GMs.
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: Kristian Lundkvist (chairperson) – elected until AGM in 2019 Haakon M. Sæter – elected until AGM in 2019
All members of the Nomination Committee are considered independent of the Board of Directors.
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.
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 that were elected in the EGA 5 April 2018 are: Henrik A. Christensen (Chairman) – elected until AGM in 2020 Kristin Hellebust – elected until AGM in 2020 Arne Fredly – elected until AGM in 2020
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 2018: Henrik A. Christensen owns 400 000 shares, through August AS, which represents 0,10%.
Kristin Hellebust owns zero shares.
Arne Fredly owns a total of 102,956,677 shares, through Apollo Asset Limited, which represents a total of 26,75%.
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.
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 25 board meeting during the fiscal year 2018.
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.
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.
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.
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 2018 in note 23.
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 2018, the executive personnel's holdings of shares are the following:
| Name | Shares |
|---|---|
| Erik A.S. Frydendal | 1,650,000 |
| Sujoy K. Seal | 0 |
| Total | 1,650,000 |
HUNT provides its shareholders, Oslo Børs/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 www.oslobors.no 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 Børs/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.
An announcement regarding HUNT's share capital and number of votes related thereto shall be made by the end of each month during which changes to any of these have occurred.
HUNT will disclose all material information to all recipients equally in terms of timing and content.
The Group has not implemented any specific guidelines on how to act in the event of a takeover bid.
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.
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.
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 27th March 2019 and shall apply until revised and reapproved.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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:
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 2018 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.
On 27 September 2018 Hunter Group ASA became one of the founding members of the Clean Shipping Alliance (CSA). CSA represents a group of leading companies from the commercial shipping and cruise industries that have been leaders in emission control efforts and have made significant investments in research and analysis, funding and committing resources to comply with 2020 fuel requirements through the development and use of Exhaust Gas Cleaning Systems (EGCS). The Alliance aims to support and educate on the use and effectiveness of EGCS in order to help achieve shared environmental and sustainability initiatives (founding members of the Alliance include: Carnical Corporation, DHT Holdings, Eagle Bulk Shipping, Frontline Ltd., Golden Ocean Group, Hunter Group ASA, Navig8 Group, Okeanis Eco Tankers, Oldendorff Carriers, Safe Bulk Carriers, Spliethoff, Star Bulk Carriers Corp. Torm and Trafigura).
No injuries or accidents have been reported in 2018.
Everyone to whom this policy applies shall make themselves familiar with the same and carry out their duties accordingly.
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.
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.
HUNT will work with and assign more priority to corporate social responsibility in 2019. HUNT aims to keep absence due to sick leave low in 2019. With further emphasis on HSE, the Group works towards another accident and injury free year at HUNT.
The Board of Directors and the CEO confirm that to the best of our knowledge the financial statements as of 31 December 2018, 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, 28 March 2019
The board of directors and Chief Executive Director Hunter Group ASA
Erik A. S. Frydendal CEO
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 now is Dronningen 1, N-0287 Oslo, Norway.
On 26 April 2018 Hunter Group entered into a definitive VLCC contract transfer agreement with Apollo Asset Ltd. Subsequently, Hunter Tankers AS was established. On 9 May at the AGM the shareholders of Hunter Group ASA approved taking over the four VLCC construction contracts and three options from Apollo Asset Ltd on a "back-to-back" basis as contracted with Daewoo Shipbuilding Marine Engineering Co., LTD whereby the Company will assume the obligations versus the Shipyard.
On 11 May the board decided to exercise the options for construction of three additional vessels. Each of the option vessels has a price of USD 82.8m, plus USD 2.7m for each scrubber. Estimated delivery times are 31 May 2020, 30 June 2020 and 31 July 2020. Hunter Takers AS signed a contract for one additional VLCC, H.no 5470, at DSME, with identical specifications. This takes the Group's total fleet order to 8 vessels.
On 9 May 2018 it was decided in the general assembly to distribute 100 % of the shares in Dwellop AS to the Company's shareholders. Dwellop AS was acquired 2 May 2017 and consolidated into Hunter Group ASA's group accounts from this date. A valuation of Dwellop was performed by Hunter Group ASA in connection with the change of the share ownership in the company, valuing Dwellop to NOK 115 million (including equity injections of NOK 28.8 million). The formal distribution of the shares was 30 May 2018. As a consequence of the exit of Dwellop AS, the segment Dwellop was discontinued. It was also decided in 2018 to organize the development of the VLCC construction contracts in a new segment; Hunter Tankers.
In mid-October Hunter Group ASA was chosen as Technical Advisor by Hartree Maritime Partners, LLC to conduct the building supervision for Hartree's 4 VLCC vessels under construction at DSME. Hunter Group ASA will receive a fee for this service.
At present, there are no business activities in Indicator AS (containing the Badger-technology).
The Company's shares are listed on Oslo Axess, a regulated market operated by the Oslo Stock Exchange under the ticker "HUNT".
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 profit forecasts for the year 2019 and the Group's long-term strategic forecasts. The Group's economic and financial position is sound.
The Group's revenues increased from NOK 0.1 million in 2017 to NOK 0.4 million in 2018. Net income from continuing operations in 2018 was NOK 2.0 million compared to NOK -95.0 million in 2017. The profit in 2018 is mainly due to interest income and currency gain on USD time deposit placements. Significant write-downs of the Badger tool development cost and capital grants contributed to weak results in 2017.
Total cash flow from operating activities was NOK -15.4 million in 2018 and the operating profit constituted NOK -10.3 million mainly driven by negative net contributions from the Dwellop-segment included up until 9 May.
Net cash flow from financing was NOK 737.7 million, mainly related to the private placements and the issuance of shares. NOK -697.7 million were used for investments during the year, mainly related to the first installments for the VLCC construction contracts of NOK -482.6 million and NOK -215.1 million in net placement in the USD time deposit account.
Total consolidated adjusted cash position NOK 519.1 million consisted of NOK 304.1 million in cash and cash equivalents and NOK 215.1 million in USD time deposit placements (USD 28.8 million).
Total assets at year-end amounted to NOK 1,013.8 million, compared to NOK 449.0 million last year. The equity ratio was 99.8 % as of 31 December 2018, compared to 92.4 % the year before.
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 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.
At the time of this report the Group's business is construction of VLCCs at DSME. Although HUNT does not have any vessels on the water, the future expectations of the tanker market affects the Group's share price and its ability to issue equity or debt. The Group is positive on the future outlook of the tanker market.
The Company is also exposed to currency fluctuations, as the majority of the Group's turnover is in USD or Euro. The Group's exposure towards currency fluctuations are relatively low, since the majority of the contracts in foreign currency are hedged to avoid risk and fluctuations.
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 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.
The Company 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. The cash position of Hunter Group at year end 2018 was NOK 304.1 million, compared to NOK 279.4 million in 2017.
Following the successful launch of the private placement in 2018, the Company's financial and liquidity position was further significantly improved. The net proceeds from the Private Placement has been used to fund the development of 8 VLCC ships. Over the next 2 years, both private placement and borrowings will be used to fund the development. Following the ordering of vessel number 8, Hunter Group ASA contacted shareholders representing more than 50 percent of the outstanding shares. The shareholders were positive to the transaction and stated a clear intent to part take in potential future equity offerings.
The Company is currently in advanced discussions regarding the establishment of an external credit funding of more than 60 % of the contract values of the ships. The aim is to have this process completed within May 2019, after which the Group will issue a statement outlining its intent to issue either debt, equity or a combination of the two, and the amounts needed. Please also see note 11 for further information.
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 has not registered any critical incidents or leave of absence due to incidents. The percentage of days lost through illness was approximately 0 % in 2018 and in 2017 it was 1.9 %.
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 2 employees by the end of 2018.
We kindly refer to our corporate governance and corporate social responsibility documents on page 4 to 14 for further information.
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.
There have been no incidents reported related to emissions that has resulted in a breach of the pollution act or other pollution of significance.
All R&D activities in Indicator has been put on hold.
DSME has in January 2019 agreed to further extend the option agreement for three additional vessels until February 28th, 2019. The price is USD 93.6 million per vessel and the delivery time is unchanged (within 1st half of 2021).
First installment was made on vessel H.no. 5470 upon receipt of the refund guarantee from the yard. Second installment made on vessels H.no. 5455 and 5456 in accordance with the building contracts. The Group has now received refund guarantees for all 8 VLCCs. The refund guarantee is a letter of credit issued by Korea Development Bank that states that the Group will receive a full refund of all installments made if the shipbuilding yard should go bankrupt.
For the Group, the future challenges will continue to be to make the shipbuilding contracts effective, project management of the construction process, including site supervision, financing of the vessels, delivery, chartering and the operation of the VLCCs.
The Board of Directors has proposed the net income of Hunter Group ASA to be attributed to:
Retained Earnings NOK -34,228 thousand Net income allocated NOK -34,228 thousand
Oslo, 28 March 2019
| (Figures in NOK 1 000) | Note | 2018 | 2017 |
|---|---|---|---|
| Continuing operations | |||
| Revenues | |||
| Revenues | 4 | 435 | 91 |
| Total Revenues | 435 | 9 1 |
|
| Operating expenses | |||
| Raw matrials and consumables | 0 | -744 | |
| Payroll expenses | 23 | 3 781 | 8 871 |
| Depreciation and amortisation expense | 5, 6 | 0 | 22 |
| Net write-down intangible assets and capitalized grants | 5 | 0 | 69 374 |
| Other operating expenses | 6, 18, 23 | 18 851 | 17 660 |
| Capitalised development cost | 5 | 0 | -1 915 |
| Total operating expenses | 22 631 | 93 268 | |
| Operating profit (loss) continuing operations | -22 196 | -93 177 | |
| Interest income | 7 227 | 2 622 | |
| Finance income | 20 186 | 0 | |
| Interest expenses | -1 | -54 | |
| Other financial expenses | -207 | -71 | |
| Net financial income (loss) | 20 | 27 206 | 2 497 |
| Profit (loss) before taxes from continuing operations | 5 010 | -90 680 | |
| Tax on ordinary result | 21 | -2 964 | -4 337 |
| Net profit (loss) from continuing operations | 2 046 | -95 017 | |
| Discontinued operations | |||
| Net profit (loss) from discontinued operations | 25 | -34 557 | -1 311 |
| Net profit (loss) | -32 511 | -96 328 | |
| Earnings per share | 22 | -0,11 | -0,09 |
| Earnings per share diluted | 22 | -0,11 | -0,09 |
| Earnings per share continuing operations | 22 | 0,01 | -0,09 |
| Earnings per share diluted continuing operations | 22 | 0,01 | -0,09 |
| For the year ended 31 December | |||
| (Figures in NOK 1 000) | 2018 | 2017 | |
| Total comprehensive income for the year | |||
| Profit (loss) for the year | -32 511 | -96 328 | |
| Net profit (loss) from discontinued operations | -34 557 | -1 311 | |
| Comprehensive income for the period continuing operations | 2 046 | -95 017 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the parent company | 2 046 | -95 017 | |
| Total comprehensive income continuing operations | 2 046 | -95 017 | |
For the year ended 31 December
| As at 31 December | |||
|---|---|---|---|
| (Figures in NOK 1 000) | Note | 2018 | 2017 |
| NON-CURRENT ASSETS | |||
| Research and development | 3, 5 | 0 | 17 830 |
| Patents and customer relationships | 3, 5 | 0 | 18 911 |
| Goodwill | 3, 5 | 0 | 58 655 |
| Total intangible assets | 0 | 95 396 | |
| Property, plant, equipment & machineries | 6, 13 | 83 | 27 884 |
| VLCC under construction | 3, 6, 11 | 492 482 | 0 |
| Total tangible assets | 492 564 | 27 884 | |
| TOTAL NON-CURRENT ASSETS | 492 564 | 123 280 | |
| CURRENT ASSETS | |||
| Inventories | 7, 13 | 0 | 20 368 |
| Total inventories | 0 | 20 368 | |
| Trade receivables | 8, 13 | 724 | 21 073 |
| Other short-term receivables | 9, 16, 18 | 1 281 | 4 873 |
| Total current receivables | 2 004 | 25 946 | |
| Other financial investments | 10 | 215 107 | 0 |
| Total other financial investments | 215 107 | 0 | |
| Cash and cash equivalents | 10 | 304 110 | 279 456 |
| TOTAL CURRENT ASSETS | 521 222 | 325 770 | |
| TOTAL ASSETS | 1 013 786 | 449 050 |
| As at 31 December | ||||
|---|---|---|---|---|
| (Figures in NOK 1 000) | Note | 2018 | 2017 | |
| EQUITY | ||||
| Share capital | 24 | 481 135 | 163 948 | |
| Share premium | 531 069 | 508 844 | ||
| Other equity | 0 | -257 654 | ||
| TOTAL EQUITY | 1 012 204 | 415 138 | ||
| LIABILITIES | ||||
| Other interest-bearing debt | 13 | 0 | 11 700 | |
| Total non-current liabilities | 0 | 11 700 | ||
| Trade payables | 14, 16 | 1 145 | 8 587 | |
| Accrued public charges and indirect taxes | 75 | 3 161 | ||
| Short-term derivatives | 0 | 24 | ||
| Current interest-bearing loans and borrowings | 12 | 0 | 3 600 | |
| Other current liabilities | 15, 16 | 362 | 6 840 | |
| Total current liabilities | 1 582 | 22 212 | ||
| TOTAL LIABILITIES | 1 582 | 33 912 | ||
| TOTAL EQUITY AND LIABILITIES | 1 013 786 | 449 050 |
Oslo, 28 March 2019
Note: Changes in various cash flow items is reflecting the change in Dwellop's items up until the exit 9 May 2018.
| For the year ended 31 December | ||||
|---|---|---|---|---|
| (Figures in NOK 1 000) | Note | 2018 | 2017 | |
| Contribution from operations before tax | -10 312 | -31 263 | ||
| Change in accounts receivables and accounts payables | -104 | 17 101 | ||
| Change in inventory | -4 375 | -11 464 | ||
| Change in other receivables and payables and other | -569 | 80 | ||
| Net cash flow from operating activities | -15 360 | -25 546 | ||
| Capital expenditures | 5 | 0 | -1 915 | |
| Investments in VLCC newbuilds and PP & E | 6 | -482 564 | -3 647 | |
| Investments in other financial investments | 10 | -682 420 | 0 | |
| Sale of other financial investments | 10 | 467 312 | 0 | |
| Acquisition of a subsidiary, net of cash acquired | 3 | 0 | -50 522 | |
| Net cash flow from investment activities | -697 672 | -56 084 | ||
| Public grants | 0 | 1 061 | ||
| Interest received | 20 | 7 228 | 2 661 | |
| Interest paid | 20 | -256 | -715 | |
| Proceeds from borrowings financial institution | -900 | -9 554 | ||
| Capital contribution | Equity | 744 500 | 385 368 | |
| Transaction cost capital contribution | Equity | -12 888 | -18 069 | |
| Net cash flow from financing activities | 737 685 | 360 751 | ||
| Total change in cash and cash equivalents | 24 654 | 279 121 | ||
| Cash and cash equivalents beginning of period | 279 456 | 335 | ||
| Cash and cash equivalents end of period | 10 | 304 110 | 279 456 | |
| Profit (loss) before tax from continuing operations | 5 010 | -90 680 | ||
| Profit (loss) before tax discontinued operations | -34 557 | -19 167 | ||
| Profit (loss) before tax | -29 547 | -109 847 | ||
| Employee options and other | 0 | 142 | ||
| Depreciation and amortization expense | 8 935 | 11 013 | ||
| Net write-down intangible assets and capitalized grants | 5, 25 | 17 273 | 69 374 | |
| Financial income | -7 228 | -2 661 | ||
| Financial expenses | 256 | 715 | ||
| Contribution from operations before tax | -10 312 | -31 263 |
| Share | Share | Other paid- | Retained | Total | ||
|---|---|---|---|---|---|---|
| (Figures in NOK 1 000) | Note | Capital | premium | in capital | earnings | equity |
| Equity as of 1 January 2017 | 2 317 | 218 070 | 3 935 | -165 403 | 58 919 | |
| Total comprehensive 2017 | 0 | 0 | 0 | -96 328 | -96 328 | |
| Private placement 16 January 2017 | 24 | 45 000 | 0 | 0 | 0 | 45 000 |
| Private placement 28 February 2017 | 24 | 75 000 | 225 000 | 0 | 0 | 300 000 |
| Private placement 7 March 2017 | 24 | 10 000 | 0 | 0 | 0 | 10 000 |
| Private placement 31 March 2017 | 24 | 7 592 | 22 776 | 0 | 0 | 30 368 |
| Issuance of shares 22 May 2017 | 24 | 24 038 | 56 731 | 0 | 0 | 80 769 |
| Transactions costs (after tax) and reclassifications | 0 | -13 733 | -3 935 | 3 935 | -13 733 | |
| Option plan payment and other | 0 | 0 | 0 | 143 | 143 | |
| Equity as of 31 December 2017 | 163 947 | 508 843 | 0 | -257 653 | 415 138 | |
| Total comprehensive income 2018 | 0 | 0 | 0 | -32 511 | -32 511 | |
| Private placement 9 May 2018 | 24 | 93 750 | 78 750 | 0 | 0 | 172 500 |
| Issuance of shares 14 June 2018 | 24 | 203 125 | 316 875 | 0 | 0 | 520 000 |
| Transactions costs (after tax) | 0 | -9 923 | 0 | 0 | -9 923 | |
| Warrants related to VLCC shipbuilding contracts | 24 | 0 | 0 | 10 000 | 0 | 10 000 |
| Distribution in kind, shares in Dwellop AS | 25 | 0 | -115 000 | 0 | 0 | -115 000 |
| Issuance of shares 19 July 2018 | 24 | 20 313 | 31 688 | 0 | 0 | 52 000 |
| Reclassifications | 0 | -280 164 | -10 000 | 290 164 | 0 | |
| Equity as of 31 December 2018 | 481 135 | 531 068 | 0 | 0 | 1 012 204 |
Hunter Group ASA (HUNT) is a public limited liability company, incorporated in Norway, headquartered in Oslo and listed on the Oslo Stock Exchange (Oslo Axess list), address headquarter: Dronningen 1, 0287 Oslo, Norway. The financial statements of Hunter Group ASA for the fiscal year 2018 were approved in the board meeting on 28 March 2019.
The Group's activities are described in the Board of Director's report.
HUNT's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), which have been adopted by the EU and are mandatory for financial year beginning on or after 1 January 2018, and Norwegian disclosure requirements listed in the Norwegian Accounting Act as of 31 December 2018.
The historical cost basis have been used when preparing the financial statements. These policies have been applied consistently to all periods presented, and certain amounts in the comparable year have been reclassified to be consistent with current year presentation. Some totals may not equal the sum of the amounts shown due to rounding.
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. A change in the ownership interest of a subsidiary, without a loss of control, will be accounted for as an equity transaction. The Group consist of the following companies as per 31 December 2018:
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
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.
Estimation uncertainty could mainly affect;
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. Please refer to 1.3 and 1.15 for further information about VLCC and deferred tax asset.
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired.
An assessment of impairment losses on assets is made when there is an indication of a fall in value. If an asset's carrying amount is higher than the asset's recoverable amount, an impairment loss will be recognized in the statement of profit or loss. The recoverable amount is the higher of the fair value less costs to sell and the discounted cash flow from continued use. The fair value less costs to sell is the amount that can be obtained from a sale to an independent third party minus the sales costs. The recoverable amount is determined separately for all assets but, if this is impossible, it is determined together with the entity as there is only one CGU (cash generating unit) in the Group.
Impairment losses recognized in the statements of profit or loss of previous periods are reversed when there is information that the need for the impairment loss no longer exists or is not as great as it was. However, no reversal takes place if the reversal leads to the carrying amount exceeding what the carrying amount would have been if normal depreciation periods had been used.
The Group follows the development of the price of the Company's listed shares, and monitors the development of the pricing of new ships when evaluating if there exist indicators of the Group's VLCCs. Furthermore, the management has tested recoverable amounts of the seven vessels under construction. The recoverable amount was determined based on fair value less cost to sell. Management obtained an external valuation for similar newbuilds as evidence of fair value less cost to sell.
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. USD time deposit placements has a maturity term of three months, and are classified as other financial investments.
The statement of cash flows is prepared in accordance with the indirect method.
The Group's presentation currency is NOK. This is also the functional currency of the companies in the Group. Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the balance sheet date. Nonmonetary items that are measured at their historical price expressed in a foreign currency are translated into NOK using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates on monetary items are recognized in the income statement as they occur during the accounting period.
The main transactions for the Group in 2017 and 2018 have been in NOK, but the main transactions going forward for Hunter Group ASA and Hunter Tankers AS will be in USD. As a consequence of this these two companies have changed their functional currencies from NOK to USD from 1 January 2019.
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year, ref note 1.21 regarding discontinued operations.
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, receivables, 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 cash and cash equivalents, trade and other receivables.
For purposes of subsequent measurement, financial assets are classified in two categories:
Included in financial assets at fair value through profit or loss are the USD time deposits. All other assets are included in loans and receivable category.
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at fair value through profit or loss include financial assets designated upon initial recognition at fair value through profit or loss. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in the statement of profit or loss.
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
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.
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.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.
The Group's financial liabilities include trade and other payables.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
After initial recognition, the USD time deposit placements are subsequently measured at balance sheet date rate, with gains or losses recognized in profit or loss.
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently 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.
The accounting treatment of the distribution in kind of the Dwellop shares is accounted for in accordance with IFRIC 17 "Accounting for distribution of non-cash items to owners". The distribution is of non-cash assets (shares) and all shareholders of Hunter Group ASA are treated equally in the distribution. The liability to pay a dividend is recognized when the dividend is appropriately authorized and is no longer at the discretion of the entity, which is the date of the approval from the general assembly in Hunter Group ASA 9 May 2018. The non-cash assets payable as a dividend to its owners is measured at the fair value of the assets to be distributed. At the end of each reporting period and at the date of settlement, the entity reviews and adjust the carrying amount of the dividend payable, with any changes in the carrying amount of the dividend payable recognized in equity as adjustments to the amount of the distribution. The difference, if any, between the carrying amount of the assets distributed and the carrying amount of the dividend payable at time of settlement is recognized in profit or loss.
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.
The gross carrying amount of fixed assets is the purchased price, including duties/taxes and direct acquisition costs relating to making the asset ready for use. Subsequent costs, such as repair and maintenance costs, are recognized in profit or loss as incurred. When increased future economic benefits as a result of repair/maintenance work can be proven, such costs will be recognized in the statement of financial position as additional to fixed assets.
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.
Paid instalments for new builds of VLCCs are capitalized as fixed assets as each payment take place. Investments regarding the new vessels that are not included in the contract, such as inspection costs and other related costs during construction are capitalized. Vessels under construction are not depreciated until the asset is available for use. Paid instalments, inspection costs and a minor portion of the construction contract are financed using own equity. Borrowing costs will be capitalized together with the vessel to the extent that they are directly related to the acquisition of the vessel. Construction in progress is stated at cost, net of accumulated impairment losses, if any.
Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are evaluated at the end of each month and adjusted to reflect the available information about the provision. When the information available is insufficient, the best estimate is used.
Revenue is recognized to reflect the transfer of promised goods or services to customers, and then at an amount that reflects the consideration the company expects to be entitled to in exchange for those goods or services. Revenues are presented net of value added tax and discounts.
Services are recognized as they are delivered. Interest income is recognized in the statement of profit or loss based on the effective interest method as they are earned.
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities.
Deferred tax assets are recognized when it is probable that the Group will have a sufficient profit for tax purposes in subsequent periods to utilize the tax asset. The Group recognize previously unrecognized deferred tax assets to the extent it has become probable that the Group can utilize the deferred tax asset. Similarly, the Group will reduce a deferred tax asset to the extent that the Group no longer regards it as probable that it can utilize the deferred tax asset.
Deferred tax and deferred tax assets are measured on the basis of tax rates that have been enacted or substantially enacted at the reporting date.
Deferred tax and deferred tax assets are recognized at their nominal value and classified as non-current assets (long-term liabilities) in the balance sheet.
Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Contingent liabilities are not recognized in the annual accounts. Significant contingent liabilities are disclosed, with the exception of contingent liabilities that are remote to be incurred.
Contingent assets are not recognized in the annual accounts but are disclosed if it is probable that a benefit will be added to the Group.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset (or assets) and the arrangement conveys a right to use the asset (or assets), even if that asset is (or those assets are) not explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an operating expense in the statement of profit or loss on a straight-line basis over the lease term.
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Transaction costs directly related to an equity transaction are recognized directly in equity after deducting tax expenses.
New information on the Group's financial position at the end of the reporting period which becomes known after the reporting period is reflected in the annual accounts. Events after the reporting period that do not affect the Group's financial position at the end of the reporting period but which will affect the Group's financial position in the future are disclosed if significant.
For management purposes, the Group is organized into business units based on its products and services and has three reportable segments, as follows:
No operating segments have been aggregated to form the above reportable operating segments.
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.
The Group's financing (including finance costs and finance income) and income taxes are managed on a Group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
Employees of HUNT receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in note 23. That cost is recognized in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the sharebased payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
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. The Group applied IFRS 15 and IFRS 9 for the first time in 2018. The nature and effect of the changes as a result of adoption of these new accounting standards are described below. Several other amendments and interpretations apply for the first time in 2018, 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.
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.
The Group has applied IFRS 9 retrospectively, but there were no material changes in the accounts based on a new standard as per 1 January 2018.
The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a sharebased payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled.
The implementation of IFRS 2 amendments did not have any effect on the equity as per 1 January 2018.
IFRS 15 supersedes all existing standards and interpretations for revenue recognition. The core principle of IFRS 15 is that revenue is recognized to reflect the transfer of promised goods or services to customers, and then at an amount that reflects the consideration the company expects to be entitled to in exchange for those goods or services.
On 24 October Hunter Group ASA was appointed Senior Technical Advisor for Hartree Maritime Partners. Hunter Group will provide technical newbuild supervision services for Hartree's four VLCC vessels. Hunter Group will use its best efforts to ensure that the Hartree Vessels and the Hunter Vessels are identical to the maximum extent possible. The intention is to form a new scrubber fitted pool to operate the fleet of 11 sister vessels. The agreement will provide both companies with significant cost savings and synergies.
In addition Hunter Group will receive a fee for its services. These fees follow an agreed upon payment plan divided into steel cutting, keel laying for the first block, when the vessel leaves dry land and becomes waterborne, and when the buyers accepts delivery.
As from the date of completion of planning and accept from customer, the fee of 50 % is considered earned (point in time). Thereafter the Group earns the right to payment of the remaining 50 % over time. For 2018 the only contract with effect was a contract with a point in time earned fee.
The Group decided to adopt IFRS 15 using the modified retrospective method (ie. without adjusting the comparable amounts for earlier periods). The Group has as such not evaluated contracts completed before January 1, 2018. In 2017, only one contract was entered into with expected delivery in 2018. The contract value was immaterial. It is the Groups's assessment that under IFRS 15, the revenue recognition will be equal to the current IFRS standards for this contract. The implementation of IFRS 15 has as such not had any effect on the equity as at 1 January 2018. The business performed in the first part of 2018 and earlier related to the Dwellop-segment was discontinued in May, and do not represent relevant information of the business going forward. Please refer to the discontinued note number 26 for further information.
Effective from 1 January, 2019, IFRS 16 covers the recognition of leases and related disclosure in the financial statements, and replaces IAS 17 Leases. In the financial statement of lessees, the new standard requires recognition of all contracts that qualify under its definition of a lease as right-of-use assets and lease liabilities in the balance sheet, while lease payments are to be reflected as interest expense and reduction of lease liabilities. The right-ofuse assets are to be depreciated in accordance with IAS 16 Property, Plant and Equipment over the shorter of each contract's term and the assets' useful life. The standard consequently implies a significant change in lessees' accounting for leases currently defined as operating leases under IAS 17, both with regard to impact on the balance sheet and the statement of income.
With regards to lessor accounting IASB decided to substantially carry forward the lessor accounting model in IAS 17. The standard requires adoption either on a full retrospective basis, or retrospectively with the cumulative effect of initially recognizing the standard as an adjustment to retained earnings at the date of initial application.
The Company has reviewed its rental agreements for assessing if these will change category from operational to financial lease at time of implementing the new standard. The new standard is expected to have an impact on the accounting of leasing of premises as the Company rent the buildings it operates its business from.
The analysis has not identified any significant leasing items. IFRS 16 will be implemented using the modified retrospective method. The remaining undiscounted lease obligations as of 31.12.18 is not significant.
Hunter Group adopted IFRS 16 on 1 January, 2019.
On 9 May 2018 it was decided in the general assembly to distribute 100 % of the shares in Dwellop AS to the Company's shareholders. The formal distribution of the shares was 30 May 2018. The income statement for 2017 and 2018 reflects as if Dwellop never was consolidated, while the balance sheet for 2017 equals the balance sheet in the Annual report for 2017 (including the consolidation of Dwellop). Please refer to note 26 for the effects that relate to the Dwellop-segment for the income statements, balance sheets and cash flow for 2017 and 2018.
The accounting principles described below relate to the items for the Dwellop-segment, which was discontinued in May 2018.
Intangible assets that have been acquired separately are carried at cost at initial recognition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is expensed as incurred.
Intangible assets not ready to use are tested for impairment annually ref. note 5. Such intangibles are not amortized. The cost of intangible assets acquired in a business combination is their fair value at the date of the acquisition. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements, is given in note 5.
Other intangible assets are depreciated on a straight-line basis over the estimated useful lives of the assets, which are 5 years.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate:
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in other operating expenses. During the period of development, the asset is tested for impairment annually.
Amounts paid for patents and licences are capitalized and amortized on a straight line basis over the expected useful life from the time the technology it relates to is ready for use. The expected useful life of patents and licences varies from 5 til 20 years.
Goodwill is initially measured at cost being the excess of the aggregate of consideration transferred and the amount recognized over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The Company assesses whether there are any indications that goodwill is impaired at each reporting date. Goodwill is tested for impairment, annually and when circumstances indicate that the carrying value may be impaired. Impairment of goodwill is determined by assessing the recoverable amount of the cash-generating units, to which the goodwill relates. Where the recoverable amount of the cash-generating units is less than their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods.
Government grants are recognized when it is reasonably certain that the Group will meet the conditions stipulated for the grants and that the grants will be received. Operating grants are recognized systematically during the grant period. Grants are deducted from the cost which the grant is meant to cover.
Historical contributions from partners in the Badger Technology are subject to specific requirements, and the contributions were recognized in the balance sheet as long term liabilities.
In addition to the estimation uncertainty mentioned previously, the Dwellop-segment had significant estimation uncertainty related to;
For purchase price allocation, goodwill, customer relationships and patents, a valuation methodology based on a discounted cash flow (DCF) model is used, as there is a lack of comparable market data because of the nature of these assets.
Intangible assets not ready to use are tested for impairment annually. Such intangibles are not amortized.
After initial recognition, borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
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 as finance costs in the statement of profit or loss.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
After initial recognition, the USD time deposit placements are subsequently measured at balance sheet date rate, with gains or losses recognized in profit or loss.
Inventory is valued at the lower of cost and net realizable value. Cost incurred in bringing raw materials to its present location and condition are accounted for by purchase cost on a first in, first out basis. Cost incurred in bringing finished goods and work in progress to its present location and condition are accounted for by cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.
Provisions for warranty-related costs are recognized when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
The Dwellop-segment contained income from construction contracts. Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by reference to the stage of completion of the contract activity at the end of the reporting period. The percentage of completion is measured based on the proportion of hours incurred for work performed to date relative to the estimated total estimated hours in the project. For projects that are expected to generate a loss, the entire estimated loss is taken immediately.
Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. All cancellations of equity-settled transaction awards are treated equally.
Social security tax on options is recorded as a liability and is recognized over the estimated vesting period.
HUNT have previously received grants and tax incentive schemes from different government sources, such as the Research Council of Norway (RCN), Innovation Norway and SkatteFUNN, reported as Government grants.
The development projects were funded with a percentage of the total project costs. Received government grants in 2017 were NOK 1.061 and zero in 2018.
On 9 May at the AGM the shareholders of Hunter Group ASA approved taking over four VLCC construction contracts and three options from Apollo Asset Ltd on a "back-to-back" basis as contracted with Daewoo Shipbuilding Marine Engineering Co., LTD whereby the Company assumed the obligations versus the Shipyard.
Hunter Group ASA completed the acquisition of all the shares in Dwellop pursuant to a share purchase agreement (the "SPA") dated 2 May 2017. As a result thereof, Dwellop became a wholly-owned subsidiary of the Company. The operating segments were then first established in May 2017 when the Company acquired Dwellop AS.
On 9 May 2018 it was decided in the general assembly to distribute 100 % of the shares in Dwellop AS to the Company's shareholders. The formal distribution of the shares was 30 May 2018. As a consequence of the exit of Dwellop AS, the segment Dwellop was discontinued from 9 May 2018.
The income statement for 2017 reflects as if Dwellop never were consolidated, while the balance sheet for 2017 equals the balance sheet in the Annual report for 2017 (including the consolidation of Dwellop). Please refer to note 26 for the effects that relate to the Dwellop-segment for the income statements, balance sheets and cash flow for 2017 and 2018.
It was also decided in 2018 to organize the development of the VLCC construction contracts and options in a new segment; Hunter Tankers. Hunter Tankers will also organize the future chartering of the vessels.
For management purposes the group is organized into business units based on its products and services and has three reportable segments at 31 December 2018, as follows:
The Executive Management Committee 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.
| Adjustments | ||||||
|---|---|---|---|---|---|---|
| (Figures in NOK 1 000) | Hunter | Hunter | and | |||
| Year 2018 | Group | Tankers | Indicator | Dwellop | eliminations | Consolidated |
| Type of goods or services | ||||||
| Other revenues | 435 | 0 | 0 | 0 | 0 | 435 |
| Total revenues | 435 | 0 | 0 | 0 | 0 | 435 |
| Timing of revenue recognition | ||||||
| Goods transferred at a point in time | 0 | 0 | 0 | 0 | 0 | 0 |
| Services transferred over time | 435 | 0 | 0 | 0 | 0 | 435 |
| Total revenues | 435 | 0 | 0 | 0 | 0 | 435 |
| Income / (expenses) | ||||||
| Depreciation and amortization | 0 | 0 | 0 | 0 | 0 | 0 |
| Net impairment charges* | 0 | 0 | 0 | 0 | 0 | 0 |
| Segment profit (loss) | 6 072 | -3 316 | -132 | 0 | -35 135 | -32 511 |
| Total assets | 679 985 | 494 838 | -183 | 0 | -160 853 | 1 013 786 |
| Additions in property, plant, equipment & machineries | 83 | 482 482 | 0 | 0 | 0 | 482 564 |
| Total liabilities | 1 159 | 160 466 | 233 | 0 | -160 275 | 1 582 |
Inter-segment revenues are eliminated upon consolidation and reflected in the 'adjustments and eliminations' column. The Group's only customer account for 100 % of the turnover in 2018, and relate all to the Hunter Group segment.
| Other | ||||||
|---|---|---|---|---|---|---|
| Geografical table | Norway | USA | Asia | Middle East | contries | Consolidated |
| Total operating revenues (see note 18) | 0 | 0 | 435 | 0 | 0 | 435 |
| Other assets than financial intstruments | 306 197 | 0 | 492 482 | 0 | 0 | 798 679 |
| Adjustments | ||||||
| (Figures in NOK 1 000) | Hunter | Hunter | and | |||
| Year 2017 | Group | Tankers | Indicator | Dwellop | eliminations | Consolidated |
| Type of goods or services | ||||||
| Other revenues | 0 | 0 | 91 | 0 | 0 | 91 |
| Total revenues | 0 | 0 | 91 | 0 | 0 | 91 |
| Timing of revenue recognition | ||||||
| Goods transferred at a point in time | 0 | 0 | 91 | 0 | 0 | 91 |
| Services transferred over time | 0 | 0 | 0 | 0 | 0 | 0 |
| Total revenues | 0 | 0 | 91 | 0 | 0 | 91 |
| Income / (expenses) | ||||||
| Depreciation and amortization | 7 | 0 | 15 | 0 | 0 | 22 |
| Net impairment charges* | 0 | 0 | 69 374 | 0 | 0 | 69 374 |
| Adjustments | ||||||
|---|---|---|---|---|---|---|
| (Figures in NOK 1 000) | Hunter | Hunter | and | |||
| Year 2017 | Group | Tankers | Indicator | Dwellop | eliminations | Consolidated |
| Segment profit (loss) | -20 245 | 0 | -70 435 | -6 634 | 986 | -96 328 |
| Total assets | 296 731 | 0 | 803 | 163 023 | -11 509 | 449 049 |
| Additions in property, plant, equipment & machineries | 0 | 0 | 0 | -3 662 | 15 | -3 647 |
| Total liabilities | 2 066 | 0 | 1 088 | 50 065 | -19 306 | 33 912 |
* Net impairment charges of NOK 69.4 million relates to the Indicator-segment, which existed prior to the company Indicator AS that was formally established in September 2017.
| Other | ||||||
|---|---|---|---|---|---|---|
| Geografical table | Norway | USA | Asia | Middle East | contries Consolidated | |
| Total operating revenues (see note 18) | 91 | 0 | 0 | 0 | 0 | 91 |
| Other assets than financial intstruments | 449 050 | 0 | 0 | 0 | 0 | 449 050 |
Intangible assets in the balance sheet as of 31 December 2017 of NOK 95.4 million related to the Dwellop-segment, which was discontinued in 2018, ref note 26. The intangible assets related to the Badger-technology was written down in full in 2017 ref. the impairment-paragraph below.
| (Figures in NOK 1 000) | Customer | Development | ||||
|---|---|---|---|---|---|---|
| Per 31 December 2018 | Goodwill | relationships | Patents | costs | Total | |
| Cost at 1 January 2018 | 58 655 | 11 074 | 11 885 | 172 126 | 253 740 | |
| Disposal of Dwellop (as dividend) | -58 655 | -11 074 | -11 485 | -21 640 | -102 854 | |
| Additions in 2018 | 0 | 0 | 0 | 0 | 0 | |
| Cost at 31 December 2018 | 0 | 0 | 400 | 150 486 | 150 886 | |
| Accumulated impairments at 31 December 2018 | 0 | 0 | -389 | -150 486 | -150 875 | |
| Accumulated depreciations at 31 December 2018 | 0 | 0 | -11 | 0 | -11 | |
| Book value at 31 December 2018 | 0 | 0 | 0 | 0 | 0 | |
| Impairment charges in 2018 | 0 | 0 | 0 | 0 | 0 | |
| Depreciation for 2018 | 0 | 0 | 0 | 0 | 0 | |
| Estimated useful life: | Indefinite | 5 years | 5 years | 5 years | ||
| Depreciation method: | N/A | straight-line | straight-line | straight-line |
| (Figures in NOK 1 000) | Customer | Development | ||||
|---|---|---|---|---|---|---|
| Per 31 December 2017 | Goodwill | relationships | Patents | costs | Total | |
| Cost at 1 January 2017 | 0 | 0 | 400 | 149 632 | 150 032 | |
| Additions through aquisition of Dwellop | 58 655 | 11 074 | 11 485 | 21 640 | 102 854 | |
| Additions in 2017 | 0 | 0 | 0 | 1 915 | 1 915 | |
| Government grants | 0 | 0 | 0 | -1 061 | -1 061 | |
| Cost at 31 December 2017 | 58 655 | 11 074 | 11 885 | 172 126 | 253 740 | |
| Accumulated impairments at 31 December 2017 | 0 | 0 | 389 | 150 485 | 150 874 | |
| Accumulated depreciations at 31 December 2017 | 0 | 1 575 | 2 085 | 3 810 | 7 471 | |
| Book value at 31 December 2017 | 58 655 | 9 499 | 9 412 | 17 830 | 95 396 | |
| Impairment charges in 2017 | 0 | 0 | 389 | 150 485 | 150 874 | |
| Depreciation for 2017 | 0 | 1 575 | 2 072 | 3 810 | 7 458 |
The goodwill, customer relationships and patents are related to the business acquisition of Dwellop AS. The goodwill is in its entirety related to the cash generating unit of Dwellop.
The write-down of intangible assets of NOK 150.9 million in 2017 related to the Badger Technology, and was due to a change of course and position from the new owners and new directors. A comprehensive assessment of the Badger Technology including the possibilities for commercializing was performed. The conclusion was that the possibility of an early commercialization was less likely. As such, the related Capitalized grants of NOK -81.5 million were also derecognized in 2017 and charged against the profit and loss statement together with the write-down of NOK 150.9 million, and relates to the Badger Technology. The contractual obligations related to any future earnings will remain, should there be commercializing possibilities in the future. Net write-down amounted to NOK 69.4 million in 2017.
According to the Development program, the industry partners have first right of refusal to buy an equal share of the full manufacturing and operational capacity of all explorers at market price for a period of up to six years from commercialization.
| Property, | |||
|---|---|---|---|
| (Figures in NOK 1 000) | plant, equip. | VLCC under | |
| Per 31 December 2018 | & machineries | construction | Total |
| Cost price at 1 January | 37 233 | 0 | 37 233 |
| Additions | 83 | 492 482 | 492 565 |
| Disposal of Dwellop (as dividend) | -37 233 | 0 | -37 233 |
| Cost price at 31 December | 83 | 492 482 | 492 565 |
| Accumulated depreciations at 31 December | 0 | 0 | 0 |
| Book value at 31 December | 83 | 492 482 | 492 565 |
| Depreciation (straight-line method) | 0 | N/A | |
| Estimated useful life | 3-10 years | N/A | |
| Property, | |||
| (Figures in NOK 1 000) | plant, equip. | VLCC under | |
| Per 31 December 2017 | & machineries | construction | Total |
| Cost price at 1 January | 5 816 | 0 | 5 816 |
|---|---|---|---|
| Additions (acquisition of Dwellop) | 27 770 | 0 | 27 770 |
| Additions | 3 647 | 0 | 3 647 |
| Cost price at 31 December | 37 233 | 0 | 37 233 |
| Accumulated depreciations at 31 December | -9 348 | 0 | -9 348 |
| Book value at 31 December | 27 884 | 0 | 27 884 |
The depreciation period and method are assessed each year to ensure that the method and period used harmonize with the financial realities of the non-current asset. The same applies to the scrap value (discontinued in 2018).
From 1 November 2018 the Company rents office space from Dronningen Eiendom AS for NOK 25 000 per month until 30 April 2019. From 1 May 2019 the rent is NOK 41 667 per month. The rental agreement is for 36 months. HUNT moved its administration and workshop to new facilities located at Dronningen 1 in Oslo. The Group had in 2017 lease commitments for office- and repair location at Koppholen in Stavanger until 31 December 2018 of NOK 7.4 million, and from 1 January 2019 to 31 December 2022 with a total of NOK 19.2 million.
| (Figures in NOK 1 000) | ||
|---|---|---|
| Operating leasing costs | 2018 | 2017 |
| Rent costs on buildings | 605 | 5 007 |
| Other operational leasing costs | 38 | 118 |
| Total operating leasing costs | 643 | 5 125 |
| The future minimum rents related to non-cancellable leases fall due as follows: | Within 1 year | 2-5 years After 5 years | |
|---|---|---|---|
| Other operational leasing costs | 38 | 0 | 0 |
| Rent costs on buildings | 300 | 550 | 0 |
| Total | 338 | 550 | 0 |
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Finished goods | 0 | 3 076 |
| Work in progress (WIP) | 0 | 17 292 |
| Total inventories | 0 | 20 368 |
Provision for obsolescence included in the amount above 0 -358
Inventory was part of the Dwellop-segment, which was discontinued in 2018.
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Accounts receivable | 0 | 21 595 |
| Contract assets | 435 | 978 |
| Other | 288 | 0 |
| Provision of loss on receivables | 0 | -1 500 |
| Total trade receivables | 724 | 21 073 |
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 | ||
| 2018 | 435 | 435 | 0 | 0 | 0 | 0 | 0 | |
| 2017 | 21 595 | 8 883 | 3 626 | 555 | 301 | 1 510 | 6 720 |
Trade receivables are non-interest bearing and the payment terms are generally net 30 days. Fair value of the receivables approximates the nominal values, less provision for doubtful receivables, which was NOK 1.5 million per 31 December 2017 and NOK 0 per 31 December 2018.
| Total other receivables | 1 281 | 4 873 |
|---|---|---|
| Refundable VAT | 0 | 1 262 |
| Prepaid expenses | 1 281 | 1 920 |
| Skattefunn & Research Council of Norway receivables | 0 | 1 691 |
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
| Total cash at bank | 304 110 | 279 456 |
|---|---|---|
| Cash at bank | 304 110 | 279 456 |
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
Restricted bank deposits for employee withholding taxes 200 1 869
In addition NOK 215.1 million were placed on USD time deposit as per 31 December 2018, and is classified as other financial investments the maturity term is three months with end dates 9 th and 10th of January.
Through its 100% owned subsidiary Hunter Tankers AS, the Company has entered into the following commitments for the 7 VLCC ships signed as at 31 December 2018 (in MUSD);
Hull no. 2Q '18 3Q '18 4Q '18 1Q '19 2Q '19 3Q '19 4Q '19 1Q '20 2Q '20 3Q '20 payment 5455 8,52 8,52 8,52 8,52 51,12 85,20 5456 8,52 8,52 8,52 8,52 51,12 85,20 5457 8,52 8,52 8,52 59,64 85,20 5460 8,55 8,55 8,55 8,55 51,30 85,50 5465 8,55 8,55 8,55 8,55 51,30 85,50 5466 8,55 8,55 8,55 59,85 85,50 5467 8,55 8,55 8,55 8,55 51,30 85,50 Total 34,11 0,00 25,65 34,11 25,59 51,21 178,98 76,95 119,70 51,30 597,60 Paid -34,11 0,00 -25,65 -59,76 To be paid 0,00 0,00 0,00 34,11 25,59 51,21 178,98 76,95 119,70 51,30 537,84
Expected MUSD payments due:
Furthermore, as of January 2019 the Company signed the 8th VLCC ship with a total commitment of MUSD 90.75, to be completed in 3Q 2020.
Following the ordering of vessel number 8, Hunter Group ASA contacted shareholders representing more than 50 percent of the outstanding shares. The shareholders were positive to the transaction and stated a clear intent to part take in potential future equity offerings. The Company is currently in advanced discussions regarding the establishment of an external credit funding of more than 60 % of the contract values of the ships. The aim is to have this process completed within May 2019, after which the Group will issue a statement outlining its intent to issue either debt, equity or a combination of the two, and the amounts needed. Please also se note 16 for further information.
Through strategic industrial cooperation agreements, HUNT has historically received contributions amounting to NOK 81.5 million. The Badger Demonstrator Program (2012 -2014) Agreement was supported by Equinor, Chevron Energy Technology Company, ExxonMobil Exploration and Production Norway AS, Wintershall Norge AS and China National Petroleum Corporation Drilling Research Institute (CNPC DR). The Badger Explorer Development Program has been co-sponsored by Equinor.
If commercial sales to the market should start, all participants and Shell Technology Norway AS (the previous partner of the Badger Explorer Prototype Program Agreement) will share 5 % royalty of all sales of products and services related to the Badger Explorer on a yearly basis. This royalty is limited to a total of 150 % of received contributions.
The industry partners having signed the Badger Explorer Development Program Agreement have a first right of refusal to buy an equal share of the full manufacturing and operational capacity of all Badger Explorers at a prenegotiated gross margin. This gross margin is considered to be acceptable and fair oil industry standard. The partners do have this right for a period up to 6 years from commercialization. Should a partner not employ its first right of refusal, this right and the corresponding share of manufacturing capacity will fall to the remaining partners. The program was fully written off in 2017. As such, the related Capitalized grants of NOK -81,5 million were also derecognized in 2017. The contractual obligations related to any future earnings in the Indicator will remain should there be commercializing possibilities in the future. Net write-down amounted to NOK 69.4 million in 2017.
Total
Current interest-bearing loans and borrowings were part of the Dwellop-segment, which was discontinued in 2018.
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Short-term liabilities | 0 | 3 600 |
| Debt financial institutions | 0 | 3 600 |
| Non-cash changes | ||||||
|---|---|---|---|---|---|---|
| Cash | Divest- | FX | Fair | |||
| 2018 | 31.12.2017 flows |
ment | movement value changes | 31.12.2018 | ||
| Other interest-bearing debt (long-term) | 11 700 | -900 | -10 800 | 0 | 0 | 0 |
| Short-term liabilities | 3 600 | 0 | -3 600 | 0 | 0 | 0 |
| Currency futures | 24 | 0 | -24 | 0 | 0 | 0 |
| Total liabilities from financing activities | 15 324 | -900 | -14 424 | 0 | 0 | 0 |
| Non-cash changes | ||||||
|---|---|---|---|---|---|---|
| Cash | Acqui- | FX | Fair | |||
| 2017 | 31.12.2016 | flows | sition | movement value changes | 31.12.2017 | |
| Other interest-bearing debt (long-term) | 0 | -2 700 | 14 400 | 0 | 0 | 11 700 |
| Short-term liabilities | 6 889 | -6 854 | 3 565 | 0 | 0 | 3 600 |
| Currency futures | 0 | 0 | 0 | 0 | 24 | 24 |
| Total liabilities from financing activities | 6 889 | -9 554 | 17 965 | 0 | 24 | 15 324 |
| (Figures in NOK 1 000) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Other interest-bearing debt (long-term) | 0 | 11 700 |
| Other interest-bearing debt (long-term) | 0 | 11 700 |
| Maturity of long-term and short-term interest-bearing debt | 31.12.2018 | 31.12.2017 |
| Maturity 0-1 year (classified as short-term debt) | 0 | 3 600 |
| Maturity 2-4 years | 0 | 11 700 |
| Maturity 5 years and after | 0 | 0 |
| Total long-term and short-term interest-bearing debt | 0 | 15 300 |
Average interest rate on interest-bearing debt was 4.6% in 2017. Book value of interest-bearing debt approximately equal fair value.
Other interest-bearing debt was part of the Dwellop-segment, which was discontinued in 2018.
Trade payables are generally non-interest bearing and the payment terms are net 30 days. Fair value of the payables equals the nominal value.
| Total other current liabilities | 362 | 6 840 |
|---|---|---|
| Other* | 191 | 191 |
| Other accrued costs | -11 | 3 417 |
| Government grants | 0 | 0 |
| Unpaid vacation pay | 183 | 3 233 |
| Other current liabilities | 2018 | 2017 |
| (Figures in NOK 1 000) |
* Other short-term liabilities include outstanding balance payable to CNPC DR for having two Chinese engineers working at Badger Explorer ASA's HQ from May to September in 2015.
HUNT is 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.
The Group's cash reserves of NOK 304.1 million are deposited in the Norwegian bank DNB. The main transactions for the Group has been in NOK in 2018, but the main transactions for the companies Hunter Group ASA and Hunter Tankers AS going forward will be in USD. As a consequence of this these two companies have changed their functional currencies from NOK to USD from 1 January 2019. When commercial operations in larger scale commence, a foreign currency exchange risk policy will be introduced.
The Group's financial income and financial costs in the statement of profit or loss are influenced by changes in interest rates as the interest with DNB is on a floating basis. The Group had NOK 0.1 million in interest expense and NOK 7.2 million in interest income in 2018, consisting of an interest income of NOK 3.9 million related to the USD time deposit placements and NOK 3.3 million related to cash and cash equivalents.
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.
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. The cash position of Hunter Group at year end 2018 was NOK 304.1 million, compared to NOK 279.4 million in 2017.
Following the successful launch of the private placement in 2018, the Company's financial and liquidity position was further significantly improved. The net proceeds from the Private Placement has been used to fund the development of 8 VLCC ships. Over the next 2 years, both private placement and borrowings will be used to fund the development. Following the ordering of vessel number 8, Hunter Group ASA contacted shareholders representing more than 50 percent of the outstanding shares. The shareholders were positive to the transaction and stated a clear intent to take part in potential future equity offerings. The Company is currently in advanced discussions regarding the establishment of an external credit funding of more than 60 % of the contract values of the ships. The aim is to have this process completed within May 2019, after which the Group will issue a statement outlining its
intent to issue either debt, equity or a combination of the two, and the amounts needed. Please also see note 11 for further information.
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 table below shows a maturity analysis for HUNT's total short term liabilities:
| (Figures in NOK 1 000) | within | within | within |
|---|---|---|---|
| 31.12.2018 | 3 months | 3-6 months | 9-12 months |
| Accounts payable | 1 145 | 0 | 0 |
| Public duties payables | 75 | 0 | 0 |
| Short-term debt financial institutions | 0 | 0 | 0 |
| Short-term derivatives | 0 | 0 | 0 |
| Other short-term liabilities | 180 | 183 | 0 |
| Interest payable | 0 | 0 | 0 |
| within | within | within | |
|---|---|---|---|
| 31.12.2017 | 3 months | 3-6 months | 9-12 months |
| Accounts payable | 8 587 | 0 | 0 |
| Public duties payables | 3 161 | 0 | 0 |
| Short-term debt financial institutions | 900 | 1 800 | 900 |
| Short-term derivatives | 24 | 0 | 0 |
| Other short-term liabilities | 3 608 | 3 233 | 0 |
| Interest payable | 176 | 321 | 145 |
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 NOK 1 000) 31.12.2018 |
31.12.2017 |
|---|---|
| Derivatives 0 |
24 |
| Long-term debt financial institutions 0 |
11 700 |
| Short-term debt financial institutions 0 |
3 600 |
| Trade and other payables 1 582 |
18 588 |
| Other financial investments -215 107 |
0 |
| Bank deposits -304 110 |
-279 456 |
| Net debt (asset) -517 635 |
-245 544 |
| Equity 1 012 204 |
415 137 |
| Total capital | |
| Capital and net debt 494 569 |
169 593 |
| Gearing ratio -104,7 % |
-144,8 % |
| Equity ratio 99,8 % |
92,4 % |
Set out below is a comparison by category of carrying amounts and fair values of all of the Company's financial instruments:
| Fair value | 31.12.2018 | 31.12.2017 | |||
|---|---|---|---|---|---|
| (Figures in NOK 1 000) | measurement | Carrying | Fair | Carrying | Fair |
| Financial assets | hierarchy | amount | value | amount | value |
| Cash and cash equivalents | Level 1 | 304 110 | 304 110 | 279 456 | 279 456 |
| Other financial investments | Level 1 | 215 107 | 215 107 | 0 | 0 |
| Trade receivables | Level 2 | 724 | 724 | 21 073 | 21 073 |
| Other short-term receivables | Level 2 | 1 281 | 1 281 | 4 873 | 4 873 |
| 31.12.2018 | 31.12.2017 | ||||
| Carrying | Fair | Carrying | Fair | ||
| Financial liabilities | amount | value | amount | value | |
| Other interest-bearing debt (long-term) | Level 2 | 0 | 0 | 11 700 | 11 700 |
| Current interest-bearing loans and borrowings | Level 2 | 0 | 0 | 3 600 | 3 600 |
| Trade payables | Level 2 | 1 145 | 1 145 | 8 587 | 8 587 |
| Derivatives | Level 2 | 0 | 0 | 24 | 24 |
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:
The Group does not use hedge accounting.
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 NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Purchased services | 5 409 | 4 869 |
| Other short term liabilities to related parties | 0 | 0 |
| Account payable to related parties | 26 | 1 083 |
Middelborg AS, has invoiced the Company NOK 3 509 994 for 2017, mainly for interim CEO services from February to December. For January to March 2018, Middelborg AS has invoiced the Company NOK 1 933 591, mainly related to Mr. Vegard Urnes, Investment Manager of Middelborg AS, and former CEO of Hunter Group ASA. The contract was terminated in May 2018.
In May 2017, the Company entered into a consultancy agreement with Gudbrandsneset AS. Gudbrandsneset is owned by the Company's former SVP Business Development (hired on 60% basis) and chairman in Dwellop Mr. Eirik Bergsvik. NOK 540 000 were invoiced the Company for the first part of 2018, and NOK 528 000 for 2017. The contract was terminated in May 2018.
The Company has used the services of the law firm Ro Sommernes DA for legal advice in 2018. Ro Sommernes DA has invoiced the Company NOK 2 884 871 in 2018. The Company's chairman Henrik Christensen is a partner in Ro Sommernes DA.
On 26 April 2018 Hunter Group entered into a definitive VLCC contract transfer agreement with Apollo Asset Ltd. Apollo Asset Ltd. Is 100% owned by Mr. Arne Fredly, board member and largest shareholder of Hunter Group ASA. In consideration of Apollo entering into the Contract Transfer Agreement, Apollo is entitled to subscribe for new shares in the Company as follows: (i) 5,000,000 shares at a subscription amount of NOK 2.60 per share (exercisable within 3 years from the date of issuance of the Warrants); (ii) 5,000,000 shares at a subscription amount of NOK 2.90 per share (exercisable within 4 years from the date of issuance of the Warrants); and (iii) 5,000,000 shares at a subscription amount of NOK 3.20 per share (exercisable within 5 years from the date of issuance of the Warrants), together, the "Warrants".
From 1 November 2018 the Company rents office space from Dronningen Eiendom AS. The rental agreement is for 36 months. One of the Company's shareholder is also a shareholder of Dronningen Eiendom AS.
| (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Office rent | 605 | 649 |
| IT and office-related expenses | 1 164 | 696 |
| Audit, audit-related services and accounting fees | 4 366 | 1 962 |
| Various legal fees | 11 785 | 11 976 |
| Insurance, car, travel and other expenses | 931 | 2 378 |
| Totalt | 18 851 | 17 660 |
Included in various fees per 31.12.2018 are one-off costs related to the negotiations with IKM for possible acquisition NOK 7.3 million, whereof the remaining costs mainly relates to the Dwellop-exit and the acquisition of the VLCC construction contracts.
Research and development costs of NOK 8.5 million in 2017 were charged to the income statement as part of operating expenses. Research and development were part of the Dwellop-segment, which was discontinued in 2018.
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 NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Interest income related to cash, cash equivalents & other financial investments | 7 227 | 2 622 |
| Other financial income | 0 | 0 |
| Currency gain | 20 186 | 0 |
| Total finance income | 27 414 | 2 622 |
| Finance expenses (Figures in NOK 1 000) | 2018 | 2017 |
| Interest expense related to debt to financial institutions | 1 | 54 |
| Other financial expences | 207 | 58 |
| Currency losses | 0 | 13 |
| Total finance expenses | 208 | 125 |
| Total finance income (loss) | 27 206 | 2 497 |
Interest income on cash & cash equivalents consist of earned interest on the Group's cash & cash equivalents placements, including the USD time deposit placements classified as Other financial investments.
Net foreign exchange gain on USD placements consist of USD time deposit placements translated at NOK/USD end rate 8.6855 at 31 December 2018.
| Income tax expense (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Payable tax | 0 | 0 |
| Changes in utilized tax asset | -2 964 | -4 337 |
| Total tax expense * | -2 964 | -4 337 |
* The change in utilized tax relates to transaction costs charged directly against other equity, resulting in a deferred tax asset that were written down fully. The Group has not recognized a deferred tax asset in the statement of financial position for 2018 and 2017 as the Group have been in a development phase up until 2017, and in a restructuring phase in 2018, and have as such been generating losses in 2017 and 2018.
| Calculation of basis for tax (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Earnings before tax | 5 010 | -90 680 |
| Permanent differences | -12 256 | -96 900 |
| Changes in temporary differences | -147 | 325 |
| Total basis for tax | -7 393 | -187 255 |
| Summary of temporary differences: | 2018 | 2017 |
| Fixed assets | -307 | -411 |
| Accruals | 0 | -42 |
| Loss carried forward | -340 898 | -333 491 |
| Total | -341 205 | -333 944 |
| Calculated deferred tax asset (22 % / 23 %) | -75 065 | -76 807 |
Statement of financial position
| Deferred tax asset (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Loss carried forward | -74 998 | -76 703 |
| Accruals | 0 | -10 |
| Fixed assets | -68 | -95 |
| Total deferred tax asset | -75 065 | -76 807 |
| Not recognized deferred tax asset | 75 065 | 76 807 |
| Total deferred tax asset recognised in the statement of financial position | 0 | 0 |
| Loss carried forward as of 31 December 2018 | 2018 | 2017 |
| Unlimited carrying forward | -340 898 | -333 491 |
| Effective tax rate | 2018 | 2017 |
| Profit / (loss) before tax | 5 010 | -90 680 |
| 23% / 24% tax of earnings before tax | 1 152 | -21 763 |
| Permanent differences | -2 819 | -23 256 |
| Changes in deferred tax asset not recognised in the statement of financial position and other | -4 709 | 37 343 |
| Effect due to 1% reduction in tax rate * | 3 412 | 3 339 |
| Calculated tax cost | -2 964 | -4 337 |
| Effective tax rate | 59 % | -5 % |
*With effect from the 2019 financial year, the corporate taxable profits (ordinary income) are taxed at a flat rate of 22 %. Deferred tax assets and liabilities at 31 December 2018 have been calculated using 22 % tax rate.
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.
Options, awarded to employees at the end of 2006 and 2007, were waived and not included in the calculation of diluted earnings per share. The effect of options awarded to employees in 2009, 2010, 2011, 2013, 2014, 2016 and 2017 are included in the calculation of diluted earnings per share for 2017. No options were awarded in 2018.
| (Amounts in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Net profit (loss) | -32 511 | -96 328 |
| Net profit (loss) from continuing operations | 2 046 | -95 017 |
| Weighted average number of outstanding ordinary shares during the year | 290 285 | 1 018 603 |
| Effect of dilution - share options | 1 810 | 544 |
| Weighted average outstanding diluted shares | 292 095 | 1 019 147 |
| Earnings (loss) per share | 2018 | 2017 |
| Earnings per share | -0,11 | -0,09 |
| Earnings per share diluted | -0,11 | -0,09 |
| Earnings per share continuing operations | 0,01 | -0,09 |
| Earnings per share diluted continuing operations | 0,01 | -0,09 |
| Payroll and related expenses (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Salaries and vacation pay | 3 102 | 6 048 |
| Social security tax | 484 | 836 |
| Pension expense ("OTP") | 162 | 261 |
| Employee share option program expense (incl. national insurance contributions) | 0 | 64 |
| Remuneration to the Board of Directors and the Nomination Committee | 0 | 1 568 |
| Other benefits | 32 | 94 |
| Total payroll an related expenses | 3 781 | 8 871 |
| 2018 | 2017 | |
Average work years 3 5
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 1,162,596). The National Insurance scheme basic amount for 2018 is NOK 96,883. 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.
| 2018 | 2017 | |
|---|---|---|
| Contributions expensed during the year | 162 | 261 |
The total remuneration for the members of the management was NOK 1.633 million in 2018, compared to NOK 3.052 million in 2017.
| Total remuneration to management during the year ended 31 December is as follows: 2018 | 2017 | |||||
|---|---|---|---|---|---|---|
| Other | Other | |||||
| Salary Remuneration Pension cost | Salary Remuneration | Pension cost | ||||
| Steinar Bakke, (CEO)* | 0 | 0 | 0 | 0 | 5 000 | 0 |
| Erik Frydendal, (CEO and CFO)** | 625 000 | 2 196 | 5 636 | 0 | 0 | 0 |
| Roald Valen, (CEO)*** | 0 | 0 | 0 | 609 636 | 2 928 | 5 198 |
| Vegard Urnes, (CEO)**** | 0 | 0 | 0 | 0 | 0 | 0 |
| Ola Beinnes Fosse (CFO)* | 993 724 | 2 196 | 3 999 | 816 285 | 63 000 | 37 401 |
| Helge Hustoft (CEO Dwellop AS - included from May 2017) | 0 | 0 | 0 | 910 437 | 59 895 | 14 615 |
| Eirik Bergsvik (Chm. of Board Dwellop & SVP Bus. Dev. HUNT) | 0 | 0 | 0 | 528 000 | 0 | 0 |
* Effective from 20 January 2016, Mr. Steinar Bakke resigned his position as CEO of HUNT. He has stepped down from his position as CEO and took up a new role as Senior Advisor of HUNT until 29 February 2016.
** Erik Frydendal took on the positions as CFO and CEO from 19 March 2018.
*** Effective from 22 August 2016, Mr. Roald Valen commenced as CEO of the Company.
**** Effective from 23 May 2017, Mr. Roald Valen resigned and Vegard Urnes took on the position as CEO. Vegard Urnes was rented from Middelborg AS. Urnes resigned 19 March 2018. Further information about remuneration for CEO is included in the note 14 "Transactions with related parties".
***** Effective from 15 June 2017, Mr. Ola Beinnes Fosse took on the position as CFO. He resigned 6 March 2018.
Executive management of HUNT consists of CEO and CFO.
| Number of | Exercise price | |||
|---|---|---|---|---|
| shares | % shares | Options | (NOK) | |
| Erik Frydendal, CFO & CEO | 1 650 000 | 0,43 % | 0 | - |
| Total | 1 650 000 | 0 | 0 | - |
Changes in share options held by the management group are as follows:
| Options | Options for- | Options as of | |||
|---|---|---|---|---|---|
| Options of 1 | granted in feited in the Options vested 31 December | ||||
| January 2018 | the period | period | in the period | 2018 | |
| Erik Frydendal, CFO & CEO | 0 | 0 | 0 | 0 | 0 |
| Total | 0 | 0 | 0 | 0 | 0 |
See the section "Remuneration policy for members of executive management" for further information.
The allocation of remuneration to the members of the Board and Nomination Committee is paid as follows in 2017 and 2018:
| (amounts in NOK) | 2018 | 2017 |
|---|---|---|
| Marcus Hansson - Chairman of the Board, Audit Committee until april 2017 | 0 | 630 000 |
| Birte N. Borrevik - Board member until April 2017 | 0 | 295 000 |
| Belinda T. Ingebrigtsen - Board member until April 2017 | 0 | 160 000 |
| Rolf E. Ahlqvist - Nomination Committee (until May 2017) | 0 | 12 500 |
| Bjørge Gretland - Board member (until 2015) | 0 | 135 000 |
| David Ottesen - Board member until April 2017 | 0 | 295 000 |
| Steinar Bakke - CEO until January 2016 (Nomination Committee fee) | 0 | 5 000 |
| John Vemmestad - Chairman of the Board (from May 2017 to April 2018) | 100 000 | 0 |
| Ingrid Elvira Leisner - Board member (from May 2017 to April 2018) | 100 000 | 0 |
| Kjetil Grim Skorstad - Board member (until April 2018) | 100 000 | 0 |
| Kristin Hellebust - Board member from April 2018 | 25 000 | 0 |
| Henrik A. Christensen - Chairman of the Board from April 2018 | 50 000 | 0 |
| Jan Frode Vaksvik - Nomination Committee | 0 | 20 000 |
| Richard Urbanski - Nomination Committee (until May 2017) | 0 | 10 000 |
| Knut Åm - Nomination Committee (until May 2017) | 0 | 5 000 |
| Total remuneration | 375 000 | 1 567 500 |
The number of employees share options and average exercise prices for HUNT and development during the year:
| 2018 | 2017 | ||||
|---|---|---|---|---|---|
| Weighted | Weighted | ||||
| Share | average | Share | average | ||
| Summary of oustanding options: | options exercise price | options exercise price | |||
| Balance at 1 january | 500 000 | 5,69 | 440 000 | 2,14 | |
| Granted during the year | 0 | - | 5 000 000 | 5,50 | |
| Cancelled during the year | 0 | - | 0 | 0,00 | |
| Forfeited during the year | -500 000 | - | -440 000 | 0,00 | |
| Balance at 31 December | 0 | - | 5 000 000 | 5,69 | |
| Effect of reverse share split | 0 | - | -4 500 000 | -5,12 | |
| Balance at 31 December after reverse split | 0 | - | 500 000 | 0,57 | |
| Vested options | - | 0 | 0,00 | ||
| Weighted Average Fair Value of options granted during the period | 0 | - | 5 000 000 | 0,18 |
Fair value of the options granted was in 2017 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. At the end of 2017, the Company revised its estimates of the number of options that were expected to vest.
At the annual general meeting of the Company on 31 May 2017, the Board of Directors was granted an authorization (as amended at the Company's extraordinary general meeting on 6 December 2017) to acquire, on behalf of the Company, up to 10,000,000 of the Company's own shares within a total par value of NOK 12,500,000. The minimum and the maximum amounts which may be paid per share are NOK 0.30 and NOK 10, respectively. The mandate is to be used in connection with the Company's share incentive schemes, share buy-back program and for other purposes which are in the best interest of the Company. The authorization is valid until the Company's annual general meeting in 2019, but no longer than until 30 June 2019.
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 2018.
The Company's management will receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses.
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.
The following table shows remuneration related to professional services rendered by the Company's principal auditor, Ernst & Young AS, for fiscal year 2018 and 2017. The amounts shown are exclusive of value added tax.
| (Amounts in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Audit fee | 290 | 245 |
| Assurance services | 1 333 | 716 |
| Other assistance | 1 594 | 606 |
| Total | 3 217 | 1 567 |
Share capital as at 31 December 2018 was NOK 481,1 million, being 384,908,013 ordinary shares at a nominal value of NOK 1.25 each. All shares carry equal voting rights. New shares have been issued in 2018, ref. statement of changes in equity.
| Number of ordinary shares | 2018 | 2017 |
|---|---|---|
| Ordinary shares at 1 January | 131 158 | 18 537 |
| Capital increases | 253 750 | 1 293 043 |
| Effect of reverse share split | 0 | -1 180 422 |
| Ordinary shares at 31 December | 384 908 | 131 158 |
On 16 January 2017, the private placement consisting of 360,000,000 new ordinary shares for gross proceeds of NOK 45 million with a subscription price of NOK 0.125 was registered in The Register of Business Enterprises.
On 28 February 2017, the private placement consisting of 600,000,000 new ordinary shares for gross proceeds of NOK 300 million with a subscription price of NOK 0.50 was registered in The Register of Business Enterprises.
On 7 March 2017, the private placement consisting of 80,000,000 new ordinary shares for gross proceeds of NOK 10 million with a subscription price of NOK 0.125 was registered in The Register of Business Enterprises.
On 31 March 2017, the private placement consisting of 60,735,150 new ordinary shares for gross proceeds of NOK 30.4 million with a subscription price of NOK 0.50 was registered in The Register of Business Enterprises.
On 19 May 2017, HUNT has issued 192,307,692 new ordinary shares at fair value of 0.42 per share totaling NOK 140.8 million as part of the consideration for the purchase of shares in Dwellop AS. The share issue was registered on 22 May 2017 in The Register of Business Enterprises.
On 6 December 2017, the Hunter Group carried out a reverse share split, where the shares are merged from 1,311,580,130 shares to 131,158,013 shares. The nominal value of the shares is changed from NOK 0.125 to NOK 1.25 so the company's share capital is divided into 131,158,013 shares, each with a nominal value of NOK 1.25.
On 26 April 2018, a total of 15 000 000 warrants were issued to Apollo. Please refer to note 17 for further information.
On 9 May 2018, the private placement consisting of 75,000,000 new ordinary shares for gross proceeds of NOK 172.5 million with a subscription price of NOK 2.30 was registered in The Register of Business Enterprises.
On 18 May 2018, issuance of subscription rights to all shareholders in the Company as of 16 May, who were not allocated Offer shares in the Private Placement (NOK 520M) and who are not resident in a jurisdiction where such offering would be unlawful or require a prospectus filing or similar. Subscription price NOK 3.2.
On 30 May 2018, distribution of all the Company's 206,158,013 shares in Dwellop AS as a payment in kind dividend to all shareholders on record per 18 May 2018.
On 14 June 2018, HUNT has issued 162,500,000 new ordinary shares for gross proceeds of NOK 520.0 million with a subscription price of NOK 3.20, and registered it in The Register of Business Enterprises.
On 19 July 2018, HUNT has issued 16,250,000 new ordinary shares for gross proceeds of NOK 52.0 million with a subscription price of NOK 3.20, and registered it in The Register of Business Enterprises.
The 20 largest shareholders held 67.5 % of the outstanding shares. As at 31 December 2018, the 20 largest shareholders were as follows:
| Shareholders | Number of shares | % shares |
|---|---|---|
| 1 Apollo Asset Limited | 102 956 677 | 26,7 % |
| 2 Songa Trading Inc | 29 980 501 | 7,8 % |
| 3 Sundt AS | 25 000 000 | 6,5 % |
| 4 State Street Bank And Trust Comp | 11 405 758 | 3,0 % |
| 5 Fondsfinans Norge | 10 100 000 | 2,6 % |
| 6 Swap Invest AS | 9 647 000 | 2,5 % |
| 7 Bnp Paribas Securities Services | 9 231 600 | 2,4 % |
| 8 Norron Sicav - Target | 7 669 432 | 2,0 % |
| 9 Titan Opportunities Fund Ic Sicav | 7 105 220 | 1,8 % |
| 10 Halvorsens Fabrikk AS | 7 082 169 | 1,8 % |
| 11 Verdipapirfondet Dnb SMB | 5 657 359 | 1,5 % |
| 12 Invesco Perp Euran Smler Comps Fd | 5 037 867 | 1,3 % |
| 13 Middelborg Invest AS | 4 500 292 | 1,2 % |
| 14 Verdipapirfondet Fondsfinans Norge | 4 100 000 | 1,1 % |
| 15 Verdipapirfondet Delphi Norge | 4 062 500 | 1,1 % |
| 16 Dnb Luxembourg S.A. | 3 532 613 | 0,9 % |
| 17 Pescara Invest AS | 3 500 000 | 0,9 % |
| 18 Argentum Fondsinvesteringer AS | 3 292 315 | 0,9 % |
| 19 Stavanger Forvaltning AS | 3 046 800 | 0,8 % |
| 20 VPF Nordea Avkastning | 3 026 600 | 0,8 % |
| Total shares for top 20 shareholders | 259 934 703 | 67,53 % |
| Total shares for other shareholders | 124 973 310 | 32,47 % |
| Total shares | 384 908 013 | 100,0 % |
The following members of the Board of Directors and member of executive management held shares as of 31 December 2018:
| 2018 | |
|---|---|
| August AS (Henrik Christensen - Chairman) | 400 000 |
| Apollo Asset Ltd (Arne Fredly - Board member) | 102 956 677 |
| Sagittarius Capital Ltd (Erik Frydendal - CEO and CFO) | 1 650 000 |
| Ordinary shares | 105 006 677 |
| % of total shares | 27,3 % |
On 9 May 2018 it was decided in the general assembly to distribute 100 % of the shares in Dwellop AS to the Company's shareholders. Dwellop AS was acquired 2 May 2017 and consolidated into Hunter Group ASA's group accounts from this date. A valuation of Dwellop was performed by Hunter Group ASA in connection with the change of the share ownership in the company, valuing Dwellop to NOK 115 million (including equity injections in 2Q of NOK 28.8 million). As the goodwill related to the CGU of Dwellop was written down with NOK 25.5 million in 1Q 2018, the distribution did not result in any gain/loss. The formal distribution of the shares was 30 May 2018.
The table below sets out the unaudited income statements, the statements of financial position and the cash flow statements for the part related to Dwellop (discontinued operations) for the periods presented.
| (Figures in NOK 1 000) | Year to date | Year |
|---|---|---|
| Results related to Dwellop | 09.05.2018 | 31.12.2017 |
| Revenues | 13 744 | 43 797 |
| Total operating expenses | 47 560 | 61 729 |
| Operating profit (loss) from discontinued operations | -33 816 | -17 932 |
| Net financial income (loss) | -741 | -1 235 |
| Profit (loss) before taxes from discontinued operations | -34 557 | -19 167 |
| Tax on ordinary result | 0 | -17 856 |
| Profit (loss) from discontinued operations | -34 557 | -1 311 |
| Earnings per share | -0,12 | 0,00 |
| Earnings per share diluted | -0,12 | 0,00 |
| Year to date | Year | |
| Cash flow related to Dwellop | 09.05.2018 | 31.12.2017 |
| Net cash (to)/from operating activities | -290 | -23 226 |
| Net cash (to)/from investing activities | 0 | -3 771 |
| Net cash (to)/from financing activities | -6 105 | 4 275 |
| Net cash flow for the year from discontinued operations | -6 395 | -22 722 |
| Statement of financial position related to Dwellop | 09.05.2018 | 31.12.2017 |
| Total intangible assets | 69 321 | 95 396 |
| Total tangible assets | 26 299 | 27 884 |
| Total inventories and current receivables | 44 446 | 46 442 |
| Cash and cash equivalents | -753 | 574 |
| TOTAL ASSETS FROM DISCONTINUED OPERATIONS | 139 313 | 170 296 |
Total equity 115 000 139 537 Total non-current liabilities 0 11 700 Total current liabilities 24 313 19 059 TOTAL EQUITY AND LIABILITIES FROM DISCONTINUED OPERATIONS 139 313 170 296
DSME has in January 2019 agreed to further extend the option agreement for three additional vessels until February 28th, 2019. The price is USD 93.6 million per vessel and the delivery time is unchanged (within 1st half of 2021).
First installment was made on vessel H.no. 5470 upon receipt of the refund guarantee from the yard. Second installment made on vessels H.no. 5455 and 5456 in accordance with the building contracts. The Group has now received refund guarantees for all 8 VLCCs. The refund guarantee is a letter of credit issued by Korea Development Bank that states that the Group will receive a full refund of all installments made if the shipbuilding yard should go bankrupt.
| (Figures in NOK 1 000) | Note | 2018 | 2017 |
|---|---|---|---|
| Revenues Revenues |
1 514 | 0 | |
| Total Revenues | 1 514 | 0 | |
| Operating expenses | |||
| External services for development project | 3 | 0 | -743 |
| Payroll expenses | 16 | 3 778 | 6 451 |
| Depreciation and amortisation expense | 4 | 0 | 7 |
| Net write-down intangible assets and capitalized grants | 3 | 0 | 69 374 |
| Other operating expenses | 12, 16 | 19 204 | 17 016 |
| Capitalised development cost | 3 | 0 | 0 |
| Total operating expenses | 22 982 | 92 105 | |
| Operating profit (loss) | -21 468 | -92 105 | |
| Interest income | 13 | 11 762 | 2 611 |
| Finance income | 13 | 18 946 | 0 |
| Interest expenses | 13 | -1 | -54 |
| Other financial expenses | 13, 19 | -40 504 | -848 |
| Net financial income (loss) | -9 796 | 1 709 | |
| Profit (loss) before taxes | -31 264 | -90 396 | |
| Tax on ordinary result | 13 | -2 964 | 171 |
| Net profit (loss) | -34 228 | -90 226 | |
| Earnings per share | -0,12 | -0,09 | |
| Earnings per share diluted | -0,12 | -0,09 | |
| (Figures in NOK 1 000) | 2018 | 2017 | |
| Total comprehensive income | |||
| Profit (loss) for the period | -34 228 | -90 226 | |
| Tax effect equity transactions | 0 | 0 | |
| Translation differences | 0 | 0 | |
| Comprehensive income for the period | -34 228 | -90 226 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the parent | -34 228 | -90 226 | |
| Non-controlling interest | 0 | 0 | |
| Total comprehensive income | -34 228 | -90 226 |
| (Figures in NOK 1 000) | Note | 31.12.2018 | 31.12.2017 |
|---|---|---|---|
| NON-CURRENT ASSETS | |||
| Property, plant & equipment | 4 | 83 | 0 |
| Total tangible assets | 8 3 |
0 | |
| Investment in subsidiaries | 2, 19 | 337 709 | 126 497 |
| Long-term receivable subsidiaries | 20 | 160 466 | 0 |
| Total finacial long-term assets | 498 175 | 126 497 | |
| TOTAL NON-CURRENT ASSETS | 498 257 | 126 497 | |
| CURRENT ASSETS | |||
| Short-term receivable subsidiaries | 13, 20 | 251 | 18 780 |
| Other short-term receivables | 5, 7, 9 | 2 015 | 63 |
| Total current receivables | 2 266 | 18 843 | |
| Other financial investments | 6 | 215 107 | 0 |
| Total other financial investments | 215 107 | 0 | |
| Cash and cash equivalents | 6 | 302 325 | 277 888 |
| TOTAL CURRENT ASSETS | 519 698 | 296 731 | |
| TOTAL ASSETS | 1 017 955 | 423 228 | |
| (Figures in NOK 1 000) | Note | 31.12.2018 | 31.12.2017 |
| EQUITY | |||
| Share capital | 17 | 481 135 | 163 948 |
| Share premium | 17 | 535 399 | 508 844 |
| Other equity | 0 | -251 629 | |
| TOTAL EQUITY | 1 016 534 | 421 162 | |
| LIABILITIES | |||
| Trade creditors | 9 | 1 163 | 1 649 |
| Accrued public charges and indirect taxes | 9 | 75 | 308 |
| Other current liabilities | 8, 9, 20 | 183 | 108 |
| Total current liabilities | 1 421 | 2 066 | |
| TOTAL LIABILITIES | 1 421 | 2 066 | |
| TOTAL EQUITY AND LIABILITIES | 1 017 955 | 423 228 |
Oslo, 28 March 2019
| (Figures in NOK 1 000) | Note | 2018 | 2017 |
|---|---|---|---|
| Contribution from operations before tax | -21 672 | -22 730 | |
| Change in accounts receivables and accounts payables | 18 043 | -414 | |
| Change in other receivables and payables and other | -1 943 | -230 | |
| Net cash flow from operating activities | -5 573 | -23 374 | |
| Investments in other financial investments | 9 | -682 420 | 0 |
| Sale of other financial investments | 9 | 467 312 | 0 |
| Change in long-term interest bearing receivable subsidiaries | -160 466 | 0 | |
| Investments in shares in subsidiaries | 19 | -337 709 | -61 200 |
| Net investments in PPE & intangible assets | 3, 4 | -83 | -838 |
| Net cash flow from investment activities | -713 365 | -62 038 | |
| Interest received | 13 | 11 762 | 2 611 |
| Interest paid | 13 | -1 | -54 |
| Proceeds (downpayment) borrowings financial institution | 0 | -6 889 | |
| Capital contribution | Equity | 744 500 | 385 368 |
| Transaction cost capital contribution | Equity | -12 888 | -18 069 |
| Net cash flow from financing activities | 743 374 | 362 966 | |
| Total net changes in cash flow | 24 437 | 277 553 | |
| Cash and cash equivalents beginning of period | 277 888 | 335 | |
| Cash and cash equivalents end of period | 6 | 302 325 | 277 888 |
| Profit (loss) attributable to equity holders | |||
| of the parent | -31 264 | -90 396 | |
| Employee options | 0 | 64 | |
| Depreciation | 0 | 7 | |
| Net write-down intangible assets and capitalized grants | 0 | 69 374 | |
| Write-down of shares in Dwellop and Indicator AS | 40 300 | 777 | |
| Financial income | -11 762 | -2 611 | |
| Unrealized currency exchange differences financial investments | -18 946 | 0 | |
| Financial expenses | 1 | 54 | |
| Contribution from operations before tax | -21 672 | -22 730 |
| Share | Share Other paid- | Retained | Total | |||
|---|---|---|---|---|---|---|
| (Figures in NOK 1 000) | Note | Capital | premium | in capital | earnings | equity |
| Equity as of 01.01.2017 | 2 317 | 218 070 | 3 935 | -165 403 | 58 919 | |
| Net profit (loss) | 0 | 0 | 0 | -90 226 | -90 226 | |
| Total comprehensive income 2017 | 0 | 0 | 0 | -90 226 | -90 226 | |
| Private placement 16 January 2017 | 45 000 | 0 | 0 | 0 | 45 000 | |
| Private placement 28 February 2017 | 75 000 | 225 000 | 0 | 0 | 300 000 | |
| Private placement 7 March 2017 | 10 000 | 0 | 0 | 0 | 10 000 | |
| Private placement 31 March 2017 | 7 592 | 22 776 | 0 | 0 | 30 368 | |
| Issuance of shares 22 May 2017 | 24 038 | 56 731 | 0 | 0 | 80 769 | |
| Transactions costs and reclassifications | 0 | -13 733 | -3 935 | 3 935 | -13 733 | |
| Option plan payment | 0 | 0 | 0 | 64 | 64 | |
| Equity as of 31.12.2017 | 163 948 | 508 844 | 0 -251 629 | 421 162 | ||
| Net profit (loss) | 0 | 0 | 0 | -34 228 | -34 228 | |
| Total comprehensive income 2018 | 0 | 0 | 0 | -34 228 | -34 228 | |
| Private placement 9 May 2018 | 93 750 | 78 750 | 0 | 0 | 172 500 | |
| Issuance of shares 14 June 2018 | 203 125 | 316 875 | 0 | 0 | 520 000 | |
| Transactions costs (after tax) | 14 | 0 | -9 923 | 0 | 0 | -9 923 |
| Warrants related to VLCC shipbuilding contracts | 2 | 0 | 0 | 10 000 | 0 | 10 000 |
| Distribution in kind, shares in Dwellop AS | 2 | 0 | -114 976 | 0 | 0 | -114 976 |
| Issuance of shares 19 July 2018 | 20 313 | 31 688 | 0 | 0 | 52 000 | |
| Reclassifications | 0 | -275 857 | -10 000 | 285 857 | 0 | |
| Equity as of 31.12.2018 | 481 135 | 535 399 | 0 | 0 | 1 016 534 |
Hunter Group ASA (HUNT) is the parent company of the Hunter Group, consisting of Hunter Group ASA and its subsidiaries Indicator AS and Hunter Tankers AS. Hunter Group ASA's main activities are shareholding in group companies and corporate functions.
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.
Shareholdings in subsidiaries are accounted for using the cost method. It is annually evaluated if there exist indicators for impairment.
The transfer of assets and liabilities between the company and Hunter Tankers AS (directly controlled) are accounted for at the carrying amount (continuity) of the assets and liabilities transferred, as the transfer was part of a reorganization within the Hunter Group group.
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.
On 9 May 2018 it was decided in the general assembly to distribute 100 % of the shares in Dwellop AS to the Company's shareholders. Dwellop AS was acquired 2 May 2017 and consolidated into Hunter Group ASA's group accounts from this date. A valuation of Dwellop was performed by Hunter Group ASA in connection with the change of the share ownership in the company, valuing Dwellop to NOK 115 million (including equity injections in 2018 of NOK 28.8 million). The formal distribution of the shares was 30 May 2018. As a consequence of the exit, a writedown of NOK 40.3 was executed against the Dwellop-shares.
On 9 May at the AGM the shareholders of Hunter Group ASA approved to take over the four VLCC construction contracts and three options from Apollo Asset Ltd on a "back-to-back" basis as contracted with Daewoo Shipbuilding Marine Engineering Co., LTD whereby the Company will assume the obligations versus the Shipyard. Total commitments for the four newbuilding contracts was USD 341.1m. The contracts were transferred to the subsidiary Hunter Tankers AS.
On 11 May the board decided to exercise the options for construction of three additional vessels. Each of the option vessels has a price of USD 82.8m, plus USD 2.7m for each scrubber. First and second instalment, totaling USD 59.76m was paid in 2018. Total commitments for the three vessels are USD 256.5m.
The Company has recognized the following assets in the statement of financial position (including internal built up assets such as development costs).
| Development | ||||
|---|---|---|---|---|
| Per 31 December 2017 (figures in NOK 1 000) | Patents | costs | Total | |
| Cost at 1 January 2017 | 400 | 149 632 | 150 032 | |
| Additions in 2017 | 0 | 854 | 854 | |
| Government grants | 0 | 0 | 0 | |
| Cost at 31 December 2017 | 400 | 150 485 | 150 885 | |
| Accumulated impairments at 31 December 2017 | 387 | 150 485 | 150 872 | |
| Accumulated depreciations at 31 December 2017 | 13 | 0 | 13 | |
| Book value at 31 December 2017 | 0 | 0 | 0 | |
| Impairment charges in 2017 | 387 | 150 485 | 150 872 | |
| Depreciation for 2017 | 0 | 0 | 0 |
| Development | |||||
|---|---|---|---|---|---|
| Per 31 December 2018 (figures in NOK 1 000) | Patents | costs | Total | ||
| Cost at 1 January 2018 | 400 | 150 485 | 150 885 | ||
| Additions in 2018 | 0 | 0 | 0 | ||
| Cost at 31 December 2018 | 400 | 150 485 | 150 885 | ||
| Accumulated impairments at 31 December 2018 | 387 | 150 485 | 150 872 | ||
| Accumulated depreciations at 31 December 2018 | 13 | 0 | 13 | ||
| Book value at 31 December 2018 | 0 | 0 | 0 | ||
| Impairment charges in 2018 | 0 | 0 | 0 | ||
| Depreciation for 2018 | 0 | 0 | 0 |
The write-down of intangible assets of NOK 150.9 million in 2017 related to the Badger Technology, and was due to a change of course and position from the new owners and new directors. The related Capitalized grants of NOK -81.5 million was also derecognized in 2017. The contractual obligations related to any future earnings will remain should there be commercializing possibilities in the future. Net write-down amounted to NOK 69.4 million.
| Property, | Property, | |||
|---|---|---|---|---|
| plant & equip. plant & equip. | ||||
| (Figures in NOK 1 000) | 2018 | 2017 | ||
| Cost price at 1 January | 0 | 5 816 | ||
| Transfer to Indicator | 0 | -5 816 | ||
| Additions | 83 | 0 | ||
| Cost price at 31 December | 83 | 0 | ||
| Accumulated depreciations at 31 December | 0 | 0 | ||
| Booked value at 31 December | 83 | 0 |
| Depreciation | 0 | 7 |
|---|---|---|
| Impairment charges | 0 | 2 |
| Estimated useful life | 3-5 years | 3-10 years |
| Depreciation method | straight-line | straight-line |
From 1 August 2017 the Company signed a lease for office in Munkedamsveien 45 in Oslo with a monthly rent of 37,500 until 1 August 2018, and moved its administration to Oslo. As from 1 November 2018 the Company agreed a lease for office in Dronningen 1 in Oslo with a monthly rent of NOK 25,000 until 31 October 2021, and moved its administration to Dronningen 1.
| Operating leasing costs (figures in NOK 1000) | 2018 | 2017 |
|---|---|---|
| Rent costs on buildings | 605 | 747 |
| Operational leasing costs | 38 | 77 |
| Total operating leasing costs | 643 | 823 |
| The future minimum rents related to non-cancellable leases fall due as follows: | Within 1 year | 2-5 years | After 5 years |
|---|---|---|---|
| Operational leasing costs | 38 | 0 | 0 |
| Rent costs on buildings | 300 | 550 | 0 |
| Total | 338 | 550 | 0 |
| Total other receivables | 2 015 | 63 |
|---|---|---|
| Other short term receivables | 11 | 0 |
| Prepaid expenses | 1 281 | 63 |
| Earned, not yet invoiced income | 724 | 0 |
| (Figures in NOK 1 000) | 2018 | 2017 |
| (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Cash at bank | 302 325 | 277 888 |
| Total cash at bank | 302 325 | 277 888 |
Restricted bank deposits for employee withholding taxes 198 215
In addition NOK 215.1 million were placed on USD time deposit as per 31 December 2018, and is classified as other financial investments the maturity term is three months.
Through strategic industrial cooperation agreements, HUNT has historically received contributions amounting to NOK 81.5m until 2016. The Badger Demonstrator Program (2012 -2014) Agreement was supported by Equinor, Chevron Energy Technology Company, ExxonMobil Exploration and Production Norway AS, Wintershall Norge AS and China National Petroleum Corporation Drilling Research Institute (CNPC DR). The Badger Explorer Development Program has been co-sponsored by Equinor.
If commercial sales to the market should start, all participants and Shell Technology Norway AS (the previous partner of the Badger Explorer Prototype Program Agreement) will share 5% royalty of all sales of products and services related to the Badger Explorer on a yearly basis. This royalty is limited to a total of 150% of received contributions.
The industry partners having signed the Badger Explorer Development Program Agreement have a first right of refusal to buy an equal share of the full manufacturing and operational capacity of all Badger Explorers at a prenegotiated gross margin. This gross margin is considered to be acceptable and fair oil industry standard. The partners do have this right for a period up to 6 years from commercialization. Should a partner not employ its first right of refusal, this right and the corresponding share of manufacturing capacity will fall to the remaining partners. The program was fully written off in 2017. Furthermore the business was transferred to the wholly-owned subsidiary Indicator AS.
| Total other short-term liabilities | 183 | 108 |
|---|---|---|
| Other accrued costs | 0 | 10 |
| Unpaid vacation pay | 183 | 98 |
| (Figures in NOK 1 000) | 2018 | 2017 |
HUNT is 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.
The Company's cash reserves of NOK 302.3 million are deposited in the Norwegian bank DNB. The main transactions for the Company has been in NOK, but the main transactions going forward will be in USD. As a consequence of this the Company has changed its functional currency from NOK to USD from January 1, 2019. When commercial operations in larger scale commence, a foreign currency exchange risk policy will be introduced.
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 NOK -0.6 million in interest expense and NOK 11.8 million in interest income in 2018, consisting of an interest income of NOK 3.9 million related to the USD time deposit placements, NOK 3.3 million related to cash and cash equivalents and NOK 4.5 million related to long-term interest bearing receivable from subsidiaries.
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.
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 2018 was NOK 302.3 million, compared to NOK 277.9 million in 2017.
Following the successful launch of the private placement in 2018, the Company's financial and liquidity position was further significantly improved. The net proceeds from the Private Placement has been used to fund the development of 8 VLCC ships via its subsidiary Hunter Tankers AS. Following the ordering of vessel number 8, Hunter Group ASA contacted shareholders representing more than 50 percent of the outstanding shares. The shareholders were positive to the transaction and stated a clear intent to part take in potential future equity offerings. The Company is currently in advanced discussions regarding the establishment of an external credit funding of more than 60 % of the contract values of the ships. The aim is to have this process completed within May 2019, after which the Company will issue a statement outlining its intent to issue either debt, equity or a combination of the two, and the amounts needed.
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 table below shows a maturity analysis for HUNT's total short term liabilities:
| within | within | within | |
|---|---|---|---|
| 2018 (figures in NOK 1000) | 3 months | 3-6 months | 9-12 months |
| Accounts payable | 1 163 | 0 | 0 |
| Public duties payables | 75 | 0 | 0 |
| Other short-term liabilities | 183 | 0 | 0 |
| within | within | within | |
| 2017 (figures in NOK 1000) | 3 months | 3-6 months | 9-12 months |
| Accounts payable | 1 649 | 0 | 0 |
| Public duties payables | 308 | 0 | 0 |
| Other short-term liabilities | 108 | 0 | 0 |
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. 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.
| (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Trade and other payables | 1 421 | 2 066 |
| Bank deposits | -302 325 | -277 888 |
| Net debt | -300 904 | -275 823 |
| Equity | 1 016 534 | 421 162 |
| Capital and net debt | 715 630 | 145 340 |
| Gearing ratio | -42,0 % | -189,8 % |
| Equity ratio | 99,9 % | 99,5 % |
Set out below is a comparison by category of carrying amounts and fair values of all of the Company's financial instruments:
| 2018 | 2017 | |||
|---|---|---|---|---|
| Carrying | Fair | Carrying | Fair | |
| Financial assets (figures in NOK 1000) | amount | value | amount | value |
| Cash and cash equivalents | 302 325 | 302 325 | 277 888 | 277 888 |
| Other financial investments | 215 107 | 215 107 | 0 | 0 |
| Current receivables | 2 015 | 2 015 | 63 | 63 |
| 2018 | 2017 | |||
|---|---|---|---|---|
| Carrying | Fair | Carrying | Fair | |
| Financial liabilities (figures in NOK 1000) | amount | value | amount | value |
| Long-term debt financial institutions | 0 | 0 | 0 | 0 |
| Short-term debt financial institutions | 0 | 0 | 0 | 0 |
| Trade and other payables | 1 421 | 1 421 | 2 066 | 2 066 |
Please see note 17 in the consolidated financial statements.
| Type of goods or service (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Follow-up VLCC contracts | 1 514 | 0 |
| Other income | 0 | 0 |
| Total revenues | 1 514 | 0 |
| Geographical market (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Sales in Norway | 1 079 | 0 |
| Sales abroad | 435 | 0 |
| Total revenues | 1 514 | 0 |
| Timing of revenue recognition | 2018 | 2017 |
| Goods transferred at a point in time | 0 | 0 |
| Services transferred over time | 1 514 | 0 |
| Total revenues | 1 514 | 0 |
| (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Office rent | 605 | 649 |
| IT and office-related expenses | 1 164 | 565 |
| Audit, audit-related services and accounting fees | 4 266 | 1 803 |
| Various legal fees | 12 299 | 11 949 |
| Insurance, car, travel and other expenses | 870 | 2 051 |
| Total | 19 204 | 17 016 |
Included in various fees in 2018 are one-off costs related to the negotiations with IKM for possible acquisition NOK 7.3 million, whereof the remaining costs mainly relates to the Dwellop-exit and the acquisition of the VLCC construction contracts.
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 NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Interest income related to cash and cash equivalents | 11 762 | 2 611 |
| Other financial income | 0 | 0 |
| Currency gain | 18 946 | 0 |
| Total finance income | 30 709 | 2 611 |
| Finance expenses (figures in NOK 1 000) | 2018 | 2017 |
| Interest expense related to debt to financial institutions | -1 | -54 |
| Other financial expenses | -204 | -58 |
| Realized loss distribution of shares in Dwellop AS (2018) and write-down Indicator AS (2017) | -40 300 | -777 |
| Currency losses | 0 | -13 |
| Total finance expenses | -40 504 | -902 |
| Total finance income (loss) | -9 796 | 1 709 |
| Income tax expense (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Payable tax | 0 | 0 |
| Change in utilized tax asset | -2 964 | 171 |
| Total tax expense | -2 964 | 171 |
| Calculation of basis for tax | 2018 | 2017 |
|---|---|---|
| Earnings before tax | -31 264 | -90 396 |
| Permanent differences | -12 834 | -15 423 |
| Group contribution from Dwellop | 0 | 18 780 |
| Net write-down intangible assets (Badger Tool) | 0 | 69 374 |
| Impairment of R&D Badger Tool | 0 | -150 874 |
| Realized loss distribution of shares in Dwellop AS (2018) and write-down Indicator AS (2017) | 40 300 | 777 |
| Changes in temporary differences | -147 | 325 |
| Total basis for tax | -3 944 | -167 437 |
| Summary of temporary differences: | 2018 | 2017 |
|---|---|---|
| Fixed assets | -307 | -411 |
| Accruals | 0 | -42 |
| Loss carried forward | -336 397 | -332 453 |
| Total | -336 704 | -332 907 |
| Deferred tax asset (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Loss carried forward | -74 007 | -76 464 |
|---|---|---|
| Accruals | 0 | -10 |
| Fixed assets | -67 | -95 |
| Total deferred tax asset | -74 075 | -76 569 |
| Not recognized deferred tax asset | 74 075 | 76 569 |
| 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 2018 and 2017 as the Company is in a development phase and is currently generating losses.
| Loss carried forward as of 31 December | 2018 | 2017 |
|---|---|---|
| Unlimited carrying forward | 336 397 | 332 453 |
| Effective tax rate | 2018 | 2017 |
| Profit / (loss) before tax | -31 264 | -90 396 |
| 23% / 24% tax of earnings before tax | -7 191 | -21 695 |
| Permanent differences | 6 317 | -18 568 |
| Changes in deferred tax asset not recognised in the statement of financial position | -5 458 | 37 105 |
| Effect due to 1% reduction in tax rate * | 3 367 | 3 329 |
| Calculated tax cost | -2 964 | 171 |
Effective tax rate -9 % 0 %
*With effect from the 2018 financial year, the corporate taxable profits (ordinary income) are taxed at a flat rate of 22 %. Deferred tax assets and liabilities at 31 December 2018 have been calculated using 22 % tax rate.
Please see note 23 in the consolidated financial statements.
| Payroll and related expenses (figures in NOK 1000) | 2018 | 2017 |
|---|---|---|
| Salaries and vacation pay | 3 118 | 3 889 |
| Social security tax | 465 | 691 |
| Pension expense ("OTP") | 162 | 161 |
| Employee share option program expense (incl. national insurance contributions) | 0 | 64 |
| Remuneration to the Board of Directors and the Nomination Committee | 0 | 1 568 |
| Other benefits | 32 | 78 |
| Total payroll an related expenses | 3 778 | 6 451 |
| 2018 | 2017 | |
| Number of employees (average work years) | 3 | 3 |
The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called "OTP"). The pension contributions range from 4 % of 0 - 7.1G to 7 % of 7.1 -12G of the employee's salary - maximized to a percentage of 12 G (NOK 1,162,596). The National Insurance scheme basic amount for 2018 is NOK 96,883. The retirement age for all employees, including the management, is 67 years.
| (Figures in NOK 1000) | 2018 | 2017 |
|---|---|---|
| Contributions expensed during the year | 162 | 161 |
Please refer to note 24 in the consolidated financial statements for further information about remuneration and option program for the management and board of directors.
The following table shows remuneration related to professional services rendered by the Company's principal auditor, EY, for fiscal year 2018 and 2017. The amounts shown are exclusive of value added tax.
| (Figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Audit fee | 272 | 245 |
| Assurance services | 1 333 | 716 |
| Other assistance | 1 594 | 606 |
| Total | 3 198 | 1 567 |
Please see note 25 in the consolidated financial statements.
There do not exist any material provisions or contingent liabilities/assets for Hunter Group ASA. Please see note 22 in the consolidated financial statements regarding the commitments for the 7 VLCC ships signed.
| (Figures in NOK 1000) | Voting | Book value | Equity at | Net | |||
|---|---|---|---|---|---|---|---|
| Company | Location | Share | rights | Cost | 31.12.2018 | 31.12.2018 | income 2018 |
| Indicator AS | Stavanger | 100 % | 100 % | 777 | 0 | -416 | -132 |
| Hunter Tankers AS | Oslo | 100 % | 100 % | 337 709 | 337 709 | 334 333 | -3 316 |
| Receivables (figures in NOK 1 000) | 2018 | 2017 |
|---|---|---|
| Long-term receivable subsidiaries | 160 466 | 0 |
| Short-term receivable subsidiaries (group contribution in 2017) | 251 | 18 780 |
| Payables (figures in NOK 1 000) | 2018 | 2017 |
| Other current liabilities subsidiaries | 0 | 16 |
DSME has in January 2019 agreed to further extend the option agreement for three additional vessels until February 28th, 2019. The price is USD 93.6 million per vessel and the delivery time is unchanged (within 1st half of 2021).
First installment was made on vessel H.no. 5470 upon receipt of the refund guarantee from the yard. Second installment made on vessels H.no. 5455 and 5456 in accordance with the building contracts. The Company has received refund guarantees for all 8 VLCCs. The refund guarantee is a letter of credit issued by Korea Development Bank that states that the Group will receive a full refund of all installments made if the shipbuilding yard should go bankrupt.
Hunter Group ASA Org. no. 985 955 107
Address: Dronningen 1, 0287 OSLO E-mail: Erik A. S. Frydendal, CEO/CFO, [email protected]
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