Annual Report (ESEF) • Apr 3, 2023
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Download Source FileTotal revenue for 2022 was MNOK 77.2 compared to MNOK 45.5 in 2021. Pre-tax profit for 2022 was MNOK 76.6 compared to MNOK 300.7 for 2021. PPG acquired four development properties, two preschools, and one office property over the period and sold all of the shares in Odin Bidco AS to existing shareholders in Odin Bidco. The building of two retail properties were completed, increasing the retail property count to six. PPG paid four quarterly dividends to the holders of preference shares in total NOK 9.75 per preference share and additional dividends of 5.939 per share held by Eidissen Consult AS and Grafo AS, and 5.164 per share held by Klevenstern AS and Mecca AS.
Pioneer Property Group ASA (PPG) is an investment company, mainly within real estate. PPG is a public limited company, the Company's registered office is Rådhusgata 23, 0158 Oslo, Norway. PPG has since the beginning of 2020 expanded its real estate activities into new areas and the current portfolio is contain different segments than only preschool, therefore, PPG now reports based on the characteristics of the properties and hence report on the following segments:
PPG acquired its first office property in March 2022, Office Properties is a new segment for the 2022-reporting period. The focus area for PPG will be to continue to invest in real estate within these segments and seek to enter into long-term triple- net leases with leading operators. PPG's real estate portfolio per year-end 2022 consisted of three properties in the Preschools segment, six properties in Retail properties segment, six properties in the Hotel properties segment, one office property in addition to four properties in the Property development segment.
COVID-19 represented an extraordinary situation in the beginning of 2022, and all restrictions are now lifted. The pandemic has impacted PPG directly in the two first months of 2022, as lease income from hotel properties were lower as lease payments are made based on a percentage of the hotels turnover. Hotel revenue and lease income recovered from march and by year end 2022, lease income normalized. Lease agreements on other segments are triple-net and not linked to operational utilisation of any kind.
During 2022, PPG has declared quarterly dividends to the holders of preference shares in total NOK 9.75 per preference share. As per the articles of association §5, the annual preferred dividend to the holders of preference share increased by NOK 1 per preference share from 01. July 2022 to 2.500 per quarter. Furthermore PPG paid additional dividends of NOK 5.939 per share held by Eidissen Consult AS and Grafo AS, and NOK 5.164 per share held by Klevenstern AS and Mecca AS.
In 2022, PPG has increased the real estate portfolio and its investment activity, especially within the development property segment. The largest single transaction was carried out in May 2022, when PPG sold its 8.2 % stake in Odin Bidco AS, which owns a real estate portfolio of ~256 preschools at mainly long-term triple-net contracts primarily in the Nordics. Pioneer Property Group ASA entered into an agreement regarding the sale of all the shares owned by PPG in Odin Bidco AS to the existing shareholders in Odin Bidco AS. Closing of the transaction took place on June 6th. The agreed purchase price for the Shares was MNOK 372.1 generating a profit of MNOK 25.7.
The second largest transaction was the purchase of properties and shares from Hospitality Invest AS' direct and indirect subsidiaries.
* Gaustadskogen Eiendom AS (77%),
* Tjuvholmen Eiendom AS (100%)
* Norab Eiendom Vest AS (100%),
All companies are single purpose companies with tenants owned by Norlandia Health & Care Group AS. In addition, the transaction also included 23.6% of the shares in Norlandia Holding AS which owns certain hotels operated by Norlandia Hotel Group AS.
The board of directors’ report for Pioneer Property Group ASA (PPG)
| 2022 | 2021 | |
|---|---|---|
| Total Income | 1 912 | 371 |
| Fair value adjustment on investment properties | 797 | 0 |
| Operating profit/loss (EBIT) | 2 308 | 268 |
| Investment properties | 116 000 | 11 500 |
| Cash and cash equivalents | 7 414 | 251 |
| 2022 | 2021 | |
|---|---|---|
| Total Income | 29 414 | 17 725 |
| Fair value adjustment on investment properties | -30 064 | 117 437 |
| Operating profit/loss (EBIT) | -7 405 | 130 209 |
| Investment properties | 461 000 | 428 070 |
| Cash and cash equivalents | 19 037 | 21 892 |
| 2022 | 2021 | |
|---|---|---|
| Total Income | 42 582 | 26 960 |
| Fair value adjustment on investment properties | -11 701 | 105 068 |
| Operating profit/loss (EBIT) | 13 546 | 129 863 |
| Investment properties | 924 029 | 915 971 |
| Cash and cash equivalents | 48 580 | 45 414 |
| 2022 | 2021 | |
|---|---|---|
| Total Income | 1 616 | 0 |
| Fair value adjustment on investment properties | 26 468 | 0 |
| Operating profit/loss (EBIT) | 26 908 | 0 |
| Investment properties | 70 000 | 0 |
| Cash and cash equivalents | 142 | 0 |
| 2022 | 2021 | |
|---|---|---|
| Total Income | ||
| Fair value adjustment on investment properties | 31 230 | -2 043 |
| Operating profit/loss (EBIT) | 30 028 | -4 494 |
| Investment properties | 227 681 | 37 500 |
| Cash and cash equivalents | 65 366 | 1 994 |
The total consideration payable by PPG was approximately MNOK 153. In terms of other financial investments, PPG increased its bond holdings in Hospitality Invest bonds (HOIN02, Hospitality Invest AS 17/22) in first half of 2022. These bonds were later sold as payment in kind for the transaction mentioned above. PPG holds per 31.12.22 bonds in Hospitality Invest AS (HOIN02 22/25) with a par value of MNOK 62, and high yield funds with a market value of MNOK 56. In total, PPG has acquired investment property with a total property value of MNOK 331.
The Preschool segment consists of three preschool properties owned by PPG as of 31.12.2022. Total lease income for the Preschool segment amounted to MNOK 1.9 in 2022 and MNOK 0.4 2021, with a fair property value based on third party valuation of the properties owned by PPG per 31.12.22 of MNOK 116.
Pioneer Retail Properties AS was established to procure and build facilities for retail business, mainly for the Ferda group all over Norway. The Retail Properties segment consists of 6 retail properties owned by PPG. The building of premises for Ferda in Rana and Balsfjord, recognised as Project in Progress for the 2021 Financial Statement, was completed in February 2022 and October 2022 respectively, with a fair value upon completion of MNOK 63.# PIONEER PROPERTY GROUP ASA
Total revenues were MNOK 76.2 in 2022 compared to MNOK 45.1 in 2021. Revenues consisted mostly of rental revenues from investment properties in Norway. Operating profit (EBIT) for 2022 amounted to MNOK 69.8, compared to MNOK 251.5 in 2021. The difference can primarily be explained by a larger positive fair value revision of MNOK 220.5 in 2021, when the transaction market was really strong, versus MNOK 16.7 in 2022 as interest rates increased, affecting the yields on the properties. In 2022, a loss off MNOK 1.6 from associated companies was recognised. In 2021, a loss off MNOK 4.1 from associated companies was recognised from Ramstadsletta and Kongsparken. Net financial income for the year was MNOK 6.8 compared to MNOK 49.2 in 2021, with the majority of the gain recognized from the sale of Odin Bidco. The sale generated at net gain of MNOK 25.7. Income taxes decreased from MNOK 72.4 to 11.8. There have not been any discontinued operations in 2022 or 2021. This year’s net profit for the group was MNOK 64.8, compared to MNOK 228.3 in 2021.
The Group had total assets of MNOK 2,459.6 (2,186.6 in 2021). where MNOK 1,905.8 (1,407.9 in 2021) were related to investment property and shares in associated companies. The additions in investment property and associated company has increased non-current borrowings in PPG. Further PPG had a cash balance of MNOK 226.2 (119.4 in 2021) and MNOK 118.9 (154.2 in 2021) in other short-term investments related to bonds and high yield funds held by PPG. Total equity amounted to MNOK 1,360.6 (1,377.4) with the majority of the difference being explained by the profit for 2022, and the dividends on the ordinary and preference shares paid during the year.
The annual report gives an accurate overview of the Group’s financial development throughout the year. There have been no events after the end of the fiscal year 2022 which have had any material impact on the financial status of the Group.
Total lease income for 2022 for the retail properties segment amounted to MNOK 29.2 with a fair property value based on third party valuations per 31.12.22 of MNOK 461.
Pioneer Hotel Properties AS was established to acquire hotel properties through the downturn following the Covid-19 pandemic across the Nordics and Europe. The Hotel Properties segment consists of six hotel properties owned by PPG. Total lease income for 2021 for the Hotel Properties segment amounted to MNOK 51 (two hotels under refurbishment) with a fair property value based on third party valuations per 31.12.22 of MNOK 924.
The first office property was acquired in march 2022, a seven stories tall building in Bodø,. PPG acquired Terminalveien 10 in Bodø based on a property value of MNOK 45 together with local investors. PPG has an ownership of 52 % in the property, controlling the acquired subsidiary that owns the property. The transaction was completed March 8, 2022. The property consideration has been paid in cash and the Group has incurred in a loan of MNOK 33. The expected annual lease income of 2023 is approx. MNOK 4.
Through Pioneer Property Development AS, PPG develop properties within general commercial real estate and housing. The segment consists of 6 development projects and the lease income income for the segment is related to parking and tenants in residentals that can be developed long term. The main asset is Evenes Holding AS, which holds two properties in Evenes in close proximity to Evenes Airport. In addition, PPG currently holds two plots together with local partners, treated as associate company in the accounts. One is located at Ramstadsletta in Bærum, the other is located in Mo i Rana with a potential of 400 residential units.
PPG acquired the development rights related to the property in Evenes Airport in January 2023, through Evenes Holding, a company owned together with local partners. The purchase price of MNOK 45 was settled partially with cash and partially with sellers credit.
The group is not involved in any R&D activities.
There was at year end 4 employees in Pioneer Property Group ASA. There are no employees in any other Group-companies. The Board of Directors consists of two women and three men.
The board of directors has prepared a declaration on salary and other remuneration for the Company's executive management pursuant to Section 6-16a of the Norwegian Public Limited Liability Companies Act. The declaration includes the policies which the Company will use for the determination of salary and other remuneration to its executive management in the calendar year 2022. The declaration is made available at the Group's webpage www.pioneerproperty.no
The Group’s operation consists of investing in and providing high-quality properties and is considered to have limited environmental impact. The company focuses on making investment and operational decisions that are in line with sustainable environmental practices.
Climate related risks are becoming more relevant and will be monitored closely for our properties. In general, many areas could be affected: from impairment testing, to provisions to fair value measurement. Storms and floods are long-term risks, with potential to physically damage to property values could be severe. Damage to third party equipment and installations may lead to increased insurance cost and/or reduced customer satisfaction.
Pioneer Property Group AS has prepared a report on Corporate Governance in accordance with the Norwegian Accounting Act Section 3-3b and the Norwegian Code of Practice for Corporate Governance dated 17 October 2018, and a report on Corporate Social Responsibility in accordance with the Norwegian Accounting Act Section 3-3c, both of which are made available at the Group's webpage www.pioneerproperty.no.
The Transparency Act has been incorporated in PPG and the company is reporting on the Transparency Act for 2022 and the report will published on the companys webpage www.pioneerproperty.no.
The Company is exposed towards various financial risks, yet the Board of Directors view the total exposure to be at a manageable level. Some of the most important risk factors are:
When managing the capital, PPG will take into account the need for sufficient liquidity reserves to meet PPG's financial obligations. The Board of Directors and management performs continuous assessments of the most important financial risk factors and evaluates the necessity of implementing specific measures. Specific measures are evaluated considering the Company’s total financing risk exposure.
The Articles of Association provide that the Board of Directors shall consist of 3 to 7 board members elected by the general meeting.
| Name | Position | Served since | Term expires |
|---|---|---|---|
| Roger Adolfsen | Chairperson | 2015 | 2023 |
| Sandra Henriette Riise | Board member | 2015 | 2023 |
| Geir Hjorth | Board member | 2015 | 2023 |
| Even Carlsen | Board member | 2015 | 2023 |
| Nina Torp Høisæther | Board member | 2015 | 2023 |
The directors Sandra Henriette Riise and Even Carlsen are independent of the majority shareholder of the Company, Hospitality Invest AS, and all board members are independent of the Management. All board members attended all board meetings. The composition of the Board of Directors is in compliance with the independence requirements of the Corporate Governance Code. Effective from June 1 st 2022, directors and officers are covered by a liability insurance covering personal liabilities caused by performing their duties for the group.
Roger Adolfsen has broad experience from serving on various boards. Currently, he holds various board positions has more than 30 years of experience from business and real estate development. Adolfsen is a business graduate from BI Norwegian Business School. He also holds a Master in Business and Administration (MBA) from the University of Wisconsin.
Sandra H. Riise serves as chair on the Norwegian Better Regulation Council. Ms. Riise is educated as public accountant and is former Chief Executive Officer of Accounting Norway, the Norwegian Association of Authorized Accountants, and has held the position of Chief Municipal Executive (Nw. Kommunedirektør) of Andøya municipality. Ms. Riise is educated from BI Norwegian School of Management
Geir Hjorth currently serves on the board of directors of 20 different companies (including several chairperson positions). He has extensive experience from the hotel industry and has participated in several courses pertaining to marketing and human resource management.
Even Carlsen has served on the board of directors of Private Barnehagers Landsforbund (En. the Private Kindergartens National Association), which he also participated in the start-up of. He has held various board positions in private companies. Mr.# ANNUAL REPORT 2022
Oslo, 30 March 2023
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even Carlsen
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
We confirm to the best of our knowledge, that the set of Financial statements for the financial year ending 31. December 2022 have been prepared in accordance with IFRS and gives a fair view of the Group’s assets, liabilities, financial position and profit or loss. We also confirm to the best of our knowledge, that the management report includes a fair review of important events that have occurred during the financial period and their impact on the set of financial statements, a description of the principal risks and uncertainties, and major related parties’ transactions
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even Carlsen
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
Consolidated Statement of Comprehensive Income
| NOK thousand | Note | 2022 | 2021 |
|---|---|---|---|
| Contractual rental income | 13 | 76,176 | 45,056 |
| Other operating income | 1,089 | 461 | |
| Total income | 77,264 | 45,517 | |
| Operating expenses | |||
| Employee expenses | 14 | 4,301 | 2,856 |
| Property expenses | 6,202 | 3,529 | |
| Other operating expenses | 15 | 13,247 | 8,058 |
| Total operating expenses | 23,750 | 14,443 | |
| Fair value adjustments on investment properties | 6 | 16,267 | 220,462 |
| Operating profit (EBIT) | 69,781 | 251,535 | |
| Gain/Loss from associated companies | 8 | -1,647 | -4,106 |
| Interest income | 9 | 17,027 | 15,234 |
| Interest expense | 11 | 42,396 | 20,730 |
| Other financial gains/losses (-) | 16 | 33,805 | 58,776 |
| Net Finance income (+) /expenses (-) | 6,789 | 49,174 | |
| Profit before tax | 76,571 | 300,710 | |
| Income taxes | 17 | 11,795 | 72,409 |
| Profit | 64,775 | 228,301 | |
| Profit/(loss) attributable to Shareholders of the parent | 38,778 | 210,847 | |
| Non-controlling interest | 25,997 | 17,454 | |
| Profit/(loss) for the period | 64,775 | 228,301 | |
| Profit/(loss) comprehensive income | 64,775 | 228,301 | |
| Other comprehensive income | |||
| Items to be reclassified to P&L in subsequent periods: | |||
| Exchange differences, from translation of foreign operations | -4,186 | -257 | |
| Other comprehensive income | -4,186 | -257 | |
| Total comprehensive income | 60,589 | 228,044 | |
| Comprehensive income attributable to Shareholders of the parent | 34,592 | 228,044 | |
| Non-controlling interests | 25,997 | - | |
| Comprehensive income | 60,589 | 228,044 |
| Basic earnings per ordinary share | 18 | 2.74 | 19.70 |
|---|---|---|---|
| Diltuted earnings per ordinary share | 18 | 2.74 | 19.70 |
|---|---|---|---|
| Weighted average ordinary shares | 18 | 9,814,470 | 9,814,470 |
Consolidated Statement of Financial Position
| NOK thousands | Note | 2022 | 2021 |
|---|---|---|---|
| ASSETS | |||
| Investment properties | 6 | 1,798,709 | 1,393,041 |
| Project in progress, investment property | 7 | 739 | 45,383 |
| Other interest in property | 21,654 | - | |
| Other investment | 9 | 48,953 | 365,441 |
| Associated company | 8 | 107,100 | 14,868 |
| Loan to associated company | 9, 20 | 56,948 | 51,455 |
| Loan to other companies | 9 | 12,296 | 32,646 |
| TOTAL NON-CURRENT ASSETS | 2,046,399 | 1,902,835 | |
| Trade and other receivables | 9 | 29,024 | 10,171 |
| Other short-term investments | 9 | 118,954 | 154,225 |
| Cash and cash equivalents | 10 | 265,226 | 119,383 |
| TOTAL CURRENT ASSETS | 413,204 | 283,779 | |
| TOTAL ASSETS | 2,459,603 | 2,186,614 |
Consolidated Statement of Financial Position
| EQUITY AND LIABILITIES | Note | 2022 | 2021 |
|---|---|---|---|
| EQUITY | |||
| Share capital | 21 | 14,683 | 14,683 |
| Treasury shares | 21 | -988 | -988 |
| Share premium | 21 | 555,637 | 555,637 |
| Other reserve and retained earnings | 739,604 | 779,630 | |
| Non controlling interest | 51,703 | 28,407 | |
| TOTAL EQUITY | 1,360,639 | 1,377,369 | |
| LIABILITIES | |||
| Non-current borrowings | 11 | 834,870 | 520,483 |
| Other non-current liabilities | 1,777 | - | |
| Deferred tax | 17 | 58,338 | 54,218 |
| TOTAL NON-CURRENT LIABILITIES | 894,984 | 574,701 | |
| Current borrowings | 11 | 137,087 | 176,854 |
| Current tax payable | 17 | 6,813 | 22,724 |
| Other current liabilities | 12 | 60,082 | 34,967 |
| TOTAL CURRENT LIABILITIES | 203,980 | 234,544 | |
| TOTAL LIABILITIES | 1,098,964 | 809,245 | |
| TOTAL EQUITY AND LIABILITIES | 2,459,603 | 2,186,614 |
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even Carlsen
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
Statement of Changes in Equity
| NOK thousands | Notes | Share capital | Treasury shares | Share premium | Curr. Trans. Diff.* | Retained earnings | Total | Non- contr. Interest | Total Equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2021 | 14,683 | -988 | 555,637 | - | 650,963 | 1,220,295 | 11,696 | 1,231,992 | |
| Profit/(loss) for the period | - | - | - | - | 210,847 | 210,847 | 17,454 | 228,301 | |
| Exchange diff. from foreign operations | - | - | - | -257 | - | -257 | - | -257 | |
| Total comprehensive Income for the period | - | - | - | -257 | 210,847 | 210,590 | 17,454 | 228,044 | |
| Transactions with non- controlling interests | 21 | - | - | - | - | -2,196 | -2,196 | -744 | -2,940 |
| Dividends on preference shares and ordinary shares | 21 | - | - | - | - | -79,727 | -79,727 | - | -79,727 |
| Balance at 31 December 2021 | 14,683 | -988 | 555,637 | -257 | 779,886 | 1,348,962 | 28,407 | 1,377,369 | |
| Profit/(loss) for the period | - | - | - | - | 38,778 | 38,778 | 25,997 | 64,775 | |
| Exchange diff. from foreign operations | - | - | - | -4,186 | - | -4,186 | - | -4,186 | |
| Total comprehensive Income for the period | - | - | - | -4,186 | 38,778 | 34,592 | 25,997 | 60,589 | |
| Capital reduction | - | - | - | - | 150 | 150 | - | 150 | |
| Transaction with non- controlling interests | 20 | - | - | - | - | 3,360 | 3,360 | -2,701 | 659 |
| Dividends on ordinary shares and preference shares | 21 | - | - | - | - | -78,128 | -78,128 | - | -78,128 |
| Balance at 31 December 2022 | 14,683 | -988 | 555,637 | -4,443 | 744,046 | 1,308,936 | 51,703 | 1,360,639 |
*) Other reserves
Statement of Cash Flow
| NOK thousands | Note | 2022 | 2021 |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Profit before income tax | 76,571 | 300,710 | |
| Adjustments for: | |||
| Fair value adjustments on investment property | 6 | -16,267 | -220,462 |
| Fair value adjustments on financial instruments | 9 | -10,718 | 30,226 |
| Other adjustments | 4,000 | - | |
| Profit from associated companies | 8 | 1,647 | 4,106 |
| Interest net | 25,694 | 5,496 | |
| Taxes paid | -22,229 | -6,655 | |
| Exchange gains/(losses) | 1,066 | 7,598 | |
| Gain on sale bonds/shares | -28,477 | -93,489 | |
| Changes in working capital | |||
| Trade receivables | -3,529 | 21,555 | |
| Trade payables | 12 | 20,151 | -16,770 |
| Other accruals | 7,762 | -1,598 | |
| CASH GENERATED FROM OPERATIONS | 55,670 | 30,718 | |
| Interest received | 6,799 | 12,944 | |
| Interest paid | -27,707 | -12,917 | |
| NET CASH FLOW FROM OPERATING ACTIVITIES | 34,763 | 30,745 | |
| INVESTING ACTIVITIES | |||
| Proceeds from sale of shares | 9 | 372,069 | - |
| Proceeds from sale of bonds and funds | 9 | 263,817 | 358,961 |
| Proceeds from loan to other companies | 11 | 21,291 | - |
| Loans to other companies | 11 | -12,000 | - |
| Purchase of subsidiaries / properties | 19 | -284,976 | -741,546 |
| Purchase of shares | 9 | -30,741 | - |
| Purcase of shares in assosiated companies | 8 | -93,879 | - |
| Purchase of bond | 9 | -222,990 | - |
| Purchase of funds | 9 | - | -3,120 |
| Net purchase of receivables/debt | -43,535 | -15,596 | |
| Loans to associated companies | 9, 20 | -2,400 | -57,700 |
| Received dividend/repaid paid-in capital other shares | 9 | 11,532 | 8,460 |
| NET CASH USED IN INVESTING ACTIVITIES | -21,812 | -450,541 | |
| FINANCING ACTIVITIES | |||
| Proceeds from debt to financial institutions | 11 | 349,546 | 295,458 |
| Repayments of debt to financial institutions | 11 | -194,873 | -178,128 |
| Repayments other debt | 11 | - | -1,151 |
| Loans from other companies | 11 | 51,080 | 115,500 |
| Dividends on ordinary shares | 20 | -35,251 | -44,802 |
| Dividends on preference shares | 20 | -37,351 | -33,955 |
| NET CASH (USED IN) / FROM FINANCING ACTIVITES | 133,151 | 152,922 | |
| Net increase in cash and cash equivalents | 146,101 | -266,875 | |
| Cash and cash equivalents at beginning of year | 119,383 | 386,260 | |
| Exchange (losses)/gains on cash and cash equivalents | -259 | -1 | |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | 265,226 | 119,383 |
Pioneer Property Group ASA (the 'Company') and its subsidiaries (together, the 'Group') invests mainly in a broad range of properties including retail properties; hotel properties; preschool properties, office properties and property development within commercial and residential real estate (currently under development). The Group leases out the investment properties on long-term leases. The current real estate portfolio is situated in Norway and Sweden. Pioneer Property Group ASA is a public limited company incorporated and domiciled in Norway. The address of the Company's registered office is Rådhusgata 23, 0158 Oslo. The consolidated annual financial statements cover the period from 1 January 2022 to 31 December 2022, with 2021 shown as comparative period. These consolidated financial statements are approved by the Board of Directors 30. March 2023.
In 2022, PPG has increased the real estate portfolio and its investment activity, especially within the development property segment.# 3. General Accounting Principles
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The consolidated financial statements have been prepared under the historical cost convention, except for fair value adjustments of bonds, funds, shares and investment properties.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are related to valuation of investment properties as described in note 6 and the valuation of financial instruments measured at fair value as described in note 9.
The statement of cash flow has been prepared using the indirect method. All financial numbers are presented in NOK thousand, unless otherwise stated.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet, respectively. Transactions with non-controlling interests in subsidiaries are treated as equity transactions. If shares are acquired from a non- controlling interest, the difference between the payment and the proportion of the carrying amount of the subsidiary’s net assets attributable to the shares is recognized in the equity of the parent company’s owners. Gains and losses arising from the sale of shares to non-controlling interests are recognized in equity.
The Group’s presentation currency is NOK, which is also the parent company’s functional currency. Transactions in foreign currencies are initially recognised in the functional currency at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency using the exchange rate at the reporting date. All exchange differences are recognised in the consolidated income statement.
The Group has foreign entities with functional currency other than NOK. At the reporting date, the assets and liabilities of foreign entities with functional currencies other than NOK are translated into NOK at the rate of exchange at the reporting date and their income statements are translated at the average exchange rates for the year. The translation differences arising from the translation are recognized in other comprehensive income and accumulated at currency translation as part of other reserves. On disposal reserves related to actual disposal are transferred to the consolidated statement of comprehensive income as part of profit or loss on disposal.
Pioneer Property Group ASA has two classes of shares, ordinary shares and preference shares. The preference shares were entitled to annual dividend payments amounting to NOK 9.50 per preference share until the end of June2022. This was stepped up to NOK 10.00 per preference share from 01 July 2022, in accordance with the company’s Articles of Association. The board of directors approves payment of dividends based on an authorisation from the Annual General Meeting. The dividend payments have been made quarterly with NOK 2.375 per preference share in first half of 2022, and NOK 2.500 over the second half of 2022. The Preference shares are currently redeemable at a price of NOK 100 per share, which was valid from 1 July 2020, when it was stepped down from NOK 130 per preference share. The coupon for the preference share has reached its maximum coupon, which is set to NOK 10 per share. Dividend distribution to Ordinary shares and Preference Shares is recognised as a liability in the Group's financial statement in the period in which the dividend is approved by the Board of Directors based on the authorisation given by the Company's shareholders in the General Assembly.
Leases are recognized as a right -of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group (the commencement date). Each lease payment is allocated between the liability and finance cost. The right- of-use asset is depreciated over the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the lessee’s incremental borrowing rate.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in the statement of the comprehensive income. Short-term leases are leases with a lease term of 12 months or less. The Group has only short-term leases.
The Group enters into lease agreements where it acts as a lessor. This constitutes the Group’s main source of income. See note 13 for the description of the Group’s accounting policies on Rental Income.
Management has used estimates and assumptions that have affected assets, liabilities, revenues, expenses and information on potential liabilities. Future events may lead to these estimates being changed. Estimates and their underlying assumptions are reviewed on a regular basis and are based on best estimates and historical experience. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Management has, when preparing the financial statements; made certain significant assessments based on critical judgment when it comes to application of the accounting principles. Material exercise of judgment and estimates relate to the following matters:
The Group’s activities expose it to a variety of financial risks: market risk (including fair value interest rate risk and cash flow interest rate risk), credit risk, currency risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. Risk management is carried out by management under guidance by the Board of Directors. Management identifies, evaluates and act upon financial risks.
Market risk for the Group is the risk that future cash flows in the form of interest payments change as a result of changes in market interest rates in addition to fluctuations in currencies. The level of interest rate exposure and currency risk exposure are determined based on an assessment by management and the Board of Directors of existing cash flows, general assessment of financial condition and available liquidity.(i) Fair value interest rate risk The Group holds interest bearing assets in terms for cash deposits and bonds. Fluctuations in interest rates would yield a higher or lower interest income. At the current level of cash deposits, a change in interest rate of +/- 1 % will not be material for the financial statements. Further, a change in interest levels may cause changes in the fair value of the real estate portfolio in addition to the performance of the bonds and bond funds held on PPG's balance sheet.
(ii) Cash flow interest rate risk Exposure to cash flow interest rate risk is assessed when necessary. As of 31.12.2022, the Group is exposed to variable interest rates for its borrowings linked to the different investment properties. The Group also holds borrowings with fixed interest rates. See note 11 for further details. The need for a fixed rate is periodically assessed, depending on the effects of adverse fluctuations in interest payment cash flows due to higher interest rates. Management's assessment is that the Group's current financial position does not indicate a further need for fixed interest rates. The following table summarises how the profit or loss, before tax, and equity in the 2022 reporting period would have been affected by changes in the interest rate that Management considers are reasonably possible:
Interest rate sensitivity (in TNOK)
| | -0,50 % | -0,25 % | 0,25 % | 0,50 % |
|----------|----------|----------|---------|---------|
| ANNUAL REPORT 2022 18 | | | | |
| Change P&L/Equity | -4173.2 | -2086.6 | 2086.6 | 4173.2 |
(iii) Currency risk Currency risk is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base currency of the company. Currency risk also exists when the foreign subsidiary of a firm maintains financial statements in a currency other than the reporting currency of the consolidated entity. The risk is that there may be an adverse movement in the exchange rate of the denomination currency in relation to the base currency before the date when the transaction is completed. Monetary assets and liabilities are sensitive to movements in foreign exchange rates. As most the operations of the Group are located in Norway, and all financing activities are denominated in NOK (see note 11), Management considers that the exposure to foreign exchange risk is low, as all loans are nominated in NOK and the cash funds in Swedish Krona at year end was MSEK 6.8 For its operating activities in Sweden, the Group manages its foreign currency risk by maintaining a policy to hold the foreign currency received to meet its future obligations in foreign currency, such as refurbishment needs.
b) Credit risk Credit risk is the loss that the Group would suffer if a counterparty fails to perform its financial obligations. Credit risk is managed on Group basis. Credit risk arises from cash and cash equivalents; loans granted and trade receivables, including committed transactions. The Group assess the expected credit losses in relation to its financial assets taking into account its past experience and also taking into account forwards looking information Management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. The Group places credit limits on its customers. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by the contractual counterparties. The impairment analysis on trade receivables is performed at each reporting period based on a provision matrix, grouping its receivables in the number of days past due. As of the end of the 2022 and 2021 reporting periods, there has not been recorded any loss and there are no significant amount of trade receivables past due at the date of the approval of the financial statements.
| Total | Not due | between 1 and 60 days overdue | more than 60 days overdue | |
|---|---|---|---|---|
| Trade Receivables | 8 066 | 1 976 | 6 090 | - |
| Other Receivables | 20 958 | 20 958 | - | - |
| As per 31.12.2022 | 29 024 | 22 934 | 6 090 | - |
| Trade Receivables | 4 537 | 4 537 | - | 625 |
| Other Receivables | 5 634 | 5 634 | - | - |
| As per 31.12.2021 | 10 171 | 10 171 | - | 625 |
The credit quality of the issuer is also taken into consideration when acquiring bonds. With respect to the loans to associates and other parties, the Groups applies general approach to assess the impairment of financial assets measured at amortised cost. Loans to associates are closely monitored by Management, and concludes that the credit risk, including the probability of default within the next 12 months is very low. There has not been a significant increase in the credit risk since the initial recognition.
c) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its obligations at maturity without incurring a significant increase in finance cost or not being able to meet its obligations at all. The risk also includes that the Group must forfeit investment opportunities. Cash flow forecasting is performed at Group level.
19 PIONEER PROPERTY GROUP ASA Group management monitors the Group's liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom to pay out quarterly dividends to holders of preference shares. The monitoring takes into account the possibility to raise external debt, as the Group keeps unleveraged assets and properties. The Group also keeps its liquid funds in cash and cash equivalents, and in high yield funds with high liquidity. The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:
Maturity of financial liabilities at the end of the 2022 reporting period:
| | 31.12.2022 NOK thousand | <1y | 1y-2y | 2y-5y | >5y | Total |
|-----------------------------------|-------------------------|---------|---------|---------|---------|---------|
| Borrowings | | 137 087 | 244 667 | 375 310 | 207 650 | 964 713 |
| Interest on borrowings | | 50 110 | 41 027 | 84 259 | 106 550 | 281 947 |
| Other current liabilities | | 51 412 | | | | 51 412 |
| Interest on other current liabilities | | | | | | |
| Total | | 238 608 | 285 694 | 459 569 | 314 200 | 1 298 072|
During 2022, the Group became the counterparty to a number of loan agreements, mostly in connections with its acquisitions of investment properties. See Note 11 for further details. As of the end of the 2022 reporting period, Management considers highly likely that the Group will enter into refinancing agreement for one of the loans maturing in less than 12 months, with an amortised cost value of MNOK 84. The new agreement is expected to be paid in periodic payments over a term of 5 years. However, since at the end of the 2022 reporting period the Group has not completed the agreement (i.e. no unconditional right to defer settlement for at least 12 months after the reporting period), the loan is presented as current liabilities.
Maturity of financial liabilities at the end of the 2021 reporting period:
| | 31.12.2021 NOK thousand | <1y | 1y-2y | 2y-5y | >5y | Total |
|-----------------------------------|-------------------------|---------|---------|---------|---------|---------|
| Borrowings | | 176 854 | 107 409 | 362 741 | 49 577 | 696 582 |
| Interest on borrowings | | 23 573 | 18 150 | 25 260 | 16 099 | 83 082 |
| Other current liabilities | | 26 525 | - | - | - | 26 525 |
| Total | | 216 052 | 125 559 | 388 001 | 65 677 | 806 189 |
Capital management The group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern; to maintain an optimal capital structure to reduce the cost of capital; and to comply with all covenants agreed with the lenders to the Group. Compliance with covenants is further described in note 11. When managing the capital, PPG will take into account the need for sufficient liquidity reserves to meet PPG's financial obligations. Management determines that the current liquidity in the Group and the current liquidity forecasts as of 31.12.22 grants the Group with enough resources to meets its obligations and continue with its current investment plan. Management continues to monitor the optimal capital structure going forward, depending on operational needs. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to repay debt.
Description During 2022, the Group has made different investments across a broad range of properties, mainly in Norway and in Sweden to a more limited extent. As of the end of the reporting period, the Group’s real estate portfolio was comprised of retail properties; hotel properties; preschool properties; office properties and development properties with both commercial and residential use. The Office properties segment is a new one for 2022, as a consequence of the acquisition of an office property in Bodø (see Note 6 for further information). Management has therefore identified five different segments, all of them held to with a view to enter into lease agreements where the Group acts as a lessor.
Preschools The Preschool segment consists of three preschool property owned by PPG, located in Bergen and Oslo. Two preschools were acquired in September 2022 from Hi Capital AS and Hospitality Invest AS. Total lease income for the Preschool segment amounted to MNOK 1.9 in 2022 and MNOK 0.4 in 2021, with a fair property value based on third party valuation of the property owned by PPG per 31.12.21 of MNOK 116.# Retail Properties
The retail property segment constitutes of properties owned by the subsidiary Pioneer Retail Properties AS, which was established to procure and build facilities for retail properties, mainly for the Ferda group all over Norway. The segment consists currently of 6 retail properties owned by PPG. Total lease income for 2022 for the retail properties segment amounted to MNOK 29.4 with a fair property value based on third party valuations per 31.12.22 of MNOK 461. Over the period PPG's subsidiary Pioneer Retail Properties has completed two building projects with new premises for Ferda in Balsfjord and in Mo i Rana. The premises consist of 1200 m2 building let out to Ferda on a 15-year barehouse lease agreement. Annual lease for 2023 is expected to be MNOK 4.7 MNOK combined for the two new properties.
Pioneer Property Development AS develop general commercial real estate and housing. The segment consists of 3 development projects at the end of 2022. During 2022, the construction of two new retail properties in Balsfjord and Mo i Rana was completed, previously recognized as Project in progress, investment properties. At year end of 2022, the two properties is recognized as investment properties in the retail property segment. Please refer to note 6 for further details. In autumn 2022, the building of Ferda Evenes was initialized, expected to be completed by the spring of 2024. The existing development project in Evenes, Nordland of 400 000 m2 greenfield area in close proximity to Harstad/Narvik airport in Northern Norway was expanded with av additional plot of 51 500 m2 in November 2022, consisting of a 1200 m2 building and a parking lot, with net rental income estimated to 7 MNOK annually. The purchase price for the plot was NOK 74 MNOK.
The hotel properties segment includes hotels in both Norway and Sweden, rented out to Up North Hospitality AS, who has a management agreement with Norlandia Hotel Group, or directly to Norlandia Hotel Group. Norlandia Hotel Group operates the hotels on franchise agreements with leading hotel brands. Norlandia Hotel Group is owned by Hospitality Invest AS.
21 PIONEER PROPERTY GROUP ASA
The properties are owned by subsidiaries of Pioneer Hotel Properties AS, which was established to acquire hotel properties through the downturn following the Covid-19 pandemic across the Nordics and Europe. The Hotel Properties segment consists of six hotel properties owned by PPG. Total lease income for 2022 for the Hotel Properties segment amounted to MNOK 42.6 with a fair property value based on third party valuations per 31.12.22 of MNOK 924. In relation to the creation of the Hotel Properties segment, PPG also established Up North Property AS, which is 90.1% owned by Pioneer Hotel Properties and 9.9% indirectly owned by Svein Arild Mevold, who was the previous CEO of Scandic Norway. Up North Property’s strategy is to acquire hotel properties in the Nordics and Europe, where there is an opportunity to change the hotels market position through reconfigurations and renovations for the hotel to adapt to a changed hotel market. Currently, the hotels in Forum and Gardermoen is undergoing renovations. When completed, the minimum rent and the expected rent will be increased.
The first office property was acquired in March 2022, a seven stories tall building in Bodø. PPG's has acquired Terminalveien 10 in Bodø based on a property value of MNOK 45 together with local investors. PPG has an ownership of 52 % in the property, controlling the acquired subsidiary that owns the property. The transaction was completed March 8 2022. The property consideration was settled with cash and bank debt.
“Other” includes activities and revenue in the parent company PPG that does not fall into the other categories. The information provided to the chief operating decision maker during 2022 includes:
| NOK thousand | Preschool Properties | Retail Properties | Development Properties | Hotel Properties | Office Properties | Other | Group Total | |
|---|---|---|---|---|---|---|---|---|
| Income | 1,912 | 29,414 | 1,740 | 42,582 | 1,616 | 0 | 77,264 | |
| Fair value adjustment on investment properties | 797 | -30,064 | 30,767 | -11,701 | 26,468 | 0 | 16,267 | |
| Operating profit/loss (EBIT) | 2,308 | -7,529 | 30,078 | 19,165 | 26,909 | -1,151 | 69,781 | |
| Investment properties | 116,000 | 461,000 | 227,681 | 924,029 | 70,000 | 1,798 | 1,798,709 | |
| Cash and cash equivalents | 7,414 | 19,037 | 65,366 | 48,580 | 142,124 | 688 | 265,226 |
The comparative period for 2021 is stated below:
| NOK thousand | Preschool Properties | Retail Properties | Development Properties | Hotel Properties | Office Properties | Other | Group Total | |
|---|---|---|---|---|---|---|---|---|
| Income | 371 | 17,725 | 0 | 26,960 | 461 | 45,517 | ||
| Fair value adjustment on investment properties | - | 117,437 | -2,043 | 105,068 | 220,462 | |||
| Operating profit/loss (EBIT) | 268 | 130,209 | -4,494 | 129,863 | -4,311 | 251,535 | ||
| Investment properties | 11,500 | 428,070 | 37,500 | 915,971 | 1,393,041 | |||
| Cash and cash equivalents | 251 | 21,892 | 1,994 | 45,414 | 49,832 | 119,383 |
.. ANNUAL REPORT 2022
22
Property held with the purpose of achieving rental income, increase in value or both are classified as investment property. Investment property also include property under development for future use as investment property. Investment property is initially recognised at cost including transaction costs. Cost includes the amount of cash consideration paid and the fair value of other consideration given. Transaction costs include stamp duty, lawyer's fees and commission to bring the property to the condition that is necessary to put the property into operation. Recognised value also includes replacement cost for parts of the existing investment property at the time when the cost is incurred and the terms for recognition has been met. After initial recognition the investment property is subsequently recognised at fair value. Changes in fair value are presented in the statement of comprehensive income in the reporting period when change occurs. Subsequent costs relating to investment property are included in the carrying amount if it is probable that they will result in future economic benefits for the investment property and the costs can be measured reliably. Expenses relating to operations and maintenance of the investment property are charged to the income statement during the financial period in which they are incurred. Investment properties are derecognised when they are sold or are permanently out of operations and have no expected future economic benefit. All gains or losses relating to sales or disposal are presented in the statement of comprehensive income the same year as disposal. Gains or losses from disposal of investment property is the difference between net selling price and the carrying amount of the asset.
The investment properties are valued in accordance with the fair value method and all have been valued in accordance with valuation Level 3 in the fair value hierarchy (Level 3 - where inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)), see also note 9. The yield level of the property has been determined on the basis of the unique risk and transactions based on the respective locations. At the end of the year, the Group commissioned external cash -flow valuations for the properties that are not under development, from an independent valuer. The independent valuer has in these reports valuated the properties on an individual basis using a combination of discounted cash-flow analysis and property yield level. Individual factors for the properties such as relevant country, the property's location in relation to a major city, net-population change, size of the property, year of build and whether or not the property is on leased land (Norwegian: festetomt) were applied to assess the yield for the respective property/location. As of the end of the 2022 reporting period, the following gross yield for the investment properties is observed for the properties and the valuation of the properties implies the following yields:
| Total Gross yield range 2022 | Weighted average gross yield 2022 | Gross yield range 2021 | Weighted average gross yield 2021 | |
|---|---|---|---|---|
| Preschool Properties | 3.7% - 5.6% | 5.3% | 3.4% - 3.4% | 3.4% |
| Retail Properties | 6.5% - 7.7% | 7.1% | 5.7% - 6.8% | 6.1% |
| Development Properties | n/a | n/a | n/a | n/a |
| Hotel Properties | 5.4% - 8.1% | 6.7% | 5.3% - 9.6% | 6.2% |
| Office Properties | 6.2% - 6.2% | 6.2% | n/a | n/a |
| Total | 3.7% - 8.1% | 6.5% | 3.4% - 9.6% | 6.2% |
The calculated weighted average gross yield is based on annual contractual lease income of 2023 of MNOK 105.7 after refurbishment of Forum and Voss and is based on an expected annual inflation of 6.8% and market rent at the end of lease period.
Description
23 PIONEER PROPERTY GROUP ASA
As of 31.12.22 the Groups investment property portfolio consists of three preschool properties, six retail properties, four hotels in Norway, two hotels in Sweden and land in Oslo, Rana, Evenes and Indre Østfold. The Group owns and manages a total area of approximately 75.500 square meters, not including associated companies and development properties.
| NOK thousand | Preschool Properties | Retail Properties | Development Properties | Hotel Properties | Office Properties | Other | Group | |
|---|---|---|---|---|---|---|---|---|
| Fair value in the beginning of the year | 11,500 | 428,070 | 37,500 | 915,971 | - | 1,393,041 | ||
| Completed project in progress, transferred to Investment Property | 44,882 | 44,882 | ||||||
| Investment in subsidiaries /properties | 103,703 | 18,112 | 159,414 | 24,372 | 43,532 | 349,134 | ||
| Effect of currency exchange differences in foreign operations | -4,614 | -4,614 | ||||||
| Sale of operations | ||||||||
| Fair value adjustments on investment properties | 797 | -30,064 | 30,767 | -11,701 | 26,468 | 16,267 | ||
| Fair value in the end of the year | 116,000 | 461,000 | 227,681 | 924,029 | 70,000 | 1,798,709 | ||
| Net change in unrealized gain | 797 | -30,064 | 30,767 | -11,701 | 26,468 | 16,267 |
The segment of hotel properties represented the biggest share of value of properties in the Group at year end of 2022.The largest acquisitions in 2022 were purchase of additional land close to Evenes, within development properties, and the purchase of two preschools in Oslo. In addition an office property in Bodø was acquired based on a property value of MNOK 45. With respect to the retail properties, the additions made during 2022 is related to the completion of properties located in Mo i Rana and in Balsfjord, recognized as project in progress, investment property in 2021. In summary the total Group’s portfolio as of 31 December 2022 was valued to MNOK 1 798.7 MNOK, an increase from MNOK 1 393 from year-end 2021.
As of 31.12.21 the Groups investment property portfolio consisted of one preschool property, six retail property and one plot near Evenes, all located in Norway.
| Preschool Properties | Retail Properties | Development Properties | Hotel Properties | Group | |
|---|---|---|---|---|---|
| Fair value in the beginning of the year | 11 500 | 45 000 | 37 500 | - | 94 000 |
| Investment in subsidiaries /properties | 265 | 633 | 2 043 810 | 903 | 1 078 579 |
| Effect of currency exchange differences in foreign operations | - | - | - | - | - |
| Fair value adjustments on investment properties | 117 437 | - | 437 | 105 068 | 220 462 |
| Fair value in the end of the year | 11 500 | 428 070 | 37 500 | 915 971 | 1 393 041 |
| Net change in unrealized gain | - | 117 437 | -2 043 | 105 068 | 220 462 |
As of the end of the 2022, the undergoing refurbishment of Forum Hotel and the planned renovation of Park Hotel Vossevangen with limited rent income contributions from the property over the renovation period as the rent is based on a lower percentage of the hotel turnover in the renovation period, agreed with its tenants. When renovation is completed, the annual minimum rent will increase, as well the turnover-based rent. During 2022, a renovation budget of 20 MNOK was agreed with the tenant in Guard Hotel, increasing the minimum rent to 19,1 MNOK. The Group had similar commitments of this type at the end of the 2021 reporting period, with both Park Hotel Vossevangen and Forum Hotel under renovation.
The Group did not incur any direct operating expenses (including repairs and maintenance) in investment property that did not generate rental income during the 2022 and 2021 reporting periods. As for the investment properties that did generate rental income during the 2022 and 2021 reporting periods, there were no material direct operating expenses incurred during the period, as most of the contracts are triple net (i.e. net of insurance, taxes and maintenance).
Storms and floods are long-term risks, and potential physical damage to properties could be severe. However, all properties are insured. In November 2022, a flood in Voss caused damages on some equipment and installations, however all costs has been recovered by the insurance company. On long term, such events may lead to increased insurance cost, but this has not yet been observed.
A property analysis is an estimate of the value that an investor is willing to pay for the property at a given time. The valuation is made on the basis of generally accepted models and certain assumptions on different parameters. The tables below give an indication of the effects on the value of the property portfolio if yield levels change with 0.5% or rental income change with 5% NOI is defined as net operating income, meaning all revenue from properties minus all reasonable operating expenses.
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Preschool properties | 122 | 110 | 101 | 128 | 116 | 106 |
| 134 | 122 | 111 |
As of 31 December 2021, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Preschool properties | 13 | 11 | 10 | 14 | 12 | 10 |
| 14 | 12 | 11 |
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Retail properties | 471 | 438 | 409 | 496 | 461 | 431 |
| 521 | 484 | 452 |
As of 31 December 2021, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Retail properties | 444 | 407 | 375 | 467 | 428 | 395 |
| 490 | 450 | 415 |
The fair value of the properties classified as property development use the same significant unobservable inputs as the other categories presented. However, as no change in significant unobservable inputs would cause a change in fair value that would significantly affect the results of the Group.
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Hotel properties | 948 | 878 | 817 | 998 | 924 | 860 |
| 1 048 | 970 | 903 |
As of 31 December 2021, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Hotel Properties | 1 006 | 870 | 767 | 1 059 | 916 | 807 |
| 1 112 | 962 | 847 |
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
| NOK million | Yield sensitivity -0,5% | Yield sensitivity 0,0% | Yield sensitivity 0,5% | NOI sensitivity -5 % | NOI sensitivity 0 % | NOI sensitivity 5 % |
|---|---|---|---|---|---|---|
| Office properties | 72 | 67 | 62 | 76 | 70 | 65 |
| 80 | 74 | 68 |
The Group measures its investment properties under development (“project in progress, investment properties”) following the same fair value model as for the investment property.
| Project in progress, investment properties | Cost 1 January 2022 | Additions | Additions from acquisition of companies | Realisations | Completed projects, transferred to investment properties | Depreciation | Exchange differences | Carrying value 31 December 2022 |
|---|---|---|---|---|---|---|---|---|
| 45 383 | 238 | -44 882 | 739 |
Bobil Eiendom Balsfjord AS and Bobil Eiendom Rana AS completed the construction of premises of approx. 1 250 sqm each, 2.500 sqm in total, for sale and rental of caravans and motorhomes in Rana and Balsfjord in Northern Norway in Q1 2022 and Q3 2022 respectively. For the year end reporting of 2022, the two properties are now recognised as investment properties. For 2022, the project in progress is mainly related to building of new premises in Evenes.
Associated companies are all entities over which the company has significant influence, but not control or joint control. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but without the ability to have control over those policies. This is generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at cost. Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment. When the group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long- term receivables, the group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealized gains on transactions between the group and its associates are eliminated to the extent of the group’s interest in these entities. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred.
Kongsparken AS was established 11 September 2020 by Eiendomsselskapet Ranheim AS and the Group. Both owns 50% of the company and contributed each with kroner 50.000. Kongsparken AS have acquired an old closed school, which shall be demolished and replaced by approximately 400 newbuild apartments. The Group is controlling 50 of the votes in the Board of Directors. The project management and daily operations are performed by Eiendomsselskapet Ranheim AS, thus it is PPG consideration that the group does not have control in Kongsparken.
Forus Holdco AS was established by Vico Eiendom AS and Up North Property AS to acquire 100 % of the shares in Forusveien 31 - Hotell AS from Vico Eiendom AS. Forusveien 31 - Hotell AS owns Scandic Forus Hotel in Stavanger municipality. The hotel is let out to Scandic Hotels AS The owners of Vico Eiendom AS is Hauglandgruppen, a family office located in Bergen. The Group is controlling 50 % of the votes in the Board of Directors. Project management and daily operations are performed by Hauglandgruppen. It is the Group’s evaluation that PPG does not have control in Forus Holdco AS and is regarded as an associated company. Forus Holdco AS was acquired on 29.12.2021.
During the first half of 2021 PPG, through Pioneer Development AS, acquired a 49 000 m2 plot together with local partners at Ramstadsletta in Bærum, Norway. The plot has an expected potential to develop around 70 000 m2 of residential and commercial real estate and PPG has an ownership in the project of 40.08% as of 31.12.2022. The company is treated as an associated company.Norlandia Holding AS
In September 2022, PPG acquired 23.58% of the shares in Norlandia Holding AS. Norlandia Holding is an investment company within hotel properties and development properties. Through its subsidiaries, the company owns 21 properties and has 9 associated companies. The net profit in the company was MNOK 20.1, and the total book value of equity was MNOK 383.5. The company is treated as an associated company.
The Group’s shares of the financial positions in the companies owned per year end 2022 and 2021:
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Goodwill | - | - |
| Deferred tax | -63 | 195 |
| Licenses, patents, rights | 886 | 14 047 |
| Investment properties | 21 120 | 783 910 |
| Other non-current loans | 5 617 | 157 702 |
| Other non-current assets | 93 114 | 318 841 |
| Cash | 232 879 | 21 160 |
| Other current assets | 4 590 | 38 889 |
| Borrowings (current and non-current) | 30 | -835 964 |
| Other non-current liabilities | -324 091 | - |
| Other current liabilities | - | -19 142 |
| Net assets | -2 970 | 421 249 |
| Share of ownership | 31 174 | 107 100 |
| Distribution of loss uneavenly between share classes | 14 868 | 107 100 |
| Carrying amount (at percentage of part. by the Group) | 14 868 | 107 100 |
Changes in the Group’s carrying amount in the periods:
| NOK thousand | 2022 | 2021 |
|---|---|---|
| Carrying amount at 01.01 | 14 869 | -220 |
| Invested capital in Norlandia Holding AS | - | 87 783 |
| Invested capital in Ramstadsletta Utvikling AS | 87 783 | 2 795 |
| Invested capital in Forus Holdco AS | 2 795 | 12,0 |
| Invested capital Bm3 Eiendom AS | 14 115 | 3 301 |
| Interest-free loan to Ramstadsletta AS (Note 20) | - | 5 067 |
| Share of gain in the associated companies | -1 647 | -4 106 |
| Carrying amount at 31.12 | 107 100 | 14 869 |
ANNUAL REPORT 2022 28
The share of profit (loss) is calculated in the following table, showing the breakdown by associate and its contribution to the current year consolidated income statement of the Group, for the year 2022:
| NOK thousand | Kongsparken AS | Ramstadsletta Utvikling AS | Forus Holdco AS | Norlandia Holding AS | Bm3 Eiendom AS | Total |
|---|---|---|---|---|---|---|
| Net income | -5 145 | -53 | -430 | 4 795 | 103 | -730 |
| The Group’ share of ownership | 50,00 % | 40,08 % | 50,00 % | 23,58 % | 30,71 % | |
| Share of loss in the owner period | -2 573 | -21 | -215 | 1 131 | 32 | -1 647 |
Share of profit (loss) is calculated in the following table, showing the breakdown by associate and its contribution to the current year consolidated income statement of the Group, for the year 2021 is calculated as:
| NOK thousand | Kongsparken AS | Ramstadsletta utvikling AS | Forus Holdco AS |
|---|---|---|---|
| Net income | -2 855 | -6 713 | - |
| The Group' share of ownership as of 31.12 | 50 % | 40 % | 50 % |
| Share of loss in the owner period | -1 428 | -2 690 | - |
. . .
Accounting principles
A financial instrument is a contract that gives rise to both a financial asset for one entity and a financial liability or equity instrument for another entity. Financial instruments are generally recognized as soon as the group becomes a party to the terms of the financial instrument.
Financial assets
Financial assets include cash and cash equivalents, trade receivables and other loans and receivables. Financial instrument classification is based on the business model in which the instruments are held as well as the structure of the contractual cash flows.
Financial assets measured at amortized cost
Financial assets measured at amortized cost are non-derivative financial assets with contractual payments that consist exclusively of payments of interest and principal on the outstanding nominal amount and are held with the objective of collecting the contractually agreed cash flows, such as loans and receivables, trade receivables or cash and cash equivalents (the “hold” business model). After initial recognition, these financial assets are measured at amortized cost using the effective interest method less impairment. Gains and losses are recognized in profit or loss when the loans and receivables are impaired or derecognized. Interest effects from the application of the effective interest method and effects from currency translation are also recognised through profit or loss.
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss, comprise financial assets whose cash flows do not relate solely to payments of interest and repayments of principal on the outstanding nominal amount. Gains or losses on these financial assets are recognized through profit or loss.
29 PIONEER PROPERTY GROUP ASA
Financial liabilities
Financial liabilities regularly give rise to a redemption obligation in cash or another financial asset. These include in particular bonds and other securitized liabilities, trade payables, liabilities to banks, liabilities to affiliated companies and derivatives designated as hedges.
Financial liabilities are classified into the following categories:
Upon initial recognition, financial liabilities are measured at fair value. The transaction costs directly attributable to the acquisition are also recognized for all financial liabilities that are subsequently measured at fair value not through profit or loss. Trade payables and other non-derivative financial liabilities are generally measured at amortized cost using the effective interest method. A financial liability is derecognized when the obligation underlying the liability is discharged, cancelled, or expires.
Fair Value
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This applies regardless of whether the price is directly observable or estimated using a valuation method. The fair value is not always available as a market price but must be calculated on the basis of a range of valuation parameters. For this purpose, various categories are established in which, depending on the availability of observable parameters and the significance of these parameters for determining the fair value as a whole, the following levels apply:
Financial instruments and investment properties that are measured at fair value in the financial statements require disclosure of fair value measurements by level based on the following fair value measurement hierarchy:
Critical accounting estimates
The shares in Odin Bidco AS was sold in May 2022. Until the moment of their disposal, the shares have been measured by an independent valuation expert. Odin Bidco AS owns preschool properties in Norway, Sweden, Finland and Netherlands. For the estimate of 2021, revenue was based on rental agreements adjusted for the consumer price index and it was assumed that the contracts are renewed at expire. The rental agreements are triple net contracts where the operator has the main responsibility for annual maintenance, insurance, and other directly related property. Average EBITDA-margin was estimated to 96.80%. Finance expense is based on the current borrowing structure. In addition, growth based on future acquisitions are included. The equity discount rate applied in 2021 was 9.80%. The most sensitive assumption is the discount rate. If the discount rate were reduced or increased with 0.25%, the corresponding value of the Group’s share of Odin would have increase/decrease with approximately 4.5% in 2021.
Specification of financial assets and liabilities:
The Group holds the following financial assets and liabilities:
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Financial assets at amortised cost | ||
| Loan to associated companies | 56 948 | 51 455 |
| Loan to other companies | 12 296 | 32 646 |
| Cash and cash equivalents | 265 226 | 119 383 |
| Trade and other receivables | 29 024 | 10 171 |
| Sum | 363 494 | 213 655 |
ANNUAL REPORT 2022 30
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Financial assets at fair value through profit or loss | ||
| Other investments 1) | 118 954 | 154 225 |
| Other Shares 2) | 48 953 | 365 441 |
| Sum | 167 907 | 519 666 |
| Financial liabilities at amortised cost | ||
| Borrowings | 971 955 | 697 336 |
| Other current liabilities | 49 936 | 26 751 |
| Sum | 1 021 891 | 724 087 |
1) Other investments are measured at fair value as level 1 in the fair value hierarchy in accordance with quoted prices.
2) Other Shares included the ownership share in Odin Bidco AS in 2021 and other investments in shares where the company have no significant influence or control, which is measured according to level 3 in the hierarchy.
Specification of investments measured at fair value held as of 31 December 2022:
1) Bonds and funds are measured at fair value as level 1 in the fair value hierarchy in accordance with quoted prices.
2) Investments in shares where the company have no significant influence or control, is measured according to level 3 in the hierarchy. The shares are not traded, not quoted.
Specification of investments measured at fair value held as of 31 December 2021:
| NOK thousand | 1) Bonds | 1) Funds | 2) Odin Bidco AS | 2) Hospitality Invest AS | 2) Pancom AS | Total |
|---|---|---|---|---|---|---|
| Fair value in the beginning of the year | 49 625 | 104 600 | 357 900 | 7 541 | 519 666 | |
| Purchase in 2022 | - | - | - | 30 741 | 256 490 | |
| Sold in 2022 | - | - | - | -210 615 | -50 451 | -346 368 |
| Repaid capital | - | - | -11 532 | - | -11 532 | |
| Currency adjustments | - | - | - | - | - | - |
| Fair value adjustments | 62 000 | 56 954 | 0 | 18 212 | 30 741 | 167 907 |
.
10. Cash and cash equivalents
Accounting principles
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are convertible to cash in three months or less to known amounts of cash and which are subject to an insignificant risk of changes in value.## Description
Cash and cash equivalents include bank deposits:
NOK in thousand | 31.12.2022 | 31.12.2021
---|---|---
Bank deposits | 265,226 | 119,383
Total | 265,226 | 119,383
31 PIONEER PROPERTY GROUP ASA
All interest income relates to interest on bank deposits. The bank deposits include restricted cash related to tax withholding account of TNOK 223.6 per 31 December 2022 (TNOK 140 per 31 December 2021).
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the duration of the borrowings. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Borrowings and available cash and cash equivalents constitute the capital of the Group. The Group's main source of financing are bank loans and trade credit. The Group had the following borrowing as of 31 December 2022:
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Non-current | ||
| Commercial bank loans | 736,761 | 416,067 |
| Other loans | 98,107 | 104,416 |
| Total | 834,869 | 520,483 |
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Current | ||
| Commercial bank loans | 84,248 | 161,229 |
| Other loans | 52,838 | 15,625 |
| Total | 137,087 | 176,854 |
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Total non-current and current | ||
| Commercial bank loans | 821,010 | 577,295 |
| Other loans | 150,946 | 120,041 |
| Total | 971,955 | 697,336 |
The borrowings the Group holds as of the end of 2022 and 2021 are linked to the investment properties owned by the Group. The following assets have been pledged as security for liabilities:
| NOK thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Investment property | 1,637,880 | 1,239,070 |
| Total pledged assets | 1,637,880 | 1,239,070 |
For the properties that are pledged as security for liabilities, the amount pledged corresponds to the fair value of the investment properties. (see note 6 for further information).
ANNUAL REPORT 2022 32
Out of the total amortised cost value of all borrowings held as of 31.12.2022, MNOK 109.5 have a fixed annual interest rate that ranges from 1 to 4%. The rest of the borrowings are subject to an interest rate structure that is comprised of a variable interest rate based on the 3-month NIBOR plus a margin that typically approximates 2-3% annually. On average, the annual average interest rates realised for 2022 has been 5.07%. All loans are denominated in NOK. See note 4 for the maturity of financial liabilities at the end of the period, and for a description of the financial risks arising from changes in the interest rates.
The borrowing agreements typically include covenants that the Group must fulfil. The nature and characteristics of the covenants vary from agreement to agreement, but the typical financial covenants are loan-to-value ratios ranging from 65 to 70%; and minimum liquidity requirements in the subsidiary that is the counterparty to the borrowing agreement with the lender. Management has determined that, as of the end of the 2022 reporting period, the Group is in compliance with all the covenants required by the lender.
| NOK thousand | Non-current borrowings | Current borrowings | Total |
|---|---|---|---|
| At 1 January 2022 | 520,483 | 176,854 | 697,336 |
| Cash flows | |||
| Cash flow received | 367,001 | 33,624 | 400,626 |
| Repayments | -16,000 | -178,873 | -194,873 |
| Non-cash: | |||
| Borrowing classified as non-current at 31 Desember 2021 becoming current during 2022 | -102,582 | 102,582 | - |
| Purchase of operations | 58,529 | 2,900 | 61,429 |
| Interest | 7,437 | - | 7,437 |
| At 31 December 2022 | 834,869 | 137,087 | 971,955 |
| NOK thousand | Non-current borrowings | Current borrowings | Total |
|---|---|---|---|
| At 1 January 2021 | 32,125 | 13,040 | 45,165 |
| Cash flows | |||
| Cash flow received | 388,950 | 22,008 | 410,958 |
| Repayments | -1,151 | -178,128 | -179,279 |
| Non-cash: | |||
| Purchase of operations | 99,538 | 319,934 | 419,472 |
| Interest | 1,020 | - | 1,020 |
| At 31 December 2021 | 520,483 | 176,854 | 697,336 |
| NOK in thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Trade payable | 28,909 | 8,758 |
| Government taxes | -1,379 | 1,056 |
| Accrued interest | 8,537 | 4,344 |
| Dividend | 14,742 | 9,216 |
| Accrued cost, Prepaid revenues | 1,226 | 3,844 |
| Other current liabilities | 8,047 | 7,749 |
| Total other current liabilities | 60,082 | 34,967 |
33 PIONEER PROPERTY GROUP ASA
Dividend relates to Q4 2022 dividend approved by the board 13. October 2022, with payment date in January 2023.
Revenue is recognised when it is probable that transactions will generate future economic benefits that will flow to the company and the amount can be reliably estimated. Revenues are presented net of value added tax and discounts. Revenue consists of rental income, which is typically recognised on a straight-line basis over the period of the lease agreements with its lessees (see note 3 for further information). Revenues are presented net of VAT, discounts, and rebates. Service charge expenses are charged to tenants and recognised in the balance sheet together with payments on account of tenants, and therefore does not affect the result beyond an administrative premium recognised under revenue.
The group holds nineteen revenue generating properties per year end, in general leased out on long-term triple net contracts. The group is the lessor of investment properties. The group’s contractual rental income is distributed as follows, where the numbers are adjusted annually to reflect the change in CPI. The rent in the table below are adjusted with an annual CPI-adjustment of 2%:
| NOK in thousand | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Within 1 year | 94,966 | 67,257 |
| Between 1 and 5 years | 323,622 | 316,621 |
| After 5 years | 619,784 | 625,253 |
| Total | 1,038,372 | 1,009,130 |
The Group typically rents out the investment properties to tenants on long term triple-net contracts where the operator has the main responsibility for annual maintenance, insurance, and other directly related property. All agreements are fully adjusted annually to reflect the change in CPI. However, the hotel investment properties typically have the characteristic that rental income is subject to certain positive variables over an agreed minimum lease payment: lease payments are based on the highest of a minimum rent and a percentage of the hotel’s turnover. All revenue during 2022 and 2021 has been originated in Norway and Sweden.
The Group received Government grants during 2021 for an amount of MNOK 2.05, as a compensation from the local municipality in Sweden, to partially compensate its loss in revenue due to the COVID restrictions. This grant related to income has been presented as part of the consolidated income statement, under the line item “rental income”, as it is the loss of rental income that the grant compensated. No compensation has been granted for 2022.
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Salary | 3,620,160 | 2,412,319 |
| Payroll tax | 583,585 | 374,396 |
| Pension benefits | 61,149 | 37,002 |
| Other benefits | 35,744 | 32,208 |
| Total salary and pension costs | 4,300,638 | 2,855,925 |
| Average Employees | 3 | 2 |
ANNUAL REPORT 2022 34
The remuneration to the management in 2022:
| NOK | Salary | Bonus | Other benefits | Pension benefits | Total compensation |
|---|---|---|---|---|---|
| John Ivar Busklein (CEO) | 525,713 | 150,000 | - | 7,299 | 683,012 |
| Øystein B. Grini (CFO) | 1,282,000 | 150,000 | 4,392 | 24,757 | 1,461,149 |
| Total management remuneration | 1,807,713 | 300,000 | 4,392 | 32,056 | 2,144,161 |
The remuneration to the management in 2021:
| NOK | Salary | Bonus | Pension benefits | Total compensation |
|---|---|---|---|---|
| John Ivar Busklein (CEO) | 506,798 | - | 14,522 | 521,320 |
| Øystein B. Grini (CFO) | 409,797 | - | 6,572 | 416,369 |
| Ole-Kristofer Bragnes (former CFO) | 320,801 | 250,000 | 4,239 | 575,040 |
| Total management remuneration | 1,237,396 | 250,000 | 25,334 | 1,512,730 |
John Ivar Busklein has been CEO of Pioneer Property Group ASA in a part time position at 28.4%. Øystein Grini was appointed as new CFO of the Group as of 1. September 2021. Ole-Kristofer Bragnes held the position as CFO from 24 October 2019 until 31. August 2021. No member of the management has in their agreement that they will get any right to compensation after termination of employment. No loans or guarantees have been given to any members of the management, the Board of directors or other corporate bodies. The board of directors of PPG has prepared a determination of salary and other remuneration to the executive management, in accordance with applicable law. The declaration includes the policies which PPG will use for the determination of salary and other remuneration to its executive management in the calendar year 2022 as published on the company's web page pioneerproperty.no. These policies shall be subject to an advisory vote by the general meeting.
The remuneration to the Board of Directors:
| NOK | 2022 | 2021 |
|---|---|---|
| Roger Adolfsen (Charirman of the board) | 130,000 | 110,000 |
| Geir Hjorth (board member) | 130,000 | 110,000 |
| Sandra Riise (board member) | 130,000 | 110,000 |
| Even Carlsen (board member) | 130,000 | 100,000 |
| Nina Høisæter (board member) | 130,000 | 110,000 |
| Total remuneration | 650,000 | 540,000 |
.: 15. Other operating expenses
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Accounting fees, auditing, legal expenses and other fees | 5,908 | 7,644 |
| Other operating expenses | 7,339 | 415 |
| Total other operating expenses | 13,247 | 8,059 |
. Fees from the auditor:
35 PIONEER PROPERTY GROUP ASA
Fees from the auditor
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Auditing fees | 1,203 | 841 |
| Other fees from the auditor | 25 | 143 |
| Total auditing fees | 1,227 | 985 |
.. . 16.# Other financial gains (losses)
NOK thousand | 2022 | 2021
---|---|---
Currency gain/loss | -1 065 | -7 598
Gain on sale shares | 25 701 | -
Gain on sale bonds | 3 385 | 93 489
Loss on sale funds | -609 | -
Changes in fair value (see note 9) | 10 718 | -30 226
Other adjustments | -4 000 | -
Other financial income | - | 3 372
Other financial expenses | -325 | -260
Sum | 33 805 | 58 776
The gains on sale of bonds listed under 2022 is related to the sale of Hospitality Invest AS (HOIN02) bonds and the sale of First High Yield Fund with a value of MNOK 50. The gains on sale of shares are related to the sale of the shares in Odin Bidco. The changes in fair value is mainly related to the shares in Hospitality Invest AS.
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except when related to items recognised in other comprehensive income or directly in equity. In such cases, the tax amount is also recognised in other comprehensive income or directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
The Group has applied the main rule for recognition of deferred tax in connection with the purchase of shares in property companies that are not acquired through a business combination. This means that deferred tax is recognised as the difference between the tax value and accounting value of investment property in the subsidiary, and value changes of the investment property. Not recognised deferred tax linked to initial recognition exemption for investment properties per 31 December 2022 is MNOK 175.1 (MNOK 151.5 in 2021).
ANNUAL REPORT 2022 36
| NOK in thousand | Investment property | Other items | Total |
|---|---|---|---|
| 01.01.2021 | 6 876 | -2 152 | 4 724 |
| Recognized deferred tax | 47 547 | 1 947 | 49 494 |
| 31.12.2021 | 54 423 | -205 | 54 218 |
| Recognized deferred tax | 9 544 | -5 424 | 4 120 |
| 31.12.2022 | 63 967 | -5 629 | 58 338 |
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Tax payable | 6 812 | 22 724 |
| Change in deferred tax | 4 120 | 49 494 |
| Changes related to currency translation | 135 | 120 |
| Other changes | 729 | 71 |
| Income tax expense | 11 795 | 72 409 |
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Profit before income tax | 76 571 | 300 710 |
| Tax expense based on standard rate of Norwegian (22%) | 16 846 | 66 156 |
| Adjustments for: | ||
| Effect of tax rates outside Norway | 377 | 273 |
| Tax effect not taken into account at acquisition | -5 534 | - |
| Changes related to currency translation | 135 | 120 |
| Permanent differences | -5 305 | 11 393 |
| Other differences | -258 | - |
| Income tax expense for the period | 11 795 | 72 409 |
The Group's preference shares are entitled to a fixed dividend of NOK 10.00 per annum from 01 July 2022, if the General Assembly approves payment of dividends. To calculate the earnings per share the entitled dividend to the preference shares is deducted from comprehensive income for the period. The earnings per ordinary share is the remaining comprehensive income deducted the preference share dividend divided by the weighted average number of shares in issue during the period.
| Earnings per share from total operations. NOK | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Net profit continuing operation | 64 775 | 432 228 300 631 |
| Less pref share dividends | -37 835 722 | -34 925 280 |
| Profit attributable to ord shares | 26 939 710 | 193 375 351 |
| Weighted avg ord shares | 9 814 470 | 9 814 470 |
| EPS to ord shares | 2,74 | 19,70 |
37 PIONEER PROPERTY GROUP ASA
As per 31 December 2022 no rights are issued which would cause diluted earnings per share to be different to basic earnings per share. Refer to note 21 for information related to the classes of shares.
The acquisition method of accounting is used to account for business combinations by the group. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, liabilities incurred to the former owners of the acquired business, equity interests issued by the Group, fair value of any asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value, or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred.
An acquisition of entities not comprising any business activities is viewed as a purchase of assets. The acquisition cost is allocated to the acquired assets and no deferred tax is calculated for temporary differences that arise at their initial recognition. Acquisition related costs are capitalized with the asset.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies
Upon purchase of property management assess whether the purchase constitute purchase of a business or purchase of an asset in accordance with IFRS 3.
In March 2022, Terminalveien 10 in Bodø was acquired together with local partners, holding 52% of the shares in T10 Holdco. The largest tenants is Haneseth Bodø, Haneseth VVS and Bodø Kontorsenter AS. Within the property development segment, PPG increased its ownership to 85% in Evenes Tomteselskap AS indirectly with additionally ~24% of the shares in Evenes Tomteselskap AS through an 53% owned SPV. Further, the development the acquisition of Steinbekkhaugen AS, a 7,5 acre large development plot. Two preschools was acquired during 2022, owned by the SPV’s Gaustadskogen Eiendom AS and Tjuvholmen Eiendom AS. The property value was MNOK 105 and the annual lease income is estimated to MNOK 5.8. The preschools are located in Oslo.
The non-controlling interest in PPG is related to the shares in Park Hotel Holdco, Evenes Tomteselskap AS and T10 Holdco AS. For 2022, the transactions with non-controlling interest has been purchase of additional shares in Evenes Tomteselskap AS, and the establishment of T10 Holdco AS together with local partners who acquired 48% of T10 Holdco AS.
| NOK in thousand | 2022 | 2021 |
|---|---|---|
| Purchase of subsidiaries/Properties -cash | 284 976 | 741 546 |
| Cash acquired companies | 18 620 | 36 127 |
| ANNUAL REPORT 2022 38 | ||
| Debt acquired companies | 108 968 | 611 660 |
| Company | Location | Share of ownership | Share of voting rights |
|---|---|---|---|
| T10 Holdco AS | Norway | 52% | 52% |
| T10 Eiendom AS | Norway | 100% | 100% |
| ET Nord AS | Norway | 100% | 100% |
| ET Midt AS | Norway | 100% | 100% |
| ET Øst N AS | Norway | 100% | 100% |
| ET Øst S AS | Norway | 100% | 100% |
| ET Vest N AS | Norway | 100% | 100% |
| ET Vest S AS | Norway | 100% | 100% |
| PPG Hylle 1 AS | Sweden | 100% | 100% |
| PPG Hylle 2 AS | Norway | 100% | 100% |
| PPG Hylle 3 AS | Norway | 100% | 100% |
| Gaustadskogen Eiendom AS | Norway | 100% | 100% |
| Tjuvholmen Eiendom AS | Norway | 100% | 100% |
| Norab Eiendom Vest AS | Norway | 100% | 100% |
| Neptun Eiendom Invest AS | Norway | 100% | 100% |
| Steinbekkhaugen AS | Norway | 100% | 100% |
| Brennemoen Eiendom AS | Norway | 100% | 100% |
| Company | Location | Share of ownership | Share of voting rights |
|---|---|---|---|
| Pioneer Hotel Properties AS | Norway | 100 % | 100 % |
| Up North Property AS | Norway | 90 % | 90 % |
| Forum Holdco AS | Norway | 100 % | 100 % |
| Forum Hotellbygg AS | Norway | 100 % | 100 % |
| Park Hotel Holdco AS | Norway | 50 % | 50 % |
| Park Hotel Eiendom AS | Norway | 50 % | 50 % |
| Brennemoen Hotel Eiendom AS | Norway | 100 % | 100 % |
| Guard Hotel AS | Norway | 100 % | 100 % |
| Guard Hotel II AS | Norway | 100 % | 100 % |
| Köping Hotellfastighet AB | Sweden | 100 % | 100 % |
| Strand Hotell Borgholm Fastighets AB | Sweden | 100 % | 100 % |
| Ås Næring AS | Norway | 100 % | 100 % |
| Askjem Eiendom AS | Norway | 100 % | 100 % |
| Caravan Eiendom Grimstad AS | Norway | 100 % | 100 % |
| Bobil Eiendom Grimstad AS | Norway | 100 % | 100 % |
| Bobil Eiendom Fauske AS | Norway | 100 % | 100 % |
| Bobil Eiendom Balsfjord AS | Norway | 100 % | 100 % |
The Group consists of the following subsidiaries per 31 December 2022:
| Company | Location | Share of ownership | Share of voting rights |
|---|---|---|---|
| Pioneer Property Group International AS | Norway | 100% | 100% |
| Pioneer Preschools AS | Norway | 100% | 100% |
| Kidsa Ospeli Eiendom AS | Norway | 100% | 100% |
| 39 PIONEER PROPERTY GROUP ASA | |||
| Gaustadskogen Eiendom AS | Norway | 100% | 100% |
| Tjuvholmen Eiendom AS | Norway | 100% | 100% |
| Pioneer Retail# 20. Related party transactions |
Balances and transactions between the company and its subsidiaries, which are related parties to the company, have been eliminated on consolidation and are not disclosed in this note.
The Group has the following related parties as of 31.12.2022:
| Related party | Relation to the Group |
|---|---|
| Roger Adolfsen | Chairman of the Board and owner of Mecca Invest AS |
| Sandra Henriette Riise | Board member |
| Geir Hjort | Board member |
| Even Carlsen | Board member and owner of Grafo AS |
| Nina Hjørdis Torp Høisæter | Board member |
| John Ivar Busklein | Chief Executive Officer |
| Øystein Grini | Chief Financial Officer |
| Hospitality Invest AS | Substantial shareholder |
| Grafo AS | Substantial shareholder |
| Klevenstern AS | Substantial shareholder |
| Mecca Invest AS | Substantial shareholder |
| Norlandia Health & Care Group AS | Controlled by substantial shareholders, refer to note 21 |
| Norlandia Holding AS | Controlled by substantial shareholders, refer to note 21 |
| Kara Invest AS | Controlled by substantial shareholders, refer to note 21 |
| Ferda Norge AS | Controlled by substantial shareholders, refer to note 21 |
| Acea Invest AS | Controlled by substantial shareholders, refer to note 21 |
| Kidprop AS | Controlled by substantial shareholders, refer to note 21 |
| Caravan Eiendom AS | Controlled by substantial shareholders, refer to note 21 |
| Norlandia Hotel Group | Controlled by substantial shareholders, refer to note 21 |
| Up North Hospitality AS | Controlled by substantial shareholders, refer to note 21 |
| Kongsparken AS | Associated company |
| Forus Holdco AS | Associated company |
| Ramstadsletta Utvikling AS | Associated company |
The Group had the following related parties as of 31.12.2021:
| Related party | Relation to the Group |
|---|---|
| Roger Adolfsen | Chairman of the Board and owner of Mecca Invest AS |
| Sandra Henriette Riise | Board member |
| Geir Hjort | Board member |
| Even Carlsen | Board member and owner of Grafo AS |
| Nina Hjørdis Torp Høisæter | Board member |
| John Ivar Busklein | Chief Executive Officer |
| Øystein Grini | Chief Financial Officer |
| Hospitality Invest AS | Substantial shareholder |
| Grafo AS | Substantial shareholder |
| Klevenstern AS | Substantial shareholder |
| Mecca Invest AS | Substantial shareholder |
| Norlandia Health & Care Group AS | Controlled by substantial shareholders, refer to note 21 |
| Kara Invest AS | Controlled by substantial shareholders, refer to note 21 |
| Ferda Norge AS | Controlled by substantial shareholders, refer to note 21 |
| Acea Invest AS | Controlled by substantial shareholders, refer to note 21 |
| Kidprop AS | Controlled by substantial shareholders, refer to note 21 |
| Caravan Eiendom AS | Controlled by substantial shareholders, refer to note 21 |
| Norlandia Hotel Group | Controlled by substantial shareholders, refer to note 21 |
| Up North Hospitality AS | Controlled by substantial shareholders, refer to note 21 |
| Kongsparken AS | Associated company |
| Ramstadsletta Utvikling AS | Associated company |
Indirect ownership of shares by board member per the balance sheet date:
| 2022 | 2021 | |||
|---|---|---|---|---|
| Ord. Shares | Pref. shares | Ord. Shares | Pref. shares | |
| Roger Adolfsen | 3 160 192 | - | 3 160 192 | - |
| Even Carlsen | 1 642 024 | - | 1 642 024 | - |
The Group had the following material transactions with related parties:
| NOK in thousand | 2022 | 2021 | |
|---|---|---|---|
| Rent revenue from Norlandia Health & Care Group AS including subsidiaries | 1 912 371 | ||
| Rent revenue from Ferda Norge AS | 29 414 | 17 725 | |
| Rent revenue from Norlandia Hotel group | 42 582 | 26 960 | |
| Management fee from Up North Hospitality AS | 1 875 | 1 345 | |
| Management fee from Oslo Corporate Holding AS | 423 | 2 679 | |
| M&A services and Management fee to Hospitality Invest AS | 2 877 | 2 679 | |
| Interest income from associated companies | 2 300 | 457 | |
| Sale of bonds to related parties | 153 500 | 358 961 | |
| Sale of receivables to related parties | - | - | |
| Purchase of shares and properties from related parties | 194 498 | - | |
| Purchase of receivables from related parties | - | -6 156 | |
| Purchase of shares and properties from related parties | - | 423 151 |
Transactions made between the related parties are made on terms equivalent to those that prevail in the market at arm length.
Receivables from related parties
| 31.12.2022 | 31.12.2021 | |
|---|---|---|
| Norlandia companies | 9 260 | 25 974 |
| Kongsparken AS | 14 644 | 12 714 |
| Ramstadsletta Utvikling AS | 48 000 | 48 000 |
| Smedplassen Eiendom AS | 1 432 | - |
| Ferda Norge | - | 211 |
| Wayfare Invest AS | 12 270 | - |
| Acea Invest AS | - | 8 879 |
Liabilities to related parties
| 31.12.2022 | 31.12.2021 | |
|---|---|---|
| Norlandia companies | 30 742 | 1 273 |
| Kidprop AS | - | 5 852 |
| Ferda Norge | - | 574 |
For compensation to key management personnel, see note 14.
Loans to associate entities
During the 2022 reporting period, the Group lent its associates funds in the form of loans to finance its investments, in agreement with the other shareholders of the associates. The loan to its associate Ramstadsletta Utvikling AS has a nominal amount of MNOK 48. The contract does not contemplate the payment of interests. As a consequence, the amount of the loan has been re-calculated to reflect the present value of all future cash receipts discounted using an interest rate similar to the ones beared by the Group (see note 11 for further information), resulting in an amortised cost value of MNOK 38. As the contributions from the other shareholders were of a different nature and amount, the difference between the increase in net assets for the Group, and the contribution made has been considered a financial expense in the consolidated income statement, for an amount of MNOK 2.1.
The Company have two classes of shares, ordinary shares and preference shares. As of 31 December 2022, Pioneer Property Group ASA had a share capital of NOK 14,683,023, divided into 9,814,470 ordinary shares and 4,868,553 preference shares with a nominal value of NOK 1 per share for both categories. The differences between the share classes are differing voting rights and differing rights to the Company’s profit. The regulations on voting rights and dividends are decided upon by the Shareholders’ Meeting and can be found in the Articles of Association.
The ordinary share
The Company's ordinary share confers one vote unlike the preference shares that confer one-tenth of a vote.
The preference shares
The Company’s preference shares confer a preferential right over ordinary shares to an annual dividend of NOK 9.50 per preference share per annum which stepped up to NOK 10.00 on 01 July 2022. Dividend payments are made quarterly with NOK 2.375 per preference share (NOK 2.500 after 01 of July), if approved by the Board of Directors based on the authorisation given by the General Assembly. The preference share does not otherwise confer a right to dividend. If the general meeting decided not to pay dividends or to pay dividends that fall below NOK 2.375 per preference share (NOK 2.500 after 01. of July) during a quarter, the difference between paid dividends and NOK 2.500 per preference share shall be accumulated and adjusted upwards with an annual interest rate of 5 per cent until full dividends have been distributed. No dividends may be distributed to the ordinary shareholders until the preference shareholders have received full dividends including the withheld amount.# PIONEER PROPERTY GROUP ASA
| At 1 January 2021 | Capital reduction - Payment premiums 2021 | Acquisition of treasury shares | At 31 December 2022 | Capital reduction - | Payment premiums 2022 | Acquisition of treasury shares | At 31 December 2022 | |
|---|---|---|---|---|---|---|---|---|
| Number of shares | ||||||||
| Ordinary shares | 14 683 023 | 14 683 023 | - | - | - | 14 683 023 | ||
| Preference shares | 9 814 470 | 9 814 470 | - | - | - | 9 814 470 | ||
| Share premium | 4 868 553 | 4 868 553 | - | - | - | 4 868 553 | ||
| Treasury shares | 555 636 899 | -987 966 569 | 569 331 956 | - | - | - | 569 331 956 | |
| Total | 14 683 023 | 14 683 023 | - | - | - | 14 683 023 |
PPG holds 987,966 preference shares in PPG at purchased a price of NOK 102.00 per preference share. This equals approximately 6.73% of the share capital, which represents 0.96% of the votes. Detailed information regarding dividends, issues and redemption can be found in the Company's Articles of Association, available in the prospectus at the Company's website.
During 2022, PPG has declared quarterly dividends to the holders of preference shares, in total MNOK 37.4. Furthermore PPG paid dividends to holders of the ordinary shares of MNOK 35.3.
| Ordinary shares | Preference shares | Voting share | |
|---|---|---|---|
| Hospitality Invest AS | 32,62% | 0,00% | 31,08% |
| Eidissen Consult AS | 16,73% | 0,00% | 15,94% |
| Grafo AS | 16,73% | 0,00% | 15,94% |
| Mecca Invest AS | 15,78% | 0,00% | 15,04% |
| Klevenstern AS | 15,78% | 0,00% | 15,04% |
| HI Capital AS | 2,34% | 0,00% | 2,23% |
| Skandinaviska Enskilda Banken AB | 0,00% | 12,88% | 0,61% |
| Avanza Bank AB | 0,00% | 10,25% | 0,48% |
| Nordnet Bank AB | 0,00% | 8,44% | 0,40% |
| The Bank of New York Mellon | 0,00% | 7,54% | 0,36% |
| Other Shareholders | 0,00% | 60,88% | 2,88% |
| Total | 100 % | 100 % | 100% |
| Ordinary shares | Preference shares | Voting share | |
|---|---|---|---|
| Hospitality Invest AS | 32,62% | 0,00% | 31,08% |
| Eidissen Consult AS | 16,73% | 0,00% | 15,94% |
| Grafo AS | 16,73% | 0,00% | 15,94% |
| Mecca Invest AS | 15,78% | 0,00% | 15,04% |
| Klevenstern AS | 15,78% | 0,00% | 15,04% |
| HI Capital AS | 2,34% | 0,00% | 2,23% |
| Skandinaviska Enskilda Banken AB | 0,00% | 10,27% | 0,49% |
| Nordnet Bank AB | 0,00% | 7,56% | 0,36% |
| Avanza Bank AB | 0,00% | 7,52% | 0,36% |
| The Bank of New York Mellon | 0,00% | 6,90% | 0,33% |
| Other Shareholders | 0,00% | 67,75% | 3,20% |
| Total | 100 % | 100 % | 100% |
The group has not been involved in any legal or financial disputes in the period covered by these consolidated financial statements, where an adverse outcome is considered more likely than remote.
There are no new or amended standards that affect the Group as of the year 2022. There are a number of standards, amendments to standards, and interpretations which have been issued by the International Accounting Standards Board (IASB) that are effective in future accounting periods that the Group has decided not to adopt early. None of these would be expected to have a material impact on the entity in the future reporting periods and on foreseeable future transactions.
PPG acquired the development rights related to the property in Evenes Airport. Owned together with local partners. The purchase price of MNOK 45 was settled partially with cash and partially with seller’s credit.
The company reports the following alternative performance measures (APMs):
| APM amounts in NOK million | Explanation | 2022 | 2021 |
|---|---|---|---|
| EBIT | Earnings before interest and taxes | 76 | 300 |
| Weighted average gross yield | The weighted average gross yield on estimated rent calculated by adjusting for property value. Gross yield for a property or portfolio of properties is calculated as contractual annualised rental income for the upcoming financial year divided by the market value as of balance sheet date. | ||
| Preschool | 5.3% | 3.4% | |
| Hotel | 6.8% | 6.2% | |
| Retail | 7.1% | 6.1% | |
| Office | 6.2% | n/a | |
| NOI | Net Operating Income, meaning all revenue from properties minus all reasonable direct property related expenses. | 69 974 | 41 526 |
| Note | 2022 | 2021 | |
|---|---|---|---|
| OPERATING REVENUE AND EXPENSE | |||
| Revenue | 1 | 9,689,910 | 4,124,453 |
| TOTAL OPERATING REVENUE | 9,689,910 | 4,124,453 | |
| Employee benefits expense | 2 | 4,752,215 | 2,844,664 |
| Depreciation and amortisation expense | 3 | 12,279 | 6 |
| Other operating expenses | 2 | 6,802,962 | 5,982,633 |
| TOTAL OPERATING EXPENSES | 11,567,456 | 8,833,040 | |
| OPERATING PROFIT OR LOSS | -1,877,546 | -4,708,587 | |
| FINACIAL INCOME AND EXPENSES | |||
| Financial income | |||
| Changes in market value of fin. cur. assets | 4.5 | 47,160 | 11,301,327 |
| Income from subsidiaries | 5 | 1,692,676 | 994,910 |
| Interest received from group companies | 1.5 | 34,561,471 | 23,141,361 |
| Other interest | 5 | 10,276,108 | 13,136,938 |
| Other financial income | 5 | 83,542,310 | 98,289,996 |
| Total financial income | 130,119,725 | 146,864,531 | |
| Financial expenses | |||
| Changes in market value of fin. cur. assets | 4.5 | - | -78,878,891 |
| Interest paid to group companies | 1.5 | 391,355 | 360,651 |
| Other interest | 5 | 43,579 | - |
| Other financial expense | 5 | 609,227 | 8,791,528 |
| Total financial expenses | 1,044,161 | 88,031,070 | |
| NET FINANCE | 129,075,564 | 58,833,461 | |
| ORDINARY RESULT BEFORE TAX | 127,198,018 | 54,124,873 | |
| Tax on ordinary result | 6 | 13,545,387 | 26,775,800 |
| PROFIT | 113,652,631 | 27,349,073 | |
| ATTRIBUTABLE TO | |||
| To additional dividends payable | 78,127,825 | 43,953,128 | |
| Given intra-group contribution | 35,524,807 | - | |
| To other equity | - | -16,604,053 | |
| Net brought forward | 113,652,631 | 27,349,074 |
| ASSETS | Note | 2022 | 2021 |
|---|---|---|---|
| Fixed assets | |||
| Tangible assets | |||
| Fixtures and fittings, office machinery etc. | 3 | 51,793 | 20,100 |
| Total tangible assets | 51,793 | 20,100 | |
| Financial fixed assets | |||
| Investments in subsidiaries | 7 | 585,011,829 | 31,088,422 |
| Loans to group companies | 1 | 321,152,191 | 671,831,771 |
| Investments in associates | 6 | 87,782,718 | - |
| Investments in shares or units | 38,282,669 | 310,985,144 | |
| Total financial fixed assets | 1,032,229,407 | 1,013,905,337 | |
| TOTAL FIXED ASSETS | 1,032,281,200 | 1,013,925,437 | |
| CURRENT ASSETS | |||
| Receivables | |||
| Receivables on group companies | 1 | 2,299,170 | 1,928,666 |
| Other short-term receivables | 9,202,846 | 11,368,909 | |
| Total receivables | 11,502,016 | 13,297,575 | |
| Investments | |||
| Quoted bonds | 4 | 62,000,000 | 49,625,000 |
| Other financial Instruments | 4 | 56,953,866 | 104,600,066 |
| Total receivables | 118,953,866 | 154,225,066 | |
| Cash and bank deposits | 8 | 124,545,576 | 49,709,708 |
| TOTAL CURRENT ASSETS | 255,001,458 | 217,232,349 | |
| TOTAL ASSETS | 1,287,282,658 | 1,231,157,786 |
| EQUITY AND LIABILITIES | Note | 2022 | 2021 |
|---|---|---|---|
| Equity | |||
| Share capital | 9,10,11 | 14,683,023 | 14,683,023 |
| Treasury shares | 9 | -987,966 | -987,966 |
| Share premium reserve | 9 | 555,636,899 | 555,636,899 |
| TOTAL PAID -IN EQUITY | 569,331,956 | 569,331,956 | |
| Other equity | 9 | 622,344,289 | 586,819,482 |
| TOTAL EQUITY | 1,191,676,244 | 1,156,151,438 | |
| Liabilities | |||
| Provision | |||
| Deferred tax | 6 | 283,680 | 442 |
| Total provisions | 283,680 | 442 | |
| Other non-current liabilities | |||
| Liabilities to group companies | 1 | 9,136,724 | 9,017,897 |
| Total other non-current liabilities | 9,136,724 | 9,017,897 | |
| TOTAL NON-CURRENT LIABILITIES | 9,420,404 | 9,018,339 | |
| Current liabilities | |||
| Accounts payable | 3,912,344 | 1,019,678 | |
| Income tax payable | 6 | 6,961,967 | 18,905,888 |
| Dividends payable | 14,742,481 | 9,216,394 | |
| Liabilities to group companies | 1 | 28,637,189 | 35,770,318 |
| Other current liabilities | 31,837,408 | 870,166 | |
| TOTAL SHORT-TERM LIABILITIES | 86,186,009 | 65,988,009 | |
| TOTAL LIABILITIES | 95,606,413 | 75,006,348 | |
| TOTAL EQUITY AND LIABILITIES | 1,287,282,658 | 1,231,157,785 |
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
| Note | 2022 | 2021 | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before tax | 127,198,018 | 54,124,874 | |
| Taxes paid | -18,905,888 | -6,655,427 | |
| Gains and losses on sale bonds | 4 | -3,385,000 | -93,488,770 |
| Gains and losses on sale funds | 4 | 609,227 | - |
| Depreciation | 3 | 12,279 | -5,743 |
| Gains and losses on sale shares | -80,157,310 | 5,744 | |
| Group contributions | 1 | -1,692,676 | -994,910 |
| Exchange gains/(losses) | - | 7,105,053 | |
| Fair value adjustmenst on quoted bonds | 4 | -47,160 | 67,577,564 |
| Trade receivables | 933,756 | -933,756 | |
| Trade payables | 2,892,666 | 621,914 | |
| Other accruals | 1,699,835 | -2,700,857 | |
| Net cash flow from operating activities | 29,157,747 | 24,655,686 | |
| Cash flows from investing activities | |||
| Payments for purchase of shares | -650,140,606 | -13,622,637 | |
| Payments for purchase of other investments | 3 | -43,972 | -25,843 |
| Payments of loan to group companies | 1 | -644,473,553 | - |
| Payments from other loans | 30,741,488 | - | |
| Proceeds from loan to group companies | 1 | 350,798,408 | - |
| Proceeds from sale of shares | 383,631,273 | 23,045,624 | |
| Proceeds from issuance of long term debt | - | - | |
| Proceeds from sale of funds | 4 | 49,816,734 | - |
| Proceeds from sale of bonds | 4 | 214,000,000 | 358,960,824 |
| Payments to buy other investments | -2,758,056 | -3,120,495 | |
| Payments for purchase of quoted bonds | -222,990,000 | - | |
| Net cash flow from investments activities | 153,055,269 | -279,236,080 | |
| Cash flow from financing activities | |||
| Payments for purchase of own shares | - | - | |
| Dividends paid | -72,601,738 | -78,756,725 | |
| Repayment of share premium reserve | - | - | |
| Group contributions paid | -35,770,318 | -318,379 | |
| Group contributions received | 994,910 | 3,591,379 | |
| Received share premium | - | - | |
| Net cash flow from financing activities | -107,377,146 | -75,483,725 | |
| Net change in cash and cash equivalents | 74,835,869 | -330,064,119 | |
| Cash and cash equivalents at the beginning of the period | 49,709,708 | 379,773,825 | |
| Cash and cash equivalents at the end of the period | 124,545,576 | 49,709,708 |
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway.# Accounting Policies
Revenue is recognized from the sale of goods at the time of delivery. Services are recognized as revenue as they are delivered.
Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other balance sheet items are classified as fixed assets / long term liabilities.
Current assets are valued at the lower of cost and fair value. Short term liabilities are recognized at nominal value. Fixed assets are valued at cost, less depreciation and impairment losses. Long term liabilities are recognized at nominal value.
Subsidiaries and investments in associates are valued at cost in the company accounts. The investment is valued as cost of the shares in the subsidiary, less any impairment losses. An impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a lather period. Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as they are recognised in the financial statement of the provider. If dividends / group contribution exceed withheld profits after the acquisition date, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet for the parent company.
Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general provision is estimated based on expected loss.
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 is calculated as 22 percent of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilized. Taxes payable and deferred taxes are recognised directly in equity to the extent that they relate to equity transactions.
Financial assets measured at fair value through profit or loss comprise financial assets whose cash flows do not relate solely to payments of interest and repayments of principal on the outstanding nominal amount. Gains or losses on these financial assets are recognized through profit or loss.
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. Non-monetary 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 are recognised in the income statement as they occur during the accounting period.
The cash flow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short term,
highly liquid investments with maturities of three months or less.
Interest received from group companies is NOK 34 561 471 and interest paid to group companies is NOK 391 355. Total income on management fee to group companies is NOK 9 685 809, included in this amount is accrued income with NOK 7 185 479.
| Receivables | Per 31.12. | Per 01.01. |
|---|---|---|
| Accounts receivable | 0 | 933 756 |
| Group contributions | 1 692 676 | 994 910 |
| Other short term receivables | 606 494 | 0 |
| Loans to group companies | 321 152 | 191 671 |
| Total receivables | 323 451 361 | 673 760 437 |
| Liabilities | Per 31.12. | Per 01.01. |
|---|---|---|
| Group contributions | 28 637 189 | 35 770 318 |
| Other liabilities | 9 136 724 | 9 017 897 |
| Total Liabilities | 37 773 913 | 44 788 215 |
The company's auditor expenses (VAT included) :
| 2022 | 2021 | |
|---|---|---|
| Statutory audit | 610 940 | 609 227 |
| Other services | 0 | 115 607 |
| Total | 610 940 | 724 833 |
| 2022 | 2021 | |
|---|---|---|
| Payroll | 4 070 852 | 2 614 263 |
| Payroll expenses (employer tax) | 583 585 | 374 396 |
| Pension cost | 61 149 | 37 002 |
| Other payments | 36 629 | -180 997 |
| Total | 4 752 215 | 2 844 664 |
It's been paid remuneration for directors with NOK 650 000.
The company has four employees, three in 100% and one 28.4% position and fall under the Act on Mandatory occupational pensions act, and they have established mandatory occupational pensions for the employees.
| Salary | Bonus | Other benefits | Pension cost | Total Compensation | |
|---|---|---|---|---|---|
| Øystein B. Grini (CFO) | 1 282 000 | 150 000 | 4 392 | 24 757 | 1 461 149 |
| John Ivar Busklein (CEO) (28,4% part time position) | 525 713 | 150 000 | 0 | 7 299 | 683 012 |
| Total | 1 807 713 | 300 000 | 4 392 | 32 056 | 2 144 161 |
John Ivar Busklein (CEO) and Øystein Grini received a bonus of NOK 150 000 each, paid in first quarter of 2023 for their performance in Pioneer Property Group ASA. No member of the management have in their agreement that they will get any right to compensation after termination of employment. No loans or guarantees have been given to any members of the management, the Board of directors or other corporate bodies. The board of directors of PPG has prepared a determination of salary and other remuneration to the executive management, in accordance with applicable law. The declaration includes the policies which PPG will use for the determination of salary and other remuneration to its executive management in the calendar year 2023 as published on the company’s web page pioneerproperty.no. These policies shall be subject to an advisory vote by the general meeting.
| Acquisition cost as at. 1/1 | + Additions | Acquisition cost as at. 31/12 | Accumulated depreciation 1/1 | + Depreciation for the year | Accumulated depreciation 31/12 | Net Value 31/12 | Percentage depreciation | |
|---|---|---|---|---|---|---|---|---|
| Fixtures and fittings, office machinery etc. | 25 843 | 43 972 | 69 815 | 5 743 | 12 279 | 18 021 | 51 794 | 33 |
Financial instruments has been assessed at fair value. The fair value has been set in accordance with the value observable in the market at the balance sheet date.
Quoted bonds:
| Acquisition cost | Change in value | Market Value | |
|---|---|---|---|
| Hospitality Invest AS | 62 000 000 | 0 | 62 000 000 |
| Total | 62 000 000 | 0 | 62 000 000 |
Funds:
| Acquisition cost | This year change in value | Market Value | |
|---|---|---|---|
| Holberg Kreditt A Fond | 55 672 760 | 47 158 | 56 953 866 |
| Total | 52 914 704 | 47 158 | 56 953 866 |
Quoted bonds sold/redeemed in 2022:
| Acquisition cost | Change in value previous years | Change in value this year | Sale | Gain | |
|---|---|---|---|---|---|
| HOIN 17/12 FRN | 198 490 000 | 0 | 12 125 000 | 214 000 000 | 3 385 000 |
| First Fondene AS | 50 180 336 | 245 625 | 0 | 49 816 734 | 609 226 |
| Total | 265 754 861 | 245 625 | 12 125 000 | 263 816 734 | 2 775 774 |
| 2022 | 2021 | |
|---|---|---|
| Financial income: | ||
| Change in marked value of fin.cur.assets | 47 160 | 11 301 327 |
| Group contribution | 0 | 994 910 |
| Gain on sale of subsidiaries | 0 | 0 |
| Interest received from group companies | 34 561 471 | 23 141 361 |
| Other interest | 10 276 108 | 13 136 938 |
| Currency gain | 0 | 1 680 731 |
| Other financial income | 1 692 676 | 3 120 495 |
| Gain on sale quoted bonds | 83 542 310 | 93 488 770 |
| Total financial income | 130 119 725 | 146 864 532 |
| Financial expenses: | ||
| Change in marked value of fin.cur.assets | 0 | 78 878 891 |
| Interest paid to group companies | 391 355 | 360 661 |
| Other interest | 43 579 | 0 |
| Currency loss | 0 | 8 785 784 |
| Loss on sale of shares | 609 277 | 5 744 |
| Total financial expenses | 1 044 161 | 88 031 069 |
Calculation of this years tax basis:
| Net profit/loss before tax expense | 127 198 018 |
| + Permanent differences | -68 601 863 |
| + Changes in temporary differences | -6 339 |
| + Received group contributions | 1 692 676 |
| - Paid group contributions | -28 637 189 |
| = Income | 31 645 302 |
This years income tax expense consist of:
| Estimated tax of net profit | 13 262 149 |
| = Tax payable | 13 262 149 |
| +/- Change in deferred tax | 283 238 |
| = Total tax expense | 13 545 387 |
Tax rate 22%
current tax liability:
| Tax payable | 13 262 149 |
| +/- Effect on tax of group contributions | -6 300 182 |
| = Tax payable | 6 961 967 |
Subsidiaries are valued at cost in the companys accounts. The company has shares in the following subsidiary:
| Subsidiary, office location: | Owner- ship % | Voting rights % | Net profit last year | Equity last year |
|---|---|---|---|---|
| Pioneer Preschools AS, Oslo | 100,00 % | 100,00 % | -1 060 626 | 6 194 525 |
| Pioneer Property Group International AS, Oslo | 100,00 % | 100,00 % | 259 661 | 8 865 765 |
| Pioneer Hotel Properties AS, Oslo | 100,00 % | 100,00 % | -8 512 974 | 299 355 616 |
| Pioneer Retail Properties AS, Oslo | 100,00 % | 100,00 % | -3 360 940 | 68 417 787 |
| Pioneer Property Development AS, Oslo | 100,00 % | 100,00 % | -1 810 844 | 150 030 001 |
| T10 Holdco AS | 52,00 % | 52,00 % | -264 339 | 10 331 316 |
| PPG Hylle 2 AS | 100,00 % | 100,00 % | 0 | |
| PPG Hylle 3 AS | 100,00 % | 100,00 % | 0 |
| Owner- ship % | Voting rights % | Net profit 2022 | Equity 2022 | |
|---|---|---|---|---|
| 23,58 % | 23,58 % | 20 146 437 | 383 495 298 |
The company has shares in the following associates:
Employees tax deduction, deposited in a separate bank account with total amount 31.12.22 NOK 223 683.# Note 9 - Other equity
| Share capital | Own Shares | Share premium reserve | Other equity | Total equity |
|---|---|---|---|---|
| 14 683 023 | -987 966 | 555 636 899 | 586 819 482 | 1 156 151 438 |
| Ordinary result | 113 652 631 | 113 652 631 | ||
| Dividends | -78 127 825 | -78 127 825 | ||
| Per 31.12 | 14 683 023 | -987 966 | 555 636 899 | 622 344 289 |
Other changes: Group contributions
The company has 14 683 023 shares with a book value of NOK 1 per share, and total share capital is NOK 14 683 023. The company has two classes of shares, ordinary shares and preference shares:
| Class of shares | Shares | Total value | Voting rights |
|---|---|---|---|
| Ordinary shares | 9 814 470 | 9 814 470 | Each share has 1 vote |
| Preference shares | 4 868 553 | 4 868 553 | Each share has 0,1 vote |
| Total | 14 683 023 | 14 683 023 |
57 PIONEER PROPERTY GROUP ASA
The company's shareholders (ordinary shares):
| Shareholders | Ord. shares |
|---|---|
| Hospitality Invest AS | 3 201 926 |
| Eidissen Consult AS | 1 642 024 |
| Grafo AS | 1 642 024 |
| Klevenstern AS | 1 549 214 |
| Mecca Invest AS | 1 549 219 |
| Hi Capital AS | 230 068 |
The company's 5 largest shareholders (pref.shares):
| Shareholders: | Pref.Shares |
|---|---|
| Pioneer Property Group ASA | -987 966 |
| Skandinaviska Enskilda Banken AB | 500 000 |
| Avanza Bank AB | 397 705 |
| Nordnet Bank AB | 327 649 |
| The Bank of New York Mellon | 292 714 |
Indirectly owned shares of executives in the company:
| Ordinary shares | Pref. shares | |
|---|---|---|
| Roger Adolfsen (Chairman) | 3 160 192 | 0 |
| Even Carlsen (Board member) | 1 642 024 | 0 |
The Group has various transactions with associated companies. All the transactions have been carried out as part of the ordinary operations and at arms-length prices. The most significant transactions are as follows:
GROUP WEB PAGES PARENT & SUBSIDIARIES
Pioneer Property Group ASA
www.pioneerproperty.no
PIONEER PROPERTY GROUP ASA
RÅDHUSGATA 23
0158 OSLO
NORWAY
WEB: WWW.PIONEERPROPERTY.NO
Munkedamsveien 45
PO Box 1704 Vika
0121 Oslo
Norway
www.bdo.no
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
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Independent Auditor's Report
To the Annual Shareholders meeting of Pioneer Property Group ASA
Opinion
We have audited the financial statements of Pioneer Property Group ASA. The financial statements comprise:
In our opinion:
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of Pioneer Property Group ASA for 8 years from the election by the general meeting of the shareholders on April 16 th 2015 for the accounting year 2015.
BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 2 of 4
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Description of the key audit matter | How the key audit matter was addressed in the audit |
|---|---|
| Valuation of investment properties The Group’s value of investment properties in the financial statements amounts to TNOK 1 798 709 equivalent to 73,1 % of the group’s total assets. The valuation of the properties is performed by an external independent party and is described in note 6 in the financial statements. The amount and the complexity and judgements involved in the valuation, lead us to identify this as a risk area in our audit. |
Our audit procedures included, among others, involving our internal valuation specialists to assist us in evaluating the assumptions and methodologies used by the independent party, in particular those relating to the discounted cash flow model and marked based yield for the rental properties. We also focused on the adequacy of the Group’s disclosures about those assumptions to which the outcome of the valuation is most sensitive, i.e., those that have the most significant effect on the determination of the value of the properties. We have also evaluated the independent party’s competence and independence in performing the valuation of the investment properties. |
Other information
The Board of Directors and the Managing Director (management) are responsible for the other information. The other information comprises the Board of Directors’ report. Our opinion on the financial statements does not cover the other information. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion on the Board of Directors’ report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
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Our opinion on the Board of Director’s report applies correspondingly for the statements on Corporate Governance and Corporate Social Responsibility.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view, for in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and fair presentation of the financial statements of the group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.# Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements reference is made to: https://revisorforeningen.no/revisjonsberetninger
As part of the audit of the financial statements of Pioneer Property Group ASA we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with file name 5967007LIEEXZXJ3BC22-2022-12-31-en, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements have been prepared, in all material respects, in accordance with the requirements of ESEF.
Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary.
BDO AS, a Norwegian liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
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For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, April 3 rd , 2023
BDO AS
Sven Mozart Aarvold
State Authorised Public Accountant
(This document is signed electronically)
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