EXMAR
- 0
- 9
FINANCIAL
OVER-
VIEW
CONSOLIDATED | ||||
International Financial | Management reporting based | |||
KEY FIGURES | Reporting Standards (IFRS 11) | on proportionate consolidation | ||
(Note 1) | (Note 2) | |||
31/12/2019 | 31/12/2018 | 31/12/2019 | 31/12/2018 | |
(*) | (*) |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IN MILLION USD)
Turnover
EBITDA
Depreciations and impairment losses Operating result (EBIT)
Net finance result
Share in the result of equity accounted investees (net of income tax) Result before tax
Tax
Consolidated result after tax of which group share
136.7 | 87.7 | 225.0 | 171.6 |
47.3 | 27.5 | 100.9 | 67.4 |
-31.9 | -19.0 | -66.5 | -45.4 |
15.4 | 8.5 | 34.4 | 22.0 |
-26.0 | -21.0 | -43.3 | -36.6 |
1.7 | -1.6 | 0.2 | 0.6 |
-8.9 | -14.2 | -8.7 | -14.0 |
-4.3 | -1.9 | -4.5 | -2.1 |
-13.2 | -16.1 | -13.2 | -16.1 |
-13.2 | -15.9 | -13.2 | -15.9 |
INFORMATION PER SHARE (IN USD PER SHARE)
Weighted average number of shares of the period
EBITDA
EBIT (operating result)
Consolidated result after tax
INFORMATION PER SHARE (IN EUR PER SHARE)
57,226,737 | 57,045,439 | 57,226,737 | 57,045,439 |
0.83 | 0.48 | 1.76 | 1.18 |
0.27 | 0.15 | 0.60 | 0.39 |
-0.23 | -0.28 | -0.23 | -0.28 |
Exchange rate | 1.1213 | 1.1838 | 1.1213 | 1.1838 |
EBITDA | 0.74 | 0.41 | 1.57 | 1.00 |
EBIT (operating result) | 0.24 | 0.13 | 0.54 | 0.33 |
Consolidated result after tax | -0.21 | -0.24 | -0.21 | -0.24 |
Note1: The figures in these columns have been prepared in accordance with IFRS as adopted by the EU.
Note2: The figures in these columns show joint ventures applying the proportionate consolidation method instead of applying the equity method. The amounts in these columns correspond with the amounts in the 'Total' column of Note 2 Segment Reporting in the Financial Report per 31 December 2019. A reconciliation between the amounts applying the proportionate method and the equity method is shown in Note 3 in the Financial Report per 31 December 2019.
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31.
Key ratio's
in MUSD on 31.12.2019 (based on proportionate consolidation method)
363.2
MARKET CAP
€
1,229.6
TOTAL ASSETS
100.9
EBIDTA
563.6
NET DEBT
€
36.51%
EQUITY RATIO
CONTENT
#01
PANO-
RAMA 2019
Colophon | p. 4 |
Mission Statement | p. 5 |
Letter to our | p.6 |
shareholders | |
Information for our | p. 7 |
shareholders | |
EXMAR in the world | p. 8 |
#03
CARE FOR TODAY, | ||||
RESPECT FOR | ||||
TOMORROW | ||||
Our business principles | p.28 | |||
People - our most | p.29 | |||
valuable asset | ||||
Environment and safety | p.30 |
#05
GLOSSARY
#02
ACTIVIT Y | |||
REPORT | |||
Shipping | p. 12 | ||
Infrastructure | p. 16 | ||
Supporting services | p.20 |
#04
FINANCIAL
REPORT
Corporate Governance Statement | p. 39 |
Annual report of the Board of Directors | p. 54 |
Consolidated financial statements | p. 60 |
Statutory financial statements | p. 126 |
Glossary p.130
IN 1
MEMORIAM
BARON PHILIPPE BODSON
After three weeks of fighting COVID-19, Baron Philippe Bodson, Chairman of the Board of Directors of EXMAR, passed away in Brussels on the 4th of April 2020. He was born in Liège on the 2nd of November 1944.
He obtained a degree in Civil Engineering in Liège and a Master's in Business Administration (MBA) at INSEAD in Fontainebleau / France.
In 1977, Philippe Bodson joined Glaverbel where he was Managing Director and Chairman from 1980 till 1989. As from 1989 till 1999, he was Managing Director of Tractebel and Chairman of Electrabel and Distrigaz. From 1999 till 2003, he was senator in the Belgian Senate.
Thereafter and until last week, Philippe continued his impressive career.
He was Chairman of the Board of Directors of Floridienne and Hamon, Chairman of Free Fair Post Initiative (NGO), member of the Board of Directors of AEI (Houston), Bluesky, Cobepa and advisor of Credit Suisse, and Chairman of the International Polar Foundation.
Since 2002 he was member of the Board of EXMAR and in 2005 he was appointed Chairman of the Board of Directors of EXMAR.
Philippe was at his best in crisis and difficult situations. Baron Bodson liked to walk in the Hautes Fagnes (Ardennes), often alone. It gave him strength and inspiration.
At EXMAR Philippe understood and inspired the company. He was a great supporter of innovation, both in technical solutions and operational processes. Our Chairman did not need explanations, he was thinking with the company.
In the years where EXMAR had some financial difficulties (bankruptcy of PRE), he brought serenity to the table.
Baron Philippe Bodson was an exceptional personality, admired and loved for his unconditional dedication to life, and to the EXMAR Group.
The human, Baron Philippe Bodson, was a man made of granite. An enormous concentration of human qualities in one human being, his enthusiasm, was contagious.
With Philippe people became better, stronger, provoking, with a touch of humour. Bringing consensus without obligating.
Philippe was impetuous but also had the ability to listen to others.
Baron Bodson has left us with a great legacy. We shall continue to promote his wisdom and love for the entrepreneurship in innovation.
On a personal note, I have lost a great and dear friend, an example and a source of inspiration. I shall continue to be inspired by his life and shall always follow his drive to find solutions to problems and be an innovative and cost-efficient shipowner.
Nicolas Saverys
EXMAR 2019REPORT
2
#01
PANO-
RAMA 2019
EXMAR 2019REPORT
4
Colophon
Board of Directors
Baron Philippe Bodson - Chairman († 4 April 2020)
Nicolas Saverys - Executive Chairman
Francis Mottrie
Jalcos NV - represented by Ludwig Criel
Wouter De Geest
Michel Delbaere
Ariane Saverys
Barbara Saverys
Pauline Saverys
Baron Philippe Vlerick
Isabelle Vleurinck
Executive Committee | |||||
Francis Mottrie -CEO | EXMAR NV | ||||
Patrick De Brabandere - Chief Financial Officer | |||||
Jonathan Raes - Executive Director Infrastructure | De Gerlachekaai 20 | ||||
Jens Ismar - Executive Director Shipping | 2000 Antwerp | The Dutch version of | |||
Carl-Antoine Saverys - Secretary to the Executive Committee | Tel: +32(0)3 247 56 11 | this financial report must | |||
Nicolas Saverys | Fax: +32(0)3 247 56 01 | be considered to be | |||
Auditor | Business registration number: 0860.409.202 | the official version. | |||
RPR Antwerp - section Antwerp | |||||
Deloitte Auditors | Website: www.exmar.be | ||||
Represented by Mr. Gert Vanhees | E-mail:corporate@exmar.be | ||||
MISSION 5 STATEMENT
EXMAR is a provider of floating solutions for the operation, transportation and transformation of gas. EXMAR's mission is to serve customers with innovations in the field of offshore extraction, trans- formation, production, storage and transportation by sea of liquefied natural gases, petrochemical gases and liquid hydrocarbons.
EXMAR creates economically viable and sustainable energy value chains in long-term alliances with first class business partners. EXMAR designs, builds, owns, leases and operates specialized, floating maritime infrastructure for this purpose. As well as it aims for the highest standards in performing commercial, technical, quality assurance and administrative management for the entire maritime energy industry.
EXMAR 2019REPORT
6
LETTER TO OUR
SHAREHOLDERS
Dear shareholder,
This annual report is marked by the loss of our chairman Baron Philippe Bodson, unexpectedly deceased at the age of 75 of COVID-19. The Board of directors pays tribute to this exceptional personality, admired and loved for his unconditional dedication to life, and to the EXMAR Group.
The world faces an unprecedented public health crisis. COVID-19 will induce a devastating economic crisis which causes a high level of uncertainty.
After some stormy years, EXMAR successfully concluded various challenges resulting in stability for
the Group. EXMAR is doing well, in this turbulent period. All our assets are performing as per contract. Several operational measures on-shore and on-board have been taken to ensure the safety and wellbeing of our personnel and continuity of our operations.
The Board of Directors has appointed Nicolas Saverys as Executive Chairman of the Board. Francis Mottrie has been co-opted as Member of the Board and has been appointed CEO of EXMAR.
2019 has also been a transformational year for EXMAR. At corporate level, a simplified business unit structure has been set-up:EXMAR Shipping and EXMAR Infrastructure. EXMAR also has a new Executive Committee:
Francis Mottrie,
CEO and Chairman of the Executive Committee
Patrick De Brabandere,
CFO
Jens Ismar,
Managing Director Shipping
Jonathan Raes,
Managing Director Infrastructure
Carl-Antoine Saverys,
Secretary to the Executive Committee
Nicolas Saverys
The growth in US LPG production and export, improved the freight for both VLGCs and midsize tonnage throughout the year. Despite the Corona-crisis, the 2020 prospects remain stable.
In 2019, the TANGO FLNG was commissioned and started a ten-year contract with YPF. Four LNG cargos were exported out of Argentina in 2019. The performance is well above design capacity. All other Infrastructure assets have been performing as per contract.
We would like to thank all those involved in EXMAR - on shore and at sea - for their contribution and hard work.
We wish you a pleasant reading of our annual report.
Nicolas Saverys
Francis Mottrie
INFORMATION FOR OUR 7
SHAREHOLDERS
SHARE INFORMATION
The EXMAR share is listed on Euronext Brussels and is a part of the BEL Small Index (EXM). Reference shareholder is Saverex NV.
Participation as per 31 December 2019:
FREEFLOAT
47.03%
SAVEREX
44.28%
Cobas Asset
Management
S.G.I.I.C. SA
5.002%
EXMAR
3.82%
FINANCIAL CALENDAR | 30 April 2020 |
Results 1st quarter 2020 | |
Annual shareholders meeting | 19 May 2020 |
Final results 1st semester 2020 | 11 September 2020 |
Results 3rd quarter 2020 | 29 October 2020 |
TOTAL :
59,500,000
SHARES
Contact
- All EXMAR press releases can be consulted on the website: www.exmar.be
-
Questions can be asked by telephone at +32(0)3 247 56 11 or by e-mail to corporate@exmar.be,
for the attention of Patrick De Brabandere (CFO) or Mathieu Verly (secretary). - In case you wish to receive our printed annual or half year report please mail: annualreport@exmar.be
EXMAR REPORT 2019 | EXMAR |
IN THE | |
8 | |
WORLD | |
CREW AT SEA | |
20 nationalities at sea | |
American, Argentinean, Australian, Belgian, | |
Bengalese, Chinese, Croatian, French, Greek, | |
Indian, Irish, Jamaican, Latvian, Netherlander, | |
Nigerian, Polish, Singaporean, Spanish, Ukrainian, | |
Venezuelan |
HEADQUARTERS PERSONNEL BY
GENDER AND AGE
MEN
8 | 20-30 years | total | total |
37 | 30-40 years | 101 | 95 |
18 | 40-50 years | Average age | |
30 | 50-60 years | (all): | |
40 | |||
- 60-64years
EMPLOYEES LOCATED AT EXMAR
HEADQUARTERS
malefemale
51.53% 48.47%
WOMEN
11 20-30 years
32 30-40 years
21 40-50 years
24 50-60 years
- 60-64years
9
Houston
USA
Kingston
JAMAICA
Buenos Aires
ARGENTINA
Duisburg | |||
Antwerp | GERMANY | ||
BELGIUM | |||
THE NETHERLANDS | LUXEMBURG | SOUTH-KOREA | |
London | |
UK | |
Paris | |
FRANCE | Shanghai |
CHINA | |
HONG KONG | |
Lagos | |
NIGERIA | Livorno |
ITALY | |
Pointe-Noir | SINGAPORE |
CONGO | |
Limmasol | |
CYPRUS |
Mumbai | |
Luanda | INDIA |
ANGOLA |
HEADQUARTERS | OFFICES | BRANCHES |
EXMAR REPORT 2019
10
#02
ACTIVIT Y
REPORT
EXMAR REPORT 2019
12
SHIPPING
SHIPPING PORTFOLIO | 21 |
MIDSIZE GAS CARRIERS
2
NEWBUILDS
VLGC JIANGNAN H2667
owned
VLGC JIANGNAN H2668
owned
10
PRESSURIZED
SABRINA ANNE
bareboat bareboat
HELANE ANGELA
bareboat bareboat
FATIME JOAN
bareboat bareboat
ELISABETH MARIANNE
bareboat bareboat
MAGDALENA DEBBIE
bareboat bareboat
TOURAINE | WAASMUNSTER | KAPRIJKE | KOKSIJDE |
joint venture | joint venture | joint venture | joint venture |
EUPEN | WARISOULX | KNOKKE | SYLVIE |
joint venture | joint venture | joint venture | time chartered |
LIBRAMONT | WARINSART | KONTICH | WEPION |
joint venture | joint venture | joint venture | joint venture |
SOMBEKE | WAREGEM | KORTRIJK | |
joint venture | joint venture | joint venture | |
BRUSSELS | KALLO | ||
joint venture | joint venture | ||
BASTOGNE | KRUIBEKE | ||
joint venture | joint venture | ||
ANTWERPEN | KAPELLEN | ||
time chartered | joint venture |
1
SEMI-
REFRIGERATED
1 | TEMSE | 1 |
joint venture | ||
VERY LARGE | ||
GAS CARRIER | ||
LNG CARRIER |
EXCALIBUR | BW TOKYO |
joint venture | time chartered |
13
Total per | Total per | |
31/12/2019 | 31/12/2018 (*) | |
RESULTS 2019 - PROPORTIONATE CONSOLIDATION (IN MILLION USD) | ||
Turnover | 122.4 | 114.4 |
EBITDA | 60.4 | 68.0 |
REBITDA (**) | 60.4 | 36.2 |
Operating result (EBIT) | 14.5 | 37.9 |
Consolidated result after tax | -7.2 | 18.9 |
Vessels (including vessels under construction) | 520.5 | 492.9 |
Financial debts | 437.0 | 393.7 |
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not resta ted and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31. The right-of-use assets and the right-of-use liabilities as a consequence of the implementation of IFRS 16 are included in the above reported vessels and financial debts per 31/12/2019.
- REBITDA: recurring earnings before interests, taxes, depreciations and amortizations (including impairment). Following items are excluded from EBITDA in 2018: sale COURCHEVILLE (Shipping: USD 0.9 million) and sale Excelsior (Shipping: USD 30.9 million).
EBIT for the Shipping Business Unit in the full year 2019 was USD 14.5 million compared to USD 37.9 million for the full year 2018 (including a capital gain of USD 0.9 million on the sale of the COURCHEVILLE and including a capital gain of USD 30.9 million on the sale of the company EXCELSIOR).
EXMAR Shipping is a leading shipowner and operator in the transportation of liquefied gas products such as Liquid Petroleum Gas (LPG, butane, propane and a mixture of both), anhydrous ammonia and petrochemical gases. EXMAR trades worldwide for the fertilizer, clean energy fuel and petrochemical industry. As a prominent midsize LPG owner-operator, EXMAR benefits from long-
term contracts with first class customers.
HIGHLIGHTS 2019 AND OUTLOOK VERY LARGE GAS CARRIERS (VLGC) Buoyed by increasing LPG export volumes out of the US, VLGC rates surged during the second quarter to about USD 1.3 million per month in the period freight market. The United States managed to export record LPG volumes of nearly 40 million tonnes, seven million more than last year. This puts the US on a par with the Middle East in terms of LPG exports. The US resurgence has taken place due to the confluence of low commodity prices, more loading slots thanks to infra-
structure upgrades combined with an overall improvement in US LPG export capacity.
With increased demand for cargo destined for Far Eastern destinations-with China reaching record breaking LPG imports of 19 million tonnes - additional ton-miles were generated. This had a strong bearing on vessel availability as of the second quarter of 2019, with spot earnings consequently averaging around USD 1,800k/month.
The influx of VLGC newbuild deliveries scheduled during the course of 2020 and the effect of COVID-19 will have a negative influence on the freight rates and increase future uncertainties but healthy fundamentals, more LPG supplies globally and a persistent regime of long-haul volume distribution would result in a market recovery. Moreover, the increased capacity of the Mar- cus Hook terminal on the US East Coast will ensure cargoes not only head to Asian ports, but also to European off-takers.
EXMAR REPORT 2019
14
EXMAR has currently only one vessel employed in the VLGC segment, the 84,000 m³ BW TOKYO, which benefited from the rise in the Baltic Gas Index and was secured -at the end of 2019 for a period charter with a longterm partner.
MIDSIZE GAS CARRIERS (MGC)
Driven by prosperous LPG markets, the midsize segment has seen a boost in the freight rates during the second half of 2019. For the first time since 2016, Time Charter Equivalent (TCE) levels in excess of USD 800,000 per month were reached on a modern 38,000 m³ vessel.
The main products carried remain split between LPG (65%) and Ammonia (35%). EXMAR maintains its strong position in both segments with 14 vessels trading LPG and seven vessels trading Ammonia. Three decades in the midsize market has meant that EXMAR has been able to enter into long-term commercial
relationships with blue chip customers. This remains the case today. The EXMAR fleet profile is young with an average age of nine years for the owned fleet of 17 MGC carriers.
With a total global midsize fleet of 97 vessels and a limited order book (OB) for seven vessels at year-end of 2019, the future looks promising. With the upward trend in long-haul business and the impact of scale, EXMAR's share of 21 vessels in the midsize market means that the Company is well-placed to service the market in the coming years.
Global growth in demand for LPG volumes is expected to continue to support the midsize market. For exam- ple, Africa and Latin-America is expected to receive additional butane out of the United States. Developing countries switching to lower-priced LPG to satisfy their energy needs will positively support further growth in the MGC segment.
MGC 1 year timecharter rate
(x 1,000 $/month)
1,200.00
1,000.00 | 35,000 m3 Vessel |
38,000 m3 | Vessel |
800.00 | |
600.00
Source: Clarkson Research | 400.00 |
Services Limited 2020 | 200.00 | |
0.00 |
Jan-2010 | Jan-2011 | Jan-2012 | Jan-2013 | Jan-2014 | Jan-2015 | Jan-2016 | Jan-2017 | Jan-2018 | Jan-2019 | Jan-2020 |
15
The previous trend for stable ammonia seaborne volumes during the last few years is likely to change looking ahead to future years. A volume growth of about 1.6% per annum between 2019 and 2022 is foreseen thanks to new ammonia capacity coming online and markets opening up in China and Turkey. According to Argus, China's import growth now makes it the sixth largest ammonia import market, evolving from 203,000 to 1 million tonnes between 2014 and 2019.
EXMAR has managed to benefit from stronger freight markets and as such been able to attract better overall contract freight agreements compared to 2018. With a diverse customer portfolio and a fleet coverage of 81% for 2020, EXMAR continues to maintain its strong foothold in this segment.
PRESSURIZED
The pressurized market has remained stable both East and West of Suez. The middle of 2019 saw buoyant freight markets thanks to significant LPG redistribution and occasional seasonal spikes in market demand. These vessels serve as small-scale LPG suppliers given their ability to access shallow draft and smaller ports. At the same time pressurized vessels can be flexibly deployed as workhorses to open up new energy markets.
EXMAR has a fleet of 10 vessels: seven have a capacity of 3,500 m3 and three vessels have a capacity of 5,000 m3. The trading area of the fleet is equally divided, with five vessels engaged in European coastal trades, while five are deployed in the Far East.
LNG SHIPPING
The LNG/c carrier EXCALIBUR is under long time charter contract until early 2022.
Million tonnes
40 | ||||||||||
35 | ||||||||||
30 | ||||||||||
25 | ||||||||||
20 | ||||||||||
15 | ||||||||||
10 | ||||||||||
5 | ||||||||||
0 | ||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
US LPG
(million tonnes)
Source: IHS Waterborne LPG
EXMAR REPORT 2019
16
INFRA- STRUCTURE
The mission of EXMAR Infrastructure is to provide innovative floating infrastructure solutions to the Oil & Gas industry covering the complete lifecycle starting from engi-
neering, construction supervision and moving into ownership, leasing and operations & maintenance.
Backed by decades of maritime and gas handling expertise within the EXMAR Group and a registered
INFRASTRUCTURE PORTFOLIO
production semisubmersible design, our fully-fledged engineering and project development teams specialize in the design and development of Floating Production Systems (FPS) at a very competitive total cost.
Our operations & maintenance people take care of the day-to-day operations and maintenance of the floating infrastructure assets entrusted to as per highest quality and sustainability standards.
1 | |
FLNG BARGE | |
1 | |
TANGO FLNG | FSRU BARGE |
owned | |
ASSETS | |
2 | FSRU S-188 |
owned |
ACCOMMODATION
BARGES
NUNCE
joint venture
WARIBOKO | ENGINEERING |
joint venture | |
1 |
OPTI-EX DESIGN
17
Total per | Total per | |
31/12/2019 | 31/12/2018 (*) | |
RESULTS 2019 - PROPORTIONATE CONSOLIDATION (IN MILLION USD)
The EBIT for the Infrastructure Business Unit for the full year 2019 was USD 2.0
Turnover
EBITDA
REBITDA (**)
Operating result (EBIT)
Consolidated result after tax
Vessels (including vessels under construction) Financial debts
71.832.1
20.60.7
19.1-2.7
2.0-13.4
-45.2-49.3
466.1469.7
248.1300.6
million compared to USD -13.4 million for the full year 2018. This increase in the Infrastructure segment is mainly due to invoicing towards Gunvor for the FSRU which started in the last quarter of 2018. The standby revenues generated by TANGO FLNG since May 2019 are only
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31. The right-of- use lease liabilities as a consequence of the implementation of IFRS 16 are included in the above reported financial debts per 31/12/2019.
- REBITDA: recurring earnings before interests, taxes, depreciations and amortizations (including impairment). Following items are excluded from EBITDA in 2019: license fee (Infrastructure: USD 1.5 million). Following items are excluded from EBITDA in 2018: license fee (Infrastructure: USD 3.4 million).
recognised in P&L as from start of operations in September 2019 (in accordance with IFRS 15).
HIGHLIGHTS 2019
2019 has been an important year for the EXMAR Infrastructure business unit. We have delivered the main target for the EXMAR Group, being the startup of the TANGO FLNG for commercial operations in Argentina. TANGO FLNG is EXMAR's largest and most complex investment to date. This milestone has been achieved in a record time and in a very safe way due to an excellent cooperation between our technical and operational teams on one side and our customer on the other. Now the unit is fully operational and performing above expectation and is expected to contribute significantly to the revenue and cash flow of our Group in the coming years.
In order to implement our strategy and the solutions we offer to our customers in a successful way, our teams at various locations in the world, have to join forces more than ever before. In order to take advantage of the synergies existing both in engineering, project development and effective operations, both LNG and Offshore infrastructure activities have been consolidated into "EXMAR Infrastructure." With the new structure and in cooperation with EXMAR supporting services, the Infrastructure business unit covers a strong global network and a unique range of solutions and expertise for the commercialization of our existing assets and new prospects.
FLOATING LIQUEFACTION
TANGO FLNG is now fully operational, receives natural gas from the Vaca Muerta gas field in Bahia
Blanca Argentina and is forecasted to produce 500,000 tonnes of LNG per annum for export purposes. After having signed the charter agreement with YPF for the deployment in November 2018, 2019 commenced with the mobilization to and the commissioning of the unit in Bahia Blanca. The performance acceptance test met contract obligations foreseen within less than four months from arrival. The acceptance of the unit by YPF triggered monthly standby revenue, while operations prepared effective startup and operations after the Argentinian winter period.
On 14 September 2019 the 10-year term of the contract effectively commenced. As of today, 475,000 m³ LNG have been delivered, already resulting in four shipments by YPF.
With TANGO FLNG now providing monthly revenues, the financiers of the unit have approved the release of approximately USD 40 million from the cash collateral under the loan facility.
The TANGO FLNG is the third commercially operational FLNG worldwide. The unit has attracted interest from other parties in EXMAR's floating liquefaction solutions. Leveraging EXMAR's unique expertise in the field of floating liquefaction, several other projects are under study.
FLOATING REGASIFICATION
FSRU S188, EXMAR's barge-based floating regasification unit, has been performing in line with
EXMAR REPORT 2019
18
it's ongoing 10-year charter. In September 2019, Gunvor gave notice of dispute under the Charter and has commenced arbitration. Meanwhile the charter remains in full force.
The envisaged sale and lease back of the barge by CSSC shipping announced last year was not completed.
FLOATING ACCOMMODATION
Since July 2019, NUNCE has been continuously under contract to SONANGOL, offshore Angola. It remains employed until June 2022 and is contributing as anticipated to EXMAR's result.
ENGINEERING
EXMAR's engineering office in Houston, US, has registered high engineering utilization levels in 2019, and has contributed positively to the Group result.
EXMAR Offshore Company (EOC) has been working on a third semisubmersible floating production system using EXMAR's proprietary OPTI® design for the KING's QUAY project of Murphy Oil. Murphy Oil Corporation is one of the top five producing operators in the Gulf of Mexico and has acquired this unit under construction from the LLOG group in June 2019. Hull engineering and construction supervision services are being performed successfully. The unit will be deployed in the Gulf of Mexico, where also the two other existing OPTI designs are performing as per expectations.
Beyond the KING's QUAY project, EOC has performed additional early engineering work on potential new OPTI projects in the Gulf of Mexico. EOC expects that these studies and additional work related to its OPTI design will continue in 2020.
DESIGN | BUILD | OWN | COMMISSION |
19
OPERATE
DVO
For DV Offshore (DVO), our independent firm of consulting engineers specialized in all the technical aspects of marine engineering and operations, 2019 has confirmed to be a transition year with registered engineering levels in line with expectations and a growing focus on renewables.
OUTLOOK
EXMAR Infrastructure strives to be the preferred business partner of oil & gas exploration and production companies in the valorization of their existing or discovered oil & gas reserves.
The significant advantages of independent leasing and operation of oil & gas infrastructure assets has been proven to the industry over the past decades. Indeed, it allows the customer to focus on the monetization of the molecule, while enabling them
at the same time to reduce the required upfront investment and the technical risk on the project development.
After having been a pioneer in the development of ship based floating regasification, the (re) deployment of TANGO FLNG as the third FLNG in operation in the world has confirmed EXMAR's capabilities to successfully deliver innovative, fast track and cost competitive floating oil and gas infrastructure projects.
For new FLNG projects we are confident that we can leverage on the experience of our competent and motivated experts from the various domains and on the lessons learned of TANGO FLNG to provide a well performing floating liquefaction solution at a competitive life cycle cost and backed by appropriate financing.
The same goes for floating infrastructure opportunities we are working with LNG regasification and storage, oil production and storage, or in other aspects of the value chain.
The opportunities that match the globally ongoing energy transition and the technology for this purpose are very much existing. We strongly believe that the challenge in floating infrastructure projects is in tailoring this existing technology into quick to market one stop-shop solutions and that at the same time are a best fit for the specific project and location.
EXMAR, with its in-house project development and operational resources and expertise, is perfectly geared to take full responsibility of such projects, coordinating modifications, upgrades or any re-deployment tailored to the project in a fast track way. And our continued involvement in the ownership and operations and maintenance after delivery and start of operations is a commitment for performance as per expectations.
Floating infrastructure solutions being capital intensive, we are constantly developing our network of financiers and equity partners to support the prospects and projects in our portfolio. Here again EXMAR's 40 years of experience and track record in project development and execution is of key importance.
EXMAR REPORT 2019
20
SUPPORTING SERVICES
In addition to its core business activities, EXMAR has business interests in a variety of companies in the fields of ship management, specialized travel and supplies to the marine and offshore industry.
Total per | Total per |
31/12/2019 | 31/12/2018 (*) |
RESULTS 2019 - PROPORTIONATE CONSOLIDATION (IN MILLION USD)
The EBIT for the Supporting Services in the full year 2019 was USD 18.0 million compared to USD -2.5 million for the full year 2018. On June 29, 2019, EXMAR signed an agreement with Compagnie Maritime
Turnover
EBITDA
REBITDA (**)
Operating result (EBIT)
Consolidated result after tax
Vessels (including vessels under construction)
Financial debts
42.337.9
19.9-1.3
0.9-1.3
18.0-2.5
39.214.3
0.00.0
24.79.7
Belge ("CMB") for the sale of its 50% share in RESLEA. The sale resulted in a gain of USD 19.2 million.
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31. The right-of- use lease liabilities as a consequence of the implementation of IFRS 16 are included in the above reported financial debts per 31/12/2019.
- REBITDA: recurring earnings before interests, taxes, depreciations and amortizations (including impairment). Following items are excluded from EBITDA in 2019: sale RESLEA and BIM (Services: USD 19 million).
EXMAR SHIP MANAGEMENT
XMAR Ship Management provides high quality ship management and related services to LPG carriers, fruit juice carriers, bulk carriers, FLNGs, FSRUs, FSUs, FSOs
and accommodation barges.
The past decade EXMAR Ship Management has matured from an in-house ship management services provider to a known Operations and
Maintenance (O&M) services provider in niche segments in the oil and gas industry. In alignment with the EXMAR Group, during 2019 the O&M activities of EXMAR Ship Management have been grouped into two distinct Business Units: (i) Ship- ping, and (ii) Infrastructure. This new organizational structure improves the flexibility and customer focus of the fleet teams and enables operational teams to efficiently align with international industry standards and best practices.
Industry requirements
A major contributing factor to the overall improvement in ship management operations and safety over the last three decades has been the gradual tightening of oil major requirements through stringent vetting regimes and the Tanker Manager Self-Assessment (TMSA) declaration. TMSA was developed by the Oil Companies Marine International Forum (OCIMF) to assist ship managers in assessing their safety management systems (SMS), required under the International Safety Management (ISM) Code. Using TMSA, owners can measure and improve upon any aspect in their SMS that might be sub-standard or weak. EXMAR Ship Management continuously maintains an updated TMSA that is reviewed regularly by different oil majors.
As our seafarers are the cornerstone to the success of the EXMAR Group, one of the action items is to further strengthen the good relationship between shore- and sea-based employees. The developed action plan includes a variety of updated targets ranging from increased vessel visits by shore personnel to more coaching on board of the vessels. For many years, our global crew conferences have been hosted in order to spread the Company values, to start a dialogue with our seafarers, to train our crew on industry best practices and to inform them on latest developments in the industry and EXMAR Group. These confe rences are organized on a global scale and will remain a very strong element in building a constructive, safe and performing work environment.
21
SHIP TO SHIP | ||||||||
TRANSFER | ||||||||
SUMMARY LPG STS OPERATIONS 2019 | ||||||||
3,079 m3 | 4,331 m3 | |||||||
57,226 m3 | 425,086 m3 | 651,236 m3 | 421,725 m3 | |||||
LOADED | DISCHARGED | |||||||
485,391 m3 | 1,077,292 m3 | |||||||
� | TOTAL | � | ||||||
145 | Butane | |||||||
TRANSFERS | Propane | |||||||
LPG Mix | ||||||||
1,562,683 m3 | ||||||||
EXMAR Ship Management has always had a varied portfolio of vessel and infrastructure owners active in the oil and gas industry. 2019 has been a challenging year for the shipping division with four newbuild VLGCs and one MGC entering into management. The Infrastructure division commenced commercial operations of TANGO FLNG in Argentina. The unit was commissioned by the customer in June 2019, with commercial operations commencing in mid-September and the first LNG cargo being transported by mid-November. This fast track solution is unique and a great achievement by all parties involved, especially the O&M team ashore and on board of the unit.
2020 will be another interesting year with the preparations for the management of two VLGCs ordered by EXMAR at the Jiangnan shipyard in China and the start of AEX LNG Management.
EXMAR and Anglo-Eastern Univan Group joined forces and established a joint-venture named AEX LNG Management. The start-up will be dedicated to LNG newbuilding supervision and vessel management of LNG carriers for third-party owners. Based in Singapore and combining the LNG expertise of EXMAR Ship Management with the global scale and systems of Anglo-Eastern, AEX LNG Management successfully completed its first interim Document of Compliance audit in December 2019. In 2020, focus will turn to bringing the first LNG conventional carrier into management and subsequently expanding its scope of business.
Excelerate Energy announced in 2019 the launch of their own ship management division Excelerate Technical Management. They plan to transition their entire fleet to this division before the end of 2020.
EXMAR REPORT 2019
22
2
NEWBUILDS
VLGC JIANGNAN H2667
owned
VLGC JIANGNAN H2668
owned
5
PRESSURIZED
ELISABETH JOAN
bareboat bareboat
MAGDALENA MARIANNE
bareboat bareboat
ANGELA
bareboat
1
FSU
(VESSEL-BASED)
PORTOVYY
managed
20
MIDSIZE GAS CARRIERS
TOURAINE | SOMBEKE | KAPRIJKE | KOKSIJDE |
joint venture | joint venture | joint venture | joint venture |
EUPEN | WAASMUNSTER | KNOKKE | WEPION |
joint venture | joint venture | joint venture | joint venture |
LIBRAMONT | WARISOULX | KONTICH | JUNGFRAU |
joint venture | joint venture | joint venture | EXPLORER |
WARINSART | KORTRIJK | managed | |
joint venture | joint venture | ||
WAREGEM | KALLO | ||
joint venture | joint venture | ||
BRUSSELS | KRUIBEKE | ||
joint venture | joint venture | ||
BASTOGNE | KAPELLEN | ||
joint venture | joint venture |
1
SEMI-
REFRIGERATED
2 | |
TEMSE | ACCOMMODATION |
joint venture | BARGES |
1 | NUNCE |
joint venture | |
WARIBOKO | |
FSRU BARGE | joint venture |
FSRU S-188
owned
23
1 | 1 | ||
FSO | |||
MULTIPURPOSE | |||
SUPPLY VESSEL | |||
10 | NKOSSA II | ||
1 | GEO OCEAN II | managed | |
managed | |||
FSRU | |||
(VESSEL-BASED) | |||
FLNG BARGE |
TANGO FLNG | EXCELLENCE | EXPEDIENT | FSRU TOSCANA |
managed | managed | managed | |
owned | EXCELSIOR | EXPLORER | SUMMIT LNG |
11 | managed | managed | managed |
EXEMPLAR | EXPRESS | EXPERIENCE | |
managed | managed | managed | |
VERY LARGE | EXQUISITE | ||
GAS CARRIERS | |||
managed |
LEVANT | BREEZE | EIGER | 5 | |
managed | managed | EXPLORER | ||
PASSAT | MISTRAL | managed | ||
managed | managed | MATTERHORN | FRUIT JUICE CARRIERS | |
SIROCCO | MONSOON | EXPLORER | ||
managed | ||||
managed | managed | |||
WEISSHORN | ||||
AVANCE | DOM | |||
EXPLORER | ||||
managed | EXPLORER | CARLOS | PREMIUM DO | |
managed | ||||
managed | FISCHER | BRASIL | ||
managed | managed | |||
1 | CITRUS VITA | SOL DO | ||
BRASIL | BRASIL | |||
managed | managed | |||
OURO DO | ||||
LNG CARRIER | BRASIL | |||
managed | ||||
EXCALIBUR | ||||
joint venture |
EXMAR REPORT 2019
24
BEXCO
BEXCO is a leading European manufacturer of synthetic mooring, towing and lifting ropes, made-to-measure for offshore, oil and gas, marine and industrial applications.
In 2019, BEXCO had its largest order ever intake for deep water mooring rope, with DeepRope tender wins for exploration projects reaching final investment decision (FID). BEXCO was also able
to successfully deliver its first DeepRope project in China for national offshore producer CNOOC.
BEXCO significantly grew its market share in synthetic slings for offshore heavy lift operations, with notable reference gains for offshore wind installations. It also delivered specialized HMPE rope for FLNG jetty mooring and FSRU shallow water seabed mooring. Both these markets are expected to grow in demand during 2020.
25
BEXCO also consolidated its market share in Single Point Mooring solutions.
In the marine market, BEXCO retained its recurring mooring business with two of the world's leading liner shipping owners for their existing fleets as well winning tenders for their ultra-large containership newbuild programmes. BEXCO also made inroads into the cruise liner sector, having developed a specialized mooring solution
for the segment. BEXCO will expand its activities in both LNG shipping and towing in 2020.
BEXCO expanded its presence in the US, with strong showings in the order book for inland marine and local offshore mooring, towing and heavy lift applications. In 2020, BEXCO will also esta blish direct representation in Australia.
January 2020 saw the appointment of Chief Commercial Officer Rudi Labeau as the new Chief Executive Officer of BEXCO.
TRAVEL PLUS
Travel PLUS is Belgium's largest independent travel agency, located in Antwerp. It differentiates by offering a high level of personal care towards its business and leisure travellers, combining tailor -made itineraries with exceptional after-sales service.
The revenue split of 70/30 between respective business and leisure segments is as per the previous year.
The result from 2019 is also in line with the previous year thanks to a decent performance in bookings from both existing and new clients.
Travel PLUS aims at retaining and further growing its clientele base by centralizing all its bookings onto a single platform and by focusing on profitable organic growth in 2020. The company has also entered into an exclusive partnership with the Travel Leaders Network, a community of travel professionals representing approximately 5,700 travel agency locations across the United States and Canada. This will provide access for the company to corporate travel whilst maintaining its PLUS Service value proposition (Professional Loyal Unbeatable Service).
It is expected that COVID-19 will have an impact on the results of 2020.
EXMAR YACHTING
With a fleet of luxury vessels under management, EXMAR Yachting assists both experienced and first-time owners in building, refitting, maintaining and chartering their luxury yachts. The team of highly experienced captains, technical superinten- dents, crewing managers and operations staff are on hand to provide a dedicated and personal service for each vessel.
EXMAR REPORT 2019
26
#03
CARE FOR TODAY,
RESPECT
FOR TOMORROW
EXMAR REPORT 2019
28
As a global energy supply chain solutions provider, EXMAR operates in an ever-changing world. Our business is to develop specialized solutions for clients
who are looking to find innovative means of storing, transporting and transhipping hydrocarbons in
both liquefied and gaseous states. In all activities we give the upmost priority to the health, safety and well-being of our people at sea and ashore, the quality of our assets and the protection of the envi- ronment. We want to demonstrate to the world "we care today because we respect tomorrow".
Our business principles
We do business with respect for the world in which we operate and we recognize that our operations impact our colleagues, customers, suppliers, partners and society as a world-class global provider of specialized services to the oil and gas industry.
- We respect the fundamental human rights and freedoms. We do not tolerate discrimi- nation of any kind on grounds of race, colour, sex, language, religion, political or other opin- ion, national or social origin, property, birth or other status.
- We undertake to be open, honest and accountable in our relationships with everyone we work with and with each other. This means that we will not tolerate any form of bribery, facilitation payments or fee- based recruitments made in the course of business or services related to our Company.
- We apply a zero-tolerance for modern slavery in our supply chain. This includes but is not limited to child labour, human trafficking and forced or bonded labour. Furthermore, we subscribe to fundamen- tal labour rights: the ability to enter into employment and terminate it freely and voluntarily as per relevant collective agreements; freedom of association and collective bargaining; and access to information on rights and obligations during employment.
- We encourage and promote processes in our supply chain that minimize the impact on our natural resources, that reduce the release of greenhouse gasses and that have no negative consequences to the environment.
- We insist on maintaining the highest safety standards throughout our operations, our supply chain and in the services provided to us.
PEOPLE - OUR MOST VALUABLE ASSET 29
EXMAR employees are the key to our success: their skills, commitment and motivation make EXMAR competitive and fit for the future.
EXMAR places great importance on a healthy, competitive working environment and a well- defined organisational structure, and to the sense of belonging, motivation and team spirit of its employees, on every level.
All staff members are given the opportunity to extend their knowledge and experience further via courses and training, with participation in internal and external seminars and conferences.
SOCIAL RESPONSIBILITY INITIATIVES EXMAR is also a patron to VZW ZachteKracht, which is a charity located at the Royal Yacht Club at the Belgian coast town of Nieuwpoort and which offers opportunities to young people with special needs to sail on a yacht at sea for a day. EXMAR staff organizes an annual fairtrade breakfast in recent years and distributed Saint Nicholas chocolate which support the charity OXFAM.
TRANSITION OFFICE
Early 2019 an internal EXMAR survey took place. Up to 50 managers and employees from different business units in Antwerp Headquarters as well as from the Houston office were interviewed to give open feedback on the current status of the Company and the potential areas of improvement. The findings provided very useful input and resulted in a report with action points to prepare EXMAR for the future. A Transition Office team was installed to facilitate the implementation of the plan. Four focus areas were identified: the business model, organizational struc- ture, financial performance management and the Company culture. This has led to a series of changes and initiatives which include:
- an adapted organisational structure
- increased interaction between the business units
- internal communication engagement with several information sessions, internal workshops and an EXMAR Conference for all staff
- HR policies for the various companies in the EXMAR Group were compared and prepared for alignment.
EXMAR REPORT 2019
30
ENVIRONMENT AND
SAFET Y
SUSTAINABLE SHIPPING
The shipping sector has always been subject to increasing international, regional and local regulatory pressure for sustainable shipping and more lately an increased focus has been placed on improving efficiency and reducing CO2 and greenhouse gas emissions.
As a ship manager, EXMAR Ship Management (ESM) aims to operate the vessels in compliance with all international regulations and requirements. Our ESM management system obtained external certifications such as ISO 14001 (environmental care), ISO 50001 (energy efficiency) and OHSAS 18001 (health and safety). ESM supports sustainability initiatives and is part of the Environmental Committee of Intertanko.
The commitment to lower emissions and to optimize fuel consumption is monitored via annual objectives. All energy efforts and fuel efficiency targets are also continuously monitored via technology that is supported by a leading classification society. EXMAR Ship Management voluntarily participates in the
Environmental Ship Index system (ESI) whereby basic vessel emission data is submitted resulting in an ESI score per vessel.
ENVIRONMENTAL PERFORMANCE
In 2019 there were no overboard spills reported. In total there were six oil spills on board of which two took place on deck during lifting operations. Each case was thoroughly investigated, with corrective and preventive actions taken.
One of our main focus points is improving the energy efficiency of the EXMAR fleet. The Energy Efficiency Operational Indicator (EEOI) is a monitoring tool for managing ship and fleet efficiency over time. The average EEOI for EXMAR's LPG fleet was 40,5 in 2019.
Thanks to our efforts by staff at sea and on shore, the EXMAR midsize LPG fleet had a year-on-year average reduction of 14,75% on fuel consumed per nautical mile sailed. As a result, EXMAR achieved a 10,80% reduction in CO2 emitted per nautical mile sailed.
In 2019, the EXMAR Fully Pressurized fleet completed the second special survey dry dock. Maintenance works on the engines, hull and propeller performed during these technical stops, lead to a fuel efficiency increase as per following graphs.
-22% | -22% |
2019 | |
-20% | -20% |
2018 | |
-18% | -18% |
Di…erence(%) | |
-16% | -16% |
-14% | -14% |
-12% | -12% |
-10% | -10% |
-8% | -8% |
-6% | -6% |
-4% | -4% |
-2% | -2% |
0% | 0% |
Fuel consumed | CO2 emitted |
per nautical | by distance |
mile (kg/NM) | (kg)NM) |
Pre DD Group avg | Post DD Group avg | Saving % | ||||
-17.51% | ||||
-16.74% | ||||
-13.81% | ||||
-10.81% | ||||
-5.89% | ||||
11 | 12 | 13 | 14 | 15 |
Speed (km)
31
SAFETY PERFORMANCE
In 2019 the frequency of lost time injuries (LTI) for the total fleet managed by EXMAR Ship Management decreased to 0.81, a reduction of 37% compared to last year. Taking into account the significant expansion of both the owned and managed fleet, we are very proud of this result. Looking at the EXMAR LPG fleet, the safety performance in 2019 was the best so far with 0.31 lost time injuries per 1 million working hours.
EXMAR is not only looking into preventive measures for lost time injuries, but also into the root causes of restricted work, medical treatment, first aid cases or serious near misses. Examples of initiatives taken in 2019: new scaffolding material, reviewed procedure for safe lifting operations and working at height, new Personal Protective Equipment (PPE) for the prevention of eye injuries, and a vertical life line system to safely climb on deck ladders with a height of more than two meters.
Launch of the generic risk assessment library The overall goal of our Safety Management System is to control the risks related to a job. Based on the input from our crew, proper risk management is often time consuming and very challenging given the vessels' busy schedule with short port calls, increased administration etc. EXMAR's HSEQ department is continuously looking into ways to optimize the process and improve the Company's safety performance.
In 2019 we launched a digital generic risk assessment library on board the fleet. The library includes generic risk assessments for the jobs that frequently take place on board. Each risk assessment is the result of a team effort between ves- sels, marine, technical and HSEQ department. The crew on board uses the generic risk assessment as a basis to start from and adds situation and job specific risks to it.
Third parties: their safety is our business
Based on analysis of safety statistics third parties working on board our fleet were identified as a high risk, both to our crew as to third party workers' own safety.
Their safety is our business and needs a structured approach, below tools were implemented:
01 A new policy on the EXMAR HSEQ standard and requirements towards third parties. The policy is to be acknowledged by the third party when signing the contract.
02 A new tool to manage safety during third party interventions with a focus on
- joint job preparation
- open communication and close follow-up
03 New evaluation system for third parties
Safety campaign posters
Besides systems and tools, safety awareness and communication are crucial. The initiative of bi-monthly safety campaign posters was launched. Here's an overview of the 2019 campaigns:
01 Safety is in your hands:
8 measures to prevent hand injuries
02 Know how to beat the heat with tips and
tricks on how to avoid heat strokes
03 Lift the value of safety: safety during lifting operations
04 Get on board with safety: safe transfer by launch
05 Don't be toxic to safety: safely working with chemicals
Taking
the Safety LEAD update
U s w
F e
M | ||
B | g | |
y | s | |
p | c | |
u | ||
g |
EXMAR REPORT 2019
32
RESEARCH & DEVELOPMENT (R&D)
With the R&D group within EXMAR, efforts are being made to look beyond hydrocarbons and work towards a less hydrocarbon- intensive economy. One of the possible cornerstones for an economy which might be less carbon intensive could be hydrogen. In this respect, EXMAR has multiple R&D projects running to anticipate the possible shift from a hydrocarbon economy to a hydrogen economy.
The hydrogen coalition
Together with six other leading players EXMAR signed a cooperation agreement to research on hydrogen and the establishment of an end-to-end supply of hydrogen as an energy and fuel source.
The climate target to reduce CO2 emissions in Belgium by 80% by 2050 compared to 2005 levels is a major challenge. Hydrogen could have an important role to play in the mix of solutions to achieve results. The coalition includes DEME, ENGIE, EXMAR, Fluxys, Port of Antwerp, Port of Zeebrugge and WaterstofNet.
A joint study will serve as a basis to coordinate delivery of concrete projects that shape the production, transport and storage of hydrogen. Hydrogen is an important carrier for renewable energy to be used for electricity and heat production, for mobility, for fuel production and as a raw material for industrial production. Crucial in the viability of a hydrogen economy is the generation of sufficient renewable electricity for the production of hydrogen.
As in Belgium wind and solar energy are not sufficiently available, part of the renewable energy will need to be imported. However, efficient and economic solutions for the production, transport, import and storage of hydrogen require specific expertise. The seven major industrial players and public stakeholders will bring their expertise together in a coordinated way taking steps towards a hydrogen-based economy in Belgium.
The partners will make a joint analysis of the entire hydrogen import and transport chain. The aim is to map the financial, technical and regulatory aspects of the various components in the logistics chain: production, loading and unloading and transport by sea and via pipelines. The outcome of the analysis will be a roadmap that indicates the best way to transport hydrogen for the various applications in the energy and chemical sector. The results of this analysis, which is expected to be ready in approximately one year, will form the bridge towards concrete projects.
HyMethShip
EXMAR is part of the HyMethShip Consortium which has been granted EUR 9 million fund under the EU Horizons 2020 programme.
The goal of the research project is to design an emission -free commercial vessel, using e-methanol as fuel source.
The HyMethShip system innovatively combines a membrane reactor, a CO2 capture system, a storage
OFF-SHOREON-SHORE
H2O | RENEWABLE | |
ENERGY SOURCES | ||
O2 | ELECTRICITY | |
H2 | ||
CO2 | REFORMER 1 | |
HYMETSHIP SYSTEM BOUNDARY | METHANOL AIR CLEAN EXHAUST GAS | |
N2 O2 H2O | ||
SOX, PM | ||
NOX IMO Tier III | ||
METHANOL-TANK | ||
PERFORMER 2 | H2 | |
CO2 TANK |
33
system for CO2 and methanol as well as a hydrogen -fueled internal combustion engine into one system (Figure page 32).
The proposed solution converts methanol to hy- drogen, which is then burned in a conventional reciprocating engine that has been upgraded to burn multiple fuel types and especially optimized for hydrogen use.
The HyMethShip system is expected to significantly reduce emissions and improve the efficiency of wa- terborne transport at the same time. The concept allows for more than 90% reduction in CO2 emissions and will practically eliminate sulphur oxide and particulate matter emissions.
It is envisaged that NOx emissions will be reduced by more than 80%, significantly below the IMO Tier
- limit. This system will be developed, validated, and demonstrated on-shore with an engine in the range of 1-2 MW typical for marine applications. Ultimate- ly the HyMethShip concept could become a nega- tive greenhouse gas (GHG)-emission contributor.
Hydrogen-driven yachts
The Dutch naval architecture and design studio Diana Yacht Design has unveiled a brand new, radical superyacht concept for the 2019 Monaco Yacht
Show: the 36-metre Blue Angel superyacht. With hydrogen propulsion providing the yacht's power, Diana Yacht Design and the Belgian company EXMAR Yachting prove the eco-credentials within the superyacht industry can be so much more than surface level. Blue Angel is aesthetically appealing; she is clean and athletic with modern exterior lines, and, above all, realistic in the design.
The idea behind this ecological yacht began with EXMAR Yachting, which has been closely following the development of technology for creating a hydrogen-powered yacht. After some creative meetings with the Dutch studio, sketches of the first of three yacht concepts were made: the 'Ecological' Blue Angel concept.
The concept is based on meeting the needs of a hard-working, modern family who are looking to make the most of their leisure time, enjoy a luxury lifestyle and explore the world but who also care deeply about the environment.
When Blue Angel is running on hydrogen as its sole fuel, this allows for silent and clean cruising with zero emissions. The fuel cells to be used to generate the propulsion power are completely silent, vibration, smoke and smell free. This perfectly combines the advantages for the environment with an increased experience on board of the yacht.
EXMAR REPORT 2019
34
NEWBUILD VESSELS
In 2019, EXMAR has placed an order for two state- of-the-art VLGCs at the Jiangnan shipyard in China. Compared to their peers, when delivered these VLGCs will be considered as a Super-ECO design with a significantly lower environmental footprint.
Environmental
Less consumption/lower carbon footprint
All best available technology will be combined to increase the efficiency of the vessels.
The power needed to sail the vessels through the water will be minimized as far practically possible through a smart combination of following features:
- Hull line optimization using powerful Computational Fluid Dynamics software comparing hundreds of dif- ferent hull forms and selecting the one hull form which has the best performance for the intended service
- Selection of a premium anti-foaling coating on the underwater hull to minimize the resistance through
the water, while keeping the operating profile of the vessel in the equation
- Installation of a propeller with the lowest possible surface roughness, which can be made with the current machinery available in combination with a well-designed propeller boss cap fin. Both signifi- cantly boost propeller performance
- Providing the crew with trim optimization software and tools to ensure the vessel is always sailing on the trim giving the least resistance
- Fitting of a full spade rudder which reduces the total rudder surface and hence also has a positive effect on the total vessel resistance.
Reducing the power requirements is only one step of the effort. The next step is to ensure that the power to propel the vessel will be generated in the most efficient way. EXMAR has succeeded in this by radically opting for a completely different marine fuel: LPG. While LPG has been used for a long time already in the automotive industry, it never made its introduction in the maritime industry up until now.
Percentage | |||
105 | |||
M/E specific consumption | Propulsion power | Ship's fuel consumption | |
100 | |||
95 | |||
90 | |||
85 | |||
80 | |||
75 | |||
70 | |||
65 | |||
60 | 2014 | 2015 | 2018 |
2006 |
Year of dilivery
35
With this novel idea, the CO2 emissions of the vessel decrease in one step with 15%, which brings with it a major reduction of the carbon footprint of a VLGC. Additionally the latest engine design has been adopted to give lower consumption and a shaft generator will be fitted. Using the shaft generator during sailing, the 4-stroke auxiliary engines can simply be switched off and all onboard electrical power can be generated using LPG as fuel as well with a more efficient 2-stroke engine.
All these efforts are finally being translated into the Energy Efficiency Design Index (EEDI), which is an IMO Key Performance Indicator (KPI) on the performance of newbuild vessels. The new VLGCs will easily reach an EEDI level 3. Such a level is only mandatory as from 2025 onwards, which means the EXMAR VLGCs being delivered in 2021 will already be compliant with the energy requirements of the future.
Less pollution
As an important additional benefit of EXMAR's choice to use LPG as fuel, the air emissions of harmful components are being drastically lowered as well (compared to standard HFO):
- The SOx emissions are lowered with 97%, easily complying with the IMO limit of 0.5% Sulphur in the fuel
- The NOx emissions are lowered with 15% while sailing worldwide. In the NOx ECA zones the NOx emissions are further reduced by using a Selective Catalytic Reduction unit, lowering the NOx lev- els from the exhaust gas below the IMO Tier III limiations
- The Particulate Matter content in the exhaust gas is lowered with 50%.
Apart from the direct air emissions from the machin- ery, significant efforts and investments have been done to tackle as well other possible harmful substances.
- The refrigerant in the cooling systems used on board of the vessels will be R407C, which is much less ozone depleting compared to other products available on the market. Additional to this, leak detectors will be fitted around refrigerating equip- ment to quickly be warned in case of any leakage.
- The firefighting substances which will be deployed include CO2, nitrogen, dry power and water spray; i.e. no substances which are damage the ozone layer.
- An UV-type ballast water treatment plant compli- ant with IMO D-2 and with USCG type approval will be installed.
- In order to segregate the oil better from the bilge water a primary bilge settling/cascade tank will be fitted. The oily water separator will be fitted with a 5 ppm oil in water detector on the overboard line. This means that the water is much cleaner compared to the industry standard where regulations allow 15ppm oil in water concentration for discharging bilge water.
- Clean condensate water from the main engine air cooler and the air-handling unit will be collected in a separate tank to avoid oil contamination of the same.
- A garbage management plan will be implemented, all garbage will be separated and a garbage com- pactor will be installed to reduce the waste volume.
- The vessels will be equipped with a sewage treatment plant compliant with the latest international standards. The grey water (coming from the showers) will also be led to this sewage treatment plant. A grey water holding tank with
sufficient capacity will be installed in the vessel.
- The vessels will comply with the anti-fouling con- vention and use no harmful components like TBT that leach into the seawater and kill marine life.
- Grease for open gears and cables of deck machinery shall be an environmentally acceptable lubricant.
- An air chamber sealing system will be installed in the stern tube.
- The vessels will hold and maintain an Inventory of Hazardous Materials.
- Last but not least will the liquefaction plants of the vessels be equipped with an ECO condenser to reduce the emission of hydrocarbons in cargo liquefaction operations.
Social
The vessels will be fully compliant with the Maritime Labour Convention. Additional investments have been made to improve the accommodation and equipment installed inside to improve the welfare of the crew.
The galley equipment was upgraded and the design of the galley was made in consultation with a galley coach.
The ships office will have an "open office" setup, increasing the social interaction. For the same reason a common mess room was selected instead of the usual separate setup between officers and crew.
A dedicated smoking room with proper extraction fan is foreseen where smoking is allowed. In all other places in the accommodation smoking will be forbidden.
EXMAR REPORT 2019
36
#04
FINANCIAL
REPORT
EXMAR REPORT 2019
38
FINANCIAL
CONTENT
CORPORATE GOVERNANCE STATEMENT 39
ANNUAL REPORT OF THE BOARD OF DIRECTORS 54
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 61
CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND CONSOLIDATED STATEMENT OF
OTHER COMPREHENSIVE INCOME 62
CONSOLIDATED STATEMENT OF CASH FLOWS 63
CONSOLIDATED STATEMENT OF CHANGES IN EQUIT Y 64
NOTES:
#1. | Accounting policies | 66 | #20. | Trade and other receivables | 97 |
#2. | Segment reporting | 76 | #21. | Tax assets and liabilities | 98 |
#3. | Reconciliation segment reporting | 79 | #22. Restricted cash and cash and cash | 99 | |
#4. | Operating income | 81 | equivalents | ||
#5. | Vessel expenses | 82 | #23. Share capital and reserves | 99 | |
#6. | General and administrative expenses | 83 | #24. Earnings per share | 100 | |
#7. | Personnel expenses | 83 | #25. Borrowings | 101 | |
#8. | Finance income/expenses | 83 | #26. Share based payments | 104 | |
#9. | Income taxes | 84 | #27. Employee benefits | 105 | |
#10. Disposal of an equity accounted | 85 | #28. Provisions | 107 | ||
investee | #29. Trade and other payables | 107 | |||
#11. | Vessels | 87 | #30. Financial risks and financial | 108 | |
#12. | Other property, plant and equipment | 88 | instruments | ||
#13. | Intangible assets | 89 | #31. | Leases | 112 |
#14. Right-of-use assets | 90 | #32. Capital commitments | 114 | ||
#15. Equity accounted investees | 90 | #33. Contingencies | 114 | ||
#16. Financial information equity | 91 | #34. Related parties | 115 | ||
accounted investees | #35. Group entities | 118 | |||
#17. | Borrowings to equity accounted | 96 | #36. Major exchange rates used | 119 | |
investees | #37. Fees statutory auditor | 119 | |||
#18. Non-current assets held for sale | 96 | #38. Subsequent events | 120 | ||
#19. Other investments | 97 |
SIGNIFICANT JUDGMENTS AND ESTIMATES 120
STATEMENT ON THE TRUE AND FAIR VIEW 121
REPORT OF THE STATUTORY AUDITOR 122
STATUTORY FINANCIAL STATEMENTS 126
CORPORATE GOVERNANCE 39 STATEMENT
Corporate Governance aims to define several rules and behaviours according to which companies are properly managed and con- trolled, with the objective to increase trans-
parency. It's a system of checks and balances between the shareholders, the Board of Directors, the Chief Executive Officer and the Excecutive Committee.
GOVERNANCE MODEL
EXMAR NV is governed by the Belgian Code of Companies and Associations and the 2009 Belgian Corporate Governance Code. The key features are:
- A Board of Directors, which defines EXMAR's general policy and strategy and supervises the op- erational management;
- An Audit Committee, a Nomination and Remu- neration Committee and an Executive Committee created by the Board of Directors;
- A Chief Executive Officer (CEO) who takes pri- mary responsibility for operational management.
DESIGNATION APPLICALBE 2009 CODE ON CORPORATE GOVERNANCE
This Corporate Governance Statement is covered by the provisions of the Belgian 2009 Corporate Governance Code. The Royal Decree of 6 June 2010 recognized the Code of 2009 as the only applicable Code. This Code is published in the Belgian Official Gazette (Moniteur Belge/Belgisch Staatsblad) on 23 April 2010 (www.staatsblad.be), as well as on the website www.corporategovernancecommittee.be.
As a result of the publication of the 2009 Belgian Corporate Governance Code ("Code 2009"), EXMAR has Code 2009 as a reference code.
PRINCIPLES CODE 2009
Pursuant to article 3:6 of the Belgian Code of Companies and Associations, EXMAR follows the principles of the 2009 Belgian Code on Corporate Governance:
- The Company adopts a clear governance structure;
- The Company has an effective and efficient Board of Directors that will make decisions in the interest of the Company;
- All directors show integrity and dedication;
- The Company has a rigorous and transparent pro- cedure for the appointment and the evaluation of its Board and the members thereof;
- The Board of Directors creates specialized Committees;
- The Company develops a clear structure for executive management;
- The Company compensates the directors and the members of the Executive Management in a fair and responsible manner;
- The Company enters into a dialogue with share- holders and potential shareholders, based on mutual understanding of each other's objectives and expectations;
- The Company guarantees suitable disclosure of its Corporate Governance.
CORPORATE GOVERNANCE CHARTER AND CORPORATE GOVERNANCE STATEMENT As a Belgian-headquartered Company with a commitment to the highest standards of corporate governance, the Board of Directors adopted a Corporate Governance Charter.
EXMAR's Corporate Governance Charter was approved by the Board on 31 March 2010 and updated and approved by the Board of Directors on 2 September 2016. This Charter is also applicable to all affiliates of EXMAR.
The Corporate Governance Charter contains a summary of the rules and principles on which EXMAR's Corporate Governance is organized and is based on the provisions of EXMAR's Articles of Association, the Belgian Code of Companies and Associations and the most recent version of the Belgian Corporate Governance Code.
The Belgian Corporate Governance Code is based on a 'comply or explain' principle.
The Company aims to comply with most provisions of the Belgian Corporate Governance Code, but the Board is of the opinion that deviation from provisions may be justified in the light of the Company's specific situation. If applicable, an explanation is provided in the Corporate Governance Statement about the deviations during the past financial year on specific provisions of the Code in accordance with the 'comply or explain' principle.
The Corporate Governance Charter describes the Company's profile, capital shares and shareholders and the applied principles related to the shareholders' meetings.
EXMAR REPORT 2019
40
The roles and responsibilities of the different organs within the Company are described:
- The power, responsibilities and functioning of the Board are elaborated. The Corporate Gover- nance Charter defines the rules in operation of the Board, dealing with Conflicts of Interest, remuner- ation and evaluation.
- The functioning of the Audit Committee and Nomination and Remuneration Committee, set up in delegation of the Board is described in detail.
- The roles and rules in the organization of the day- to-day management, the power and responsibili- ties of the Chief Executive Officer and Executive Committee are elaborated.
This Corporate Governance Statement describes the measures taken by EXMAR to ensure compliance with laws and regulations relating to insider trading, corruption, money-laundering practices, competition, sanctions and suchlike.
The Corporate Governance Charter and Corporate Governance Statement of EXMAR can be consulted on the website (http://exmar.be/en/in- vestors/corporate-governance).
NEW BELGIAN CORPORATE GOVERANCE CODE 2020
The new Belgian Corporate Governance Code 2020 ("Code 2020") was presented on 9 May 2019 as a new reference code for Belgian listed companies.
Code 2020 attaches great importance to sustainable value creation and long-term vision. The new code, which replaces the versions previously published in 2004 and 2009, is also structured under a number of principles. Listed companies are expected to comply with the principles unless an adequate explanation for deviating from a provision is provided.
The Code 2020 applies as from financial year 2020. EXMAR will reflect on its current governance struc- ture; an amended Corporate Governance Charter will be drafted, discussed and adopted by the EXMAR Board including all elements required by law and the statements how the Code is applied. The EXMAR code will be aligned with the new Code of Companies and Associations and the new Articles of Association which will be discussed and presented to the Shareholders later in 2020 for approval.
1. General information
about the Company
1.1 DATE OF ESTABLISHMENT AND AMEND- MENTS TO THE ARTICLES OF ASSOCIATION TheCompanywasestablishedbynotarialdeedon20June 2003, published in the appendix to the Belgian Official Gazette of 30 June thereafter, reference 03072972, and of 4 July thereafter, reference 03076338.
The Articles of Association were amended several times and for the last time by deed executed before civil law notary Benoit De Cleene in Antwerp, replacing his colleague notary Patrick Van Ooteghem in Temse, on 15 May 2018, published in the appendix to the Belgian Official Gazette of 17 September thereafter, reference 18139021.
1.2 REGISTERED OFFICE
De Gerlachekaai 20, 2000 Antwerp, Belgium.
VAT BE0860.409.202.
Company Registration Antwerp - section Antwerp.
1.3 ISSUED CAPITAL
The issued capital amounts to USD 88,811,667, is fully paid-up and is represented by 59,500,000 shares without nominal value. For the application of the provisions of the the Belgian Code of Companies and Asso- ciations, the reference value of the capital is set at EUR 72,777,924.85.
No changes in capital occurred during the course of 2019.
1.4 AUTHORIZED CAPITAL
Pursuant to the Belgian Code of Companies and As- sociations, the Board of Directors may be authorized by the shareholders, during a five years period, to increase the capital up to a defined amount and within certain limits.
By decision of the Extraordinary General Meeting of Shareholders held on 16 May 2017, the Board of Directors was authorized to increase the share capital of the Company once or several times, in the manner and at conditions to be determined by the Board of Directors, within a period of five years with effect from the date of publication of such a decision, by a maximum amount of USD 12,000,000, the reference value of EUR 7,703,665.66 for application of the provisions of the Belgian Code of Companies and Associations. The special report of the Board of Directors was drawn up in accordance with the provisions of Section 7:199 of the Belgian Code of Companies and Associations.
1.5 ARTICLES OF ASSOCIATION, GENERAL MEETINGS, PARTICIPATION, AND EXERCISING OF VOTING RIGHTS
The Annual General Meeting takes place on the third Tuesday of May at 2.30 p.m.
The rules governing the convening, the participation, the conducting of the meeting, the exercising of the voting rights, amendments to the Articles of Asso- ciation, nomination of the members of the Board of Directors and its Committees can be found in the coordinated Articles of Association and the Corporate Governance Charter of the Company, both of which are available on the Company's website under "Investor Relations". (http://exmar.be/en/investors/re- ports-and-downloads/articles-association)
1.6 PURCHASE OF OWN SHARES
On 15 May 2018, the Extraordinary General Meeting of Shareholders authorized the Board of Directors of EXMAR for a period of five years to acquire the Com- pany's own shares within a well-defined price range.
The number of treasury shares as at 31 December 2019
amounted to 3.82%, which represents 2,272,900 shares.
�
FREEFLOAT | SAVEREX |
47.03% | 44.28% |
COBAS ASSET | EXMAR |
MANAGEMENT S.G.I.I.C. SA |
5.002%3.82%
1.7 SHARES AND SHAREHOLDERS Shareholding as per 31 December 2019:
The EXMAR share is listed on Euronext Brussels and is part of the Bel Small index (Euronext: EXM).
During the course of 2019 and till the date of this report, EXMAR NV received three notifications in the
context of the Transparency Act of 2 May 2007. | |
The latest notifications received by the Company as | |
notified to the FSMA are as follows: | |
• On 18 July 2019 EXMAR NV announced that Cobas | 41 |
Asset Management S.G.I.I.C. S.A. crossed a downward threshold (from 5.02% to 4.98%).
• On 8 August 2019 EXMAR NV announced that Cobas Asset Management S.G.I.I.C. S.A. crossed a threshold of 5% due to an acquisition of shares.
• On 30 October 2019 EXMAR NV announced that Saverex NV disclosed that due to the sale of 500,000 voting rights the threshold of 50% was crossed.
In accordance with Section 74§6 of the law on public takeover bids of 1 April 2007, Saverex NV notified the FSMA on 15 October 2007, updated on 30 August 2019, that it holds more than 30% of the securities with voting rights in EXMAR NV, a listed Company.
The statutory information is published on the website (www.exmar.be).
The Company has no knowledge of any agreements made between shareholders.
The Articles of Association impose no restrictions on the transfer of shares.
2. Composition and functioning of the Board, management and controlling bodies
2.1 BOARD OF DIRECTORS 2.1.1 Composition
On 31 December 2019 the Board of Directors consist- ed of 10 members, appointed by the Annual General Meeting of Shareholders and is composed of members from diverse professional backgrounds and who repre- sent a wide range of experience; it consists of a suffi- cient number of directors to ensure proper operation,
taking into account the specificness of the Company.
Mr. De Geest however was co-opted as independent director as per 29 January 2020 to replace Mrs. Eisbrenner who passed away on 9 May 2019. The appointment of Mr. De Geest will be submitted for approval to the General Meeting of Shareholders of EXMAR of Tuesday 19 May 2020.
Functions and terms of office of the Directors on the Board per 31 December 2019:
Name - Function | Number of attended meetings | Beginning of mandate | Last renewal | End of mandate |
BOARD OF DIRECTORS | ||||
BARON PHILIPPE BODSON | ||||
• Chairman Board of Directors | 7/7 | 20 June 2003 | 15 May 2018 | 2021 |
• Non-executive director | ||||
• Member Audit Committee | ||||
• Chairman Nomination- and Remuneration Committee | ||||
NICOLAS SAVERYS | 7/7 | 20 June 2003 | 15 May 2018 | 2021 |
• Executive director | ||||
• Chief Executive Officer (CEO) | ||||
MICHEL DELBAERE | 7/7 | 17 May 2016 | 21 May 2019 | 2022 |
• Independent director | ||||
• Member Nomination- and Remuneration Committee | ||||
JALCOS NV REPRESENTED BY LUDWIG CRIEL | 7/7 | 16 May 2017 | 2020 | |
• Non-executive director | ||||
• Chairman Audit Committee | ||||
ARIANE SAVERYS | 7/7 | 15 May 2012 | 15 May 2018 | 2021 |
• Non-executive director | ||||
PAULINE SAVERYS | 7/7 | 15 May 2012 | 15 May 2018 | 2021 |
• Non-executive director | ||||
EXMAR REPORT 2019
42
BARON PHILIPPE VLERICK
- Non-executivedirector
- Member Audit Committee
BARBARA SAVERYS
-
Non-executivedirector
ISABELLE VLEURINCK - Independent director
- Member Nomination- and Remuneration Committee
- Member of the Audit Committee
- Appointed since 21 May 2019
KATHLEEN EISBRENNER (†)
- Independent director
- Co-optedby Mr. Wouter De Geest as per 29 January 2020
JENS ISMAR
- Independent director
- Member of the Audit Committee
- Member Nomination- and Remuneration Committee
- Appointed since 10 October 2019 as member of the Executive Committee (Executive Director Shipping)
7/7 | 20 June 2003 | 16 May 2017 | 2020 |
7/7 | 19 May 2015 | 15 May 2018 | 2021 |
4/4 | 21 May 2019 | 2022 | |
2/2 | 15 May 2018 | 2019 | |
5/5 | 18 May 2010 | 21 May 2019 | 2019 |
2.1.2 Position and mandate
The Board of Directors is the ultimate decision-making body of the Company. The powers and the operation of the Board are described extensively in the Corporate Governance Charter. The Board has all the powers with the exception of matters reserved by the Belgian Code of Companies and Associations or the coordinated Articles of Association for the General Meeting of Shareholders.
The Board of Directors strives for the success of the Company in the long-term, provides the necessary leadership for this, and ensures that risks can be identified and managed. It is responsible for the overall strategy and values of EXMAR, based on the social, economic and ecological responsibility, gender di- versity, and diversity in general. The directors will be provided in good time with a file containing all the information for the deliberations on the agenda items. Decisions are taken at Board of Directors meetings in accordance with Article 22 of the Articles of Associ- ation, which includes the stipulation that the Chair- man's vote is decisive in the event of a tied vote. To date, such a tied vote has never occurred.
2.1.3 Activities
During 2019 the Board held seven meetings; all the meetings were held under the chairmanship of Mr. Bodson, each in the presence of all members.
In addition to exercising the powers provided by law, the Articles of Association and the Corporate Governance Charter, the Board of Directors deals with reviewing and deciding on the long-term strat- egy, key policies and structure of the Company and closing the accounts and financial statements of the Group. Other topics were:
- Financial position - Action plan
- Going concern
- VLGC newbuildings
- Prepare for the Future
- Corporate Governance
2.2 AUDIT COMMITTEE 2.2.1 Composition
The Audit Committee is founded by the Board of Directors.
Article 7:99 of the Belgian Code of Companies and Associations and the EXMAR Corporate Governance Charter stipulate that at least one member be independent; the Board of Directors confirms that the composition of the Audit Committee meets the purpose of the law.
2.2.2 Position and mandate
The Board of Directors has granted the Audit Committee the broadest powers of investigation within its area.
The Audit Committee assists the Board of Directors with the fulfilment of its supervisory task and to ensure monitoring in the broadest sense. It is the main point of liaison for the Internal Auditor and the External Au- ditor. All the members of the Audit Committee possess the necessary expertise concerning accounting and auditing, and are familiar with financial reporting, accounting standards and risks, because of their qual- ifications, their careers in various multinational groups and their current professional activities.
With the entry into force of the EU General Data Protection Regulation 2016/679 (GDPR) as of 25 May 2018, a Data Protection Committee (DPC) is appointed.
The role of the DPC is to propose the changes to the Company's policies and procedures as required by the GDPR, coordinate and oversee their implementation and monitor compliance with GDPR.
The DPC will report to the Risk Committee.
2.2.3 Activities
The specific responsibilities of the Audit Committee are set out in an Audit Charter, approved by the Board of Directors on 31 March 2011 and modified on 25 March 2015.
In 2019, five meetings were held each in the presence of all members.
The Statutory and the Internal Auditor were present during two meetings.
The Audit Committee deliberated on specific financial matters that arose during the year, made
recommendations to the Board of Directors, other agenda items included:
- Compliance and Risks
- Going concern
The Compliance policies confirm EXMAR's commitment to comply with applicable laws and rules.
A specific Risk Committee is set up with the task of continuously supervising the effective functioning of the Compliance Model and respect of the applicable legislation.
The EXMAR Risk Committee performs these tasks for all entities within the EXMAR group, reporting to the Audit Committee.
The Risk Committee shall at least once per year submit to the Audit Committee a report on the risk assessment carried out by the Key Risk Officers who are instructed and authorized to assess the risks as set out in the Compliance Model and on complaints or questions received by the Risk Committee. At least once per year the Risk Committee shall report on non-compliance complaints it has received in the form requested and within the appropriate timeframe. It will also report the action taken to the Audit Committee (unless the complaint concerns a member of the Audit Committee in which case the complaint shall be directed to the Chairman of the Board). The Audit Committee will report to the Board on the functioning of the Risk Committee at least once a year.
2.3 NOMINATION AND REMUNERATION COMMITTEE
2.3.1 Composition
The Nomination and Remuneration Committee op- erates in compliance with Article 7:100 of the Bel- gian Code of Companies and Associations:
• Composed out of a majority of independent directors
• Chaired by the Chairman of the Board of Directors
• Other members are non-executive
The Nomination and Remuneration Committee was composed of three members on 31 December 2019 and reports to the Board of Directors.
Mrs. Isabelle Vleurinck was appointed as a new independent director of the Company. She is also a member of the Nomination and Remuneration Committee and of the Audit Committee.
2.3.2 Position and mandate
All the members of the Nomination and Remuneration Committee possess the necessary expertise in the area of remuneration policy based on exercising their positions during their careers.
The Committee assists the Board of Directors with the exercising of its responsibilities concerning the determination of the Company's remuneration policy and the nomination procedures.
2.3.3 Activities
The specific responsibilities have been set out in a Nomination and Remuneration Committee Charter, approved by the Board of Directors on 29 November 2011. The Board of Directors also approved the procedure for the nomination and
reappointment of directors and members of the Executive Committee.
The Nomination and Remuneration Committee met three times during the past year; all the members were present at each meeting.
With respect to remuneration, the following items were discussed:
- Remuneration package for 2020
- Remuneration report
With respect to the nominations, the following items were discussed:
• Composition of the Board of Directors
2.4 EXECUTIVE COMMITTEE - CEO 2.4.1 Composition as per 31 December 2019
The Board of Directors delegated its management powers to an Executive Committee in accordance with article 524bis of the (old) Belgian Code of Companies.
Under the 2020 Corporate Governance Code, EXMAR shall make an explicit choice regarding its Governance Structure and the delegation of the daily management to the Executive Committee.
Since 1 February 2020, Mr. De Brabandere is CFO of the Company. No new COO was appointed. The tasks of the COO are entrusted to the deputy CEO.
EXCO 2019 | EXCO 2020 |
NICOLAS SAVERYS | NICOLAS SAVERYS |
• Executive director | • Executive director |
• Chief Executive Officer (CEO) | • Chief Executive Officer (CEO) |
PATRICK DE BRABANDERE | FRANCIS MOTTRIE |
• Chief Operating Officer (COO) | • Deputy CEO |
MIGUEL DE POTTER | PATRICK DE BRABANDERE |
• Chief Financial Officer (CFO) | • Chief Financial Officer (CFO) |
PIERRE DINCQ | JENS ISMAR |
• Managing Director Shipping | • Executive Director Shipping |
JONATHAN RAES | JONATHAN RAES |
• Managing Director LNG Infrastructure | • Executive Director Infrastructure |
DAVID LIM | |
• Managing Director EXMAR OFFSHORE | |
MARC NUYTEMANS | |
• CEO EXMAR Shipmanagement | |
EXMAR REPORT 2019
44
2.4.2 Position and mandate
The Executive Committee is responsible for the day-to-day management of EXMAR and the EXMAR group, under supervision of the Board of Directors.
The operating rules of the Executive Committee are set out in a Charter, approved by the Board of Directors on 29 November 2011.
The Executive Committee meets on a regular basis. The CEO is the chairman of the Executive Commit- tee.
The role of the Executive Committee consists of leading EXMAR according to the values, strategies, policies, schedules and budgets set by the Board of Directors.
3. Policy regarding gender diversity
3.1 LEGISLATION
The Board of Directors took note of the Belgian law of 28 July 2011 regarding to gender diversity on the level of the Board of Directors, the members of the Executive Committee and persons entrusted with the daily management of the Company.
In accordance with provision 2.1 of the Belgian Corporate Governance Code (provision 3.3 of the
Code 2020), the Board of Directors needs to be composed based on gender diversity and diversity in general.
3.2 CURRENT SITUATION
The Board of Directors consists of four female members out of a total of 10 members and this complies with the gender diversity rules.
4. Performance Evaluation
In order to function effectively, it is required for the Board to have a transparent means by which it can measure and review its performance with a clear potential path for renewal and improvement.
The Belgian Corporate Governance Code and EXMARS's Corporate Governance Charter foresee this requirement by periodically requesting Board members to complete an evaluation.
EXMAR's Board, under the guidance of its Chairman, first introduced the evaluation process in 2011 (renewed in 2014) and during the course of 2017 the decision was
taken to implement a new Board evaluation in 2018.
The evaluation has the main objective of improving the added value of the Board. It should reinforce the values of the Company, increase efficiency also potentially assist in detecting and proactively dealing with any potential problems.
Following the evaluation, feedback by the members results in fine-tuning the functioning of the Board and committees where required.
5. Supervision
5.1 EXTERNAL AUDIT
By decision of the Annual General Meeting of 16 May 2017, on the basis of the proposal formulated by the Board of Directors and in line with the recommendation and preference of the Audit Committee, Deloitte Belgium was appointed as Statutory Auditor of the Company for a period of three years, represented by Mr. Gert Vanhees.
The auditor conducts the external audit of both the consolidated and statutory figures of EXMAR. The Audit Committee in its meeting of 1 September 2017 proposed to the Board of Directors and the Board agreed to no longer review the half-year results, in line with other listed compa- nies' policies. The auditor however was requested to review the updated version of the interim condensed consolidated financial statements to ensure consistency with the adjustments proposed by the Committee.
5.2 INTERNAL AUDIT
EY has been appointed to assist the Company in the conducting of its internal audit activities. The internal auditor was reappointed for a new term of three years ending at the meeting of the Audit Committee in March 2022.
5.3 SECRETARY
Mr. Mathieu Verly, Secretary, appointed since 1 July 2015.
The Secretary shall ensure that Board procedures are complied with and that the Board acts in accordance with its statutory obligations and its obligations under the Articles of Association. He shall advise the Board on all governance matters and assist the Chairman of the Board in fulfilling his duties as detailed above, as well as in the logistics associated with the affairs of the Board (information, agenda, etc.).
5.4 COMPLIANCE OFFICER
Mr. Patrick De Brabandere, Compliance officer, appointed on the recommendation of the Audit Committee, by the Board of Directors on 25 March 2015 with effect from 1 July 2015.
6. Guberna
EXMAR joined Guberna as institutional member, because EXMAR believes in the merits of corporate governance principles and is keen on further developing its corporate governance structure. Guberna is a knowledge centre promoting corporate governance in all its forms and offers a platform for the exchange of experiences, knowledge and best practices.
He is responsible for the implementation of and the supervision on compliance with the Dealing Code and the tasks described in the Compliance Model as member of the Risk Committee.
45
Guberna organizes several activities such as workshops, round tables and seminars. EXMAR promotes directors and management of the Company to participate in these activities.
The training "Director effectiveness" focusses on competences and knowledge needed for a director to fulfil.
7. Rules
and procedures
7.1 CONFLICTS OF INTEREST
Each member of the Board of Directors and of the Executive Committee is encouraged to organize his mandate as efficiently as possible and their personal and business interests in such a way that there is no direct or indirect Conflict of Interest with the Company.
Transactions, if any, between EXMAR or an affiliated company and a Board member will take place at arm's length. The same applies for transactions between the Company or an Affiliate and a person closely related to a member of the Board.
The provisions of the Belgian Code of Companies and Associations and the Corporate Governance Charter will apply in the event of a Conflict of Interest.
7.2 TRANSACTIONS
EXMAR has no knowledge of any potential Conflicts of Interest among the members of the Board of Directors and the members of the Executive Committee in the meaning of articles 7:96 or 7:115, except those that may be described in the Annual Report from the Board of Directors.
Currently Saverbel NV and Saverex NV, companies controlled by Mr. Nicolas Saverys, CEO, provide administrative services to the EXMAR Group. These services are invoiced and are at arm's length conditions.
8. Political contributions
EXMAR did not make contributions or payments or otherwise give any endorsement, directly or in- directly, to political parties or committees or to individual politicians.
The employees of EXMAR may not make any political contribution on behalf of EXMAR or through the use of corporate funds or resources.
EXMAR REPORT 2019
STRATEGIC RISKS
46
International control and
risk management systems - assesment
Description of risk | Potential impact | Limiting factors and control | |
MARKET RISKS | |||
The overall gas and oil market and the worldwide | A decline in the overall oil and gas market could | Diversified client base and a significant coverage | |
market for the transportation of gas is cyclical. | impact the freight rates for transportation of gas | with a mix of long-term and short-term charters. | |
and would affect our income and cash flows and | The value of our fleet is continuously | monitored | |
could affect the value of our fleet. | and assessed by using internal and external | ||
information. | |||
Lower demand for gas carriers, as well as other | A lower demand would impact the freight rates | A significant part of our fleet is secured on long- | |
floating assets including our LNG infrastructure | and the number of off-hire days of our fleet. This | term charters. Geographical diversification and a | |
assets. | would impact our business and cash flows as well | qualitative client portfolio and network through | |
as the value of our fleet and our financial position. | integration in the markets thanks to years of | ||
experience. We are a flexible shipping | Company | ||
aiming for structural quality and durability for our | |||
clients. |
POLITICAL ENVIRONMENT IN FOREIGN COUNTRIES
Deterioration of the economic, legal and political | Changes to economic, legal and or political | |
circumstances in countries, including political, civil | circumstances could affect the trading | patterns |
and military conflicts. Such changes will from time | of LPG and LNG and could affect our | fleet, |
to time result in attacks on ships, disruption of | our result of operations and our ability to obtain | |
waterways, piracy, terrorism and other activities. | financing. Instability could result in a reduced | |
demand for our services. It could also expose us | ||
to increased, additional or unexpected expenses | ||
to comply with changed laws and regulations and | ||
could affect our insurance expense or | policy. | |
Continuous assessment and monitoring of eco- nomic, political and legal circumstances in order to anticipate, limit or avoid any possible impact. Gathering information from authoritative and or industry organisations as well as from specialised consultants. Our insurance policy is regularly updated and includes among others protection and indemnity, hull and machinery and loss of income at insured values deemed to be appropriate to cover anticipated losses.
COMPETITION
Competitors investing in LPG carriers, FSRUs | The process of obtaining a charter is highly | Defining a strategy with a long-term vision and | ||
or other floating assets through consolidation, | competitive. Increased competition may cause | consistent management of ongoing trends in the | ||
acquisitions of second hand or newbuildings. | greater price competition for price charters and | industry. Experience of our management team | ||
might impact the price of vessels or other floating | and our Board of Directors. Investing in a variety | |||
assets. This could have a material effect | on | our | of factors such as the quality of our operations, | |
results and cash flows and the value of | our | fleet. | technical abilities and reputation, quality and | |
experience of our crew and relationships within | ||||
the industry. | ||||
OPERATIONAL RISKS
Description of risk | Potential impact | Limiting factors and control | |||
RISKS ENTAILED IN THE OPERATION OF VESSELS AND OTHER FLOATING ASSETS | 47 | ||||
Environmental accidents, work, epidemic diseas- es, interruptions caused by mechanical defects, human error, war, terrorism, political actions in various countries, strikes and bad weather. Vessels not meeting certain performance standards.
Any such event would harm our reputation as reliable shipping company and would result in increased costs and an increase of the number of off-hire days. The cost of urgent repairs are more unpredictable and can be very high. In case performance standards are not met the charterer could withhold a portion of the hire.
Our experience within the industry and our policies and procedures such as our maintenance, HSEQ and training programme should limit or avoid certain risks inherent in our business. All our vessels and assets are covered by adequate insurance.
INCREASED OPERATING EXPENSES
Operating expenses and maintenance expenses | Operating expenses and drydock capital expen- | Proactive in-house ship management and a |
can be volatile. | ditures depend on a variety of factors which are | continuous internal and external inspection of our |
outside our control and affect the entire shipping | assets. Our maintenance policy is updated and | |
industry. Drydocking of vessels can also result in | improved on a day-to-day basis with the objective | |
loss of income. | to maintain the highest quality levels. |
FLEET AGE PROFILE
As a ship ages class requirements become more stringent and compared to new modern ships the vessel will be less competitive and more expensive to operate.
We must make substantial capital expenditure to maintain the operational capacity of our fleet. These expenditures could vary significantly and can increase as a result of customer requirements, competitive standards and regulations or organizations standards.
The average age of our fleet is monitored and our strategy includes regular investments in new vessels to keep our fleet competitive. Our in-house ship manager and commercial team have many years of experience to assess the operational and commercial performance. All our vessels are certified as "in class" by a classification society which is also a requirement for insurance coverage. Inspections of our fleet are carried out on a day-to-day basis at sea or in port. Based on these inspections the continual maintenance plan of each vessel is created, updated and implemented.
ASSETS UNDER CONSTRUCTION
Specific risks apply to our assets under construction and include the solvency of our contractor as well as the delivery of the asset in accordance with all specifications and securing all required permits.
Failure by the shipyard to construct or deliver our assets under construction or bankruptcy by the shipyard would have a substantial impact on our financial position and our results. In the event the shipyard does not perform and we are not able to enforce the refund guarantee we might lose all or part of our investment. Additionally we might fail to comply with our obligations towards the charterer.
Advance payments are made to the shipyards and these payments are secured by refund guaran- tees. Progress of the construction and compliance with all technical and regulatory specifications is closely monitored by our technical teams at the shipyards.
EMPLOYMENT
Vessels or other floating assets remain off-hire for a substantial period or charters are not renewed or terminated early.
In case we cannot enter into profitable long-term charters for our existing fleet or our floating assets under construction our result and cash flows might be substantially affected. We would be subject to a short-term or spot market or charters based on changing market prices. In addition it might be more difficult to obtain financing for such assets at reasonable terms.
Our management team and our commercial team have many years of experience and have an extensive network in the market. Our charter portfolio is very diversified. The commercial strategy is to remain flexible in the market by having a good balance between long-term and short-term charters.
REGULATIONS
New regulation could come into force. Environ- | Regulatory changes could impact our ability to | Continuous monitoring and anticipation of |
mental law changes can also be implemented by | charter our vessels or floating assets and might | changes in legislation and applicable requirements. |
public or other authorities. | increase expenditure to be made to comply with | Our in-house ship manager and our management |
all requirements and legislation. | team have many years of experience and an | |
extensive network within the industry to monitor | ||
ongoing trends and changes. |
EXMAR REPORT 2019
Description of risk | Potential impact | Limiting factors and control |
INFORMATION TECHNOLOGY SYSTEMS
48
Information technology systems change rapidly and are fundamental for the day-to-day opera- tions.
The failure of key information technology systems or processes could adversely affect the operations or lead to data breaches. Cyber-attacks, ransom- ware or other security breaches could make information technology systems unavailable, interrupt our vessel operations and result in a loss of hire.
A dedicated IT team monitors continuously the information technology changes and exposures. Several measures such as firewalls, anti-virus software and separated networks etc are in place. An information technocogy risk assessment is performed on a regular basis. Policies and procedures are in place and include a disaster recovery plan, an incident response plan and a business continuity plan.
OUTBREAK OF A PANDEMIC DISEASE
Our seafarers as well as the supplies are crucial for | An outbreak of a pandemic virus in any region or | Specific and strict policies and procedures are | |
our operations, an outbreak of a pandemic virus or | on a global scale would impact our operations. | in place for an isolated outbreak on board of an | |
contagious disease can complicate operations. | Local or international measures such as but not | asset and our people are specifically trained on | |
limited to travel bans, limited or no port access | how to deal with such event. Events and risks are | ||
or quarantine measures following such outbreak, | continuously monitored by our operational teams | ||
could complicate supplies for our floating assets | who also participate in local and international | ||
and complicate embarking or even suspend the | associations and industry organisations to align | ||
possibility for seafarer to embark. Such events | with changes in requirements, ongoing guidelines | ||
could result in the asset to be off-hire and a loss | and measures. | ||
of income for the asset or part of our fleet. | Our operations are very diversified and our assets | ||
are deployed on a global scale, our seafarer are | |||
also sourced globally and neither dependent on | |||
one nationality or a specific region. Planning | |||
of our seafarer is flexible and contracts can be | |||
extended if needed in case replacement is not | |||
immediately possible or available. A business | |||
continuity plan is available to respond to such | |||
event and the measures foresee the possibility to | |||
have all our shore based teams working remotely | |||
or even isolated. In case operations need to be | |||
stopped, some of our commercial agreements | |||
include clauses covering force majeure and in case | |||
of an off-hire event exceeding a specific number | |||
of days, our insurance policies cover temporary | |||
the loss of income. | |||
FINANCIAL RISKS | |||
Description of risk | Potential impact | Limiting factors and control | |
COUNTERPARTY RISKS | |||
Dependency on a limited number of clients, we | Deterioration of the financial viability of one of | Obligations of clients under long-term charters | |
receive a considerable part of our income from a | our significant clients would lead to a significant | can be secured by guarantees or other securities. | |
limited number of clients. | loss of income and cash flows. | Most of our significant clients have been client of | |
EXMAR for many years, our management team | |||
has the necessary experience and knows how to | |||
assess the operations and financial viability of | our | ||
clients. | |||
Charterers can be in default or can become | In case of the loss of a client our income and cash | Our customer base is diversified and consists | of |
bankrupt. | flows would be impacted. The costs of rechar- | major companies active in the oil and gas market. | |
tering the vessel can be high and the market | Extensive credit checks are performed for new | ||
conditions can be unfavorable. | clients and additional securities or guarantees will | ||
be requested if deemed necessary. Charter hire is | |||
in most cases payable in advance. |
Description of risk | Potential impact | Limiting factors and control | |||
FINANCING | |||||
49 | |||||
EXMAR is subject to restrictions on credit | The existing financing arrangements for our fleet | Our cash flows and our financial position, includ- | |||
agreements, such as financial covenants and re- | are secured by the vessels and parent company | ing the requirements under the financing agree- | |||
strictions for EXMAR and its subsidiaries to take | guarantees and contain restrictions and other | ments, are continuously monitored. Our financing | |||
on further debts, distribute dividends, undertake | covenants that may restrict our business and | strategy aims for a diversification of financing re- | |||
certain investments, sell part of its business with- | financing activities. Any default could result in | sources and a spread of maturity dates. A dialogue | |||
out the consent of its lenders | the acceleration of the maturity date and lenders | is maintained with different investors and financial | |||
could call on the guarantees of these facilities. | partners in order to build a long-term relationship. | ||||
As of 31 December 2019, all applicable financial | |||||
covenants under the financing arrangements are | |||||
complied with. | |||||
Financing to be obtained for assets under con- | Impossibility to finance or refinance our assets | Financing is inherent to our activities and invest- | |||
struction, operational assets and existing financing | under construction and our existing fleet | would | ments. Our management team has numerous | ||
arrangements to be refinanced at maturity date. | have a substantial impact on our financial | position. | contacts and support of different financing | ||
The financing possibilities and the cost of | financ- | partners and has many years of experience in | |||
ing can be volatile and dependent on the overall | obtaining financing for a variety of activities and | ||||
economic circumstances. | investments. |
INTEREST AND EXCHANGE RATES
A significant portion of our financing arrangements has a variable interest rate. Our operations are in USD but certain costs are in EUR, a portion of our financial debt is in NOK.
An increase of the interest rates on the international financial markets would negatively impact our cash flows and could negatively impact the fair value of financial instruments used to hedge the interest rate exposure. A weakening of the USD compared to the EUR would negatively influence our results. Some of our financial instruments require a cash collateral for the fair value of the financial instrument. Additional cash guarantees might be required.
The interest rate exposure and the foreign currency exposure are actively managed and various instruments will be used to cover an appropriate part of the exposure. Fluctuations in the fair value of hedging instruments represent a non-realizednon-cash item.
IMPAIRMENT
Negative variations in the fair market value of our fleet and other floating assets.
A significant decline in the fair value of our fleet could lead to an impairment loss to be recognized and would have a significant impact on our financial position and result. The ratio of the fair value of our fleet compared to the outstanding debt is a financial covenant in our financing arrangements. Our activities tend to be cyclical resulting in changes in the overall fair value of the fleet on the short-term. A significant decline could trigger an event of default under such arrangements
The value of our fleet is continuously monitored using internal and external information and at least on each reporting date our fleet is tested for impairment. Testing is done by comparing the carrying amount of our fleet to appraisals of independent shipping brokers and to the net present value of the expected operating cash flows. The operating cash flows are based on internal information and a sensitivity analysis is performed on each assumption.
Based on the testing performed as of 31 Decem- ber 2019 it is concluded that the carrying amount of our fleet is recoverable and that all financial covenants under our financing arrangements are complied with.
LIQUIDITY RISK
Financial obligations and working capital require- | Our cash generating activities can be cyclical | Liquidity is managed on a continuous basis to en- | |
ments can vary depending upon a number of | and dependent upon market circumstances while | sure that sufficient | funds are available to meet our |
factors. | our outgoing cash flows can relate to operating, | financial obligations | when due under normal and |
investing or financing activities. Any failure to | stressed conditions. Based on our known con- | ||
meet our financial obligations could have material | tractual rights & obligations and using estimates | ||
consequences for our operations and could trig- | or assumptions if needed, a monthly cash flow | ||
ger events of default under certain arrangements. | forecast is prepared and monitored per segment | ||
and for at least the subsequent 12 months. | |||
Our sources of operating income as well as our | |||
sources of financing are diversified. Payments | |||
relating to investing activities and our maturities | |||
of bank and other loans are also spread over | |||
different years. |
EXMAR REPORT 2019
50
REMUNERATION REPORT
1. General
The Remuneration Report describes EXMAR's remuneration policy as provided for in the legislation of 6 April 2010 in relation to Corporate Governance.
The remuneration policy and the individual scheme for members of the Board of Directors and members of the Executive Committee is in line with the aforementioned legislation.
EXMAR strives for remuneration which will attract, retain and motivate the members of the Board of
Directors, members of the Executive Committee and management and which will guarantee and promote the Company's interests in the medium and longer term.
With this policy, EXMAR attempts to ensure that the members of the Board of Directors, the members of the Executive Committee and management do not act in their own interests, and do not take risks that do not fit in with the Company's strategy and risk profile.
2. Description of the procedures to develop the remuneration policy as well as to determine the remuneration of individual directors
and members of the Executive Committee
The Nomination and Remuneration Committee is responsible for deciding the procedure for developing a remuneration policy.
The Remuneration Committee checked at the meeting of 6 December 2019 the remuneration amounts for compliance with market practices and no changes were recommended.
The nature and the amounts of the remuneration awarded to executive directors and the members of the Executive Committee are decided by the Board of Directors on the basis of recommendations from the Nomination and Remuneration Committee.
The Board of Directors decides on the plans for granting stock options, on the basis of recommendations from the Nomination and Remuneration Committee.
3. Remuneration policy for
executive and non-executive Directors
The remuneration of non-executive directors consists of a fixed non-performance-related annual remuneration which is linked to the director's position and positions on the various committees, in accordance with the Company's remuneration policy. Non-executive directors do not receive any variable remuneration and do not benefit from additional pension plans or share-related incentives. The Nomination and Remuneration Committee regularly checks the remuneration of non-executive directors for compliance with market practices.
3.1 BOARD OF DIRECTORS
The non-executive directors receive a fixed annual remuneration of EUR 50,000. Because of his role and responsibility, the Chairman receives an annual fixed remuneration of EUR 100,000. No variable remu- nerations, share options, additional pension plans, loans or advance payments were granted to the non-executive and independent directors.
3.2. AUDIT COMMITTEE
The members of the Audit Committee receive a
51
fixed annual remuneration of EUR 10,000. The chairman receives a remuneration of EUR 20,000.
3.3 NOMINATION AND REMUNERATION COMMITTEE
The members of the Nomination and Remuneration Committee receive a fixed annual remuneration of EUR 10,000.
3.4 EXECUTIVE DIRECTORS
The mandate of executive directors who are members of the Executive Committee is remunerated according to the remuneration criteria for the Executive Committee following recommendations from the Nomination and Remuneration Committee.
OVERVIEW OF THE REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS FOR 2019
(IN EUR)
Fixed | Audit Commitee | Remuneration | |||
Committee | Total | ||||
Remuneration | Remuneration | ||||
remuneration | |||||
OVERVIEW OF THE REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS FOR 2019 | |||||
Baron Philippe Bodson | Chairman | 100,000 | 10,000 | 10,000 | 120,000 |
Nicolas Saverys | CEO | 0 | |||
Jalcos nv* | non-executive Director | 50,000 | 20,000 | 70,000 | |
Michel Delbaere | non-executive Director | 50,000 | 10,000 | 60,000 | |
Isabelle Vleurinck** (as from 21 May 2019) | non-executive Director | 30,738 | 6,148 | 6,148 | 43,033 |
Kathleen Eisbrenner (till 21 May 2019) | non-executive Director | 19,262 | 19,262 | ||
Jens Ismar (till his nomination as EXCO | non-executive Director | 35,600 | 3,852 | 3,852 | 43,305 |
member) | |||||
Baron Philippe Vlerick | non-executive Director | 50,000 | 10,000 | 60,000 | |
Pauline Saverys | non-executive Director | 50,000 | 50,000 | ||
Barbara Saverys | non-executive Director | 50,000 | 50,000 | ||
Ariane Saverys | non-executive Director | 50,000 | 50,000 | ||
TOTAL | 485,600 | 50,000 | 30,000 | 565,600 |
* Represented by Ludwig Criel
** Appointed at General Assembly 19 May 2019
4. Remunerations policy for
the Executive Committee
The remuneration of the members of the Executive Committee including the CEO consists of:
4.1 FIXED ANNUAL SALARY
The scale of the fixed remuneration for members of the Executive Committee, including the executive directors, is linked to the function performed by the person concerned, his responsibilities and compe- tencies.
The remuneration is determined on the basis of the remunerations of a reference group consisting of a number of comparable enterprises in the maritime industry. The Nomination and Remuneration Committee can, if necessary, call on an independent external consultant.
Once a year the various compensation components for the members of the Executive Committee
EXMAR REPORT 2019
52
(including the CEO) are evaluated by the Nomination and Remuneration Committee and tested against conditions in the market.
4.2 VARIABLE REMUNERATION
The short-term variable remuneration (annual bonus) rewards members of the Executive Committee for achieving performance criteria and the amount is expressed as a percentage of the fixed annual remuneration. The evaluation period is the financial year.
The variable payment depends on the Company's results, as well as on other factors such as the performance of the individual, future prospects, the market situation, exceptional contribution(s) and/or special projects.
The variable remuneration is linked to developments in the results and to the specific evaluation and the performance of each individual.
The Board of Directors can deviate from this and decide to award a bonus to a member of the Executive Committee on the basis of other objective criteria.
The Extraordinary Shareholders' Meeting held on 17 May 2011 decided on the application of the provision of article 7:91 of the Belgian Code of Companies and Associations and waived the staggering of the payment of the variable remuneration of the members of the executive com- mittee.
The decision on the application of this dispensation was delegated by the Shareholders' Meeting to the Board of Directors.
If the result deviates substantially from the basis on which the variable remuneration of the
members of the Executive Committee is calcu- lated, the Board of Directors can decide to revise the variable part of the remuneration and if need be to reclaim that part.
4.3 LONG TERM INCENTIVE (LTI)
EXMAR works towards creation of sustainable economic value by means of long-term remu- neration. This ensures that the interests of the members of the Executive Committee are more in line with those of shareholders and that they remain bound to the Company.
The long-term remuneration consists of a share option plan for existing EXMAR shares.
The options can only be exercised after a period of 3 years.
In the event that a member of the Executive Committee resigns or is dismissed for compelling reasons by EXMAR the right to exercise the options lapses.
The amounts of share options offered are every year approved by the Board of Directors upon recommendation of the Remuneration and Nomination Committee. The granting of stock options is not linked to pre-determined and objectively quantifiable performance criteria.
4.4 INSURANCE PACKAGE
The members of the Executive Committee with self-employed or employed status benefit from group insurance (type individual pension benefits for the self-employed) as well as guaranteed income insurance, accident insurance, hospitalisa- tion insurance and travel insurance.
4.5 OTHER COMPENSATION COMPONENTS
The members of the Executive Committee receive a company car, a cell phone and meal cheques.
5. Remuneration | |||||||||||||
of the chairman | |||||||||||||
and the other | of | ||||||||||||
members | |||||||||||||
the Executive | Committee (CEO) | ||||||||||||
5.1 OVERVIEW | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
CEO: Nicolas Saverys | EXCO: 6,16 | EXCO: 6 | |||||||||||
REMUNERATION OF THE CHAIRMAN AND THE OTHER MEMBERS OF THE EXECUTIVE COMMITTEE (CEO) | |||||||||||||
Basic salary | €823,385 | €823,385 | € 2,227,895 | € 2,033,153 | |||||||||
Variable remuneration | € 0 | € 1,100,000 | € 0 | € 625,000 | |||||||||
Share Options (taxable base) | € 0 | € 0 | € 0 | € 0 | |||||||||
Insurance Package* | € 174,956 | € 174,161 | € 265,042 | € 332,948 | |||||||||
Other benefits** | p.m. | p.m. | p.m. | p.m. | |||||||||
TOTAL | € 998,341 | € 2,097,546 | € 2,492,937 | € 2,991,101 |
- Individual pension benefit, guaranteed income insurance, accident insurance, hospitalisation insurance, travel insurance
- Car, cell phone and meal cheques
During 2019, an amount of KEUR 122 was invoiced to Mr. Nicolas Saverys as a consequence of private expenses to be recharged. The relating outstanding amount per 31 December 2019 is KEUR 5.5.
The ratio between the fixed and variable part of the remuneration for members of the Executive Committee in 2019 was as follows:
53
CHAIRMAN OF THE EXECUTIVE COMMITTEE (CEO)
Basic salary
Variable remuneration
OTHER MEMBERS OF THE EXECUTIVE COMMITTEE
Basic salary
Variable remuneration
5.2 SHARE OPTIONS | On the basis of the recommendations of the |
The members of the Executive Committee ben- | Nomination and Remuneration Committee the |
efit from the share option plans as previously ap- | Board of Directors decided not to award share |
proved by the Board of Directors. | options for the year 2019. |
100%
0%
100%
0%
Outstanding as per | Expired during 2019 | Exercised in 2019 | Granted 2019 | Outstanding as per | |
31/12/2018 | 31/12/2019 | ||||
SHARE OPTIONS | |||||
Nicolas Saverys | 227,553 | 28,929 | - | - | 198,624 |
Patrick De Brabandere | 156,160 | 21,696 | - | - | 134,464 |
Miguel de Potter | 90,000 | - | - | - | 90,000 |
Pierre Dincq | 108,982 | 8,135 | - | - | 100,847 |
David Lim | 104,464 | 7,232 | - | - | 97,232 |
Marc Nuytemans | 90,000 | - | - | - | 90,000 |
Jonathan Raes | 2,500 | - | - | - | 2,500 |
779,659 | 65,992 | - | - | 713,667 |
5.3 SHARES
No EXMAR shares are granted to the Members of the Executive Committee.
5.4. TERMINATION ARRANGEMENTS Following members of the Executive Committee having self-employed status:
Nicolas Saverys (CEO) Patrick De Brabandere (CFO)
Pierre Dincq (appointment as EXCO member terminated 6 December 2019)
Marc Nuytemans (appointment as EXCO member terminated 6 December 2019) and have no enti- tlement to any form of redundancy payment in the event of termination of their appointment.
FLX Consultancy BVBA, represented by Mr. Jonathan Raes would be entitled to a compensation equivalent of nine months' salary in the event of termination.
Chirmont NV, represented by Mr. Miguel de Potter would be entitled to a compensation equivalent to three months' salary in the event of termination.
Lisann AS , represented by Mr. Jens Ismar would be entitled to a compensation equivalent to three month's salary in the event of termination. (appoint- ment as EXCO member as per 10 October 2019).
David Lim has an employment agreement under United States law and has no contractual notice period. (appointment as EXCO member terminated 6 December 2019).
- CHANGES TO REMUNERATION POLICY No significant changes were made to the remu- neration policy in 2019.
- REMUNERATION POLICY 2020-2021 The Remuneration Policy will be aligned accord- ing to the new dispositions of the Belgian Code on Corporate Governance (Code 2020) on Ex- ecutive pay.
EXMAR REPORT 2019
54
ANNUAL REPORT OF THE BOARD OF DIRECTORS
Dear shareholders,
The Board of Directors submits for your approval the statutory and consolidated financial statements of EXMAR NV (the "Company") for the year ended 31 December 2019. It's drawn up in accordance with article 3:6 and 3:6§2 of the new Belgian Code of Companies and Associations.
Under the provisions of the Royal Decree of 14 November 2017 regarding the duties of issuers of financial instruments admitted to trading on the Belgian regulated market, the Company is required to publish its annual financial report.
The elements that are applicable to the Company as provided by the regulations mentioned above, as well
as in the Code of Companies and Associations, are addressed in the present financial statements, and also in this annual report under the Corporate Governance Statement.
This annual report should be read together with EXMAR's report on 2019.
The Coronavirus COVID-19 is causing a high level of uncertainty in the world and will impact the global econ- omy. Several operational measures on-shore and onboard have been taken by EXMAR to ensure the safety and wellbeing of our personnel and continuity of our business operations. The majority of our ships are currently operating under medium to long-term contracts. EXMAR however is subject to certain risks with respect to market dynamics and contractual counterparties.
1. The statutory accounts prepared in accordance with
the Belgian GAAP
SHARE CAPITAL
The share capital of the Company amounts to USD 88,811,667 and is represented by 59,500,000 no- par-value shares. All shares have been paid up in full. The capital has not changed during the previous financial year.
Notwithstanding the provisions laid down in article 3:42 of the Code of Companies and Associations, the capital and the accounting are expressed in US dollars. This derogation was granted by the Ministry of Economic Affairs and was confirmed in writing on 2 July 2003. The Board of Directors believes that the reasons for which this derogation was requested still apply to the financial statements for the period under discussion.
During the past financial year, no capital changes have occurred that must be reported in accordance with article 7:203 of the Code of Companies and Associations.
COMMENTARY ON THE FINANCIAL STATEMENTS
The statutory result for the financial year amounts to USD 44.9 million (USD 10.2 million in 2018).
Operating expenses decreased compared to 2018 with USD 0.5 million.
Financial income increased with USD 33.6 million in comparison with 2018, this is mainly due to the sale of joint-venture Reslea end of June 2019 to Compagnie Maritime Belge ("CMB").
Financial expenses decreased compared to 2018 with USD 1.8 million, mainly due to the fact that no share options have been exercised in 2019. Conse- quently, no costs are registered in the statement of profit or loss in this respect.
At the end of 2019, the total assets amounted to USD 823.3 million (USD 736.8 million at the end of 2018), including USD 702.8 million financial fixed assets (USD 619.2 million in 2018).
55
Shareholder's equity amounted to USD 704.1 million at the end of 2019 (USD 659.2 million in 2018). The increase of USD 44.9 million is the effect of the profit of the financial year 2019 for the same amount.
Total liabilities at the end of 2019 amounted to USD
- million (USD 77.3 million at the end of 2018), of which USD 118.9 million short-term debt (USD
- million short-term debt at the end of 2018). The increase in the debt can be mainly explained by increased short term bank financing.
The 2019 statutory annual accounts show a profit of USD 44.9 million. Including the results carried forward from the previous financial years and the transfer from reserves not available for distribution, an amount of USD 321.3 million can be carried forward.
APPROPRIATION OF THE RESULT
The Board will propose to the General Shareholders' Meeting to appropriate the result for the year as follows:
Profit | brought forward: USD 274,177,783.01 | |
Profit | of the period: USD | 44,885,407.34 |
Transfer from the | reserves not available | |
for distribution: USD 2,234,508.42 |
Result to be carried forward: USD 321,297,698.77
Following this appropriation, the shareholders' equity of USD 704,115,046.69 will be composed as follows:
Capital: USD 88,811,667.00
Issue premium: USD 209,901,923.77
Reserves: USD 84,103,757.15
Retained earnings: USD 321,297,698.77
2. The consolidated financial statements, prepared in accordance with
the International Financial Reporting Standards (IFRS)
Below commentary on the consolidated financial statements is based on the consolidated financial statements using the equity method.
In 2019, EXMAR Group achieved a consolidated result of USD -13.2 million (USD -16.1 million in 2018).
Revenue increased in comparison with 2018 (USD 49.0 million).
The increase in total revenue is mainly situated in the infrastructure and services segment. The increase in the Infrastructure segment is mainly due to invoicing towards Gunvor for the FSRU which started in the last quarter of 2018. The standby revenues generated by TANGO FLNG since May 2019 are only recognised in P&L as from start of operations in September 2019 (in accordance with IFRS 15). The increase in the Services segment is amongst others explained by the new contract for the management of the Floating Storage and Offloading (FSO) LPG unit NKOSSA II in Congo.
The capital gain on the sales of assets amounted to USD 19.2 million and mainly relates to the sale of joint-venture Reslea end of June 2019 to Compag- nie Maritime Belge ("CMB").
The other operating income decreased compared to 2018 with USD 6.4 million. This decrease can be mainly explained by the registered settlement fee in 2018 between EXMAR and PT JAWA SATU POWER as a consequence of the parties' inability to agree on the terms of EXMAR's involvement as FSRU partner and FSRU ship manager. Another explanation for the decrease is a license fee which was granted and which represents the right to use the EXMAR design for the construction, delivery, ownership and operation of an EXMAR OPTI® -11,000Semi-Submersible Hull as an oil & gas floating production unit. The major part of this license fee in recognized in the second semester of 2018, the remaining part is recognized in 2019.
Operating expenses increased compared to 2018
EXMAR REPORT 2019
56
with USD 23.9 million, as a consequence of on the one hand increased vessel expenses for the FSRU and TFLNG following the increased revenues registered for both barges and on the other hand increased depreciations as a consequence of the application of IFRS 16. Additionally, as a consequence of the registration of a purchase obligation of an aircraft, an impairment loss of USD 4.7 million has been registered in the statement of profit or loss to reflect the current market value of the asset.
The net finance result for 2019 amounted to USD -26 million (2018: USD -21 million). The movement can be mainly explained by by the implementation of IFRS 16 and the full impact of the interests paid on the TANGO FLNG facility. In 2018, a part of these interests was paid by Wison.
The share of result of equity accounted investees amounted to USD 1.8 million (USD -1.6 million in 2018).
The vessels amounted to USD 576.6 million and comprise the LPG pressurized fleet, the TFLNG, the FSRU and advance payments made relating to two VLGCs with LPG as fuel.
The investment in equity accounted investees amounted to USD 95.6 million (2018: USD 104.5 million) and consists of our share in the different joint ventures and associates. The decrease can
amongst others be explained by the sale of Reslea per end of June 2019.
Borrowings to equity accounted investees amounted to USD 49.5 million (2018: USD 49.3 million) and comprise the shareholder loans granted to our equity accounted investees.
The cash position on 31 December 2019 amounted to USD 119.9 million (USD 107.1 million in 2018). The restricted cash relates to credit facilities and amounted to USD 67.3 million per 31 December 2019. On 26 February 2020, the Bank of China released USD 40 million of the restricted cash or debt service reserve account (DSRA). The balance of the DSRA will be released pro rata the repayment of the outstanding debt.
Total equity amounted to USD 448.9 million on 31 December 2019 (2018: USD 462.8 million). This decrease in 2019 is mainly caused by the loss of 2019.
The financial debt amounted to USD 405.4 million on 31 December 2019 and increased by USD
18.6 million compared to 2018. The financial debt increased as a consequence of amongst others the partial refinancing of the LPG pressurized fleet and other new debts (eg. bridge loan to temporally in- crease the liquidity position of the company, straight loan and MAP loan for the pre-delivery financing of the two VLGCs under construction).
3. Risk factors
The risks and uncertainties including the impact and control of pandemic risks are described in the Corporate Governance Statement.
4. Continuity statement
In view of the fact that the consolidated income statement shows a loss for the financial year for two consecutive years, there is a need to justify the application of the going-concern accounting principle in accordance with article 3:6 of the Code of Companies and Associations.
The Board of Directors would like to make reference to section "significant judgements and estimates" of EXMAR's financial report where the use of the going concern principle is justified.
The Board is confident that management will be able to maintain sufficient liquidities to meet its commitments and therefore it has an appropriate basis for the use of the going concern assumption. In the
event that the assumptions are not timely met, there is a material uncertainty whether the Company will have sufficient liquidities to fulfil its obligations of at least 12 months from the date of authorising these financial statements.
The Company has met all its financial covenants as at December 31, 2019 and the next testing date with respect to the financial position as at the end of June 2020 is in September 2020. EXMAR believes that based on forecasts for the remaining of the year, and more in particular thanks to the revenue to be generated by TFLNG and the FSRU barge, all covenants will be met as per June 2020 and De- cember 2020.
5. Non-financial information
Description activities | Strategic Objectives | Goals | Measures |
57
• Lost Time | injury Frequency | (LTIF) | • Define 10 Golden safety rules | |||
< 0.8 Total Recordable Cases Fre- | • Behavioural Based Safety programme | |||||
Social & Personnel | Improve Safety Standard | quency (TRCF) < 4 | • Populate safety campaigns | |||
• No major incidents | • Implement safety management sys- | |||||
tem | ||||||
• Retention Rate officer >90% | & rat- | • Maintain high retention rate | ||||
ings >85% | • Include KPI in job description to set | |||||
• Retention | Rate | personnel | office | expectations & growth path | ||
Optimize Ship and Shore personnel | >80% | • Improve coordination from office | ||||
competences | • 100% compliance | with mandatory | • Develop a KPI per fleet for Seagoing | |||
training matrix Seafarer | Experience | |||||
• Zero rejections due to Oil Major | ||||||
Crew Experience matrix | ||||||
Maintain DOC & ISO standards | • Zero non conformities on the SMS | • Perform internal office audits | ||||
• Zero Oil Spill overboard | • Replace all hydraulic hoses on deck | |||||
• Zero accidental cargo releases | every five years | |||||
• Increase energy efficiency | • Impose stringent reporting | |||||
Minimize Environmental impact of oper- | • Reduce emission to the atmosphere | • Perform SEEMP review and define | ||||
Environment | • Track the amount of garbage pro- | bench line for the nm/fuel | ||||
ations & optimize energy efficiency | duced on board | • Close follow up of the KPI's per type | ||||
of vessel | ||||||
• Sensitise crew on garbage reduction | ||||||
with a focus on plastic | ||||||
• Full compliance with the Maritime | • No Maritime Labour Conference re- | |||||
Human Rights and | Doing business with respect for the | Labour Conference and applicable | lated remarks during Port state Con- | |||
laws | trol inspections | |||||
Bribery | world in which we operate | |||||
• Ensuring a sustainable supply chain to | • Communicating our expectations to | |||||
our services | suppliers and controlling them |
6. Supplementary information
RESEARCH AND DEVELOPMENT
The activities carried out or planned in the area of research and development are described in the first part of this report and should be read together.
STAFF EMPLOYED
On 31 December 2019, EXMAR employed 2,416 people worldwide, including 2,124 seagoing staff (2018: 2,084 of which 1,784 are seagoing personnel).
ACQUISITION OF OWN SHARES
The authorization to acquire shares was granted to the Board of Directors by decision of the Extraordinary Shareholders' Meeting held on 16 May 2017, renewing the authorization of the Board of Directors to proceed, in case of a takeover bid for the securities of EXMAR NV, to a capital increase in accordance to the provisions and within the limits of article 7:202 of the Code of Companies and Associations. The Board of Directors is authorised to apply these measures if the notice of a takeover bid is given by the Financial Services and Markets Authority to the Company, not later than three years after the date of the abovementioned Extraordinary General Meeting.
On 31 December 2019, EXMAR held 2,273,263 own shares, representing 3.82% of the total number of issued shares.
STOCK OPTION PLAN
So far, the Board of Directors has decided on 10 occasions to offer options on existing shares to a number of employees of the EXMAR Group.
Plan 1, 2, 3, 5, 6 and 7 have been removed from below table as the plans matured. Plan 5 matured at the end of 2016, plans 1 and 6 matured at the end of 2017, plans 2 and 7 matured at the end of 2018 and plan 3 matured at the end of 2019.
EXMAR REPORT 2019
58
Date of offer | Number of Outstanding Options | Exercise period | Exercise Price in Euros |
PL 4 04.12.2007 | 212,958 | Between 01.01.2011 and | 14,641 |
15.10.2020 (*) | |||
PL 8 03.12.2013 | 437,600 | Between 01.01.2017 and | 10,54 |
02.12.2021 | |||
PL 9 02.12.2014 | 374,100 | Between 01.01.2018 and | 10,54 |
02.12.2022 | |||
PL 10 04.12.2015 | 371,500 | Between 01.01.2019 and | 9,62 |
03.12.2023 | |||
(*) The Board of Directors meeting of 23 March 2009 decided to extend the original exercise period for the first four option plans by five years, by virtue of the decision by the Belgian Government to extend the Act of 26 March 1999, in particular regarding stock option plans.
1 As a result of the capital increase of November 2009, the dilution protection and extra dividend of May 2012, the number and exercise price of the stock options was modified.
JUSTIFICATION OF THE ACCOUNTING PRINCIPLES
The accounting principles applied at the closing of the annual financial statements do not differ from the accounting principles that were applied in the previous financial year. The summary of the accounting principles is attached to the annual financial statements.
For the consolidated financial statements, we refer to the section accounting policies of the consolidated financial statements. More specifically, the change in accounting policy is explained in section E as a consequence of the first time application of IFRS 16.
EVENTS AFTER BALANCE SHEET DATE
The significant events occurred after the closing of the financial year 2019 are disclosed in note 38 of the consolidated financial statements.
OFFICES AND BRANCHES
Besides the Head Office in Antwerp (Belgium), EXMAR has offices in Hong Kong, Houston, London, Limassol, Luxembourg, Mumbai, Paris, Singapore, the Netherlands, Duisburg, Kingston, Livorno and Argen- tina.
EXMAR has branches in Shanghai, Pointe Noir, Angola and South-Korea.
ADDITIONAL ACTIVITIES OF THE STATUTORY AUDITOR
The Statutory Auditor did not carry out any exceptional activities or special assignments during the past financial year.
USE OF FINANCIAL INSTRUMENTS
The long-term vision, that is typical of EXMAR's activi- ties, is accompanied by long-term financing and therefore EXMAR's activities are also exposed to floating interest rates. EXMAR actively manages this exposure and if deemed appropriate could cover itself for rising interest rates for a part of its debt portfolio by means of various instruments.
The Group's currency risk is historically mainly affected by the EUR/USD ratio for manning its fleet, paying salaries and all other personnel-related expenses. EXMAR
Netherlands BV has completed a new unsecured bond issue of NOK 650 million in 2019. In order to monitor the currency risk, the Group uses a range of foreign currency rate hedging instruments if deemed neces- sary. As per 31 December 2019, no financial instrument contracts were outstanding to cover the EUR/USD exposure or the NOK/ USD exposure.
APPLICATION OF ARTICLE 7:96 OF THE CODE OF COMPANIES AND ASSOCIATIONS
There were no conflicts of interest as far as the Executive Committee is concerned.
Conflict of interest Board of Directors.
During the meeting of the Board of Directors held on 6 September 2019, four of the Board members declared that they had a conflict of interest (Nicolas Saverys, Barbara Saverys, Pauline Saverys and Ariane Saverys who are directors and shareholders of Saverex NV). They do not take part in the discussion and the decision making regarding this topic.
Extract of the minutes of meeting:
... With respect to the related party transaction the Board members are referred to the advice from external counsel distributed earlier regarding potential liability of the Board members for unpaid invoices by Nicolas Sav- erys / Saverex NV that could be considered as "abuse of corporate goods" which is criminally sanctioned. These transactions are also disclosed in the half-year report.
The Board has the duty to safeguard the interests of the Company and its stakeholders. Measures must be taken by the Board with respect to certain invoices of EXMAR Shipmanagement NV still being outstanding by Saverex NV, the owner of the yacht Douce France in a total amount of €755,378.70 at the end of August 2019, and certain invoices of the Company still being outstanding by Nicolas Saverys in a total amount of €513K as at 30 June 2019. The Audit Committee, having received the assurance from Saverex NV and related parties that it will proceed with a sale of EXMAR shares to repay the invoices, recommends, with respect to these outstanding invoices, granting an extension by the Company for payment of the invoices until 31 De- cember 2019. For the future, the Audit Committee
recommends that EXMAR Shipmanagement NV no longer acts as an intermediary whereby it pays the sup- plier's invoice and then needs to seek reimbursement from the owner but instead acts as agent to owners, like it does for instance for the Company's LPG fleet: suppliers invoice the owner directly. The Board fully agrees with these recommendations and decides to proceed as
such. It is added that the corporate jet will be sold but that the Company will rent approx. 100 flight hours.
Remark of the Board | |
All outstanding amounts mentioned above were settled | |
at the end of 2019. | 59 |
OUTLOOK 2020
SHIPPING
Despite the influx of VLGC new-build deliveries scheduled during the course of 2020, freight rates are expected to remain strong. The two 88,000 m³ next generation dual fuel newbuildings with a long- term charter to Equinor are progressing according to schedule with expected delivery second and third quarter 2021.
With a total global midsize fleet of 97 vessels and a limited order book for seven vessels at year-end of 2019, the future looks promising. With the upward trend in long-haul business and the impact of scale, EXMAR's share of 17 vessels in the midsize market means that the Company is well-placed to service the market in the coming years.
With a diverse customer portfolio and a fleet coverage of 81% for 2020, EXMAR continues to maintain its strong foothold in this segment.
INFRASTRUCTURE
After having been a pioneer in the development of ship based floating regasification, the (re)deployment of TANGO FLNG as the third FLNG in operation in the world has confirmed EXMAR capabilities to successfully deliver innovative, fast track and cost competitive floating oil and gas infrastructure projects.
For new FLNG projects, EXMAR is confident that we can leverage on the experience of our competent and motivated experts from the various domains and on the lessons learned of TANGO FLNG to provide
a well performing floating liquefaction solution at a competitive life cycle cost and backed by appropriate financing.
EXMAR is confident about the outcome of the arbitration procedure with Gunvor; meanwhile the charter remains in full force and effect.
SUPPORTING SERVICES
2020 will be another interesting year with the preparations for the management of two VLGCs ordered by EXMAR and the start of the joint-venture AEX LNG Management.
The impact of the corona crisis on the results of 2020 is difficult to assess at present.
The majority of our ships are currently operating under medium to long-term contracts.
The Board will however closely monitor the situation and will respond adequately to the times of crisis in order to safeguard the company and to ensure continued operations.
All information which pursuant to Article 3:8 of the Code of Companies and Associations must be included in the present annual report of the Board of Directors, more particularly the Corporate Governance Statement and the requirements of Article 34 of the Royal Decree of 14 November 2007, is shown under the chapter 'Corporate Governance Statement', under the chapter 'Risk Factors', and by reference thereto included in the present annual report.
7. Approval of financial statements and discharge
We request the General Meeting of Shareholders to approve the financial statements for the year ended 31 December 2019 in their entirety, and to appropriate the result as provided in this report. We also
request the meeting to grant discharge to the directors and the Statutory Auditor for the performance of their mandates during the above-mentioned financial year.
8. Appointments
The following mandates come to an end on the occasion of the General Meeting:
- Jalcos NV, represented by Mr. Ludwig Criel
- Baron Philippe Vlerick
Both directors are available for re-election.
The Board of Directors
26 March 2020
EXMAR REPORT 2019
60
CONSOLIDATED FINANCIAL STATEMENTS
61
CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||
Note | 31/12/2019 | 31/12/2018 (*) | |
(IN THOUSANDS OF USD) | |||
ASSETS | |||
NON-CURRENT ASSETS | |||
729,745 | 720,677 | ||
Vessels | 576,605 | 564,423 | |
Vessels | 11 | 561,135 | 564,423 |
Vessels under construction - advance payments | 11 | 15,470 | 0 |
Other property, plant and equipment | 12 | 1,797 | 2,032 |
Intangible assets | 13 | 195 | 405 |
Right-of-use assets (*) | 14 | 6,111 | 0 |
Investments in equity accounted investees | 15 | 95,557 | 104,490 |
Borrowings to equity accounted investees | 17 | 49,479 | 49,328 |
CURRENT ASSETS | 180,022 | 183,664 | |
Non-current assets held for sale | 18 | 11,000 | 0 |
Other investments | 19 | 4,170 | 4,022 |
Trade and other receivables | 20 | 43,603 | 72,345 |
Current tax assets | 21 | 1,353 | 190 |
Restricted cash | 22 | 67,270 | 67,270 |
Cash and cash equivalents | 22 | 52,626 | 39,837 |
TOTAL ASSETS | 909,767 | 904,341 | |
EQUITY AND LIABILITIES | |||
TOTAL EQUITY | |||
448,940 | 462,763 | ||
Equity attributable to owners of the Company | 448,730 | 462,786 | |
Share capital | 23 | 88,812 | 88,812 |
Share premium | 23 | 209,902 | 209,902 |
Reserves | 23 | 163,235 | 179,985 |
Result for the period | 23 | -13,219 | -15,913 |
Non-controlling interest | 210 | -23 | |
NON-CURRENT LIABILITIES | 325,179 | 225,376 | |
Borrowings | 25 | 323,582 | 221,209 |
Employee benefits | 27 | 1,597 | 4,166 |
CURRENT LIABILITIES | 135,649 | 216,203 | |
Borrowings | 25 | 81,851 | 165,657 |
Trade and other payables | 29 | 48,681 | 48,183 |
Current tax liability | 21 | 5,116 | 2,362 |
TOTAL LIABILITIES | 460,828 | 441,578 | |
TOTAL EQUITY AND LIABILITIES | 909,767 | 904,341 |
The notes are an integral part of these consolidated financial statements.
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31.
EXMAR REPORT 2019
62
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND | |||
12 months | 12 months | ||
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME | Note | ended | ended |
(IN THOUSANDS OF USD) | 31/12/2019 | 31/12/2018 (*) | |
STATEMENT OF PROFIT OR LOSS | |||
Revenue | |||
4 | 136,726 | 87,699 | |
Gain on disposal | 4 | 19,205 | 30,942 |
Other operating income | 4 | 2,315 | 8,754 |
OPERATING INCOME | 158,245 | 127,395 | |
Vessel expenses (**) | 5 | -46,928 | -33,780 |
General and administrative expenses (**) | 6 | -30,345 | -32,922 |
Personnel expenses | 7 | -33,131 | -34,294 |
Depreciations & amortisations | 11/12/13/14 | -26,771 | -19,019 |
Impairment losses | 14 | -5,139 | 0 |
Provisions | 27 | 0 | 2,360 |
Loss on disposal | -524 | -1,272 | |
RESULT FROM OPERATING ACTIVITIES | 15,407 | 8,467 | |
Interest income | 8 | 4,430 | 3,043 |
Interest expenses | 8 | -26,611 | -21,241 |
Other finance income | 8 | 3,816 | 6,999 |
Other finance expenses | 8 | -7,670 | -9,810 |
NET FINANCE RESULT | -26,034 | -21,009 | |
RESULT BEFORE INCOME TAX AND SHARE OF RESULT | -10,627 | -12,542 | |
OF EQUITY ACCOUNTED INVESTEES | |||
Share of result of equity accounted investees (net of income tax) | 15 | 1,757 | -1,603 |
RESULT BEFORE INCOME TAX | -8,870 | -14,145 | |
Income tax expense | 9 | -4,332 | -1,925 |
RESULT FOR THE PERIOD | -13,202 | -16,070 | |
Attributable to: | |||
Non-controlling interest | 16 | -157 | |
Owners of the Company | -13,219 | -15,913 | |
RESULT FOR THE PERIOD | -13,202 | -16,070 | |
BASIC EARNINGS PER SHARE (IN USD) | 24 | -0.23 | -0.28 |
DILUTED EARNINGS PER SHARE (IN USD) | 24 | -0.23 | -0.28 |
STATEMENT OF COMPREHENSIVE INCOME | |||
RESULT FOR THE PERIOD | |||
-13,202 | -16,070 | ||
Items that are or may be reclassified to profit or loss | |||
Equity accounted investees - share in other comprehensive income | 8 | -3,555 | 204 |
Foreign currency translation differences | 8 | 409 | -878 |
-3,146 | -674 | ||
Items that will never be reclassified to profit or loss | |||
Employee benefits - remeasurements of defined benefit liability/asset | 27 | 2,305 | 247 |
OTHER COMPREHENSIVE INCOME FOR THE PERIOD (NET OF INCOME TAX) | -841 | -427 | |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -14,044 | -16,497 | |
Attributable to: | |||
Non-controlling interest | 13 | -158 | |
Owners of the Company | -14,057 | -16,339 | |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -14,044 | -16,497 |
The notes are an integral part of these consolidated financial statements.
(*)The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31.
- The Group has further detailed the former "goods and services" and the former "other operating expenses" on the face of the consolidated profit or loss statement into "vessel expenses" and "general and administrative expenses".
CONSOLIDATED STATEMENT OF CASH FLOWS | |||||
12 months | 12 months | ||||
(IN THOUSANDS OF USD) | Note | ended | ended | ||
31/12/2019 | 31/12/2018 (*) | ||||
OPERATING ACTIVITIES | |||||
63 | |||||
Result for the period | |||||
-13,202 | -16,070 | ||||
Share of result of equity accounted investees (net of income tax) | 15 | -1,757 | 1,603 | ||
Depreciations and amortisations | 11/12/13 | 23,071 | 19,019 | ||
Depreciations IFRS 16 | 14 | 3,700 | 0 | ||
Impairment loss | 14 | 5,139 | 0 | ||
Profit or loss effect equity securities measured at FVTPL | 8 | -92 | 2,385 | ||
Net interest expenses/ (income) | 8 | 22,181 | 18,198 | ||
Income tax expense/ (income) | 9 | 4,332 | 1,925 | ||
Net gain on sale of assets | -18,681 | -29,670 | |||
Dividend income | 8 | -259 | -113 | ||
Unrealised exchange difference | 8 | 3,930 | -5,049 | ||
Equity settled share-based payment expenses (option plan) | 26 | 0 | 578 | ||
GROSS CASH FLOW FROM OPERATING ACTIVITIES | 28,362 | -7,194 | |||
(Increase)/decrease of trade and other receivables (**) | -3,550 | 1,092 | |||
Increase/(decrease) of trade and other payables | -1,202 | 2,125 | |||
Increase/(decrease) in provisions and employee benefits | -186 | -2,570 | |||
CASH GENERATED FROM OPERATING ACTIVITIES | 23,424 | -6,547 | |||
Interests paid | -23,890 | -13,315 | |||
Interests paid IFRS 16 | -1,392 | 0 | |||
Interests received | 4,457 | 4,431 | |||
Income taxes paid | -2,742 | -226 | |||
NET CASH FROM OPERATING ACTIVITIES | -143 | -15,657 | |||
INVESTING ACTIVITIES | |||||
Acquisition of vessels and vessels under construction (***) | |||||
11 | -5,684 | -46,732 | |||
Acquisition of other property, plant and equipment | 12 | -336 | -443 | ||
Acquisition of intangible assets | 13 | -122 | -34 | ||
Proceeds from the sale of vessels and other property, plant and equipment (incl held for sale) | 0 | 81 | |||
Disposal of equity accounted investees, net of cash disposed of | 10 | 18,667 | 44,438 | ||
Dividends received from equity accounted investees | 15 | 5,000 | 2,000 | ||
Other dividens received | 8 | 259 | 113 | ||
Borrowings to equity accounted investees | 17 | 0 | 0 | ||
Repayments from equity accounted investees | 17 | 1,000 | 4,350 | ||
NET CASH FROM INVESTING ACTIVITIES | 18,783 | 3,773 | |||
FINANCING ACTIVITIES | |||||
Proceeds from treasury shares and share options exercised | |||||
0 | 1,135 | ||||
Proceeds from new borrowings | 25 | 169,393 | 69,584 | ||
Repayment of borrowings | 25 | -169,306 | -57,505 | ||
Repayment of lease liabilities IFRS 16 | 25 | -2,600 | 0 | ||
Payment for banking fees/ debt transaction costs | 25 | -2,857 | -2,295 | ||
Increase in restricted cash | 22 | 0 | 0 | ||
Decrease in restricted cash | 22 | 0 | 164 | ||
NET CASH FROM FINANCING ACTIVITIES | -5,370 | 11,083 | |||
NET INCREASE /( DECREASE) IN CASH AND CASH EQUIVALENTS | 13,270 | -801 | |||
RECONCILIATION OF NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | |||||
Net cash and cash equivalents at 1 January | |||||
39,837 | 41,824 | ||||
Net increase/(decrease) in cash and cash equivalents | 13,270 | -801 | |||
Exchange rate fluctuations on cash and cash equivalents | -481 | -1,186 | |||
NET CASH AND CASH EQUIVALENTS AT 31 DECEMBER | 22 | 52,626 | 39,837 |
The notes are an integral part of these consolidated financial statements.
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31.
- The movement on the trade and other receivables has been corrected with the recovered amount from the Korean Development Bank. This amount was recorded per 31/12/2018 as other receivable. See also (***).
- The acquisition of vessels and vessels under construction has been corrected with the recovered amount from the Korean Development Bank in respect of advance payments made for 2 VLGC's (see also note 32) and acquisitions not yet paid per 31 December 2019.
EXMAR REPORT 2019
64
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||
(IN THOUSANDS OF USD) | Note | Share capital | Share premium | ||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS PER 31 DECEMBER 2018 | |||||
OPENING EQUITY PER 1 JANUARY 2018 | 88,812 | 209,902 | |||
COMPREHENSIVE RESULT FOR THE PERIOD | |||||
RESULT FOR THE PERIOD | |||||
Foreign currency translation differences | 8 | ||||
Foreign currency translation differences - share equity accounted investees | 8 | ||||
Net change in fair value of cash flow hedges - hedge accounting - share equity accounted investees | 8 | ||||
Employee benefits - remeasurements of defined benefit liability/asset | 27 | ||||
TOTAL OTHER COMPREHENSIVE RESULT | 0 | 0 | |||
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | 0 | 0 | |||
TRANSACTIONS WITH OWNERS OF THE COMPANY | |||||
Dividends paid | 23 | ||||
Share-based payments | 26 | ||||
Share options exercised | |||||
Treasury shares | |||||
Share based payments transactions | |||||
TOTAL TRANSACTIONS WITH OWNERS OF THE COMPANY | 0 | 0 | |||
31 DECEMBER 2018 | 88,812 | 209,902 | |||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS PER 31 DECEMBER 2019 | |||||
OPENING EQUITY AS PREVIOUSLY REPORTED PER 1 JANUARY 2019 | |||||
88,812 | 209,902 | ||||
RECLASSIFICATION WITHIN EQUITY AS CONSEQUENCE OF IFRS 2 (*) | |||||
ADJUSTMENT ON INITIAL APPLICATION OF IFRS 16 (NET OF TAX) (**) | |||||
ADJUSTED BALANCE AT I JANUARY 2019 | 88,812 | 209,902 | |||
COMPREHENSIVE RESULT FOR THE PERIOD | |||||
RESULT FOR THE PERIOD | |||||
Foreign currency translation differences | 8 | ||||
Foreign currency translation differences - share equity accounted investees | 8 | ||||
Net change in fair value of cash flow hedges - hedge accounting - share equity accounted investees | 8 | ||||
Employee benefits - remeasurements of defined benefit liability/asset | 27 | ||||
TOTAL OTHER COMPREHENSIVE RESULT | 0 | 0 | |||
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | 0 | 0 | |||
TRANSACTIONS WITH OWNERS OF THE COMPANY | |||||
Contributions & distributions | |||||
Dividends paid | 23 | ||||
Share-based payments | 26 | ||||
Changes in ownership interests | |||||
Acquisition of NCI without a change in control | |||||
TOTAL TRANSACTIONS WITH OWNERS OF THE COMPANY | 0 | 0 | |||
31 DECEMBER 2019 | 88,812 | 209,902 |
The notes are an integral part of these consolidated financial statements.
(*) The Group has reclassified USD 3.9 million within equity as a consequence of expired options.
(**)The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect to the accounting policies section E and to note 31.
Retained | Reserve for | Translation | Hedging | Share-based | Non-controlling | |||||
payments | Total | Total equity | ||||||||
earnings | treasury shares | reserve | reserve | interest | ||||||
reserve | ||||||||||
65 | ||||||||||
218,373 | -48,486 | -5,666 | 2,901 | 11,571 | 477,407 | 135 | 477,542 | |||
-15,913 | -15,913 | -157 | -16,070 | |||||||
-877 | -877 | -1 | -878 | |||||||
-403 | -403 | -403 | ||||||||
607 | 607 | 607 | ||||||||
247 | 247 | 247 | ||||||||
247 | 0 | -1,280 | 607 | 0 | -426 | -1 | -427 | |||
-15,666 | 0 | -1,280 | 607 | 0 | -16,339 | -158 | -16,497 | |||
0 | 0 | |||||||||
72 | 4,137 | -3,069 | 1,140 | 1,140 | ||||||
0 | 0 | |||||||||
578 | 578 | 578 | ||||||||
72 | 4,137 | 0 | 0 | -2,491 | 1,718 | 0 | 1,718 | |||
202,779 | -44,349 | -6,946 | 3,508 | 9,080 | 462,786 | -23 | 462,763 | |||
202,779 | -44,349 | -6,946 | 3,508 | 9,080 | 462,786 | -23 | 462,763 | |||
3,942 | -3,942 | 0 | 0 | |||||||
0 | 0 | |||||||||
206,721 | -44,349 | -6,946 | 3,508 | 5,138 | 462,786 | -23 | 462,763 | |||
-13,219 | -13,219 | 16 | -13,202 | |||||||
412 | 412 | -3 | 409 | |||||||
-69 | -69 | -69 | ||||||||
-3,486 | -3,486 | -3,486 | ||||||||
2,305 | 2,305 | 2,305 | ||||||||
2,305 | 0 | 343 | -3,486 | 0 | -838 | -3 | -841 | |||
-10,914 | 0 | 343 | -3,486 | 0 | -14,057 | 13 | -14,044 | |||
0 | 0 | |||||||||
0 | 0 | |||||||||
0 | 220 | 220 | ||||||||
0 | 0 | 0 | 0 | 0 | 0 | 220 | 220 | |||
195,808 | -44,349 | -6,603 | 22 | 5,138 | 448,730 | 210 | 448,940 |
EXMAR REPORT 2019
66
1. ACCOUNTING POLICIES
- REPORTING ENTITY
EXMAR nv ("the Company") is a company domiciled in Belgium whose shares are publicly traded (Euronext - EXM). The consolidated financial statements of the Group comprise the Company, its subsidiaries, and the Group's interest in associates and joint arrangements (referred to as "The Group"). The Group is active in the industrial shipping business.
B. BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by EU on 31/12/2019.
The group has adopted the following new standards issued by the International Accounting Standards Board (IASB) with a date of initial application of 1 January 2019.
• IFRS 16 Leasing
We refer to section E Changes in accounting policies.
The Group has applied a number of amendments to IFRS Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are effective for an annual period that begins on or after 1 January 2019. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
- IFRIC 23 Uncertainty over Income Tax Treatments
- Amendments to IFRS 9 Prepayment features with negative compen- sation
- Long-terminterest in Associates and Joint Ventures (Amendments to IAS 28)
- Amendments to IAS 19 Plan Amendment, Curtailment or Settlement
- Annual improvements to IFRS Standards 2015-2017 Cycle
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2019, and have not been applied in preparing these consolidated financial statements. The following new or amended standards or interpretations are not expected to have a significant impact on the Group's consolidated financial statements.
- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28).
- IFRS 17 Insurance Contracts
- Amendments to References to the Conceptual Framework in IFRS Standards
- Amendments to IFRS 3 Business combinations
• Amendments to IAS 1 and IAS 8 Definition of Material
The IASB issued Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) on 26 September 2019. There are hedges of interest rate risk at equity accounted investees (Hedge reserve of KUSD 22 as per year end 2019 and KUSD 3.486 net change in fair value of cash flow hedges recognized in other comprehensive income in 2019). These amendments permit continuation of hedge accounting even if in the future the hedged benchmark interest rate may no longer be separately identifiable. However, this relief does not extend to the requirement that the designated interest rate risk component must continue to be reliably measureable. If the risk component is no longer reliably measureable, the hedging relationship would be discontinued.
The consolidated financial statements were approved and were autho- rised for issue by the Board of Directors on March 26, 2020.
C. FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated accounts are presented in USD in accordance with the deviation granted by the Financial Services and Markets Authority (FSMA) by letter of 2 July 2003, and all values are rounded to the nearest thousand. USD is the Company's functional currency. They are prepared on the historical cost basis except for the following material assets and liabilities that have been measured on an alternative basis on each reporting date: derivative financial instruments, equity securities at FVTPL and the net defined benefit liability. Assets held for sale are stated at the lower of carrying amount and fair value less cost to sell.
D. USE OF JUDGEMENTS AND ESTIMATES
The preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and related assumptions are based on historical experience and various other factors that are believed to be reasonable under the circum- stances. Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Preparing the consolidated financial statements, the Group has made judgements, estimates and assumptions regarding the fair value for the share options, the employee benefit plans, provisions and contingencies and the classification of new lease commitments and time charter agreements. On a yearly basis the residual value and the useful life of the vessels is reviewed.
The carrying values of the vessels may not represent the fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be cyclical. The carrying amounts of each specific fleet are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a specific fleet may not be fully recoverable. The recoverable amount is the highest of the fair value less cost to sell and the value in use. The fair value less cost to sell is determined based upon independent valuation reports. The value in use is based upon future cash flows discounted to their present value. In developing estimates of future cash flows, we must make assumptions about future charter rates, ship operating expenses, the estimated remaining useful lives of the fleet and the WACC. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are ob- servable for the assets or liability, either directly (i.e. as prices) or indi- rectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
At this moment, we are confronted with the COVID-19 outbreak. It is almost impossible to predict the consequences of this outbreak, so the impact hasn't been included in the 2019 financial statements.
E. CHANGES IN ACCOUNTING POLICIES | IFRS 16, the Group recognises right-of-use assets and lease liabilities for | |
The Group has initially applied IFRS 16 from 1 January 2019. IFRS 16 | most leases - i.e. these leases are on-balance sheet. | |
introduced a single, on-balance sheet accounting model for lessees. | ||
As a result, the Group, as a lessee, has recognised right-of-use assets | At inception or on reassessment of a contract that contains a lease com- | |
representing its rights to use the underlying assets and lease liabilities | ponent, the Group allocates the consideration in the contract to each | |
representing its obligation to make lease payments. Lessor accounting | lease and non-lease component on the basis of their relative stand-alone | 67 |
remains similar to previous accounting policies. | prices. | |
The Group has applied IFRS 16 using the modified retrospective approach, | At transition, for leases classified as operating leases under IAS 17, lease | |
under which the cumulative effect of initial application is recognised in | liabilities were measured at the present value of the remaining lease | |
retained earnings at 1 January 2019. The impact on retained earnings is | payments, discounted at the Group's incremental borrowing rate as at 1 | |
determined as zero. Accordingly, the comparative information presented | January 2019. Right-of-use assets are measured at an amount equal to | |
for 2018 has not been restated - i.e. it is presented, as previously | the lease liability, adjusted by the amount of any prepaid or accrued lease | |
reported, under IAS 17 and related interpretations. The details of the | payments. | |
changes in accounting policies are disclosed below. | The Group has tested its right-of-use assets for impairment on the date | |
Definition of a lease | ||
of transition and has concluded that there is no indication that the right- | ||
Previously, the Group determined at contract inception whether an | of-use assets are impaired. | |
arrangement was or contained a lease under IFRIC 4 determining | ||
whether an arrangement contains a lease. The Group now assesses | The Group used the following practical expedients when applying IFRS 16 | |
whether a contract is or contains a lease based on the new definition of a | to leases previously classified as operating leases under IAS 17: | |
lease as explained further under "Leases". | • Did not recognise right-of-use assets and liabilities for low value assets | |
On transition to IFRS 16, the Group elected to apply the practical expe- | • Excluded initial direct costs from measuring the right-of-use asset at | |
dient to grandfather the assessment of which transactions are leases. It | the date of initial application. | |
applied IFRS 16 only to contracts that were previously identified as leases. | Leases as a lessor | |
Contracts that were not identified as leases under IAS 17 and IFRIC 4 | ||
were not reassessed. Therefore, the definition of a lease under IFRS 16 | The Group leases out a significant part of its vessels. The Group has classi- | |
has been applied only to contracts entered into or changed on or after 1 | fied these leases as operating leases. The accounting policies applicable to | |
January 2019. | the Group as a lessor are not different from those under IAS 17. | |
Leases as a lessee | Impacts on financial statements | |
The Group leases many assets, including properties, motor vehicles | On transition to IFRS 16, the Group recognised additional right-of-use | |
and IT equipment. As a lessee, the Group previously classified leases as | assets and additional lease liabilities, recognising the difference in retained | |
operating or finance leases based on its assessment of whether the lease | earnings. The impact on retained earnings is determined as zero. The im- | |
transferred substantially all of the risks and rewards of ownership. Under | pact on transition is summarised below. |
IMPACT ON TRANSITION
01/01/2019
IMPACT ON FINANCIAL STATEMENTS
Right-of-use assets | 13,026 | |||||
Lease liabilities | 13,026 | |||||
Property | Motor vehicles | IT equipment | Total | |||
(including aircraft) | ||||||
RIGHT OF USE ASSETS | ||||||
BALANCE AT 1 JANUARY 2019 | 5,529 | 6,901 | 596 | 13,026 | ||
When measuring lease liabilities for leases that were classified as | operating leases, the | Group discounted lease payments using its incremental borrowing | ||||
rate at 1 January 2019. The weighted-average rate applied is 3.85%. | ||||||
01/01/2019 | ||||||
OPERATING LEASE COMMITMENTS | ||||||
Operating lease commitments as disclosed in annual report 31/12/2018 | 14,340 | |||||
Discounted using the incremental borrowing rate at 1 January 2019 | 13,029 | |||||
Recognition exemption for leases of low value assets | -3 | |||||
Lease liabilities recognised at 1 January 2019 | 13,026 |
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68
F. SIGNIFICANT ACCOUNTING POLICIES a) Basis of consolidation
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.
A business is an integrated set of activities and assets that is capable of being conducted and managed to provide a return to investors (or other owners, members or participants) by way of dividends, lower costs or other economic benefits. A business generally consists of inputs, processes applied on those inputs and the ability to create outputs. This can for instance be the case when the acquisition also contains the transfer of current contracts in respect of chartering, crew,…
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of ac- quisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in fair value are recognised in profit or loss.
Subsidiaries
Subsidiaries are those entities controlled by the Group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. All intra-Group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-Group transactions are eliminated in full.
Loss of control
Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, and non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit and loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date the control is lost.
Interests in equity-accounted investees
The Group's interest in equity accounted investees comprises interests in associates and joint ventures.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Investments in associates and joint ventures are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs. Subsequent to initial recognition,
the consolidated financial | statements include the Group's share of the |
profit or loss and OCI of | equity accounted investees, from the date that |
significant influence or joint control commences until the date that significant influence or joint control ceases.
When the share of the Group in the losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of future losses is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee. In such case the negative investment in equity accounted investees is deducted from other components of the investor's interest in the equity accounted investee (borrowings to equity accounted invest- ees). If the negative investment in equity accounted investees exceeds the investor's interest, a liability is recognized for the net amount. Unre- alised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unreal- ised gains, but only to the extent that there is no evidence of impairment.
b) Foreign currency
Foreign currency transactions
Foreign currency transactions are converted to the respective functional currencies at the exchange rate applicable at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to USD at the exchange rate applicable at that date. The non-monetary assets and liabilities that are measured in terms of historical cost are translated to USD at the exchange rate at the date of the initial transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit or loss statement, except for qualified cash flow hedges to the extent that the hedges are effective, which are recognised in other comprehensive income.
Financial statements of foreign operations
Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to USD using the closing rate at reporting date. The income and expenses of the foreign operations are converted to USD at the exchange rate at the date of the transaction (the average exchange rate during the relevant period is used in case the date of transaction approximates this average rate). Foreign currency differences are recognized directly in other comprehensive income. These foreign currency differences are presented within the translation reserve. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit and loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit and loss.
c) Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market- place.
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the fi- nancial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:
- the Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met (see (iii) below); and
- the Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see (iv) below).
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
(i) Financial assets at amortised costs
These assets are subsequently measured at amortised costs using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
(ii) Debt investments at FVTOCI
These assets are subsequently measured at fair value. Interest income is calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
(iii) Equity investments at FVTOCI
These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
(iv) Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and loss- es, including any interest or dividend income, are recognised in profit or loss. However, see section derivative financial instruments and hedge accounting for derivatives designated as hedging instruments.
Derecognition of financial assets | |||||
The Group derecognises a financial | asset when the contractual rights to | ||||
the cash flows from the financial asset expire, or it transfers the rights to | |||||
receive the contractual cash flows in a transaction in | which substantially | ||||
all risks and rewards of ownership of the financial asset | are transferred or | 69 | |||
in which the Group neither transfers nor retains substantially all of the | |||||
risks and rewards of ownership and it does not retain control over the fi- | |||||
nancial asset. | |||||
Financial liabilities | |||||
Financial liabilities are classified as | measured at amortised cost or FVTPL. | ||||
A financial liability is classified at | FVTPL if it is classified as held-for- | ||||
trading, it is a derivative or it is designated as such on initial recognition. | |||||
Financial liabilities at FVTPL are measured at fair value and net gains | |||||
and losses, including any interest expense, are recognised in profit or | |||||
loss. Other financial liabilities are subsequently measured at amortised | |||||
cost using the effective interest method. Interest expense and foreign | |||||
exchange gains and losses are recognised in profit or loss. | Any gain or loss | ||||
on derecognition is also recognised in profit | or loss. | ||||
See section derivative financial instruments | and hedge | accounting for |
derivatives designated as hedging instruments.
Derecognition of financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax effects. When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs net of tax, is recognised as a deduction from equity. When treasury shares are sold, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented in retained earnings.
Derivative financial instruments & hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures when considered necessary. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.
Derivatives are recognised initially at fair value at the date a derivative contract is entered into. Subsequent to initial recognition, derivatives are recognized at fair value and changes therein are generally recognized in profit and loss.
The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative financial liabilities as hedges of foreign exchange risk of a net investment in a foreign operation.
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At inception of designated hedge relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedged instrument, including whether the changes in cash flow of the hedged item and hedging instrument are expected to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss. The amount accumulated in the hedging reserve and the cost of the hedging reserve is reclassified to profit or loss in the same period or periods during which the hedge expected future cash flows affect profit or loss.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, any gain or loss recognised in other comprehensive income and accumulated in de cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is immediately reclassified to profit or loss.
d) Goodwill
Goodwill arising upon the acquisition of subsidiaries is included in intangible assets.
For acquisitions on or after 1 January 2010, the Company measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the carrying amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in the statement of profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the statement of profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
For acquisitions prior to 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Company's interest in the recognized amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a bargain purchase gain was recognized immediately in the statement of comprehensive income. Transaction costs, other than those associated with the issue of debt or equity securities, that the Company incurred in connection with business combinations were capitalized as part of the cost of the acquisition.
Subsequently goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is allocated to the carrying amount of the equity accounted investee as a whole.
e) Intangible assets
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially new improved products and processes. Development cost is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Other- wise, it is recognised in profit or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.
Other intangible assets
Other intangible assets (e.g. software,…) acquired by the Group that have finite useful lives are measured at cost less accumulated amortisations and accumulated impairment losses. The amortisation is recognized in the profit or loss statement, and is spread over the useful life of the relevant intangible assets following the straight-line depreciation method. The amortization starts from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Intangible assets with an indefinite useful life or that are not yet available for use, are subject to an annual impairment test.
Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognized in profit or loss as incurred.
f) Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost, which includes capitalised borrowing costs, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and to bringing the asset to the location and condition necessary for its intended use. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use and capitalized borrowing costs.
Subsequent expenses associated with items of property, plant and equipment are capitalised only if a future economic advantage will result from this expenditure and its cost can be measured reliably. If a part of an item of property, plant and equipment is replaced, the replacement cost is capitalised and the carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss statement as incurred.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value and is recognized in profit or loss.
Vessels or units in the construction process are separately classified on the balance sheet as vessels under construction. These vessels under construction are not depreciated, depreciation starts at the moment that the vessels are delivered. As from the moment of delivery, the vessels are no longer classified as under construction. The business model of the Group aims to rent or operate the constructed assets.
The vessels are depreciated on a straight-line basis to their residual value over their estimated useful life in the Group. The residual value amounts to USD 0 for all vessels and platforms.
Gas vessels LPG: | 30 years |
Gas vessels LNG: | 35 years |
LNG units: | 30 years |
Accommodation platform, | |
second hand: | 10-12 years |
Accommodation platform, newbuild; | |
• Hull, machinery & deck outfitting | 20 years |
• Accommodation | 10 years |
Dry-docking expenses are capitalised when they occur and depreciated over a period until the next dry-dock.
Other property, plant and equipment are depreciated over their estimated useful life using the straight-line depreciation method. Land is not depreciated.
The estimated depreciation percentages of the various types of assets are as follows:
Buildings: | 3% |
Leased real estate: | 3% |
Plant and equipment: | 20% |
Furniture: | 10% |
Cars: | 20% |
Airplane: | 10% |
IT equipment: | 33% |
The method of depreciation, the residual value, and the useful life values are reviewed at each financial year-end and adjusted if appropriate.
Leased assets
Lease agreements substantially assigning all risks and rewards inherent to ownership to the Group, are classified as finance leases. The leased assets measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, are subsequently reduced by the accumulated depreciation and possible impairment losses. The depreciation period matches the useful life. If there is uncertainty with respect to the transfer of ownership to the Group at the end of the contract, the asset is fully depreciated over the shorter of the lease term and its useful life.
g) Investment property
Investment property is measured at historical cost less accumulated depreciation and accumulated impairment losses.
The depreciation is recognized in the profit or loss statement on a straight- line basis over the estimated useful lives of the investment properties.
h) Impairment of assets
Financial assets
Financial assets measured at cost
Financial assets measured at cost are assessed each reporting date to determine whether the credit risk of a financial asset has increased significantly since initial recognition. The Group measures loss allowances at an amount equal to lifetime expected credit losses (ECL's). When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating lifetime ECL's, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment and including forward-looking information.
Equity accounted investees
After application of the equity method, the entity determines whether it is necessary to recognise an impairment loss with respect to its net investment in the associate or joint venture. An impairment loss in respect of an equity-accounted investee is measured by comparing the recove
rable amount of the investment with its carrying amount. An impairment 71 loss is recognised in profit and loss and is reversed when there is a favour-
able change in the estimates used to determine the recoverable amount.
Non-financial assets
The carrying value of non-financial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is an indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
For goodwill and intangible assets that have indefinite lives or that are not yet available for use the recoverable amount is estimated on each balance sheet date.
The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. All impairment losses are recognised in the profit or loss statement.
Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses in prior periods are assessed at each reporting date for indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
i) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group's accounting poli- cies. Thereafter the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis except that no loss is allocated to assets not in the measurement scope of IFRS 5, which continue to be measured in accordance with the Group's other accounting policies. Intangible assets, property, plant and equipment and investment property once classified as held for sale or distribution are not amortised or de- preciated. In addition, equity accounting of equity-accounted investees ceases once classified as held for sale or distribution.
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j) Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit or loss statement as the related service is provided.
Defined benefit plans
The Group's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; discounting that amount and deducting the fair value of any plan assets. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Group determines the net interest expense (in- come) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net Interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Belgian defined contribution plans with return guaranteed by law
Belgian defined contribution plans are subject to the Law of April 28, 2003 on occupational pensions (hereafter 'the WAP'). According to article 24 of this Law, the employer has to guarantee an average minimum return of 3.75% on employee contributions and of 3.25% on employer contributions and this for contributions paid until 31/12/2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both employer and employee contributions (as changed by the Law of 18 December 2015). This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer. Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company managing the plans. Therefore these plans do not meet the definition of defined contribution plan under IFRS and have to be classified by default as defined benefit plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method.
Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
Short-term employee benefit
Short-term employee benefit obligations are measured on an undis- counted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
Share-based payment transactions
The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the options. The amounts recognised as an expense is adjusted to reflect the actual number of options for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at vesting date.
k) Provisions
A provision is recognised in the statement of financial position when the Group has a legal or constructive obligation as result of a past event, that can be estimated reliably and it is probable that an outflow of benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Restructuring provisions
Provisions for restructuring are recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.
l) Income
Revenues from assets sold and services rendered
The company and/ or its joint ventures generate revenues from charterers for the use of its assets. Assets are chartered using voyage/spot, time or bareboat charters. For voyage/spot charters, a contract is closed in the spot market for the use of an asset for a specific voyage at a contractual agreed rate per metric tonnes transported. For time or bareboat charters, a contract is entered into for the use of an asset for a specific period of time at a contractual agreed daily or monthly rate. Revenue is recognised on a straight line basis over the duration of each voyage, time or bareboat charter. Invoices and related payment terms depend on individual contractual terms.
Revenue from the sale of assets is recognised in the profit or loss statement when control of the goods underlying the particular performance obligation is transferred to the customer. For the sale of a vessel, control is transferred to the customer at the moment that the vessel is delivered to the customer. Invoices and related payment terms depend on individual contractual terms.
Revenue from services is recognised in the profit or loss statement over time as the services are provided. The customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs (recurring services). Invoices and related payment terms depend on individual contractual terms.
Commissions
If the group acts in the capacity of an agent rather than as a principal in the transaction, then the revenue recognised is the net amount of commission made by the Group.
Rental income from investment property
Rental income from investment property is recognised in the profit or loss statement on a straight-line basis over the term of the lease agreement.
m) Leases
The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately.
Policy applicable from 1 January 2019
At inception of a contract, the Group assesses whether a contract is, or con- tains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right- of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily de- termined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is reason- ably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reason- ably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether
it will exercise a purchase, extension or termination option or if there is a 73 revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets separately on the face of the balance sheet and lease liabilities in 'loans and borrowings' in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
As a lessor
At inception or on modification of a contract that contains a lease com- ponent, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assess- ment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration in the contract.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of 'revenue'.
Generally, the accounting policies applicable to the Group as a lessor in the comparative period were not different from IFRS 16.
Policy applicable before 1 January 2019
For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether:
- fulfilment of the arrangement was dependent on the use of a specific asset or assets; and
- the arrangement had conveyed a right to use the asset. An arrange- ment conveyed the right to use the asset if one of the following was met:
- the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insignificant amount of the output;
- the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insignificant amount of the output; or
- facts and circumstances indicated that it was remote that other parties would take more than an insignificant amount of the out- put, and the price per unit was neither fixed per unit of output nor equal to the current market price per unit of output.
EXMAR REPORT 2019
74
As a lessee
Leases of assets that transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at the lower of fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases are classified as an operating lease and are not recognised in the statement of financial position. Payments made under operating leases are recognised in the statement of profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
As a lessor
When the Group acted as a lessor, it determined at lease inception whether each lease was a finance lease or an operating lease.
To classify each lease, the Group made an overall assessment of whether the lease transferred substantially all of the risks and rewards incidental to ownership of the underlying asset. If this was the case, then the lease was a finance lease; if not, then it was an operating lease. As part of this assessment, the Group considered certain indicators such as whether the lease was for the major part of the economic life of the asset.
n) Government grants
Government grants are recognised initially as deferred income at fair value when there is a reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in profit and loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the periods in which the expenses are recognised.
o) Finance income and expenses
Finance income consists of interests received, dividend income, gains on the disposal of equity securities at FVTPL, changes in the fair value of
financial assets at fair value through profit or loss, and gains on hedging instruments that are recognised in profit or loss and exchange rate gains. Interest income is recognised in the profit or loss statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the profit or loss statement on the date that the dividend is declared.
Finance expenses consist of interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, exchange rate losses and losses on hedging instruments that are recognised in profit or loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis per currency as either other finance income or finance expense.
p) Taxes
Income tax expense consists of current and deferred taxes. Current and deferred tax is recognized in the profit or loss statement, except to the extent it relates to a business combination, or when they relate to items that are recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss of the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable profit, and differences relating to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing
of reversal and it is probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised.
Deferred tax assets are reduced when it is no longer probable that the related tax benefits will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that is has become probable that future taxable profits will be available against which they can be used. Deferred tax assets and liabilities are offset only if certain conditions are met.
Tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the profit or loss statement but is shown under other operating expenses.
q) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating results are reviewed regularly by management to make decisions about resources to be allocated to the segment and assess its performance.
The result for each segment includes all income and expenses generated directly by this segment, as well as part of the income and expenses that can reasonably be allocated to this segment. The assets and liabilities allocated to a segment include as a minimum the assets and liabilities which are periodically reported to the Chief operating decision maker, being the Group's CEO and the Executive Committee.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill.
r) Earnings per share
The Group presents basic and diluted earnings per share for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period, adjust- 75 ed for treasury shares held. Diluted earnings per share is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted average of ordinary shares outstanding, adjusted for treasury shares held and for the effects of all dilutive potential ordinary shares such
as share options granted to employees.
s) Discontinued operations
A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale; is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations or is a subsidiary acquired exclusively with a view to re-sale. Classification of a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative profit or loss statement is restated as if the operation had been discontinued from the start of the comparative period.
EXMAR REPORT 2019
76
2. SEGMENT REPORTING (IN THOUSANDS OF USD)
In respect of joint-ventures, the company continues to manage its operations based on internal management reports applying the principles of the proportionate consolidation method. The reconciliation of the segment reporting to the consolidated statement of financial position and the consolidated statement of profit or loss is presented in note 3. All differences relate to the application of IFRS 11 Joint arrangements, no other differences exist.
The Group has changed its reportable segments in 2019, the Group has currently 3 reportable segments. The Group's operating segments reflect the level at which the Group's CEO and the Executive Committee review the business and make decisions about the allocation of resources and other operating matters. These segments offer different products and services and are managed separately.
- The activities in the shipping segment include the transportation of liquefied gas products such as Liquid Petroleum Gas (LPG, butane, propane and a mixture of both), anhydrous ammonia and petrochemical gases.
- The infrastructure segment includes LNG infrastructure and Offshore. The mission is to provide innovative floating infrastructure solutions to the Oil & Gas industry covering the complete lifecycle starting from engineering, construction supervision and moving into ownership, leasing and operations & maintenance.
- The segment supporting services includse the specialised supporting services such as shipmanagement services and travel agency services.
The company's internal and management structure does not distinguish any geographical segments as the company's fleet is operated on a worldwide basis.
The intra-segment revenue mainly relates to management and crew services provided.
Major shipping client Equinor (ex-Statoil) represents 26% of the revenue of the shipping segment and 13.9% of the EXMAR Group revenue in 2019. Major shipping client Excelerate Energy Llc represents 9% of the revenue of the shipping segment revenue and 5% of the EXMAR Group revenue in 2019. The remaining part of the shipping revenue is divided between 16 different customers. Gunvor represents 35.8% of the revenue of the Infrastructure segment and 11.4% of the EXMAR Group revenue in 2019. YPF represents 24.8% of the revenue of the Infrastructure segment and 7.9% of the EXMAR Group revenue in 2019. No other customers represent more than 10% of the segment revenue or of the EXMAR group revenue in 2019.
SEGMENT REPORTING 2019 | |||||
Shipping | Infrastructure | Supporting | Eliminations | Total | |
Services | |||||
CONSOLIDATED STATEMENT OF PROFIT OR LOSS | |||||
Revenue third party
Revenue intra-segment
Total revenue
Revenue on property rental third party
Revenue on property rental intra-segment
Total revenue on property rental
Gain on disposal
Other operating income
OPERATING INCOME
OPERATING RESULT BEFORE DEPRECIATION AND AMORTISATION CHARGES (EBITDA)
Depreciations, amortisations and impairment loss
OPERATING RESULT (EBIT)
Interest income (non-interco)
Interest income interco
Interest expenses (non-interco)
Interest expenses interco
Other finance income
Other finance expenses
Share of result of equity accounted investees (net of income tax) Income tax expense
SEGMENT RESULT FOR THE PERIOD
RESULT FOR THE PERIOD
Non-controlling interest
ATTRIBUTABLE TO OWNERS OF THE COMPANY
119,388 | 71,315 | 33,732 | 0 | 224,435 |
3,040 | 468 | 7,892 | -11,400 | 0 |
122,428 | 71,783 | 41,624 | -11,400 | 224,435 |
0 | 0 | 611 | 0 | 611 |
0 | 0 | 62 | -62 | 0 |
0 | 0 | 673 | -62 | 611 |
16 | 0 | 19,189 | 0 | 19,205 |
430 | 1,594 | 331 | 0 | 2,355 |
122,874 | 73,377 | 61,817 | -11,462 | 246,606 |
60,425 | 20,617 | 19,873 | 100,915 | |
-45,976 | -18,650 | -1,912 | -66,538 | |
14,449 | 1,967 | 17,961 | 0 | 34,377 |
2,855 | 1,229 | 233 | 4,317 | |
771 | 550 | 26,557 | -27,878 | 0 |
-21,034 | -21,115 | -716 | -42,865 | |
-2,038 | -24,985 | -855 | 27,878 | 0 |
691 | 1,812 | 1,419 | 3,922 | |
-2,752 | -4,430 | -1,517 | -8,699 | |
0 | 322 | -125 | 197 | |
-139 | -509 | -3,804 | -4,452 | |
-7,197 | -45,159 | 39,153 | 0 | -13,202 |
-13,202 | ||||
16 | ||||
-13,219 |
SEGMENT REPORTING 2019 | |||||||
Shipping | Infrastructure | Supporting | Eliminations | Total | |||
Services | |||||||
STATEMENT OF FINANCIAL POSITION | |||||||
ASSETS | 77 | ||||||
Vessels | 487,839 | 466,095 | 0 | 953,934 | |||
Other property, plant and equipment | 393 | 123 | 1,281 | 1,797 | |||
Intangible assets | 0 | 0 | 195 | 195 | |||
Right-of-use assets | 33,613 | 2,617 | 2,594 | 38,824 | |||
Equity accounted investees | 3,741 | 0 | 5,119 | 8,860 | |||
Borrowings to equity accounted investees | 0 | 7,396 | 0 | 7,396 | |||
Non-current derivative financial instruments | 175 | 0 | 0 | 175 | |||
Non-current assets held for sale | 13,279 | 0 | 0 | 13,279 | |||
Restricted cash | 1,733 | 67,270 | 0 | 69,003 | |||
Cash and cash equivalents | 25,733 | 11,651 | 39,859 | 77,243 | |||
TOTAL SEGMENT ASSETS | 566,506 | 555,152 | 49,048 | 0 | 1,170,706 | ||
Unallocated other investments | 4,170 | ||||||
Unallocated trade and other receivables | 53,362 | ||||||
Other unallocated assets | 1,368 | ||||||
TOTAL ASSETS | 1,229,606 | ||||||
LIABILITIES | |||||||
Non-current borrowings | 363,696 | 217,677 | 1,789 | 583,162 | |||
Current borrowings | 73,329 | 30,430 | 22,903 | 126,662 | |||
Non-current provisions | 0 | 1,733 | 0 | 1,733 | |||
Non-current derivative financial instruments | 153 | 0 | 0 | 153 | |||
TOTAL SEGMENT LIABILITIES | 437,178 | 249,840 | 24,692 | 0 | 711,710 | ||
Unallocated equity | 448,940 | ||||||
Unallocated trade and other payables | 62,243 | ||||||
Unallocated other liabilities | 6,713 | ||||||
TOTAL EQUITY AND LIABILITIES | 1,229,606 |
CASH FLOW STATEMENT
Cash from operating activities Cash from investing activities Cash from financing activities Dividends paid/received Exchange rate fluctuations
TOTAL CASH FLOW
37,903 | -25,773 | 33,453 | 45,583 | |
-1,349 | -11,029 | 18,468 | 6,090 | |
-15,297 | -64,955 | 29,954 | -50,298 | |
0 | ||||
-481 | ||||
21,257 | -101,757 | 81,875 | 0 | 894 |
ADDITIONAL INFORMATION
Capital expenditures | -1,349 | -12,029 | -336 | -13,714 | |
Proceeds from disposals | 0 | 0 | 0 | 0 |
EXMAR REPORT 2019
78
SEGMENT REPORTING 2018 | |||||
Shipping | Infrastructure | Supporting | Eliminations | Total | |
(IN THOUSANDS OF USD) | Services | ||||
CONSOLIDATED STATEMENT OF PROFIT OR LOSS | |||||
Revenue third party | 112,844 | 29,886 | 27,671 | 0 | 170,401 |
Revenue intra-segment | 1,549 | 2,189 | 8,878 | -12,616 | 0 |
Total revenue | 114,393 | 32,075 | 36,549 | -12,616 | 170,401 |
Revenue on property rental third party | 0 | 0 | 1,200 | 0 | 1,200 |
Revenue on property rental intra-segment | 0 | 0 | 130 | -130 | 0 |
Total revenue on property rental | 0 | 0 | 1,330 | -130 | 1,200 |
Gain on disposal | 31,824 | 14 | 26 | 0 | 31,864 |
Other operating income | 672 | 7,454 | 503 | 0 | 8,629 |
Other operating income intra-segment | 0 | 551 | 0 | -551 | 0 |
Total other operating income | 672 | 8,005 | 503 | -551 | 8,629 |
OPERATING INCOME | 146,889 | 40,094 | 38,408 | -13,297 | 212,094 |
OPERATING RESULT BEFORE DEPRECIATION | 67,977 | 716 | -1,322 | 67,371 | |
AND AMORTISATION CHARGES (EBITDA) | |||||
Depreciations, amortisations and impairment loss | -30,086 | -14,123 | -1,145 | -45,354 | |
OPERATING RESULT (EBIT) | 37,891 | -13,407 | -2,467 | 0 | 22,017 |
Interest income (non-interco) | 1,602 | 1,532 | 152 | 3,286 | |
Interest income interco | 708 | 446 | 22,865 | -24,019 | 0 |
Interest expenses (non-interco) | -17,207 | -18,346 | -356 | -35,909 | |
Interest expenses interco | -2,709 | -19,994 | -1,316 | 24,019 | 0 |
Other finance income | 526 | 5,340 | 1,446 | 7,312 | |
Other finance expenses | -1,802 | -5,898 | -3,596 | -11,296 | |
Share of profit (loss) of equity accounted investees (net of income tax) | 0 | 1,050 | -412 | 638 | |
Income tax expense | -71 | 0 | -2,047 | -2,118 | |
SEGMENT RESULT FOR THE PERIOD | 18,938 | -49,277 | 14,269 | 0 | -16,070 |
RESULT FOR THE PERIOD | -16,070 | ||||
Non-controlling interest | -157 | ||||
ATTRIBUTABLE TO OWNERS OF THE COMPANY | -15,913 | ||||
STATEMENT OF FINANCIAL POSITION | |||||
ASSETS | |||||
Vessels | 492,853 | 469,683 | 0 | 962,536 | |
Other property, plant and equipment | 228 | 400 | 1,430 | 2,058 | |
Intangible assets | 0 | 160 | 402 | 562 | |
Investment property | 0 | 0 | 8,454 | 8,454 | |
Equity accounted investees | 0 | 4,637 | 4,413 | 9,050 | |
Borrowings to equity accounted investees | 0 | 3,948 | 0 | 3,948 | |
Non-current derivative financial instruments | 3,150 | 0 | 0 | 3,150 | |
Current derivative financial instruments | 358 | 0 | 0 | 358 | |
Restricted cash | 1,695 | 67,270 | 0 | 68,965 | |
Cash and cash equivalents | 39,299 | 11,051 | 26,000 | 76,350 | |
TOTAL SEGMENT ASSETS | 537,583 | 557,149 | 40,699 | 0 | 1,135,431 |
Unallocated other investments | 4,022 | ||||
Unallocated trade and other receivables | 88,355 | ||||
Other unallocated assets | 201 | ||||
TOTAL ASSETS | 1,228,008 | ||||
LIABILITIES | |||||
Non-current borrowings | 311,639 | 158,057 | 8,787 | 478,483 | |
Current borrowings | 82,083 | 142,591 | 883 | 225,557 | |
TOTAL SEGMENT LIABILITIES | 393,722 | 300,648 | 9,670 | 0 | 704,040 |
Unallocated equity | 462,763 | ||||
Unallocated trade and other payables | 54,666 | ||||
Unallocated other liabilities | 6,539 | ||||
TOTAL EQUITY AND LIABILITIES | 1,228,008 |
SEGMENT REPORTING 2018 | |||||||
Shipping | Infrastructure | Supporting | Eliminations | Total | |||
(IN THOUSANDS OF USD) | Services | ||||||
CASH FLOW STATEMENT | |||||||
79 | |||||||
Cash from operating activities | 20,985 | -41,460 | 25,707 | 5,232 | |||
Cash from investing activities | 1,449 | -14,491 | -139 | -13,181 | |||
Cash from financing activities | 28,151 | -17,803 | 267 | 10,615 | |||
Dividends paid/received | 0 | ||||||
Exchange rate fluctuations | -1,186 | ||||||
TOTAL CASH FLOW | 50,585 | -73,754 | 25,835 | 0 | 1,480 |
ADDITIONAL INFORMATION
Capital expenditures
Proceeds from disposals
-82,666 | -18,841 | -299 | -101,806 | |
2,177 | 0 | 81 | 2,258 |
3. RECONCILIATION SEGMENT REPORTING (IN THOUSANDS OF USD)
The financial information of each operating segment is reviewed by management using the proportionate consolidation method. The below tables reconcile the financial information as reported in the consolidated statement of financial position and the consolidated statement of profit or loss (using the equity consolidation method as required under IFRS 11) with the financial information disclosed in note 2 'Segment reporting' (using the proportionate consolidation method).
Proportionate | Difference | Equity Consolidation | |
consolidation | |||
RECONCILIATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND PROPORTIONATE CONSOLIDATION | |||
(SEGMENT REPORTING) | |||
31 DECEMBER 2019 | |||
Vessels | 953,934 | -377,329 | 576,605 |
Other property, plant and equipment | 1,797 | 0 | 1,797 |
Intangible assets | 195 | 0 | 195 |
Right-of-use assets | 38,824 | -32,714 | 6,111 |
Investments in equity accounted investees | 8,860 | 86,697 | 95,557 |
Borrowings to equity accounted investees | 7,396 | 42,084 | 49,479 |
Derivative financial instruments | 175 | -175 | 0 |
NON-CURRENT ASSETS | 1,011,181 | -281,436 | 729,745 |
Non-current assets held for sale | 13,279 | -2,279 | 11,000 |
Other investments | 4,170 | 0 | 4,170 |
Trade and other receivables | 53,362 | -9,759 | 43,603 |
Current tax assets | 1,368 | -14 | 1,353 |
Restricted cash | 69,003 | -1,733 | 67,270 |
Cash and cash equivalents | 77,243 | -24,617 | 52,626 |
CURRENT ASSETS | 218,425 | -38,403 | 180,022 |
TOTAL ASSETS | 1,229,606 | -319,839 | 909,767 |
EQUITY | 448,940 | 0 | 448,940 |
Borrowings | 583,162 | -259,581 | 323,582 |
Employee benefits | 1,597 | 0 | 1,597 |
Non-current provisions | 1,733 | -1,733 | 0 |
Non-current derivative financial instruments | 153 | -153 | 0 |
NON-CURRENT LIABILITIES | 586,645 | -261,466 | 325,179 |
Borrowings | 126,662 | -44,810 | 81,851 |
Trade and other payables | 62,243 | -13,562 | 48,681 |
Current tax liability | 5,116 | 0 | 5,116 |
CURRENT LIABILITIES | 194,021 | -58,372 | 135,649 |
TOTAL EQUITY AND LIABILITIES | 1,229,606 | -319,839 | 909,767 |
EXMAR REPORT 2019
80
Proportionate | Difference | Equity Consolidation |
consolidation | ||
RECONCILIATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND PROPORTIONATE CONSOLIDATION
(SEGMENT REPORTING)
FOR THE YEAR ENDED 31 DECEMBER 2019
Revenue
Gain on disposal
Other operating income
Vessel expenses
General and administrative expenses
Personnel expenses
Depreciations, amortisations & impairment losses Provisions
Loss on disposal
RESULT FROM OPERATING ACTIVITIES
Interest income
Interest expenses
Other finance income
Other finance expenses
RESULT BEFORE INCOME TAX AND SHARE OF RESULT OF EQUITY ACCOUNTED INVESTEES
Share of result of equity accounted investees (net of income tax) Income tax expense
RESULT FOR THE PERIOD
225,046 | -88,321 | 136,726 |
19,205 | 0 | 19,205 |
2,355 | -39 | 2,315 |
-79,011 | 32,082 | -46,928 |
-31,248 | 903 | -30,345 |
-33,175 | 44 | -33,131 |
-66,538 | 34,628 | -31,910 |
-1,733 | 1,733 | 0 |
-524 | 0 | -524 |
34,377 | -18,970 | 15,407 |
4,317 | 113 | 4,430 |
-42,865 | 16,255 | -26,611 |
3,922 | -106 | 3,816 |
-8,699 | 1,029 | -7,670 |
-8,948 | -1,679 | -10,627 |
197 | 1,560 | 1,757 |
-4,452 | 119 | -4,332 |
-13,202 | 0 | -13,202 |
Proportionate | Difference | Equity Consolidation | |
consolidation | |||
RECONCILIATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND PROPORTIONATE CONSOLIDATION | |||
(SEGMENT REPORTING) | |||
31 DECEMBER 2018 | |||
Vessels | 962,536 | -398,113 | 564,423 |
Other property, plant and equipment | 2,058 | -26 | 2,032 |
Intangible assets | 562 | -157 | 405 |
Investment property | 8,454 | -8,454 | 0 |
Investments in equity accounted investees | 9,050 | 95,440 | 104,490 |
Borrowings to equity accounted investees | 3,948 | 45,380 | 49,328 |
Derivative financial instruments | 3,150 | -3,150 | 0 |
NON-CURRENT ASSETS | 989,757 | -269,080 | 720,677 |
Other investments | 4,022 | 0 | 4,022 |
Trade and other receivables | 88,355 | -16,010 | 72,345 |
Current derivative financial instruments | 358 | -358 | 0 |
Current tax assets | 201 | -11 | 190 |
Restricted cash | 68,965 | -1,695 | 67,270 |
Cash and cash equivalents | 76,350 | -36,513 | 39,837 |
CURRENT ASSETS | 238,251 | -54,586 | 183,664 |
TOTAL ASSETS | 1,228,008 | -323,667 | 904,341 |
EQUITY | 462,763 | 0 | 462,763 |
Borrowings | 478,483 | -257,274 | 221,209 |
Employee benefits | 4,166 | 0 | 4,166 |
NON-CURRENT LIABILITIES | 482,649 | -257,274 | 225,376 |
Borrowings | 225,557 | -59,899 | 165,657 |
Trade and other payables | 54,666 | -6,483 | 48,183 |
Current tax liability | 2,373 | -11 | 2,362 |
CURRENT LIABILITIES | 282,595 | -66,393 | 216,203 |
TOTAL EQUITY AND LIABILITIES | 1,228,008 | -323,667 | 904,341 |
Proportionate | Difference | Equity Consolidation | |||
consolidation | |||||
RECONCILIATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND PROPORTIONATE CONSOLIDATION | |||||
(SEGMENT REPORTING) | 81 | ||||
FOR THE YEAR ENDED 31 DECEMBER 2018 | |||||
Revenue | 171,601 | -83,902 | 87,699 | ||
Gain on disposal | 31,864 | -922 | 30,942 | ||
Other operating income | 8,629 | 126 | 8,754 | ||
Vessel expenses | -77,537 | 43,757 | -33,780 | ||
General and administrative expenses | -33,898 | 976 | -32,922 | ||
Personnel expenses | -34,374 | 80 | -34,294 | ||
Depreciations, amortisations & impairment losses | -45,354 | 26,335 | -19,019 | ||
Provisions | 2,360 | 0 | 2,360 | ||
Loss on disposal | -1,272 | 0 | -1,272 | ||
RESULT FROM OPERATING ACTIVITIES | 22,017 | -13,550 | 8,467 | ||
Interest income | 3,286 | -243 | 3,043 | ||
Interest expenses | -35,909 | 14,668 | -21,241 | ||
Other finance income | 7,312 | -313 | 6,999 | ||
Other finance expenses | -11,296 | 1,486 | -9,810 | ||
RESULT BEFORE INCOME TAX AND SHARE OF RESULT OF | -14,591 | 2,049 | -12,542 | ||
EQUITY ACCOUNTED INVESTEES | |||||
Share of result of equity accounted investees (net of income tax) | 638 | -2,242 | -1,603 | ||
Income tax expense | -2,118 | 193 | -1,925 | ||
RESULT FOR THE PERIOD | -16,070 | 0 | -16,070 |
4. OPERATING INCOME (IN THOUSANDS OF USD)
2019 | 2018 | |
REVENUE | ||
Shipping segment | ||
31,571 | 30,268 | |
Infrastructure segment | 68,957 | 27,725 |
Services segment | 36,198 | 29,705 |
136,726 | 87,699 |
The increase in total revenue in the Infrastructure segment is mainly due to invoicing towards Gunvor for the FSRU which started in the last quarter of 2018. The standby revenues generated by TANGO FLNG since May 2019 are only recognised in P&L as from start of operations in September 2019 (in accordance with IFRS 15).
The increase in total revenue in the Services segment is amongst others explained by the new contract for the management of the Floating Storage and Offloading (FSO) LPG unit NKOSSA II in Congo.
Revenue which falls within the scope of IAS 17/ IFRS 16 Leasing represents 37.6% of total revenue and is mainly situated in the shipping segment. Revenue which falls within the scope of IFRS 15 Revenue from contracts with customers represents 62.4% of total revenue and is mainly situated in the Infrastructure and Services segment.
Major shipping client Equinor (ex-Statoil) represents 41.5% of the revenue of the shipping segment and 9.6% of the EXMAR Group revenue in 2019. Gunvor represents 37% of the revenue of the Infrastructure segment and 18.7% of the EXMAR Group revenue in 2019. YPF represents 25.7% of the revenue of the Infrastructure segment and 13% of the EXMAR Group revenue in 2019. No other customers represent more than 10% of the EXMAR Group revenue in 2019.
EXMAR REPORT 2019
82
2019 | 2018 | |
CONTRACT BALANCES | ||
Trade receivables which are included in trade and other receivables | ||
26,574 | 21,469 | |
Contract assets which are included in trade and other receivables | 3,454 | 3,532 |
Contract liabilities which are included in trade and other payables | 10,015 | 6,266 |
40,043 | 31,267 |
The contracts assets mainly relate to the Group's rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. The contract liabilities primarily relate to invoices made up in respect of vessel income (prepaid hire).
2019 | 2018 | |
GAIN ON DISPOSAL | ||
Disposal equity accounted investees | 19,164 | 30,892 |
Other | 41 | 50 |
19,205 | 30,942 |
On June 29, 2019 EXMAR has sold its 50% share in RESLEA to Compagnie Maritime Belge ("CMB"). We refer to note 10 for more information in this respect. On January 31, 2018 EXMAR has sold its 50% share in Excelsior BVBA to Excelerate Energy LP.
2019 | 2018 | |
OTHER OPERATING INCOME | ||
License fee | ||
1,498 | 3,410 | |
Settlement fee | 0 | 4,000 |
Other | 817 | 1,344 |
2,315 | 8,754 |
A license has been invoiced in the second semester of 2018 which represents the right to use the EXMAR design for the construction, delivery, ownership and operation of an EXMAR OPTI -11,000Semi-Submersible Hull as an oil & gas floating production unit. Part of this license fee in recognised in the consolidated overview of profit or loss in the second semester of 2018, the remaining part is recognised in 2019.
The settlement fee in 2018 relates to the settlement agreement closed in December 2018 between EXMAR and PT JAWA SATU POWER as a consequence of the parties inability to agree on the terms of EXMAR's involvement as FSRU partner and FSRU shipmanager.
5. VESSEL EXPENSES (IN THOUSANDS OF USD)
2019 2018
VESSEL EXPENSES
-46,928-33,780
-46,928-33,780
Vessel expenses are expenses made to operate a vessel. Vessel expenses contain expenses related to crewing (2019: KUSD 22,054), maintenance
(2019: KUSD 14,967), insurance (2019: KUSD 3,259) and other vessel expenses like bunkers, port expenses,... (2019: KUSD 6,648). The increase in the vessel expenses compared to 2018 can be mainly explained by crewing and maintenance for the FSRU and TFLNG.
6. GENERAL AND ADMINISTRATIVE EXPENSES (IN THOUSANDS OF USD)
2019 2018
83
GENERAL AND ADMINISTRATIVE EXPENSES
-30,345-32,922
-30,345-32,922
General and administrative expenses decrease with KUSD 2,577 compared to 2018, this is mainly caused by the implemantation of IFRS 16. General and administrative expenses include amongst others administrative expenses (2019: KUSD 27,499), non-income based taxes (2019: KUSD 1,655) and other expenses (2019: KUSD 1,191).
7. PERSONNEL EXPENSES (IN THOUSANDS OF USD)
2019 | 2018 | ||
PERSONNEL EXPENSES | |||
Salaries and wages | |||
-27,152 | -27,626 | ||
Social security charges | -4,803 | -4,825 | |
Employee benefit, defined benefit and defined contribution plan | -1,176 | -1,265 | |
Share option plan | 0 | -578 | |
-33,131 | -34,294 | ||
NUMBER OF PERSONNEL MEMBERS | |||
Seagoing | |||
2,124 | 1,784 | ||
Staff | 292 | 300 | |
2,416 | 2,084 | ||
The number of personnel members represents the effective number of personnel | members in service per period end. |
A significant part of EXMAR's seagoing personnel is employed on the assets held or operated by EXMAR's equity accounted investees, the related expense is not included in the personnel expenses disclosed above but presented as vessel expenses in EXMAR's equity accounted investees.
Personnel expenses decrease in comparison with 2018, mainly as a consequence of decreased expenses relating to share option plans. We refer to note 26 in this respect.
8. FINANCE INCOME / EXPENSES (IN THOUSANDS OF USD)
2019 | 2018 | |
INTEREST INCOME AND EXPENSES | ||
INTEREST INCOME | ||
Interest income on borrowings to equity accounted investees | 2,912 | 2,880 |
Interest income on cash and cash equivalents | 1,518 | 163 |
4,430 | 3,043 | |
INTEREST EXPENSES | ||
Interest expenses on borrowings | -26,611 | -21,241 |
Interest expenses on derivative financial instruments | 0 | 0 |
-26,611 | -21,241 |
The interest income on borrowings to equity accounted investees relates to interests paid by these equity accounted investees on the borrowings provided by EXMAR. We refer in this respect also to note 17. Interest expenses relate to EXMAR's borrowings as disclosed in note 25. The increase in the interest expenses can be mainly explained by the implementation of IFRS 16 and the full impact of the interests paid on the TANGO FLNG facility. In 2018, a part of these interests was paid by Wison.
EXMAR REPORT 2019
84
2019 | 2018 | |
OTHER FINANCE INCOME AND EXPENSES | ||
OTHER FINANCE INCOME | ||
Realised exchange gains | 2,781 | 1,197 |
Unrealised exchange gains | 661 | 5,661 |
Dividend income from non-consolidated companies | 259 | 113 |
Equity securities measured at FVTPL | 92 | 0 |
Other | 22 | 28 |
3,816 | 6,999 | |
OTHER FINANCE EXPENSES | ||
Realised exchange losses | -1,006 | -2,545 |
Unrealised exchange losses | -1,493 | -612 |
Banking fees | -4,543 | -3,842 |
Equity securities measured at FVTPL | 0 | -2,385 |
Other | -628 | -426 |
-7,670 | -9,810 |
The unrealized exchange gain in 2018 mainly relates to the revaluation of the NOK bond. In June 2019, the bond of NOK 1 billion has been fully repaid, which amongst others explains the increase in the realised exchange gains. This repayment was financed partially with a new bond issued in June 2019 (NOK 650 million) and partially with available resources. The NOK/ USD exposure and the NOK interest rate exposure are not covered by any financial instrument contract. The profit and loss effect in respect of the equity securities measured at FVTPL relates to the equity securities as disclosed in note 19.
2019 | 2018 | |
FINANCE INCOME/EXPENSE RECOGNISED DIRECTLY IN EQUITY | ||
Equity accounted investees - share of other comprehensive income | -3,555 | 204 |
Foreign currency translation differences | 409 | -878 |
-3,146 | -674 | |
Recognised in: | ||
Translation reserve | 343 | -1,280 |
Hedging reserve | -3,486 | 607 |
Non-controlling interest | -3 | -1 |
-3,146 | -674 |
In certain of our equity accounted investees, interest rate swaps (IRS) contracts have been closed to cover their exposure on variable interest rates. The market values of these IRS-contracts have significantly decreased compared to 2018, the effect of this decrease is registered via the hedging reserve.
9. INCOME TAXES (IN THOUSANDS OF USD)
2019 | 2018 | |
INCOME TAXES | ||
Taxes current period | ||
-4,633 | -1,865 | |
Prior year adjustments | 301 | -60 |
INCOME TAXES | -4,332 | -1,925 |
DEFERRED INCOME TAXES | 0 | 0 |
-4,332 | -1,925 |
2019 | 2018 | ||||||
RECONCILIATION OF THE EFFECTIVE TAX RATE | |||||||
85 | |||||||
RESULT BEFORE INCOME TAX | -8,870 | -14,145 | |||||
TAX AT DOMESTIC TAX RATE | -29.58% | 2,624 | -29.58% | 4,184 | |||
Share of profit of equity accounted investees net | of tax | 520 | -474 | ||||
Increase/decrease resulting from: | |||||||
Effects of tax rates in foreign jurisdictions | -3,071 | -3,146 | |||||
Non-deductible expenses | -385 | -1,136 | |||||
Other taxes (*) | -813 | 0 | |||||
Current year tax losses/ credits for which no deferred tax asset has been recognised | -13,151 | -5,353 | |||||
Use of tax credits, tax losses carried forward,... for which no DTA was recognised before | 10,449 | 5,042 | |||||
Tax exempt income | -806 | -982 | |||||
Adjustments in respect of prior years | 301 | -60 | |||||
48.83% | -4,332 | 13.61% | -1,925 |
(*) The other taxes relate mainly to local company taxes paid in EXMAR Shipmanagement Congo (branch of EXMAR Shipmanagement) relating to NKOSSA.
10. DISPOSAL OF AN EQUITY ACCOUNTED INVESTEE
(IN THOUSANDS OF USD)
On June 29, 2019, EXMAR signed an agreement with Compagnie Maritime Belge ("CMB") for the sale of its 50% share in RESLEA, owner of the office buildings in Antwerp. The investment in this equity accounted investee has been derecognised from the balance sheet. The sale resulted in a gain of USD 19.2 million.
Year ended 31/12/2019 | |
A. CONSIDERATION RECEIVED | |
Consideration received in cash and cash equivalents | |
18,667 | |
Composition of consideration received | |
Disposal of an equity accounted investee | 24,791 |
Repayment of a loan granted by an equity accounted investee to EXMAR | -6,124 |
18,667 |
The sales price of RESLEA amounts to EUR 22.2 million (USD 24.8 million). The difference with the sales prices reported per 30/06/2019 relates on the one hand to the adjustment of the sales prices as a consequence of the adjusted net equity based on final financial statements per 30/06/2019. On the other hand, the difference relates to changes in the EUR/USD exchange rate.
Year ended 31/12/2019 | |
B. GAIN ON DISPOSAL OF AN EQUITY ACCOUNTED INVESTEE | |
Contractual consideration | 24,791 |
Carrying amount of the equity accounted investee disposed of | -5,627 |
19,164 |
EXMAR REPORT 2019
86
COMPARATIVE INFORMATION AS DISCLOSED IN ANNUAL REPORT 2018
DISPOSAL OF AN EQUITY ACCOUNTED INVESTEE IN 2018
On January 31, 2018 EXMAR has sold its 50% share in Excelsior BVBA (owner of LNGRV EXCELSIOR) to Excelerate Energy LP. Per 31 December 2017, the investment in Excelsior was presented as an equity accounted investee held for sale. We also refer to note 17 of this annual report. The investment in this equity accounted investee has been derecognised from the balance sheet., the sale resulted in a gain of USD 30.9 million.
Year ended 31/12/2018 | |
A. CONSIDERATION RECEIVED | |
Consideration received in cash and cash equivalents | |
44,438 | |
Composition of consideration received | |
Disposal of an equity accounted investee | 54,438 |
Repayment of a loan granted by an equity accounted investee to EXMAR | -10,000 |
44,438 | |
Year ended 31/12/2018 | |
B. GAIN ON DISPOSAL OF AN EQUITY ACCOUNTED INVESTEE | |
Total consideration received | |
44,438 | |
Repayment of loan granted by an equity accounted investee to EXMAR | 10,000 |
Carrying amount of the equity accounted investee disposed of | -23,546 |
30,892 |
11. VESSELS (IN THOUSANDS OF USD)
Under | ||||||
Shipping | Infrastructure | construction | Total | |||
87 | ||||||
- advance | ||||||
payments (*) | ||||||
COST 2018 | ||||||
BALANCE AS PER 01 JANUARY 2018 | ||||||
118,500 | 453,562 | 0 | 572,062 | |||
Changes during the financial year | ||||||
Acquisitions | 742 | 18,815 | 19,557 | |||
Disposals | -270 | 0 | -270 | |||
Conversion differences | 0 | 0 | 0 | |||
BALANCE AS PER 31 DECEMBER 2018 | 118,972 | 472,377 | 0 | 591,349 | ||
COST 2019 | ||||||
BALANCE AS PER 01 JANUARY 2019 | ||||||
118,972 | 472,377 | 0 | 591,349 | |||
Changes during the financial year | ||||||
Acquisitions (**) | 5,353 | 13,736 | 15,470 | 34,559 | ||
Disposals | -2,378 | 0 | 0 | -2,378 | ||
Conversion differences | 0 | 0 | 0 | 0 | ||
BALANCE AS PER 31 DECEMBER 2019 | 121,947 | 486,113 | 15,470 | 623,530 | ||
DEPRECIATIONS AND IMPAIRMENT LOSSES 2018 | ||||||
BALANCE AS PER 01 JANUARY 2018 | ||||||
9,041 | 0 | 0 | 9,041 | |||
Changes during the financial year | ||||||
Depreciations | 5,983 | 12,172 | 18,155 | |||
Disposals | -270 | 0 | -270 | |||
Conversion differences | 0 | 0 | 0 | |||
BALANCE AS PER 31 DECEMBER 2018 | 14,754 | 12,172 | 0 | 26,926 | ||
DEPRECIATIONS AND IMPAIRMENT LOSSES 2019 | ||||||
BALANCE AS PER 01 JANUARY 2019 | ||||||
14,754 | 12,172 | 0 | 26,926 | |||
Changes during the financial year | ||||||
Depreciations | 6,200 | 16,177 | 22,377 | |||
Disposals | -2,378 | 0 | -2,378 | |||
Conversion differences | 0 | 0 | 0 | |||
BALANCE AS PER 31 DECEMBER 2019 | 18,576 | 28,349 | 0 | 46,925 | ||
NET BOOK VALUE | ||||||
NET BOOK VALUE AS PER 31 DECEMBER 2018 | ||||||
104,218 | 460,205 | 0 | 564,423 | |||
NET BOOK VALUE AS PER 31 DECEMBER 2019 | 103,371 | 457,764 | 15,470 | 576,605 |
- The advance payments in respect of vessels under construction have been presented under vessels in the consolidated statement of financial position. The advance payments made do not give EXMAR ownership rights on the vessels before their final delivery. The advance payments registered during 2019 relate to 2 VLGC's with LPG as fuel. The delivery of these vessels is expected in the second quarter of 2021.
- During 2019, additional investments occurred in respect of the TANGO FLNG and the FSRU (Infrastructure segment). Depreciations on both units started in the course of 2018, they are depreciated over a period of 30 years. Investments in the shipping segment mainly relate to capitalised dry-dock expenses.
The vessels are pledged as a security for the related underlying liabilities. We refer to note 25 for more information in respect of these underlying liabilities.
IMPAIRMENT
For the wholly-owned fleet, internal and external triggers are evaluated which indicate that the carrying value of this fleet should be tested for im- pairment. The carrying amount of the fleet is compared to the recoverable amount, which is the higher of the fair value less cost to sell and the value in use.
EXMAR REPORT 2019
88
The fair value less costs to sell is based upon the average fair market value as determined by two independent ship brokers. This market value is corrected with an average brokerage commission to be paid when a vessel is sold. The value in use is based upon the estimated future cash flows discounted to their present value and reflecting current market assessments relating to freight rate estimates, employment and operating expenses. The operating cash flows are based on internal information and a sensitivity analysis is performed on each assumption. The discounted cash flow model used by management includes cash flows for the remaining lifetime of the wholly-owned fleet. Three year cash flow forecasts are estimated by management based upon the past experience as well as current market expectations regarding volumes and freight rates going forward. Freight rates as well as operating expenses subsequent to this three year period are expected to change in line with estimated inflation afterwards. The discount rate used is a weighted average cost of capital of 5.76% for the shipping segment and 3.93% for the infrastructure segment.
For the FSRU, a fair value calculation was obtained based on a valuation report of an independent ship broker. Based on this valuation report and expected earnings under its employment, management has concluded that no impairment correction is required for the FSRU barge.
For the jointly-owned fleet, impairment triggers are evaluated in the same way as for the wholly-owned fleet. We refer to note 15 for more information in this respect.
12. OTHER PROPERTY, PLANT AND EQUIPMENT (IN THOUSANDS OF USD)
Land and | Machinery and | Furniture and | Total | |
buildings | equipment | movables | ||
COST 2018 | ||||
BALANCE AS PER 01 JANUARY 2018 | ||||
4,216 | 1,166 | 5,308 | 10,690 | |
Changes during the financial year | ||||
Acquisitions | 0 | 168 | 275 | 443 |
Disposals | 0 | 0 | -510 | -510 |
Translation differences | -191 | -9 | -106 | -306 |
BALANCE AS PER 31 DECEMBER 2018 | 4,025 | 1,325 | 4,967 | 10,317 |
COST 2019
BALANCE AS PER 01 JANUARY 2019 Changes during the financial year
Acquisitions
Disposals
Translation differences
BALANCE AS PER 31 DECEMBER 2019
4,025 | 1,325 | 4,967 | 10,317 |
0 | 74 | 262 | 336 |
0 | -2 | -558 | -561 |
-76 | 2 | -38 | -112 |
3,949 | 1,399 | 4,633 | 9,980 |
DEPRECIATIONS AND IMPAIRMENT LOSSES 2018
BALANCE AS PER 01 JANUARY 2018 | 3,400 | 931 | 4,036 | 8,367 |
Changes during the financial year | ||||
Depreciations | 31 | 176 | 428 | 635 |
Disposals | 0 | 0 | -469 | -469 |
Translation differences | -155 | -9 | -84 | -248 |
BALANCE AS PER 31 DECEMBER 2018 | 3,276 | 1,098 | 3,911 | 8,285 |
DEPRECIATIONS AND IMPAIRMENT LOSSES 2019
BALANCE AS PER 01 JANUARY 2019
Changes during the financial year
Depreciations
Disposals
Translation differences
BALANCE AS PER 31 DECEMBER 2019
3,276 | 1,098 | 3,911 | 8,285 |
30 | 143 | 376 | 549 |
0 | -2 | -558 | -561 |
-62 | 2 | -31 | -90 |
3,244 | 1,241 | 3,698 | 8,183 |
NET BOOK VALUE
NET BOOK VALUE AS PER 31 DECEMBER 2018 | 749 | 227 | 1,056 | 2,032 |
NET BOOK VALUE AS PER 31 DECEMBER 2019 | 704 | 158 | 935 | 1,797 |
13. INTANGIBLE ASSETS (IN THOUSANDS OF USD)
Concessions, patents, | |||
licences | |||
89 | |||
COST 2018 | |||
BALANCE AS PER 01 JANUARY 2018 | |||
3,077 | |||
Changes during the financial year | |||
Acquisitions | 34 | ||
Disposals | 0 | ||
Translation differences | -63 | ||
BALANCE AS PER 31 DECEMBER 2018 | 3,048 | ||
COST 2019
BALANCE AS PER 01 JANUARY 2019
Changes during the financial year
Acquisitions
Disposals
Translation differences
BALANCE AS PER 31 DECEMBER 2019
DEPRECIATIONS AND IMPAIRMENT LOSSES 2018
BALANCE AS PER 01 JANUARY 2018
Changes during the financial year
Depreciations
Disposals
Translation differences
BALANCE AS PER 31 DECEMBER 2018
DEPRECIATIONS AND IMPAIRMENT LOSSES 2019
BALANCE AS PER 01 JANUARY 2019
Changes during the financial year
Depreciations
Disposals
Translation differences
BALANCE AS PER 31 DECEMBER 2019
NET BOOK VALUE
NET BOOK VALUE AS PER 31 DECEMBER 2018
NET BOOK VALUE AS PER 31 DECEMBER 2019
3,048
122
-453
-32
2,685
2,465
211
0
-33
2,643
2,643
145
-267
-31
2,490
405
195
EXMAR REPORT 2019
90
14. RIGHT-OF-USE ASSETS (IN THOUSANDS OF USD)
The Group has initially applied IFRS 16 from 1 January 2019. IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments. The Group has applied IFRS 16 using the modified retrospective approach, under this approach comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect also to the accounting policies section E and to note 31.
Property | Motor vehicles | IT equipment | Total | |
COST 2019 | ||||
BALANCE AS PER 01 JANUARY 2019 | ||||
5,529 | 6,901 | 596 | 13,026 | |
Changes during the financial year | ||||
Acquisitions (*) | 172 | 12,369 | 0 | 12,541 |
Disposals | -48 | -73 | 0 | -121 |
Translation differences | 24 | 0 | 0 | 24 |
Contract re-measurement/ contract modification | 25 | -1 | 29 | 53 |
Transfer (*) | 0 | -17,166 | 0 | -17,166 |
BALANCE AS PER 31 DECEMBER 2019 | 5,702 | 2,030 | 625 | 8,357 |
DEPRECIATIONS AND IMPAIRMENT LOSSES 2019 | ||||
BALANCE AS PER 01 JANUARY 2019 | ||||
0 | 0 | 0 | 0 | |
Changes during the financial year | ||||
Depreciations | 1,721 | 1,764 | 215 | 3,700 |
Impairment | 0 | 4,712 | 0 | 4,712 |
Translation differences | 0 | 0 | 0 | 0 |
Transfer (*) | 0 | -6,166 | 0 | -6,166 |
BALANCE AS PER 31 DECEMBER 2019 | 1,721 | 310 | 215 | 2,246 |
NET BOOK VALUE | ||||
NET BOOK VALUE AS PER 1 JANUARY 2019 | ||||
5,529 | 6,901 | 596 | 13,026 | |
NET BOOK VALUE AS PER 31 DECEMBER 2019 | 3,981 | 1,720 | 410 | 6,111 |
- The change in the motor vehicles right-of-use assets can be mainly explained by a contractual modification for an aircraft with the establishment of a purchase obligation. In the course of 2019 an impairment loss of USD 4.7 million has been registered in the statement of profit or loss to reflect the current market value of the asset. Per 31 December 2019, the aircraft has been presented as non- current asset held for sale in the balance sheet. We refer in this respect also to note 18 of this annual report.
15. EQUITY ACCOUNTED INVESTEES (IN THOUSANDS OF USD)
2019 | 2018 | |
EQUITY ACCOUNTED INVESTEES | ||
BALANCE AS PER 1 JANUARY | ||
104,490 | 104,416 | |
Changes during the financial year | ||
Share in the profit/loss(-) | 1,757 | -1,603 |
Dividends paid | -5,000 | -2,000 |
Changes in consolidation scope (*) | -5,359 | -938 |
Allocation of negative net assets (**) | 3,224 | 4,691 |
Conversion differences | -69 | -403 |
Changes in other comprehensive income equity accounted investees | -3,486 | 1,000 |
Other | 0 | -673 |
BALANCE AS PER 31 DECEMBER | 95,557 | 104,490 |
(*)The changes in consolidation scope in 2019 relate to the sale of Reslea (we refer to note 10 for further information in this respect) and to the sale of the Bim companies (Bu- reau International Maritime NV, Bureau International Maritime Congo and Compagnie Parisienne Formation et Logistique).
- The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor's interest in the equity accounted investee and if the negative net asset exceeds the investor's interest, a corresponding liability is recognized.
EXMAR has analysed the existing joint arrangements and has concluded that the existing joint arrangements are all joint ventures in accordance with IFRS 11 "joint arrangements".
EXMAR has provided guarantees to financial institutions that have provided credit facilities to her equity accounted investees. As of December 31, 2019, an amount of USD 543.4 million (2018: USD 637.1 million) was outstanding under such loan agreements, of which EXMAR has guaranteed
USD 271.7 million (2018: USD 318.5 million). We refer in this respect also to note 30. EXMAR did not incur material contingent liabilities versus 91 its equity accounted investees.
Following regulatory requirements or borrowing arrangements, our joint ventures or associates may be restricted to make cash distributions such as dividend payments or repayments of shareholder loans. Under the borrowing arrangements our joint ventures or associates may only make a distribution if no event of default or no breach of any covenant would result from such distribution. Under corporate law, dividend distributions are restricted if the net assets would be less than the amount of paid up capital plus any reserves that cannot be distributed.
For the jointly-owned fleet, impairment triggers are evaluated in the same way as for the wholly-owned fleet. We refer to note 11 for more information in this respect. We refer to note 38 Subsequent events for the impairment loss registered on the vessel TEMSE.
16. FINANCIAL INFORMATION EQUITY ACCOUNTED INVESTEES
(IN THOUSANDS OF USD)
2019 | 2018 | |
ASSETS | ||
Interest in joint ventures | ||
86,697 | 96,679 | |
Interest in associates | 8,860 | 7,811 |
Borrowings to equity accounted investees | 49,979 | 54,203 |
145,536 | 158,693 | |
LIABILITIES | ||
Interest in joint ventures | ||
0 | 0 | |
Interest in associates | 0 | 0 |
0 | 0 |
Segment | JV partner | Description activities | |
JOINT VENTURES | |||
Estrela Ltd | |||
Infrastructure | ASS | Owner of the accommodation barge NUNCE | |
EXMAR Gas Shipping Ltd | Shipping | TEEKAY LPG | Owner of the midsize vessels TOURAINE and WEPION |
EXMAR LPG BVBA | Shipping | TEEKAY LPG | Holding company for EXMAR-Teekay LPG activities |
EXMAR Shipping BVBA | Shipping | TEEKAY LPG | Owner of 18 midsize carriers, 5 carriers under finance lease |
Good Investment Ltd | Shipping | TEEKAY LPG | Time-charter agreement of the VLGC BW TOKYO |
Monteriggioni Inc | Shipping | MOL | Owner of the LNG carrier EXCEL which was sold during 2017 |
Solaia Shipping Llc | Shipping | TEEKAY LNG | Owner of the LNG carrier EXCALIBUR |
The company Reslea is no longer recognized as joint venture due to the sale of the shares of this company in June 2019. We refer to note 10 for more information in this respect.
Segment | Ownership% | Description activities | |
ASSOCIATES | |||
Bexco NV | |||
Services | 44,91% | Rope manufacturer for marine and offshore industry | |
Marpos NV | Services | 45,00% | Provides waste solutions for maritime industry |
Electra Offshore Ltd | Infrastructure | 40,00% | Owner of the accommodation barge WARIBOKO |
Exview Hong Kong Ltd | Infrastructure | 40,00% | Bareboat owner of the accommodation barge WARIBOKO |
Springmarine Nigeria Ltd | Infrastructure | 40,00% | Time-charter agreement for the accommodation barge WARIBOKO |
The companies Bureau International Maritime NV, Bureau International Maritime Congo and Compagnie Parisienne Formation et Logistique are no longer recognized as associates due to the sale of the shares of these companies in December 2019 (loss of USD 0.2 million).
EXMAR REPORT 2019
92
The financial information presented below represents the IFRS financial statements of the joint ventures or associates and not EXMAR's share of those amounts.
JOINT VENTURE PARTNER | ||
TEEKAY LPG | MOL | |
SEGMENT | ||
Shipping | Shipping | |
PERCENTAGE OWNERSHIP INTEREST | ||
50% | 50% | |
31 DECEMBER 2019 | ||
Non-current assets | ||
735,715 | 0 | |
Current assets | 50,215 | 4,744 |
Of which Cash and cash equivalents | 28,704 | 4,743 |
Non-current liabilities | 591,970 | 3,466 |
Of which Bank Borrowings | 250,842 | 0 |
Of which finance leases | 236,597 | 0 |
Of which Other Borrowings | 104,531 | 0 |
Current liabilities | 92,911 | 5 |
Of which Bank Borrowings | 42,580 | 0 |
Of which finance leases | 34,174 | 0 |
Of which Other Borrowings | 3,000 | 0 |
Revenue | 149,255 | 0 |
Depreciations, amortizations & impairment losses | 59,174 | 0 |
Interest income | 4,786 | 77 |
Interest expense | 35,256 | 0 |
Income tax expense | 5 | 0 |
RESULT FOR THE PERIOD | -2,924 | -3,427 |
Other comprehensive result for the period | -5,950 | 0 |
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | -8,874 | -3,427 |
NET ASSETS (100%) | 101,049 | 1,273 |
EXMAR'S SHARE OF NET ASSETS | 50,523 | 636 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 1 JANUARY 2019 | 54,960 | 2,350 |
Share in total comprehensive income | -4,437 | -1,714 |
Dividends paid | 0 | 0 |
Other | 0 | 0 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2019 | 50,523 | 636 |
NETTING NEGATIVE EQUITY | 10,182 | 0 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2019 | 60,705 | 636 |
AFTER NETTING | ||
- On June 29, 2019, EXMAR signed an agreement with Compagnie Maritime Belge ("CMB") for the sale of its 50% share in RESLEA, owner of the office buildings in Antwerp. We refer to note 10 for futher information.
- The companies Bureau International Maritime NV, Bureau International Maritime Congo and Compagnie Parisienne Formation et Logistique are no longer recognized as associates due to the sale of the shares of these companies in December 2019 (loss of USD 0.2 million).
TEEKAY LNG | ASS | CMB | ASSOCIATES | TOTAL | |||||
93 | |||||||||
Services | Services | Infrastructure | Services | ||||||
Shipping | Infrastructure | Services | WARIBOKO | BIM | |||||
Bexco | Marpos | ||||||||
companies | companies | ||||||||
50% | 50% | 50% (*) | 45% | 45% | 40% | 40% (**) | |||
68,052 | 16,667 | 0 | 7,143 | 402 | 10,615 | 0 | 838,594 | ||
8,751 | 5,193 | 0 | 20,471 | 1,234 | 13,188 | 0 | 103,796 | ||
5,427 | 3,119 | 0 | 337 | 811 | 2,348 | 0 | 45,489 | ||
32,028 | 0 | 0 | 4,142 | 0 | 8,558 | 0 | 640,164 | ||
31,723 | 0 | 0 | 3,732 | 0 | 0 | 0 | 286,297 | ||
0 | 0 | 0 | 0 | 0 | 0 | 0 | 236,597 | ||
0 | 0 | 0 | 0 | 0 | 8,558 | 0 | 113,089 | ||
14,447 | 1,479 | 0 | 15,605 | 704 | 6,434 | 0 | 131,585 | ||
11,660 | 0 | 0 | 9,878 | 0 | 0 | 0 | 64,118 | ||
0 | 0 | 0 | 0 | 0 | 0 | 0 | 34,174 | ||
0 | 0 | 0 | 0 | 0 | 500 | 0 | 3,500 | ||
22,302 | 10,545 | 989 | 32,517 | 2,042 | 11,529 | 2,186 | 231,365 | ||
6,961 | 2,295 | 511 | 963 | 53 | 1,892 | 246 | 72,095 | ||
392 | 0 | 0 | 0 | 0 | 0 | 14 | 5,269 | ||
2,561 | 0 | 173 | 155 | 4 | 1,199 | 18 | 39,366 | ||
0 | 0 | 234 | -35 | 86 | 29 | 0 | 319 | ||
7,995 | 1,072 | 402 | 519 | 207 | 806 | -1,129 | 3,521 | ||
-1,022 | 0 | 0 | 0 | 0 | 0 | 0 | -6,972 | ||
6,973 | 1,072 | 402 | 519 | 207 | 806 | -1,129 | -3,451 | ||
30,328 | 20,381 | 0 | 7,867 | 932 | 8,811 | 0 | |||
15,164 | 10,190 | 0 | 3,534 | 420 | 3,524 | 0 | |||
14,676 | 11,654 | 4,914 | 3,364 | 333 | 3,420 | 696 | 96,365 | ||
3,488 | 536 | 201 | 233 | 93 | 322 | -452 | -1,729 | ||
-3,000 | -2,000 | 0 | 0 | 0 | 0 | 0 | -5,000 | ||
0 | 0 | -5,115 | -63 | -6 | 0 | -244 | -5,428 | ||
15,164 | 10,190 | 0 | 3,534 | 420 | 3,743 | 0 | 84,208 | ||
0 | 0 | 0 | 0 | 0 | 1,167 | 0 | 11,349 | ||
15,164 | 10,190 | 0 | 3,534 | 420 | 4,910 | 0 | 95,557 | ||
EXMAR REPORT 2019
94
JOINT VENTURE PARTNER | ||
TEEKAY LPG | MOL | |
SEGMENT | ||
Shipping | Shipping | |
PERCENTAGE OWNERSHIP INTEREST | ||
50% | 50% | |
31 DECEMBER 2018 | ||
Non-current assets | 708,549 | 0 |
Current assets | 71,032 | 4,704 |
Of which Cash and cash equivalents | 43,387 | 4,703 |
Non-current liabilities | 601,534 | 0 |
Of which Bank Borrowings | 293,422 | 0 |
Of which finance leases | 203,581 | 0 |
Of which Other Borrowings | 104,531 | 0 |
Current liabilities | 68,126 | 4 |
Of which Bank Borrowings | 43,564 | 0 |
Of which finance leases | 14,001 | 0 |
Of which Other Borrowings | 0 | 0 |
Revenue | 132,766 | 0 |
Depreciations, amortizations & impairment losses | 40,969 | 0 |
Interest income | 3,773 | 46 |
Interest expense | 30,230 | 0 |
Income tax expense | 0 | 0 |
RESULT FOR THE PERIOD | -13,844 | 113 |
Other comprehensive result for the period | 1,834 | 0 |
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD | -12,010 | 113 |
NET ASSETS (100%) | 109,921 | 4,700 |
EXMAR'S SHARE OF NET ASSETS | 54,960 | 2,350 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 1 JANUARY 2018 | 61,638 | 2,293 |
Share in total comprehensive income | -6,005 | 57 |
Dividends paid/received | 0 | 0 |
Other | -673 | 0 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2018 | 54,960 | 2,350 |
NETTING NEGATIVE EQUITY | 6,885 | 0 |
SHARE IN THE NET ASSETS OF EQUITY ACCOUNTED INVESTEES AT 31 DECEMBER 2018 | 61,845 | 2,350 |
AFTER NETTING | ||
TEEKAY LNG | ASS | CMB | ASSOCIATES | TOTAL | |||||
Services | Services | Infrastructure | Services | ||||||
Shipping | Infrastructure | Services | WARIBOKO | BIM | |||||
Bexco | Marpos | ||||||||
companies | companies | 95 | |||||||
50% | 50% | 50% | 45% | 45% | 40% | 40% | |||
75,013 | 19,277 | 17,008 | 7,945 | 428 | 12,507 | 416 | 841,143 | ||
17,213 | 4,057 | 12,587 | 15,485 | 1,375 | 11,253 | 2,907 | 140,613 | ||
16,012 | 2,883 | 86 | 197 | 937 | 2,553 | 318 | 71,076 | ||
0 | 0 | 17,597 | 4,601 | 0 | 5,183 | 0 | 628,915 | ||
0 | 0 | 17,541 | 4,149 | 0 | 0 | 0 | 315,112 | ||
0 | 0 | 0 | 0 | 0 | 0 | 0 | 203,581 | ||
0 | 0 | 3 | 0 | 0 | 5,183 | 0 | 109,717 | ||
62,871 | 25 | 2,173 | 11,340 | 1,065 | 10,573 | 1,581 | 157,758 | ||
60,490 | 0 | 1,718 | 4,643 | 0 | 0 | 0 | 110,415 | ||
0 | 0 | 0 | 0 | 0 | 0 | 0 | 14,001 | ||
0 | 0 | 0 | 0 | 0 | 4,875 | 0 | 4,875 | ||
24,799 | 10,220 | 2,168 | 18,543 | 1,893 | 15,876 | 1,938 | 208,203 | ||
6,960 | 2,969 | 1,072 | 1,055 | 51 | 1,892 | 220 | 55,188 | ||
1,368 | 72 | 0 | 0 | 0 | 0 | 19 | 5,278 | ||
3,360 | 146 | 375 | 154 | 4 | 1,491 | 7 | 35,767 | ||
0 | 0 | 386 | 3 | 62 | 288 | 5 | 744 | ||
9,044 | -376 | 579 | 45 | 115 | 2,625 | -1,209 | -2,908 | ||
125 | 42 | 0 | 0 | 0 | 0 | 0 | 2,001 | ||
9,169 | -334 | 579 | 45 | 115 | 2,625 | -1,209 | -907 | ||
29,355 | 23,309 | 9,825 | 7,489 | 738 | 8,004 | 1,742 | |||
14,676 | 11,654 | 4,914 | 3,364 | 333 | 3,202 | 696 | |||
13,030 | 11,821 | 4,818 | 3,503 | 296 | 2,370 | 1,215 | 100,982 | ||
4,585 | -167 | 290 | 20 | 52 | 1,050 | -484 | -603 | ||
-2,000 | 0 | 0 | 0 | 0 | 0 | 0 | -2,000 | ||
-938 | 0 | -194 | -159 | -15 | 0 | -35 | -2,014 | ||
14,676 | 11,654 | 4,914 | 3,364 | 333 | 3,420 | 696 | 96,365 | ||
0 | 0 | 0 | 0 | 0 | 1,219 | 21 | 8,125 | ||
14,676 | 11,654 | 4,914 | 3,364 | 333 | 4,639 | 717 | 104,490 | ||
EXMAR REPORT 2019
96
17. BORROWINGS TO EQUITY ACCOUNTED INVESTEES
(IN THOUSANDS OF USD)
Shipping | Infrastructure | Total | |
BORROWINGS TO EQUITY ACCOUNTED INVESTEES 2018 | |||
AS PER 1 JANUARY2018 | |||
50,273 | 12,971 | 63,244 | |
New loans and borrowings | 0 | 0 | 0 |
Repayments | 0 | -4,350 | -4,350 |
Change in allocated negative net assets (*) | -4,910 | 219 | -4,691 |
AS PER 31 DECEMBER2018 | 45,363 | 8,840 | 54,203 |
MORE THAN 1 YEAR | 45,363 | 3,965 | 49,328 |
LESS THAN 1 YEAR | 0 | 4,875 | 4,875 |
Shipping | Infrastructure | Total | |
BORROWINGS TO EQUITY ACCOUNTED INVESTEES 2019 | |||
AS PER 1 JANUARY 2019 | |||
45,363 | 8,840 | 54,203 | |
New loans and borrowings | 0 | 0 | 0 |
Repayments | 0 | -1,000 | -1,000 |
Change in allocated negative net assets (*) | -3,296 | 72 | -3,224 |
AS PER 31 DECEMBER 2019 | 42,067 | 7,912 | 49,979 |
MORE THAN 1 YEAR | 42,067 | 7,412 | 49,479 |
LESS THAN 1 YEAR | 0 | 500 | 500 |
- The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor's interest in the equity accounted investee and if the negative net asset exceeds the investor's interest, a corresponding liability is recognized.
The activities and assets of certain of our equity accounted investees are financed by shareholder borrowings made by the company to the respective equity accounted investees. The current portion of such borrowings is presented as other receivables. The balances mentioned below between brackets represent the outstanding balances including netting of negative net assets.
EXMAR LPG (Shipping segment) - USD 42.1 million (2018: USD 45.4 million)
Both shareholders have granted shareholder loans to EXMAR LPG in 2013. Repayment occurs based on availability of cash and only if such repayment would not result in a breach of the covenants applicable on the bank borrowings to EXMAR LPG. The applicable interest rate on these loans amounts to three-month LIBOR plus 0.5%.
Electra Offshore Ltd (Infrastructure segment) - USD 7.9 million (2018: USD 8.8 million)
EXMAR Netherlands has granted a loan to Electra Offshore Ltd in 2016. The loan is repaid based on availability of cash. The interest rate applicable on the loan is a fixed percentage of 12%.
18. NON-CURRENT ASSETS HELD FOR SALE (IN THOUSANDS OF USD)
2019 | 2018 | |
NON-CURRENT ASSETS HELD FOR SALE | ||
Aircraft | ||
11,000 | 0 | |
11,000 | 0 |
A purchase obligation has been registered for an aircraft as a consequence of a contractual modification. In the course of 2019, an impairment loss of USD 4.7 million has been registered in the statement of profit or loss to reflect the current market value of the asset. Per 31 December 2019, the aircraft has been presented as non-current asset held for sale in the balance sheet because of EXMAR's intent to sell the aircraft.
19. OTHER INVESTMENTS (IN THOUSANDS OF USD)
2019 | 2018 | |||
97 | ||||
EQUITY SECURITIES - FVTPL | ||||
Unquoted shares (*) | 1,004 | 1,237 | ||
Quoted shares (**) | 3,166 | 2,785 | ||
4,170 | 4,022 |
(*) The unquoted shares include the 149 shares of Sibelco, which were acquired during 2014.
- The quoted shares include the 149,089 shares of Teekay LNG (TGP) quoted at USD 15.35 on 31 December 2019 (31 December 2018: USD 11.02) and the 116,338 shares of Frontera Energy Corporation quoted at CAD 9.8 on 31 December 2019 (31 December2018: CAD 13.38).
20. TRADE AND OTHER RECEIVABLES (IN THOUSANDS OF USD)
2019 2018
TRADE AND OTHER RECEIVABLES
Trade receivables & contract assets Cash guarantees
Borrowings to equity accounted investees less than 1 year Other receivables
Deferred charges and accrued income (*)
OF WHICH FINANCIAL ASSETS (NOTE 30)
30,028 25,001
- 209
- 4,875
7,795 38,599
5,017 3,661
43,603 72,345
35,107 65,815
- 'Deferred charges' comprise expenses already invoiced relating to the next accounting year, e.g. hire, insurances, commissions, bunkers,...
'Accrued income' comprises uninvoiced revenue related to the current accounting period, e.g. interests,...
The Group's exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in note 30.
The decrease in other receivables is mainly due to the advance payments made for the building of 2 VLGC newbuildings to Hanjin Heavy Industries
- Construction. On January 8, 2019 Hanjin Heavy Industries & Construction at Subic Bay (Philippines) filed for rehabilitation due to financial diffi- culties. The construction disruptions caused thereby obliged EXMAR to cancel both Shipbuilding Contracts and invoke the Refund Guarantee from Korean Development Bank (South Korea) to recover each of the Instalments already paid (as a consequence, the installments have been presented as "other receivables" per 31 December 2018). These instalments (USD 27.2 million) have been repaid during the first semester of 2019 together with an interest of 6%.
EXMAR REPORT 2019
98
21. TAX ASSETS AND LIABILITIES (IN THOUSANDS OF USD)
CURRENT TAX ASSETS AND LIABILITIES
2019 | 2018 | ||
CURRENT TAX ASSETS AND LIABILITIES | |||
Current tax assets | 1,353 | 190 | |
Current tax liabilities | 5,116 | 2,362 |
Current tax assets and current tax liabilities increase mainly as a consequence of a received additional tax assessment for accounting year 2017 for EXMAR NV. EXMAR disputes this tax assessment and has simultaneously registered a tax liability (to reflect the received assessment note) and a tax receivable (to reflect the disputed tax assessment note). As the management assessed that the tax claim is not valid, a receivable, for the same amount
as the liability, has been accounted for in the consolidated financial statements per 31 | December 2019. | ||||
DEFERRED TAX ASSETS AND LIABILITIES | |||||
Assets | Liabilities | Assets | Liabilities | ||
31 December 2019 | 31 December 2018 | ||||
DEFERRED TAX ASSETS AND LIABILITIES IN DETAIL (*) | |||||
Provisions | |||||
0 | 100 | 0 | 100 | ||
Employee benefits | 2,254 | 3,612 | 0 | ||
Vessels | 0 | 0 | 0 | 2,504 | |
DEFERRED TAX ASSETS / LIABILITIES | 2,254 | 100 | 3,612 | 2,604 | |
Set off of taks assets/ liabilities | -100 | 0 | -2,604 | 0 | |
Tax assets not recognised (**) | -2,154 | 0 | -1,008 | 0 | |
0 | 0 | 0 | 0 | ||
DEFERRED TAX ASSETS/ LIABILITIES NOT RECOGNISED (***) | |||||
Deductible temporary differences | |||||
2,154 | 1,008 | ||||
Unused tax losses and investment tax credits (***) | 43,422 | 48,145 | |||
45,576 | 0 | 49,153 | 0 |
(*) The temporary differences that exist within our equity accounted investees are not included in above overview of deferred tax assets and liabilities in detail.
(**) These deferred tax assets have not been recognised because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom or because the future taxable profits cannot be measured on a reliable basis.
(***) The unused tax losses and the main part of the investment tax credits do not expire in time.
22. RESTRICTED CASH AND CASH AND CASH EQUIVALENTS
(IN THOUSANDS OF USD)
2019 | 2018 | |||
99 | ||||
RESTRICTED CASH AND CASH AND CASH EQUIVALENTS | ||||
RESTRICTED CASH | 67,270 | 67,270 | ||
Bank | 52,145 | 39,461 | ||
Cash in hand | 83 | 118 | ||
Short-term deposits | 398 | 258 | ||
NET CASH AND CASH EQUIVALENTS | 52,626 | 39,837 |
The restricted cash relates to the credit facility with the Bank of China for the TANGO FLNG (see also note 25). On February 26, 2020, the Bank of China released USD 40 million of the restricted cash or debt service reserve account (DSRA). The balance of the DSRA will be released pro rata the repayment of the outstanding debt.
23. SHARE CAPITAL AND RESERVES (IN THOUSANDS OF USD)
SHARE CAPITAL AND SHARE PREMIUM
2019 | 2018 | |
NUMBER OF ORDINARY SHARES | ||
Issued shares as per 1 January | 59,500,000 | 59,500,000 |
Issued shares as per 31 December - paid in full | 59,500,000 | 59,500,000 |
The issued shares have no nominal value. The holders of ordinary shares are entitled to dividends and are entitled to one vote per share during the General Shareholders' Meetings of the Company.
DIVIDENDS
No distribution to owners of the Company occurred for 2019 and 2018.
TREASURY SHARES
The reserve for treasury shares comprises the cost of the Company's shares held by the Group.
2019 2018
TREASURY SHARES
Number of treasury shares held as of 31 December (*) Bookvalue of treasury shares held (in thousands USD) Average cost price per share (in EUR) - historical value
2,273,263 2,273,263
44,349 44,349
14.1507 14.1507
(*) No treasury shares have been sold during 2019 in respect of the share option plans.
EXMAR REPORT 2019
100
TRANSLATION RESERVE
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations and the financial statements of consolidated companies not reporting in USD as functional currency.
HEDGING RESERVE
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to the hedged transactions that have not yet occurred. In certain of our equity accounted investees, interest rate swaps (IRS) contracts have been closed to cover their exposure on variable interest rates.
24. EARNINGS PER SHARE (IN THOUSANDS OF USD)
2019 | 2018 | ||
BASIC EARNINGS PER SHARE IN USD | |||
Result for the period (in USD) | |||
-13,218,671 | -15,912,725 | ||
Issued ordinary shares as per 31 December | 59,500,000 | 59,500,000 | |
Effect of treasury shares | -2,273,263 | -2,454,561 | |
Weighted average number of ordinary shares as per 31 December | 57,226,737 | 57,045,439 | |
-0.23 | -0.28 | ||
DILUTED EARNINGS PER SHARE IN USD | |||
Result for the period (in USD) | |||
-13,218,671 | -15,912,725 | ||
Weighted average number of ordinary shares as per 31 December | 57,226,737 | 57,045,439 | |
Average closing rate of one ordinary share during the year (in EUR) | (a) | 5.65 | 5.99 |
Average exercise price for shares under option (in EUR) | (b) | 0.00 | 0.00 |
Number of shares under option | (c) | 0 | 0 |
Number of shares that would have been issued at average market price: (c*b) / a | 0 | 0 | |
Weighted average number of ordinary shares including options | 57,226,737 | 57,045,439 | |
-0.23* | -0.28 |
(*) As option plan 4, 8, 9 and 10 are anti-dilutive as per 31 December 2019, they are not included in the calculation of the diluted earnings per share.
25. BORROWINGS (IN THOUSANDS OF USD)
Bank loans | Other loans | Lease liabilities | Total | |||
ROU assets (*) | ||||||
101 | ||||||
BORROWINGS AS PER 31 DECEMBER 2018 | ||||||
AS OF 1 JANUARY 2018 | 246,973 | 125,734 | 0 | 372,707 | ||
New loans | 49,173 | 20,411 | 0 | 69,584 | ||
Scheduled repayments | -56,379 | -1,126 | 0 | -57,505 | ||
Paid transaction costs | -1,646 | -649 | 0 | -2,295 | ||
Amortized transaction costs | 2,114 | 1,236 | 0 | 3,350 | ||
Translation differences | 0 | -6,188 | 0 | -6,188 | ||
Accrued interest payable | 4,702 | 2,512 | 0 | 7,214 | ||
AS OF 31 DECEMBER 2018 | 244,937 | 141,930 | 0 | 386,867 | ||
More than 1 year | 204,690 | 16,519 | 0 | 221,209 | ||
Less than 1 year | 40,247 | 125,411 | 0 | 165,658 | ||
AS OF 31 DECEMBER 2018 | 244,937 | 141,930 | 0 | 386,867 | ||
Infrastructure segment | 67,555 | 18,635 | 0 | 86,190 | ||
Shipping segment | 177,354 | 123,295 | 0 | 300,649 | ||
Services segment | 28 | 0 | 0 | 28 | ||
AS OF 31 DECEMBER 2018 | 244,937 | 141,930 | 0 | 386,867 | ||
BORROWINGS AS PER 31 DECEMBER 2019 | ||||||
AS OF 1 JANUARY 2019 AS PREVIOUSLY REPORTED | ||||||
244,937 | 141,930 | 0 | 386,867 | |||
ADJUSTMENT ON INITIAL APPLICATION OF IFRS 16 (NET OF TAX) (*) | 0 | 0 | 13,026 | 13,026 | ||
ADJUSTED BALANCE AT 01 JANUARY 2019 | 244,937 | 141,930 | 13,026 | 399,893 | ||
New loans (**) | 61,705 | 107,688 | 11,198 | 180,591 | ||
Scheduled repayments (**) | -43,309 | -125,997 | -2,600 | -171,906 | ||
Paid transaction costs | -922 | -1,935 | 0 | -2,857 | ||
Amortized transaction costs | 2,502 | 1,122 | 0 | 3,624 | ||
Translation differences | 0 | -1,393 | -10 | -1,403 | ||
Accrued interest payable | -811 | -1,749 | 0 | -2,560 | ||
Contract re-measurement/ contract modification | 0 | 0 | 51 | 51 | ||
AS OF 31 DECEMBER 2019 | 264,102 | 119,666 | 21,665 | 405,433 | ||
More than 1 year | 200,473 | 118,903 | 4,206 | 323,582 | ||
Less than 1 year | 63,629 | 763 | 17,459 | 81,851 | ||
AS OF 31 DECEMBER 2019 | 264,102 | 119,666 | 21,665 | 405,433 | ||
Infrastructure segment | 70,178 | 46,118 | 16,338 | 132,634 | ||
Shipping segment | 161,872 | 73,548 | 2,687 | 238,107 | ||
Services segment | 32,052 | 0 | 2,640 | 34,692 | ||
AS OF 31 DECEMBER 2019 | 264,102 | 119,666 | 21,665 | 405,433 | ||
2019 | 2018 | |||||
CREDIT LINES | ||||||
Total credit lines Drawn credit lines Available credit lines
36,740 21,870
-32,0000
4,740 21,870
- The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective method. Under this approach, comparative information is not restated and the impact on retained earnings is determined as zero. We refer in this respect also to the accounting policies section E and to note 31.
- The sum of the new bank and other loans is reflected under "proceeds from new borrowings" in the cash flow statement. The sum of the scheduled repayments for bank and other loans is reflected under "repayments of borrowings" in the cash flow statement.
EXMAR REPORT 2019
102
BANK LOANS
The bank loans mainly relate to the LPG pressurized facilities and the CARIBBEAN FLNG facility, now renamed TANGO FLNG facility.
NEW LPG pressurized facilities - USD 70.2 million (2018: USD 47.7 million)
In the last quarter of 2018, EXMAR refinanced its LPG pressurized fleet. Five vessels were refinanced under this transaction in October 2018, one vessel in December 2018 and four vessels in April 2019. The loans are repayable in quarterly tranches and the applicable interest percentage amounts to three-month LIBOR plus 2.4%. The last repayment is foreseen in December 2025. All obligations of the borrower are guaranteed by EXMAR NV ("guarantor").
TANGO FLNG facility - USD 161.9 million (2018: USD 177.4 million)
End of June 2017, EXPORT Lng Limited (a 100% subsidiary of EXMAR NV) has signed a financing agreement of USD 200 million with the Bank of China (Boc), Deutsche Bank and Sinosure for the financing of the TANGO FLNG. This loan has been drawn on 27 July 2017 at the time of the delivery of the CARIBBEAN FLNG, renamed TANGO FLNG. The agreement with BoC provides a repayment period of 12 years and the loan bears interest at a rate of six-month LIBOR plus 3%. The yearly estimated debt service amounts to USD 25 million. All obligations of the borrower are guaranteed by EXMAR NV ("guarantor"). There is a requirement for EXPORT to deposit an amount equal to 30 months principal plus interest, i.e. an amount of USD 67.3 million, on an escrow account as long that no long-term employment is in place. Further to the successful performance acceptance tests of the TANGO FLNG on 5 June 2019, EXMAR met all conditions for the partial release (USD 40 million in a first phase) of the debt service reserve account (amounting in total USD 67.3 million) in respect of the USD 200 million loan with Bank of China and Deutsche Bank. This release was subject to the approval of SINOSURE, the latter took more time than expected. On February 26, 2020, Bank of China finally released the amount of 40 million USD from the debt service reserve account. The amount of 40 million USD has been partially allocated to the repayment of the bridge loans and to cover EXMAR's capital commitments.
Bridge loans - USD 15 million & straight loans - USD 17 million
The delay incurred by the release of the Debt Service Reserve Account (DSRA) has caused pressure on the liquidity position of EXMAR in 2019 and early 2020. Pending the release of the DSRA, EXMAR closed a bridge loan in the amount of USD 30 million with NORDEA and BELFIUS who assisted EXMAR during this interim period to temporarily increase its liquidity. The applicable interest percentage amounted to 1-month LIBOR plus 4% for Nordea and plus 3.25% for Belfius. These bridge loans have been reduced to USD 15 million in December and have been fully repaid end of February 2020 with the released amount from the debt service reserve account (DSRA). EXMAR also used USD 17 million per 31 December 2019 from its available credit facilities (USD 21 million) in the form of straight loans. A part of these straight loans (USD 4.4 million) has been repaid end of February 2020 with the released amount from the DSRA. The applicable interest percentage amounted to 1-month LIBOR plus 2.55%.
OTHER LOANS
The other loans relate mainly to a senior unsecured bond issue. This bond was closed in July 2014 by EXMAR Netherlands BV ("issuer"), a 100% subsidiary of EXMAR NV, for an amount of NOK 700 million. During 2015, an additional amount of NOK 300 million has been issued (second tranche on the original NOK 700 million bond). The total nominal amount outstanding amounted to NOK 1 billion with initial maturity date in July 2017. In June 2017, the term of the bond has been amended and extended until July 2019. As a consequence of the extension of the term of the bond, each bond holder had the possibility to exchange NOK bonds to USD bonds. The interest percentage applicable on the remaining NOK bonds amounted to three-month NIBOR plus a margin of 8%. The exchanged USD bonds beared an interest percentage of three-month LIBOR plus a margin of 8.5%. In June 2019, the bond of NOK 1 billion has been fully repaid. This repayment was financed partially with a new bond issued in June 2019 and partially with available resources.
EXMAR Netherlands BV, a fully owned subsidiary of EXMAR NV, has successfully completed a new unsecured bond issue of NOK 650 million with a coupon of 3 months NIBOR plus 8.75% and with maturity date in May 2022. All obligations of the issuer are guaranteed by EXMAR NV ("guarantor"). EXMAR NV has to maintain direct or indirect a 100% ownership in the issuer. The NOK/ USD exposure and the NOK interest rate exposure are not covered by any financial instrument contract. We refer to note 30 for the currency risk exposure and related sensitivity analysis.
EXMAR has two Very Large Gas Carriers under construction at Jiangnan, due for delivery in the course of 2021. The two vessels will each enter a five year time-charter to Equinor upon delivery from the shipyard. EXMAR has obtained and drawn under a pre-delivery financing of USD 20 million with Maritime Asset Partners, which partially covers the instalments during the construction of these vessels. The repayment date of this pre-delivery financing is the earlier of the delivery date or the maturity date (June 2021). The interest percentage applicable on this pre-delivery financing amounts to 10.75% per annum.
OTHER INFORMATION
EXMAR's barge based FSRU was delivered end of December 2017. The unit was able to obtain a long-term contract with GUNVOR and its employment commenced in October 2018. The FSRU has been mainly financed with available resources. The finance documentation for the sale and lease back of the FSRU barge by CSSC shipping was finalized and signed at the end of August. A first tranche of approximately USD 78.0 million was conditional upon fulfilment of the conditions precedent under the lease agreement (including security documents requiring charterers' signature) and a second tranche of USD 31.0 million upon start of the regasification operations at a location. In September 2019, GUNVOR gave notice of a dispute with respect to the execution of the Charter and has commenced arbitration. This arbitration procedure could last several months. Under the ongoing arbitration procedure, the financing of the asset could not be completed at this stage of the procedure. Meanwhile the charter remains in full force and effect.
In general, the borrowings held by EXMAR and its equity accounted investees are secured by a mortgage on the underlying assets owned by EXMAR and its equity accounted investees. Furthermore, different pledges and other types of guarantees exist to secure the borrowings. In addition, dividend restrictions are included as a special covenant in the terms of the bond. EXMAR shall not declare or make any dividend payment or distribution, whether in cash or in kind, that in aggregate exceed 50% of the consolidated net profit after tax (proportionate consolidation) based on the audited
consolidated financial statements for the previous financial year. EXMAR has pledged financial assets as collateral for liabilities. | We refer to note 22 | |
where the amount of restricted cash in respect of financing agreements is disclosed. | 103 |
COVENANTS
Different debt covenants exist that require compliance with certain financial ratio's. These ratio's are calculated semi-annually based on EXMAR's consolidated figures in which equity accounted investees are not accounted for under IFRS 11 but still on a proportionate basis (similar to accounting policies used for segment reporting purposes). In case of non-compliance with these covenants, early repayment of related borrowings might be required and should therefore be accounted for as short term debt. We refer to the table below for an overview of the applicable covenants.
APPLICABLE COVENANTS | |||||
Pressurized facility | TANGO FLNG | Bond | Other (*) | Actual | |
RATIO | facility | 31/12/2019 (**) | |||
Minimum/ Book equity ratio
Minimum free cash
Equity ratio (Equity/Total assets)
Net Interest Bearing Debt or NIBD/equity Interest Coverage ratio
Working capital ratio
Net financial indebtedness ratio
Outstanding loan amount
≥ USD 300 million | ||||
≥ USD 300 million | ≥ USD 300 million | ≥ USD 300 million | + 50% of | 448.94 |
net positive income | ||||
≥ USD 25 million | ≥ USD 25 million | ≥ USD 25 million | ≥ USD 40 million | 81.98 |
≥ 25% | ≥ 25% | NA | ≥ 25% | 40.12% |
NA | NA | Maximum 2,50 | NA | 1.28 |
NA | min 2:1 | min 2:1 | NA | 2.30 |
min positive | min positive | min positive | min positive | 82.80 |
NA | NA | NA | < 70% | 58.52% |
96,296 | 161,872 | 73,548 | 48,041 |
- The other covenants partly relate to loan amounts which are registered in our proportionate consolidation but not in our equity consolidation. The outstanding loan amount for this covenant is not included in the outstanding loan amount in the table above. The outstanding loan amount for this covenant in our proportionate consolidation amounts to USD 21.7 million.
(**) The actual amounts presented are based on the most restrictive definitions.
As of December 31, 2019 EXMAR was compliant with all covenants with sufficient headroom.
EXMAR believes that as per June 2020 and December 2020, all covenants will be met. EXMAR is continuously monitoring compliance with all applicable covenants.
If a breach of covenants would occur, the Company will request and believes it will be able to obtain a waiver from the relevant lenders. Following steps are to be taken in accordance with applicable agreements if a breach of covenants would occur:
- Each borrower shall notify the Facility Agent of any Defaults ( and the steps, if any, taken to remedy it) promptly upon becoming aware of its occurrence.
- Promptly, upon the request by the Facility Agent, the Borrower shall supply a certificate signed by two of its directors certifying that no Default is continuing, specifying the Default and the steps, if any, being taken to remedy it.
EXMAR REPORT 2019
104
26. SHARE BASED PAYMENTS (IN THOUSANDS OF USD)
The Group established a share option plan program that entitles certain employees to register for a number of shares. The share options are only exercisable after a period of three years and for employees still in service after this three year period. Each share option entitles the holder of the option to one EXMAR share.
The fair value of services received in return for share options granted are measured by reference to the exercise price of the granted share options. The estimated fair value of the services received is measured based on a binomial lattice model. The contractual life of the option is used as an input into this model.
Plan 10 | Plan 9 | Plan 8 | Plan 4 | |
GRANT DATE FAIR VALUE OF SHARE OPTIONS AND ASSUMPTIONS AT INCEPTION | ||||
Number of options outstanding at year-end (*) | ||||
371,500 | 374,100 | 437,600 | 212,958 | |
Fair value at grant date (in EUR) | 3.21 | 2.32 | 3.36 | 5.64 |
Share price at grant date (in EUR) | 9.62 | 10.00 | 11.33 | 16.80 |
Exercise price at inception (in EUR) (*) | 9.62 | 10.54 | 10.54 | 14.64 |
Expected volatility (**) | 40.70% | 30.60% | 31.40% | 25.78% |
Option life at inception (***) | 8 years | 8 years | 8 years | 8 years |
Maturity date | 2023 | 2022 | 2021 | 2020 |
Expected dividends | 0.3 eur/y | 0.3 eur/y | 0.4 eur/y | 0.5 eur/y |
Risk-free interest rate | 0.53% | 0.62% | 1.87% | 4.29% |
- The number of options granted and the exercise prices for option plans have been adjusted due to the dilutive effect of the capital increase (adjustment ratio of 0.794) of November 2009, extraordinary dividend distributions (adjustment ratio of 0.929) of May 2012 and extraordinary dividend distributions (adjustment ratio of 0.9364) of September 2013. The number of options granted and the exercise price mentioned above reflect the adjusted amounts.
- The expected volatility is based on the historical volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information.
- The board of directors of 23th March 2009 decided to extend the exercise period for option plans 1 - 4 by 5 years, in virtue of the decision by the Belgian Government to extend the Act of 26 March 1999 regarding stock options. At modification date additional fair value calculations were made based on the remaining and extended life time of the options.
Plan 1, 2, 3, 5, 6 and 7 have been removed from above table as the plans matured. Plan 5 matured at the end of 2016, plans 1 and 6 matured at the end of 2017, plans 2 and 7 matured at the end of 2018, plan 3 matured at the end of 2019. In respect of plan 3, zero options have been exercised during 2019 and 386,008 options have forfeited as a consequence of the maturity of the plan. No new option plans have been granted in 2018 and 2019.
2019 | 2018 | |||
number of | weighted | number of | weighted | |
average exercise | average exercise | |||
options | options | |||
price | price | |||
RECONCILIATION OF OUTSTANDING SHARE OPTIONS | ||||
OUTSTANDING AT 1 JANUARY | ||||
1,796,390 | 12.00 | 2,483,178 | 11.14 | |
New options granted | 0 | 0.00 | 0 | 0.00 |
Changes during the year | ||||
Options exercised | 0 | 0.00 | -211,984 | 4.71 |
Options forfeited | -400,232 | 15.76 | -474,804 | 10.76 |
OUTSTANDING AT 31 DECEMBER | 1,396,158 | 10.92 | 1,796,390 | 12.00 |
EXERCISABLE AT 31 DECEMBER | 1,396,158 | 10.92 | 1,796,390 | 12.00 |
The weighted average remaining contractual life of the outstanding options at the end of December 2019, amounts to 2.7 years (2018: 3.08 years).
2019 | 2018 | |||
SHARE OPTIONS | ||||
105 | ||||
Total number of share options outstanding | 1,396,158 | 1,796,390 | ||
Included in personnel expenses | ||||
option plan 10 | 0 | 578 | ||
0 | 578 |
27. EMPLOYEE BENEFITS (IN THOUSANDS OF USD)
LIABILITY FOR DEFINED BENEFIT PLAN AND SIMILAR LIABILITIES
The group provides pension benefits for most of its employees, either directly or through a contribution to an independent fund. The pension benefits for management staff employed before 1 January 2008 are provided under a defined benefit plan. This plan is a defined benefit plan organized as a final pay program.
For the management staff employed as from 1 January 2008, the management staff promoted to management as from 1 January 2008 and the management staff who reached the age of 60, the pension benefits are provided under a defined contribution plan. Belgian defined contribution plans are subject to the Law of April 28, 2003 on supplementary pensions (WAP). According to article 24 of this law, the employer has to guarantee a fixed minimum return of 3.25% on employer contributions and of 3.75% on employee contributions and this for contributions paid until December 31, 2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both employer and employee contributions (as changed by the Law of 18 December 2015).
This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer.
Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company managing the plans. Therefore these plans do not meet the definition of defined contribution plan under IFRS and have to be classified by default as defined benefit plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method. The contributions recognised in the profit or loss statement in respect of this defined contribution plan amount to USD 0.6 million (2018: USD 0.6 million).
The weighted average duration of the defined benefit obligation for the defined benefit plan amounts to 6 years. The weighted average duration of the defined benefit obligation for the defined contribution plan amounts to 19 years.
EMPLOYEE BENEFITS | |||||
2019 | 2018 | 2017 | 2016 | 2015 | |
EMPLOYEE BENEFITS - DEFINED BENEFIT PLAN | |||||
Present value of funded obligations | |||||
-11,535 | -11,697 | -12,072 | -11,297 | -11,662 | |
Fair value of the defined plan assets | 8,839 | 7,626 | 7,361 | 7,098 | 7,217 |
PRESENT VALUE OF NET OBLIGATIONS | -2,696 | -4,072 | -4,711 | -4,198 | -4,445 |
EMPLOYEE BENEFITS - BELGIAN DEFINED CONTRIBUTION PLAN WITH GUARANTEED RETURN
Present value of funded obligations
Fair value of the defined plan assets
PRESENT VALUE OF NET OBLIGATIONS
TOTAL EMPLOYEE BENEFITS
-5,340 | -4,703 | -3,313 | -3,845 | |
6,438 | 4,609 | 3,198 | 3,777 | |
1,099 | -94 | -115 | -69 | 0 |
-1,597 | -4,166 | -4,826 | -4,267 | -4,445 |
EXMAR REPORT 2019
106
DEFINED BENEFIT PLAN
2019 | 2018 | |
CHANGES IN LIABILITY DURING THE PERIOD | ||
LIABILITY AS PER 1 JANUARY | ||
11,697 | 12,072 | |
Distributions | -622 | -333 |
Actual employee's contributions | 76 | 89 |
Interest cost | 101 | 101 |
Current service cost | 464 | 536 |
Actual taxes on contributions paid (excluding interest) | -89 | -102 |
Actuarial gains/losses | 129 | -114 |
Translation differences | -222 | -552 |
LIABILITY AS PER 31 DECEMBER | 11,535 | 11,697 |
CHANGES OF FAIR VALUE OF PLAN ASSETS | ||
PLAN ASSETS AS PER 1 JANUARY | ||
7,626 | 7,361 | |
Contributions | 808 | 929 |
Distributions | -622 | -333 |
Interest income | 68 | 64 |
Actuarial gain/loss | 145 | 117 |
Actual taxes on contributions paid (excluding interest) | -89 | -102 |
Actual administration costs | -50 | -58 |
Translation differences | -144 | -353 |
Correction paragraph 115 | 1,097 | 0 |
PLAN ASSETS AS PER 31 DECEMBER (*) | 8,839 | 7,626 |
EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS | ||
Current service expenses | ||
-464 | -536 | |
Interest expense | -101 | -101 |
Expected return on plan assets | 68 | 64 |
Administration cost | -50 | -58 |
TOTAL PENSION COST RECOGNISED IN THE INCOME STATEMENT (SEE NOTE 6) | -547 | -631 |
EXPENSE RECOGNISED IN OTHER COMPREHENSIVE INCOME | ||
Recognition of actuarial gains and losses | ||
-16 | -231 | |
TOTAL PENSION COST RECOGNISED IN OTHER COMPREHENSIVE INCOME | -16 | -231 |
MOST SIGNIFICANT ASSUMPTIONS, EXPRESSED IN WEIGHTED AVERAGES | ||
Discount rate at 31 December | ||
0.20% | 0.90% | |
Expected return on assets at 31 December | 0.20% | 0.90% |
Future salary increases (including inflation) | (salary scales) | (salary scales) |
Mortality tables | Belgian (MR/FR) | Belgian (MR/FR) |
Inflation | 2% | 2% |
EXPECTED NEXT YEAR CONTRIBUTIONS | ||
Best estimate of contributions expected to be paid during next year | ||
835 | 960 | |
DETAIL PLAN ASSETS INVESTMENTS | ||
Shares | ||
2% | 2% | |
Bonds & loans | 87% | 90% |
Property investments | 7% | 6% |
Cash | 4% | 2% |
(*) The plan assets do not include any shares issued by EXMAR or property occupied by EXMAR.
28. PROVISIONS (IN THOUSANDS OF USD)
2019 | 2018 | ||||
107 | |||||
PROVISIONS | |||||
Long-term provisions (*) | 0 | 2,360 | |||
AS PER 1 JANUARY | 0 | 2,360 | |||
New provisions | 0 | 0 | |||
Reversal of unused provisions (*) | 0 | -2,360 | |||
AS PER 31 DECEMBER | 0 | 0 | |||
Long-term provisions (*) | 0 | 0 | |||
AS PER 31 DECEMBER | 0 | 0 |
- Following the partial demerger from CMB, EXMAR provided for 39% of the estimated exposure relating to the PSA claim against CMB. The provision in respect of this claim has been released in the statement of profit or loss during 2018 as a consequence of a confirmation from PSA that the litigation has been terminated.
29. TRADE AND OTHER PAYABLES (IN THOUSANDS OF USD)
2019 | 2018 | |
TRADE AND OTHER PAYABLES | ||
Trade payables | ||
24,658 | 24,772 | |
Other payables | 10,655 | 15,258 |
Deferred income (*) | 13,368 | 8,153 |
48,681 | 48,183 | |
OF WHICH FINANCIAL LIABILITIES (NOTE 30) | 34,695 | 39,877 |
(*) 'Deferred income' comprises already invoiced revenue, related to the next accounting year, e.g. freight, hire,...
The decrease in the other payables compared to 2018 can be mainly explained by the repayment of the loan granted by RESLEA to EXMAR as a consequence of the sale of RESLEA to CMB. We refer in this respect to note 10 of this annual report.
Compared to previous year, deferred income shows an increase at year-end 2019. This increase is mainly triggered by the received prepayment (USD 3.3 million) from Excelerate Energy. In February 2019, Excelerate Energy, via the respective owning companies of each vessel, elected to terminate the ship management agreements for their 7 vessels managed by EXMAR Shipmanagement NV. In accordance with the contractually agreed termination clauses a notice period up to 2 years is to be considered and a cancellation fee is payable to EXMAR Shipmanagement. A transition schedule, subject to the operations of each vessel, and a payment schedule for the cancellation fee has been agreed between both parties end 2019. The first prepayment of the cancellation fee has been received at December 31, 2019 and is recognised as deferred income at year-end. The cancellation fee will be recognised in operating income in 2020 and/or 2021, depending upon the actual transition date for each vessel once all performance obligations have been satisfied by EXMAR Shipmanagement NV.
EXMAR REPORT 2019
108
30. FINANCIAL RISKS AND FINANCIAL INSTRUMENTS
During the normal course of its business, EXMAR is exposed to various risks as described in more detail in the Corporate Governance Statement. EXMAR is exposed to credit, interest, currency and liquidity risks and in order to hedge this exposure, EXMAR uses different financial instruments, mainly interest rate hedges situated within our equity accounted investees. EXMAR applies hedge accounting for all hedging relations which meet the conditions to apply hedge accounting (formal documentation and high effectiveness at inception and on an ongoing basis). Financial instruments are recognised initially at fair value. Subsequent to initial recognition, the effective portion of changes in fair value of the financial instruments qualifying for hedge accounting, is recognised in other comprehensive income. Any ineffective portion of changes in fair value and changes in fair value of financial instruments not qualifying for hedge accounting are recognised immediately in profit or loss.
The following table shows financial assets and financial liabilities measured at fair value, including their level in the fair value hierarchy.
FAIR VALUE & FAIR VALUE HIERARCHY
Level 1 | Level 2 | Level 3 | Total | |
31 DECEMBER 2019 | ||||
Equity securities - FVTPL | ||||
3,166 | 1,004 | 0 | 4,170 | |
TOTAL FINANCIAL ASSETS CARRIED AT FAIR VALUE | 3,166 | 1,004 | 0 | 4,170 |
TOTAL FINANCIAL LIABILITIES CARRIED AT FAIR VALUE | 0 | 0 | 0 | 0 |
Financial instruments other than those listed above are all measured at amortized cost.
CREDIT RISK
Credit risk policy
Credit risk is monitored closely on an ongoing basis by the Group and creditworthiness controls are carried out if deemed necessary. At year-end no significant creditworthiness problems were noted. The borrowings to equity accounted investees consist of shareholder loans to our joint ventures that own or operate an LPG vessel or Offshore platform. As all vessels are operational and generate income, we do not anticipate any recoverability issues for the outstanding borrowings to equity accounted investees. The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor's interest in the equity accounted investee and if the negative net asset exceeds the investor's interest, a corresponding liability is recognized. The term of the shareholder loans are discussed in note 17 of this annual report.
Exposure to risk | ||
2019 | 2018 | |
CARRYING AMOUNTS OF FINANCIAL ASSETS | ||
Borrowings to equity accounted investees | ||
49,979 | 54,203 | |
Other investments - equity instruments at FVTPL | 4,170 | 4,022 |
Trade and other receivables | 34,607 | 60,940 |
Restricted cash | 67,270 | 67,270 |
Cash and cash equivalents | 52,626 | 39,837 |
208,653 | 226,272 |
The carrying amounts of the financial assets represent the maximum credit exposure.
Impairment losses
As past due outstanding receivable balances are immaterial, no ageing analysis is disclosed. No important impairment losses have occurred and at reporting date, no significant allowances for impairment have been recorded.
INTEREST RISK
Interest risk policy
The interest-bearing loans are mainly negotiated with variable interest rates. In order to monitor this interest risk, the Group makes use of interest hedging instruments available on the market when management is of the opinion that it is favorable to do so. For the moment, no interest rate swaps
exist within our subsidiaries. On the other hand, different interest rate swaps exist within our equity accounted investees. The Group applies hedge 109 accounting when the conditions to apply hedge accounting are met. In case no hedge accounting is applied, the changes in fair value are recorded in
the statement of profit or loss.
Exposure to risk
2019 | 2018 | |
EXPOSURE TO INTEREST RATE RISK | ||
Total borrowings (*) | ||
391,612 | 392,918 | |
with fixed interest rate | 46,975 | 19,285 |
with variable interest rate: gross exposure | 344,637 | 373,633 |
Interest rate financial instruments (nominal amount) | 0 | 0 |
NET EXPOSURE | 344,637 | 373,633 |
- The difference of the total borrowings compared to the balance sheet amount relates to transaction costs, accrued interests payables allocated to the loan account and leasing liabilities as a consequence of the implementation of IFRS 16.
Sensitivity analysis
In case the interest rate would increase/decrease with 50 basis points, the financial statements would be impacted with the following amounts (as- suming that all other variables remain unchanged):
2019 | 2018 | |||||
+ 50 bp | - 50 bp | + 50 bp | - 50 bp | |||
SENSITIVITY ANALYSIS | ||||||
Interest-bearing loans (variable interest rate) | -1,723 | 1,723 | -1,868 | 1,868 | ||
Interest rate swaps and cross currency rate swaps | 0 | 0 | 0 | 0 | ||
SENSITIVITY (NET) | -1,723 | 1,723 | -1,868 | 1,868 | ||
Impact in profit or loss | -1,723 | 1,723 | -1,868 | 1,868 | ||
Impact in equity | 0 | 0 | 0 | 0 | ||
TOTAL IMPACT | -1,723 | 1,723 | -1,868 | 1,868 |
A significant portion of EXMAR's interest income is derived from borrowings to equity accounted investees with variable interest rates. Any increase/ decrease in the interest rate would result in an increase/decrease of interest income but would mainly be offset by an increase/ decrease in the interest expense recognized by the equity accounted investee for a corresponding amount. Accordingly, any increase/decrease in the variable interest rate applied on the borrowings to equity accounted investees would have no impact on the net result of the Group. Therefore, borrowings to equity accounted investees have not been included in the above sensitivity analysis.
EXMAR REPORT 2019
110
CURRENCY RISK
The Group's currency risk is historically mainly affected by the EUR/USD ratio for manning its fleet, paying salaries and all other personnel-related expenses. EXMAR Netherlands BV has completed a new unsecured bond issue of NOK 650 million in 2019. In order to monitor the currency risk, the Group uses a range of foreign currency rate hedging instruments if deemed necessary. As per 31 December 2019 and 2018, no financial instrument contracts were outstanding to cover the EUR/USD exposure or the NOK/ USD exposure.
Exposure to risk
Exposure to currency risk, based on notional amounts in thousands of foreign currency:
2019 | 2018 | |||||||
EUR | NOK | SGD | ARS | EUR | NOK | GBP | ||
Receivables | ||||||||
11,489 | 70 | 0 | 98,173 | 12,576 | 0 | 0 | ||
Payables | -16,045 | -107 | -1,501 | -19,924 | -19,632 | -70 | -583 | |
Interest-bearing loans | 0 | -650,000 | 0 | 0 | -14 | -912,450 | 0 | |
BALANCE SHEET EXPOSURE | -4,556 | -650,037 | -1,501 | 78,249 | -7,070 | -912,520 | -583 | |
IN THOUSANDS OF USD | -5,118 | -74,039 | -1,116 | 1,307 | -8,095 | -105,031 | -746 |
Sensitivity analysis
As per 31 December 2019 an increase in the year-end EUR/USD rate of 10% would affect the statement of profit or loss with USD -0.5 million (2018: USD -0.8 million). A 10% decrease of the EUR/USD rate would impact the profit or loss statement with the same amount (opposite sign).
The NOK/USD exposure on the outstanding NOK bond is not covered by financial instrument contracts. An increase in the year-end NOK/USD rate of 10% would affect the statement of profit or loss with USD -7.4 million (2018: USD -10.5 million). A 10% decrease of the NOK/USD rate would impact the profit or loss statement with the same amount (opposite sign).
LIQUIDITY RISK
Liquidity risk policy
The Group manages the liquidity risk in order to meet financial obligations as they fall due. The risk is managed through a continuous cash flow projection follow-up, monitoring balance sheet liquidity ratio's against internal and regulatory requirements and maintaining a diverse range of funding sources with adequate back-up facilities. Different debt covenants exist that require compliance with certain financial ratio's. As of December 31, 2019 EXMAR was compliant with all covenants. We also refer in this respect to note 25 regarding borrowings and to note 32 regarding capital commitments.
Maturity analysis of financial liabilities, borrowings to equity accounted investees and financial guarantees
Our current financial liabilities such as trade and other payables are expected to be paid within the next twelve months and are therefore not included in below tables. The contractual maturities of our financial liabilities and our borrowings to equity accounted investees, including estimated interest payments, are detailed in the tables below. The contractual maturities of our financial liabilities are based on the contractual amortization tables of the facilities. The bridge loans and the straight loans are not included in the tables below. The contractual maturities of our borrowings to equity accounted investees are based on the contractual amortization table of the loan for the Electra Offshore Ltd facility and on the cash flow projections for future years for the EXMAR LPG shareholder's loan. EXMAR has also provided guarantees to financial institutions that have provided credit facilities to her equity accounted investees. The amount that EXMAR could have to pay if the guarantee is called on, is disclosed below under financial guarantees.
Contractual cash flows | |||||||||
Currency | Interest rates | Maturity | Carrying amount | Total | 0-12 mths | 1-2 years | 2-5 years | > 5 years | |
111
AS PER 31 DECEMBER 2018
NON-DERIVATIVE FINANCIAL LIABILITIES
Bank loans
Bank loans/other loans
Bank loans
Bond
Other bank loans
USD | libor + 3% | 2019- | -19,891 | -20,549 | -16,105 | -4,444 | 0 | 0 |
2020 | ||||||||
libor + 2.4% | 2023- | |||||||
USD | 2024- | -66,278 | -76,272 | -10,362 | -10,390 | -33,843 | -21,677 | |
2025 | ||||||||
USD | libor + 3% | 2029 | -177,353 | -255,251 | -27,205 | -27,264 | -77,514 | -123,268 |
NOK | Nibor + 8% | 2019 | -123,295 | -130,633 | -130,633 | 0 | 0 | 0 |
Libor +8.5% | ||||||||
EUR | -50 | -60 | -38 | -22 | 0 | 0 | ||
-386,867 | -482,765 | -184,343 | -42,120 | -111,357 | -144,945 |
BORROWINGS TO EQUITY | USD | 54,203 | 72,168 | 7,502 | 6,458 | 37,749 | 20,459 | ||
ACCOUNTED INVESTEES | |||||||||
FINANCIAL GUARANTEES | |||||||||
USD | 0 | -318,538 | -60,511 | -29,875 | -153,923 | -74,229 | |||
Contractual cash flows | |||||||||
Currency | Interest rates | Maturity | Nominal amount | Total | 0-12 mths | 1-2 years | 2-5 years | > 5 years | |
AS PER 31 DECEMBER 2019
NON-DERIVATIVE FINANCIAL LIABILITIES
Bank loans/other loans
Bank loans
Bond
Other loans
Lease liabilities ROU assets Lease liabilities ROU assets Lease liabilities ROU assets Lease liabilities ROU assets
BORROWINGS TO EQUITY ACCOUNTED INVESTEES
FINANCIAL GUARANTEES
libor + | 2023- | |||||||
USD | 2024- | -98,916 | -108,078 | -16,454 | -16,529 | -58,880 | -16,215 | |
2.4% | ||||||||
2025 | ||||||||
USD | libor + 3% | 2019 | -166,667 | -212,850 | -24,884 | -23,681 | -68,159 | -96,126 |
NOK | Nibor + | 2022 | -74,029 | -93,825 | -7,950 | -7,919 | -77,956 | 0 |
8.75% | ||||||||
USD | 10.75% | 2021 | -20,000 | -23,303 | -2,037 | -21,266 | 0 | 0 |
USD | -18,371 | -18,834 | -16,742 | -1,106 | -986 | 0 | ||
EUR | -3,111 | -3,248 | -1,704 | -844 | -508 | -192 | ||
SGD | -42 | -44 | -33 | -1 | -9 | 0 | ||
INR | -142 | -168 | -45 | -47 | -75 | 0 | ||
-381,277 | -460,350 | -69,850 | -71,394 | -206,573 | -112,533 | |||
USD | 49,979 | 71,546 | 3,435 | 14,690 | 52,846 | 575 | ||
USD | 0 | -271,678 | -35,506 | -149,129 | -19,476 | -67,567 |
EXMAR REPORT 2019
112
FAIR VALUES
Carrying amounts versus fair values
2019 | 2018 | ||||||
Fair value | Carrying | Fair value | Carrying | Fair value | |||
hierarchy (*) | amount | amount | |||||
CARRYING AMOUNTS VERSUS FAIR VALUES | |||||||
Borrowings to equity accounted investees | |||||||
2 | 49,979 | 46,605 | 54,203 | 50,188 | |||
Other investments - equity instruments at FVTPL | 1/2 | 4,170 | 4,170 | 4,022 | 4,022 | ||
Interest-bearing loans | 2 | -405,433 | -426,676 | -386,867 | -396,650 | ||
-351,284 | -375,901 | -328,642 | -342,440 | ||||
(*) The financial assets and liabilities carried at fair value are analysed and a hierarchy in valuation method has been defined: level 1 being | quoted bid prices in active | markets for |
identical assets or liabilities, level 2 being inputs in other than quoted prices included in level 1 that are observable for the related assets and liabilities, either directly (as prices) or indirectly (derived from prices), level 3 being inputs for the asset or liability that are not based on observable market data. The breakdown between level 1 and 2 of the equity instruments at FVTPL is shown in the beginning of this note.
BASIS FOR DETERMINING FAIR VALUES:
Equity instruments at FVTPL | quoted closing bid price at reporting date for Teekay shares and Frontera shares/ non-quoted | |||
closing fixing price at reporting date through a public auction via Euronext for Sibelco shares | ||||
Interest-bearing loans | present value of future cash flows, | discounted | at the | market rate of interest at reporting date |
Borrowings to equity accounted investees | present value of future cash flows, | discounted | at the | market rate of interest at reporting date |
For certain financial assets and liabilities (trade and other receivables, cash and cash equivalents and trade and other payables) not carried at fair value, no fair value is disclosed because the carrying amounts are a reasonable approximation of the fair values.
31. LEASES (IN THOUSANDS OF USD)
We also refer to the accounting policies - section changes in accounting policies and section Lease.
LEASES AS A LESSEE
The Group leases properties, motor vehicles and IT equipment.
Property | Motor vehicles | IT equipment | Total | |
RIGH-OF-USE ASSETS | ||||
BALANCE AT 1 JANUARY 2019 | ||||
5,529 | 6,901 | 596 | 13,026 | |
BALANCE AT 31 DECEMBER 2019 | 3,981 | 1,720 | 410 | 6,111 |
For the full roll forward schedule in respect of the right-of-use assets including the depreciation charge for the year, we refer to note 14 of this annual report.
AMOUNTS RECOGNISED IN PROFIT OR LOSS
LEASES UNDER IFRS 16
Interest on lease liability
Expenses related to short-term leases Expenses related to leases of low-value assets
2019
113
1,392
0
0
2018
OPERATING LEASES UNDER IAS 17
Lease expense | 2,178 |
There are no extension or termination options on the lease contracts.
For the maturity analysis in respect of related lease liabilities, we refer to note 30.
LEASES AS A LESSOR
The Group entered into long-term time charter agreements for certain assets in its fleet. In respect of lease classification, it was judged that substantially all risks and rewards remain with the Group. As a consequence, these agreements qualify as operating leases. The accounting policies applicable to the Group as a lessor are not different from those under IAS 17.
Rental income recognised by the Group during 2019 was USD 51.4 million ( 2018: 33.6 million).
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. No variable lease payments are included.
2019 | |
OPERATING LEASES UNDER IFRS 16 | |
Less than one year | |
76,636 | |
One to two years | 68,783 |
Two to three years | 68,783 |
Three to four years | 68,783 |
Four to five years | 68,783 |
More than five years | 310,114 |
TOTAL | 661,882 |
2018 | |
OPERATING LEASES UNDER IAS 17 | |
Less than one year | |
67,812 | |
Between one and five years | 276,079 |
More than five years | 378,896 |
TOTAL | 722,787 |
EXMAR REPORT 2019
114
32. CAPITAL COMMITMENTS (IN THOUSANDS OF USD) As per December 31, 2019 the capital commitments are as follows:
Subsidiaries (*) | Equity accounted | |
investees | ||
CAPITAL COMMITMENTS | ||
Shipping-segment | 139,516 | 0 |
139,516 | 0 |
In March 2018 EXMAR announced it had contracted 2 VLGC Newbuildings with LPG as a fuel for the main engine at Hanjin Heavy Industries & Construction at Subic Bay (Philippines) to serve long-term commitments with Equinor ASA of Norway for worldwide LPG transportation.
In January 2019 Hanjin Heavy Industries & Construction at Subic Bay (Philippines) filed for rehabilitation due to financial difficulties. The construction disruptions caused thereby obliged EXMAR to cancel both Shipbuilding Contracts and invoke the Refund Guarantee from Korean Development Bank (South Korea) to recover each of the Instalments already paid. These instalments (USD 27.2 million) have been repaid during the first semester of 2019 together with an interest of 6%.
In order to fulfil its long-term commitments towards Equinor ASA of Norway, EXMAR entered into shipbuilding contracts with Jiangnan Shipyard (China) for 2 VLGC's with LPG as fuel. These contracts are also covered by a Refund Guarantee. The delivery of these vessels is expected in the second quarter of 2021.
(*) Payment schedule for the two contracted VLCC newbuilds is as follows:
Timing | In thousands of USD |
2020 (**) | 15,470 |
2021 at delivery | 124,046 |
TOTAL | 139,516 |
(**) paid per January 22, 2020
33. CONTINGENCIES
In September 2019, GUNVOR gave notice of a dispute under the Charter for EXMAR's FSRU unit and has commenced arbitration. This arbitration procedure could last several months. EXMAR is confident about the outcome. Meanwhile the charter remains in full force and effect and management is of the opinion that the hire paid is effectively earned.
EXMAR NV received a tax assessment of USD 1.0 million regarding the tax treatment of remunerations paid. Even though the management assessed that the tax claim is not valid, a receivable, for the same amount as the liability, has been accounted for in the consolidated financial statements per 31 December 2019.
Several of the Group's companies are involved in a number of minor legal disputes arising from their day-to-day operations. The management does not expect the outcome of these procedures to have any material effect on the Group's financial position.
34. RELATED PARTIES (IN THOUSANDS OF EUR)
We also refer in this respect to the remuneration report (for remuneration policy) and to the Board of Directors report (for information relating to conflicts of interests).
115
ULTIMATE CONTROLLING PARTY
Saverex NV, the major shareholder of EXMAR NV prepares consolidated financial statements available in Belgium. Saverex NV is controlled by Mr. Nicolas Saverys (CEO of EXMAR).
TRANSACTIONS WITH CONTROLLING SHAREHOLDER AND WITH
CONTROLLING SHAREHOLDER RELATED PARTIES
Saverbel NV and Saverex NV, both controlled by Mr. Nicolas Saverys, charged KEUR 453 to the Group (2018: KEUR 392) for general admin-
istration services provided during 2019. The outstanding amount at year end in respect of these services amounts to KEUR 20 (2018: KEUR 72).
EXMAR Shipmanagement charged KEUR 669 to Saverex for shipmanagement services in respect of the yacht "Douce France" (2018: KEUR
464). The outstanding amount at year end in respect of these services amounts to KEUR 0 (2018: KEUR 174).
During 2019, an amount of KEUR 122 was invoiced to Mr. Nicolas Saverys as a consequence of private expenses to be recharged. The relating outstanding amount per 31 December 2019 in respect of these services is KEUR 5.5. Per 31 December 2018, a provision of KEUR 397 was accounted for in this respect.
TRANSACTIONS WITH JOINT VENTURES AND ASSOCIATED COMPANIES
EXMAR provides general, accounting, corporate, site supervision and shipmanagement services to its joint ventures and associates. For these ser- vices, fees are charged based on contractual agreements between all parties involved. Below table gives an overview of the significant receivables, significant payables and the related P&L amount of services provided and received.
Receivables per | Payables per | Services | Services |
provided | received | ||
31/12/2018 | 31/12/2018 | ||
P&L2018 | P&L2018 | ||
SERVICES (IN THOUSANDS OF EUR)
Shipmanagement services | 579 | 89 | 12,336 | 0 |
General, accounting and corporate services | 0 | 5,200 | 976 | 0 |
Site supervision & plan approval services | 36 | 0 | 940 | 0 |
Rental services | 0 | 0 | 0 | 1,238 |
Receivables per | Payables per | Services | Services | |
provided | received | |||
31/12/2019 | 31/12/2019 | |||
P&L2019 | P&L 2019 | |||
SERVICES (IN THOUSANDS OF EUR) | ||||
Shipmanagement services | ||||
1,378 | 37 | 13,625 | 0 | |
General, accounting and corporate services | 873 | 0 | 722 | 0 |
Site supervision & plan approval services | 0 | 0 | 0 | 0 |
Rental & other services | 0 | 0 | 0 | 1,040 |
EXMAR also provides borrowings to its joint ventures and associates for which an interest income is recognised in the financial statements. We refer to note 17 for an overview of these borrowings and to note 8 for the total amount of interest income.
EXMAR REPORT 2019
116
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Board of Directors
2019 | 2018 | |
BOARD OF DIRECTORS (IN THOUSANDS OF EUR) | ||
Chairman | ||
100 | 100 | |
Other members (individual amount) | 50 | 50 |
Total paid (*) | 485.6 | 500 |
- The total amount paid to the members of the Board of Directors represents the total payments to all non-executive and independent directors for the activities as members of the Board of Directors. The directors,who are member of the executive committee and were paid accordingly, have foregone the director's payment. No loans were granted to the members of the Board in 2019. The outstanding amount per 31 December 2019 in respect of recharged private expenses to Mr. Nicolas Saverys is KEUR 5.5. Per 31 December 2018, a provision of KEUR 397 was accounted for in this respect.
Audit committee
2019 | 2018 | ||
AUDIT COMMITTEE (IN THOUSANDS OF EUR) | |||
Chairman | |||
20 | 20 | ||
Other members (individual amount) | 10 | 10 | |
Total paid | 50 | 50 | |
Nomination and remuneration committee | |||
2019 | 2018 | ||
NOMINATION AND REMUNERATION COMMITTEE (IN THOUSANDS OF EUR) | |||
Chairman | 10 | 10 | |
Total paid | 30 | 30 |
Executive Committee
The remuneration of the members of the Executive Committee is determined annually by the Board of Directors on the basis of a proposal of the Nomination and Remuneration Committee. The remuneration consists of a fixed component and a variable component. The variable component is partly determined in function of the financial result of the Group.
End of 2019 the Executive Committee, excluding the CEO, consisted of four members. All members of the Executive Committee (including the CEO) have a self-employed status. In the event of termination of their appointment, they have no contractual right to any form of severance com- pensation. Three members of the Executive Committe are represented by means of their management company. In the event of termination by EXMAR, FLX Consultancy BVBA (represented by Jonathan Raes) would be entitled to a compensation equivalent of nine month's salary, Chirmont NV (represented by Miguel De Potter) to a compensation equivalent of three month's salary and Lisann AS (represented by Jens Ismar) to a compensation equivalent of three months salary.
2019 | 2018 | |
EXECUTIVE COMMITTEE, EXCLUDING CEO (IN THOUSANDS OF EUR) | ||
Total fixed remuneration | ||
2,493 | 2,366 | |
of which for insurance and pension plan | 265 | 333 |
of which value of share options | 0 | 0 |
Total variable remuneration | 0 | 625 |
2019 | 2018 | ||||
CEO (IN THOUSANDS OF EUR) | |||||
117 | |||||
Total fixed remuneration | 998 | 997 | |||
of which for insurance and pension plan | 175 | 174 | |||
of which value of share options | 0 | 0 | |||
Total variable remuneration | 0 | 1,100 |
No loans were granted to the members of the executive committee in 2019. The outstanding amount per 31 December 2019 in respect of recharged private expenses to Mr. Nicolas Saverys is KEUR 5.5. Per 31 December 2018, a provision of KEUR 397 was accounted for in this respect.
The members of the executive committee are among the beneficiaries of the 4 share option plans approved by the board of directors. The accumulated number of options (plan 4 and plan 8 to 10) allocated to the members of the executive committee are as follows:
2019 | 2018 | |
NUMBER OF SHARES ALLOCATED | ||
Nicolas Saverys | ||
198,624 | 227,553 | |
Patrick De Brabandere | 134,464 | 156,160 |
Pierre Dincq | 100,847 | 108,982 |
Marc Nuytemans | 90,000 | 90,000 |
Miguel de Potter | 90,000 | 90,000 |
David Lim | 97,232 | 104,464 |
Jonathan Raes | 2,500 | 2,500 |
713,667 | 779,659 |
A number of key management personnel, or their close family members, hold positions in other companies that result in them having control or joint control over these companies. None of these companies transacted with the Group during the year.
EXMAR REPORT 2019
118
35. GROUP ENTITIES
Country of | Company id | Consolidation | Ownership | |||
incorporation | method | 2019 | 2018 | |||
CONSOLIDATED COMPANIES | ||||||
JOINT VENTURES | ||||||
Estrela Ltd | Hong Kong | Equity | 50.00% | 50.00% | ||
EXMAR Gas Shipping Ltd | Hong Kong | Equity | 50.00% | 50.00% | ||
EXMAR LPG BVBA | Belgium | 0501.532.758 | Equity | 50.00% | 50.00% | |
EXMAR Shipping BVBA | Belgium | 0860.978.334 | Equity | 50.00% | 50.00% | |
Good Investment Ltd | Hong Kong | Equity | 50.00% | 50.00% | ||
Monteriggioni Inc. | Liberia | Equity | 50.00% | 50.00% | ||
Reslea NV (*) | Belgium | 0435.390.141 | Equity | 0.00% | 50.00% | |
Solaia Shipping Llc | Liberia | Equity | 50.00% | 50.00% | ||
ASSOCIATES | ||||||
Bexco NV | Belgium | 0412.623.251 | Equity | 44.91% | 44.91% | |
Bureau International Maritime NV (*) | Belgium | 0462.574.489 | Equity | 0.00% | 40.00% | |
Bureau International Maritime Congo (*) | Congo | Equity | 0.00% | 40.00% | ||
Compagnie Parisienne Formation et | France | Equity | 0.00% | 40.00% | ||
Logistique (*) | ||||||
Electra Offshore Ltd | Hong Kong | Equity | 40.00% | 40.00% | ||
Exview Hong Kong Ltd | Hong Kong | Equity | 40.00% | 40.00% | ||
Marpos NV | Belgium | 0460.314.389 | Equity | 45.00% | 45.00% | |
Springmarine Nigeria Ltd | Nigeria | Equity | 40.00% | 40.00% | ||
SUBSIDIARIES | ||||||
Ahlmar Germany GmbH | Germany | Full | 100.00% | 60.00% | ||
Ahlmar SA (*) | Luxembourg | Full | 0.00% | 60.00% | ||
Ahlmar Ship Management NV | Belgium | 0676.847.588 | Full | 100.00% | 60.00% | |
Best Progress International Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
Croxford Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
DV Offshore SAS | France | Full | 100.00% | 100.00% | ||
ECOS SRL | Italy | Full | 60.00% | 60.00% | ||
EXMAR Argentina (**) | Argentina | Full | 100.00% | 0.00% | ||
EXMAR Energy France | France | Full | 100.00% | 100.00% | ||
EXMAR Energy Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
EXMAR Energy Netherlands BV | Netherlands | Full | 100.00% | 100.00% | ||
EXMAR Energy Services BV | Netherlands | Full | 100.00% | 100.00% | ||
EXMAR Export Netherlands | Netherlands | Full | 100.00% | 100.00% | ||
EXMAR FSRU Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
EXMAR Holdings Ltd | Liberia | Full | 100.00% | 100.00% | ||
EXMAR Hong Kong Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
EXMAR LNG Holding NV | Belgium | 0891.233.327 | Full | 100.00% | 100.00% | |
EXMAR LNG Investments Ltd | Liberia | Full | 100.00% | 100.00% | ||
EXMAR Lux SA | Luxembourg | Full | 100.00% | 100.00% | ||
EXMAR Marine NV | Belgium | 0424.355.501 | Full | 100.00% | 100.00% | |
EXMAR Netherlands BV | Netherlands | Full | 100.00% | 100.00% | ||
EXMAR NV | Belgium | 0860.409.202 | Full | 100.00% | 100.00% | |
EXMAR Offshore Company | USA | Full | 100.00% | 100.00% | ||
EXMAR Offshore Ltd | Bermuda | Full | 100.00% | 100.00% | ||
EXMAR Offshore Services SA | Luxembourg | Full | 100.00% | 100.00% | ||
EXMAR Offshore NV | Belgium | 0882.213.020 | Full | 100.00% | 100.00% | |
EXMAR Singapore Pte Ltd | Singapore | Full | 100.00% | 100.00% | ||
EXMAR Shipmanagement NV | Belgium | 0442.176.676 | Full | 100.00% | 100.00% | |
EXMAR Shipmanagement India Private Ltd | India | Full | 100.00% | 100.00% | ||
EXMAR Shipping USA Inc | USA | Full | 100.00% | 100.00% | ||
EXMAR Small Scale LPG NL BV | Netherlands | Full | 100.00% | 100.00% | ||
EXMAR Small Scale LPG HK Ltd | Hong Kong | Full | 100.00% | 100.00% | ||
EXMAR Small Scale LPG BE NV | Belgium | 0713.409.957 | Full | 100.00% | 100.00% | |
EXMAR (UK) Shipping Company Ltd | Great-Britain | Full | 100.00% | 100.00% |
Country of | Company id | Consolidation | Ownership | |||||
incorporation | method | 2019 | 2018 | |||||
CONSOLIDATED COMPANIES | ||||||||
119 | ||||||||
EXMAR VLGC BV (**) | ||||||||
Belgium | 0739.802.370 | Full | 100.00% | 0.00% | ||||
EXMAR Yachting NV | Belgium | 0546.818.692 | Full | 100.00% | 100.00% | |||
Export LNG Ltd | Hong Kong | Full | 100.00% | 100.00% | ||||
Farnwick Shipping Ltd (***) | Liberia | Full | 0.00% | 100.00% | ||||
Franship Offshore Lux SA | Luxembourg | Full | 100.00% | 100.00% | ||||
Fertility Development Co. Ltd | Hong Kong | Full | 100.00% | 100.00% | ||||
Glory Transportation Ltd | Hong Kong | Full | 100.00% | 100.00% | ||||
Hallsworth Marine Co. | Liberia | Full | 100.00% | 100.00% | ||||
Internationaal Maritiem Agentschap NV | Belgium | 0404.507.915 | Full | 99.03% | 99.03% | |||
Laurels Carriers Inc | Liberia | Full | 100.00% | 100.00% | ||||
Seavie Private Ltd | India | Full | 100.00% | 100.00% | ||||
Talmadge Investments Ltd | British Virgin Islands | Full | 100.00% | 100.00% | ||||
Tecto Cyprus Ltd | Cyprus | Full | 100.00% | 100.00% | ||||
Tecto Luxembourg SA | Luxembourg | Full | 100.00% | 100.00% | ||||
Travel Plus NV | Belgium | 0442.160.147 | Full | 100.00% | 100.00% | |||
Universal Crown Ltd | Hong Kong | Full | 100.00% | 100.00% | ||||
Vine Navigation Co. (***) | Liberia | Full | 0.00% | 100.00% |
- These companies have been sold during the accouting year. For Reslea, we refer to note 10 for further information. (**) These companies were incorporated during the accouting year.
(***) These companies were liquidated during the accouting year.
36. MAJOR EXCHANGE RATES USED
Closing rates | Average rates | |||
2019 | 2018 | 2019 | 2018 | |
EXCHANGE RATES | ||||
EUR | ||||
0.8902 | 0.8734 | 0.8918 | 0.8447 | |
GBP | 0.7573 | 0.7812 | 0.7844 | 0.7478 |
HKD | 7.7865 | 7.8319 | 7.8370 | 7.8371 |
NOK | 8.7803 | 8.6885 | 8.7857 | 8.1245 |
ARS | 59.8700 | NA | 47.1800 | NA |
KRW | 1,153.8900 | NA | 1,160.8300 | NA |
All exchange rates used are expressed with reference to the USD.
37. FEES STATUTORY AUDITOR
The worldwide audit and other fees in respect of services provided by the statutory auditor or companies or persons related to the auditors, can be detailed as follows:
2019 | 2018 | |
FEES STATUTORY AUDITOR | ||
Audit services | ||
457 | 384 | |
Audit related services | 130 | 3 |
Tax services | 124 | 89 |
711 | 476 |
For 2019 and 2018, the non-audit fees do not exceed the audit fees.
EXMAR REPORT 2019
120
38. SUBSEQUENT EVENTS
On February 26, 2020, Bank of China finally released the amount of 40 million USD from the debt service reserve account. The relaxation of the cash collateral follows the steady operational results of the TANGO FLNG since September 2019, under the 10-years' charter with YPF S.A. The amount of 40 million USD has been partially allocated to the repayment of the bridge loans and to cover EXMAR's capital commitments.
The vessel TEMSE which is situated within one of our equity accounted investees, has been registered as held for sale as a consequence of ongoing negotiations with a potential buyer. An impairment loss of in total USD 1.3 million (EXMAR share: USD 0.65 million) has been registered in the accounts to reflect the fair value of the vessel (USD 4.65 million for 100%).
A purchase obligation has been registered for an aircraft as a consequence of a contractual modification. In the course of 2019 an impairment loss of USD 4.7 million has been registered in the statement of profit or loss to reflect the current market value of the asset. Per 31 December 2019, the aircraft has been presented as non-current asset held for sale in the balance sheet. Per 26 February 2020, the aircraft has been purchased for an amount of USD 15.4 million.
COVID-19 is causing a high level of uncertainty in the world. Several operational measures on-shore and on-board have been taken by EXMAR to ensure the safety and wellbeing of our personnel and continuity of our business operations. The majority of our ships are currently operating under medium to long-term contracts. We are however subject to certain risks with respect to market dynamics. We are however subject to certain risks with respect to our contractual counterparties, and failure of such counterparties to meet their obligations could cause us to suffer losses or impact our liquidity position. EXMAR continues to closely monitor the situation.
SIGNIFICANT JUDGMENTS AND ESTIMATES
The significant judgements and estimates that might have a risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year relates to:
Going Concern
Over the past months EXMAR's liquidity positions was closely monitored and evolved positively amongst other because of:
- On February 26, 2020, Bank of China finally released the amount of 40 million USD from the debt service reserve account in respect of financing of TANGO FLNG. The relaxation of the cash collateral follows the steady operational results of the TANGO FLNG since September 2019, under the 10-years' charter with YPF S.A. The amount of 40 million USD has been partially allocated to the repayment of the bridge loans and to cover EXMAR's capital commitments.
* EXMAR has obtained and drawn under a pre-delivery financing of USD 20 million with Maritime Asset Partners in December 2019, which partially covers the instalments paid during the construction of the two VLGC under construction.
The company is of the opinion that, taking into account its available cash and cash equivalents, its undrawn committed facilities available on the date of establishing the consolidated financial statements, its project cash flows based on approved budgets and the liquidity impact of the elements listed below, it has sufficient liquidity to meets its present obligations and cover its working capital needs for a period of at least 12 months from the authorization date of this annual report.
The consolidated financial statements for the year ended 31 December 2019 have been prepared on a going concern basis. The main assumptions and uncertainties for EXMAR underpinning the going concern assessment are concentrated around following matters:
* In September 2019, GUNVOR gave notice of a dispute under the Charter and has commenced arbitration. This arbitration procedure could last several months. Meanwhile management assumes that the charter remains in full force and effect and management is of the opinion that the hire paid is effectively earned and no amounts should be repaid.
* EXMAR assumes to obtain post-delivery financing to cover the payments in April and June 2021 of the last instalments at delivery of the 2 Very Large Gas Carriers under construction at Jiangnan, amounting to USD 62 million per vessel, as well as the repayment of the pre-delivery financing at that date.
- Considerations received from YPF with respect to the barge Tango FLNG are paid into a restricted earnings account with Bank of China, the provider of financing of the Tango FLNG. Management assumes that Bank of China will give its consent to withdraw excess cash, after payments to the debt servicing account.
- COVID-19is causing a high level of uncertainty in the world. Several operational measures on-shore and on-board have been taken by EXMAR to ensure the safety and wellbeing of our personnel and continuity of our business operations. The majority of our ships are currently operating under medium to long-term contracts. We are however subject to certain risks with respect to market dynamics. We are however subject to certain risks with respect to our contractual counterparties, and failure of such counterparties to meet their obligations could cause us to suffer losses or impact our liquidity position. EXMAR continues to closely monitor the situation.
Covenants
In light of its ongoing operational challenges and the resulting pressure on its financial position, the Company is closely monitoring its compliance with the financial covenants. The Company has met all its financial covenants as at December 31, 2019 and the next testing date with respect to the financial position as at the end of June 2020 is in September 2020. EXMAR believes that based on forecasts for the remaining of the year, and more in particular thanks to the revenue to be generated by TFLNG and the FSRU barge, all covenants will be met as per June 2020 and December 2020.
EXMAR is continuously monitoring compliance with all applicable covenants. If a breach of covenants would occur, the Company will request and believes it will be able to obtain a waiver from the relevant lenders. See also note 25 of this report.
The unexpected delays in the release of the 40 million USD caused EXMAR to continue to pay careful attention to the liquidity of the Company. The receipt of the restricted cash under the Tango FLNG financing together with other anticipated cash flows (i.e. the charter fees from the shipping and infrastructure assets), allows EXMAR to cover its financial commitments budgeted for the year 2020.
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Considering the assumptions and uncertainties described above, the Board is confident that management will be able to maintain sufficient liquidities to meet its commitments and therefore it has an appropriate basis for the use of the going concern assumption. In the event the above assumptions are not timely met, there is a material uncertainty whether the Company will have sufficient liquidities to fulfil its obligations of at least 12 months from the date of authorising these financial statements.
Provisions
The LNG EXCEL, owned by one of our joint ventures, was party to a lease arrangement in the UK whereby the Lessor could claim depreciation on the capital expenditures it incurred to acquire the vessel (Capital Allowances). As is typical in these leasing arrangements, tax and change of law risks are assumed by the Lessee. Our joint venture terminated this lease arrangement in August 2013. The UK tax authorities (HMRC) have made inquiries in respect of the right to receive the Capital Allowances. Based on commercial, legal and financial considerations, our position is that the allowances were validly claimed and we have informed HMRC accordingly. However, in case of a successful challenge by the UK tax authorities of the tax treatment of the lease, we could be required to compensate the Lessor for any tax amount to be reimbursed to the tax authorities. The amount held on the joint venture company's account (USD 1.7 million for EXMAR's share), is maintained to cover our obligations to the Lessor and has therefore been provisioned in the current financial period. Last year no such provision was recognised in the consolidated financial statements of EXMAR as the possible outflow could not be accurately calculated at that time.
STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE MANAGEMENT REPORT
The Board of Directors, represented by Nicolas Saverys and Jalcos NV represented by its legal representative Ludwig Criel , and the Executive Committee, represented by Patrick De Brabandere (CFO) and Francis Mottrie (Deputy CEO), hereby certifies on behalf and for the account of the company, that to their knowledge,
-
the consolidated financial statements which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the equity, financial position and financial performance of the company, and the entities included in the consolidation as a whole,
-the annual report on the consolidated financial statements includes a fair overview of the development and performance of the business and the position of the company, and the entities included in the consolidation, together with a description of the principal risks and uncertainties which they are exposed to.
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REPORT OF THE STATUTORY AUDITOR
STATUTORY AUDITOR'S REPORT TO THE SHAREHOLDERS' MEETING OF EXMAR NV FOR THE YEAR ENDED 31 DECEMBER 2019 - CONSOLIDATED FINANCIAL STATEMENTS
In the context of the statutory audit of the consolidated financial statements of EXMAR NV ("the company") and its subsidiaries (jointly "the group"), we hereby submit our statutory audit report. This report includes our report on the consolidated financial statements and the other legal and regulatory requirements. These parts should be considered as integral to the report.
We were appointed in our capacity as statutory auditor by the shareholders' meeting of 16 May 2017, in accordance with the proposal of the board of directors ("bestuursorgaan" / "organe d'administration") issued upon recommendation of the audit committee. Our mandate will expire on the date of the shareholders' meeting deliberating on the financial statements for the year ending 31 December 2019. We have performed the statutory audit of the consolidated financial statements of EXMAR NV for 3 consecutive periods.
REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Unqualified opinion
We have audited the consolidated financial statements of the group, which comprise the consolidated statement of financial position as at 31 December 2019, the consolidated statement of profit or loss and consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated statement of financial position shows total assets of 909 767 (000) USD and the consolidated statement of profit or loss shows a loss for the year then ended of 13 202 (000) USD.
In our opinion, the consolidated financial statements give a true and fair view | of the group's net equity and financial position as of 31 December 2019 |
and of its consolidated results and its consolidated cash flow for the year then | ended, in accordance with International Financial Reporting Standards |
(IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. |
Basis for the unqualified opinion
We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the "Responsibilities of the statutory auditor for the audit of the consolidated financial statements" section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial statements in Belgium, including those regarding independence.
We have obtained from the board of directors and the company's officials the explanations and information necessary for performing our audit. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to Note "Significant judgements and estimates" in the financial statements, which states that the Company is facing ongoing challenges that put pressure on its financial position. In preparing the financial statements, and as disclosed in this note, the board has considered four main assumptions and uncertainties to be successfully and timely completed to provide sufficient liquidity to the Company during a period of at least 12 months from the authorization date of the annual report. These assumptions and uncertainties form a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern when not timely realized. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters | How our audit addressed the key audit matters | ||
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT - VESSELS | |||
123 | |||
• Property, plant and equipment - vessels with a carrying amount of | • We considered the process and the internal controls implemented by | ||
576 605 (000) USD represent 63% of the consolidated balance | management and we carried out testing relating to the design and im- | ||
sheet total as at 31 December 2019. Management's assessment of the | plementation of management's controls to assess impairment indica- | ||
valuation of property, plant and equipment is significant to our audit | tors and perform impairment testing. | ||
because this process is complex and requires significant management | • We validated for each cash generating unit if impairment indicators, as | ||
judgement. | determined by IAS 36, were considered in the impairment assessment | ||
• Reference to disclosures | of management. | ||
We refer to the consolidated financial statements, including notes to the | • We obtained the appraisal reports from external brokers which are used | ||
consolidated financial statements: 11 - vessels. | by management to test for impairment indicators and to determe the | ||
fair value less costs to sell ("FVLCTS") of the vessels. | |||
• We tested management's assumptions used in the value in use ("VIU") | |||
calculations especially the most critical assumptions such as the post | |||
contract charter rates and discount rates. In challenging these assump- | |||
tions, we took into account actual results, negotiated contract terms, | |||
external data, independent market reports and market conditions. | |||
• Furthermore, we evaluated the adequacy of the disclosures regarding | |||
the impairments of property, plant and equipment. | |||
Responsibilities of the board of directors for the preparation of the consolidated financial statements
The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the board of directors is responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the group or to cease operations, or has no other realistic alternative but to do so.
Responsibilities of the statutory auditor for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstate- ment, whether due to fraud or error, and to issue a statutory auditor's report that includes our opinion. Reasonable assurance is a high level of assur- ance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of consolidated financial statements in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the efficiency or effectiveness demonstrated by the board of directors in the way that the company's business has been conducted or will be conducted.
As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
- obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control;
- evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors;
- conclude on the appropriateness of the use of the going concern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern;
- evaluate the overall presentation, structure and content of the consolidated financial statements, and whether the consolidated financial state- ments represent the underlying transactions and events in a manner that achieves fair presentation.
- obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and significant audit
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findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applica- ble, related safeguards.
From the matters communicated to the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter.
OTHER LEGAL AND REGULATORY REQUIREMENTS
Responsibilities of the board of directors
The board of directors is responsible for the preparation and the content of the directors' report on the consolidated financial statements, the statement of non-financial information attached to the directors' report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements.
Responsibilities of the statutory auditor
As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director's report on the consolidated financial statements, the statement of non-financial information attached to the directors' report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements, as well as to report on these matters.
Aspects regarding the directors' report on the consolidated financial statements
In our opinion, after performing the specific procedures on the directors' report on the consolidated financial statements, this report is consistent with the consolidated financial statements for that same year and has been established in accordance with the requirements of article 3:32 of the Code of companies and associations.
In the context of our statutory audit of the consolidated financial statements we are also responsible to consider, in particular based on information that we became aware of during the audit, if the directors' report on the consolidated financial statements is free of material misstatement, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such material misstatement.
The non-financial information as required by article 3:32, § 2 of the Code of companies and associations, has been disclosed in the directors' report on the consolidated financial statements. This non-financial information has been established by the company in accordance with an internationally recognised framework. In accordance with article 3:80 § 1, 5° of the Code of companies and associations we do not express any opinion on the question whether this non-financial information has been established in accordance with this internationally recognised framework.
Statements regarding independence
- Our audit firm and our network have not performed any prohibited services and our audit firm has remained independent from the group during the performance of our mandate.
• The fees for the additional non-audit services compatible with the statutory audit, as defined in article 3:65 of the Code of companies and associ- ations, have been properly disclosed and disaggregated in the notes to the consolidated financial statements.
Other statements
This report is consistent with our additional report to the audit committee referred to in article 11 of Regulation (EU) No 537/2014.
Zaventem, 6 April 2020
The statutory auditor
Deloitte Bedrijfsrevisoren/Réviseurs d'Entreprises CVBA/SCRL
Represented by Gert Vanhees
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EXMAR REPORT 2019
126
STATUTORY ACCOUNTS
127
The statutory accounts of EXMAR NV are disclosed hereafter in a summarised version. The full version will be filed with the National Bank of Belgium. The full version is available on the Company's website (www.exmar.be) and a copy can be obtained free of charge on request. An unqualified audit opinion has been expressed by the statutory auditor.
BALANCE SHEET | ||
31/12/2019 | 31/12/2018 | |
(IN THOUSANDS OF USD) | ||
ASSETS | ||
FIXED ASSETS | ||
703,235 | 619,568 | |
(In)-tangible assets | 414 | 394 |
Financial assets | 702,821 | 619,174 |
CURRENT ASSETS | 120,100 | 117,273 |
Amounts receivable within one year | 70,344 | 79,250 |
Investments | 17,501 | 19,587 |
Cash and cash equivalents | 31,965 | 18,201 |
Accrued income and deferred charges | 290 | 235 |
TOTAL ASSETS | 823,335 | 736,841 |
EQUITY AND LIABILITIES
EQUITY
Capital
Share premium
Reserves
Accumulated profits
PROVISIONS AND DEFERRED TAXES Provisions and deferred taxes
LIABILITIES
Amounts payable within one year
TOTAL EQUITY AND LIABILITIES
STATEMENT OF PROFIT OR LOSS
(IN THOUSANDS OF USD)
STATEMENT OF PROFIT OR LOSS
Operating income
Operating expenses
OPERATING RESULT
Financial income
Financial expenses
RESULT FOR THE YEAR BEFORE TAX Income tax
RESULT FOR THE YEAR
APPROPRIATION OF RESULT
Result to be appropriated
Transfer from/(to) capital and reserves Result to be carried forward Distribution of result
704,115 659,230
88,812 88,812
209,902 209,902
84,103 86,338
321,298 274,178
- 337
- 337
118,883 77,274
118,883 77,274
823,335 736,841
01/01/2019 01/01/2018
-31/12/2019-31/12/2018
3,538 3,846
-9,075-9,551
-5,537-5,705
58,350 24,788
-5,816-7,606
46,997 11,477
-2,112-1,297
44,885 10,180
319,063 270,516
2,235 3,662
-321,298-274,178
00
EXMAR REPORT 2019
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#05
GLOSSARY
EXMAR REPORT 2019
130
GLOSSARY
BWTS | Ballast water treatment system | ||
cbm | Cubic meters (m³) | ||
CEO | Chief Executive Officer | ||
CFO | Chief Financial Officer | ||
CO2 | Carbon dioxide | ||
COO | Chief Operating Officer | ||
DVO | DV Offshore | ||
EBIT | Earnings before interest and taxes | ||
EBITDA | Earnings before interest, taxes, depreciation, and amortization | ||
EE | Excelerate Energy | ||
EEDI | Energy Efficiency | Design Index | |
EEOI | Energy Efficiency | Operational Indicator | |
EOC | EXMAR Offshore Company | ||
ESI | Environment Ship Index | ||
ESM | EXMAR Ship Management | ||
FID | Final Investment Decision | ||
FLNG | Floating Liquefaction of Natural Gas | ||
FPS | Floating Production System | ||
FPSO | Floating Production Storage and Offloading-unit | ||
FSO | Floating Storage and Offloading | ||
FSU | Floating Storage Unit | ||
FSRU | Floating Storage and Regasification Unit | ||
GDPR | General Data Protection Regulation | ||
GHG | Greenhouse gas | ||
HFO | Heavy Fuel Oil | ||
HMPE | High Modulus Polyethylene | ||
HR | Human Resources | ||
HSEQ | Health, Safety, Environment and Quality | ||
HSEEQ | Health, Safety, Environmental Energy and Quality | ||
HyMethShip | Hydrogen Methanol Ship | ||
IAS | International Accounting Standards | ||
IFRS | International Financial Reporting Standards | ||
ISM | International Safety Management | ||
ISO | International Organization for Standardization | ||
JV | Joint venture | ||
k | 1,000 | ||
KPI | Key Performance Indicators | ||
LGC | Large Gas Carrier | ||
LNG | Liquefied | Natural Gas | |
LNG/C | Liquefied | Natural Gas Carrier | |
LNGRV | Liquefied | Natural Gas Regasification Vessel | |
LPG | Liquefied | Petroleum Gas | |
LTI | Lost Time Injurie | ||
LTIF | Lost Time Injury Frequency | ||
M³ | Cubic metres |
MGC | Midsize Gas Carrier |
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Midsize | 20,000 m³ to 40,000 m³ |
Mio | Million |
MMSCFD | Million standard cubic feet per day |
MT | Metric tons |
MTPA | Million tons per annum |
NH³ | Ammonia |
NM | Nautical Mile |
O&M | Operations & Maintenance |
OB | Order book |
OCIMF | Oil Companies Marine International Forum |
OPEX | Operating Expenditures |
Petchems | Petrochemicals |
PPE | Personal Protective Equipment |
PPM | Parts per million |
R&D | Research & Development |
REBITDA | Recurring earnings before interests, taxes, depreciations and amortizations |
Semi-ref. | Semi-refrigerated LPG carrier |
SMS | Safety Management Systems |
STS | Ship-to-ship |
TC | Time charter |
TCE | Time charter equivalent |
TMSA | Tanker Manager Self-Assesment |
TRCF | Total Recordable Cases Frequency |
TTSL | Taking The SAFETY LEAD |
U/C | Under Construction |
US | United States |
USA | United States of America |
USCG | United States Coast Guard |
USD | United States Dollar |
VCM | Vinyl Chloride Monomer |
VLGC | Very Large Gas Carrier |
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Exmar NV published this content on 22 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2020 10:12:10 UTC