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ROSETTI MARINO SPA

Bilancio

Financial Statements at 31/12/2023

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

I N D E X

Page

1.

Directors' Report on Operations, accompanying

the Financial Statements as at 31 December 2023

3

2. Financial Statements as at 31 December 2023:

Balance Sheet

14

Income Statement

17

Statement of Cash Flows, indirect method

19

- Notes to the Financial Statements

Basis of preparation

21

Accounting policies and measurement criteria

21

Other information

24

∙ Comments on main asset items

25

∙ Comments on main liability and equity items

35

∙ Comments on main income statement items

40

3. Board of Statutory Auditors' Report on the Financial Statements

as at 31 December 2023

47

4.

External Auditors' Report

51

5.

Minutes of the Shareholders' Meeting held to approve the

55

Financial Statements as at 31 December 2023

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

1. DIRECTORS' REPORT ON OPERATIONS, ACCOMPANYING THE FINANCIAL STATEMENTS

AS AT 31 DECEMBER 2023

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

Dear Shareholders,

The financial statements hereby submitted for your review and approval provide a faithful representation of the Company's current situation.

They report a net profit of Euro 9,438 thousand after depreciation and amortisation of Euro 1,185 thousand, allocations to provisions for doubtful debts of Euro 2,578 thousand, allocations to provisions for risks of Euro 205 thousand and impairment adjustments to investments of Euro 3,915 thousand.

We provide below an overview of the Company's operating performance in the last year and details of foreseeable future developments.

OPERATING PERFORMANCE

In addition to a return to profit seven times that reported in prior year - much more in line with the size and potential of the Company - and on top of the significant growth in production volumes, the most significant matters that characterised the 2023 reporting period were as follows:

  1. the significant value of new orders taken and the substantial order book achieved which show how the Company has taken advantage of the strong recovery of the Energy market as a whole;
  2. the make-up of the order book with a significant - even predominant - presence of the Renewables and Carbon Neutrality sector alongside the traditional Oil&Gas sector;
  3. the sale of the San Vitale Yard and the AMT Carrier barge, as a result of the decision not to pursue further opportunities in the Merchant Shipbuilding sector. This decision has boosted the Company's finances while also generating significant gains on disposal which have more than offset the additional losses made in that sector during the reporting period;
  4. the ability to reinforce and enhance the business structure, especially in terms of human resources, in order to cope with the growing workload.

The size and make-up of the order backlog are the result of the commercial and business development strategies that the Company dared to launch several years ago and which have proven successful given the results achieved in 2023 and the significant benefits that will be enjoyed in the years ahead. In order to understand fully the significance, it is worth remembering that the current Energy market context is marked by the so-called "trilemma" i.e. the need to meet three, apparently divergent, great expectations: the desire to reduce the portion of "climate-changing" emissions that are caused by the use of fossil fuels, the need to guarantee secure energy sources and the need to ensure that energy is accessible at affordable prices. This complex combination of factors has found the Company and the Group ready to respond positively to the needs of the market and created a number of particularly important opportunities.

In terms of emissions reduction, it should be noted that almost 80% of the Rosetti Marino SpA order backlog - now totalling Euro 590 million - is made up of projects relating to the Renewables and Carbon Neutrality sector, projects that are carried out with the specific aim of generating energy while reducing greenhouse gas emissions.

With regard to energy security, it is worth highlighting the fact that the Company is involved in key projects for both the development of infrastructures to receive liquefied natural gas in Italy and for the conversion or adaptation of floating plants destined for producer countries other than the Russian Federation.

Finally, it should be noted that Rosetti Marino is able to make an important contribution to affordable energy by fulfilling orders for countries on the Mediterranean that can count on existing, depreciated gas pipelines and infrastructures that are currently under-utilised.

Although the bulk of the new orders only materialised in the second half of 2023, thus making a limited contribution to production for the year, Gross Internal Product for the reporting period increased significantly from Euro 181 million in 2022 to Euro 214 million in 2023 (+18%).

Meanwhile, it is important to highlight the fact that net profit was hit by impairment adjustments to equity investments totalling Euro 3,915 thousand, mainly in relation to Italian companies Fores Engineering S.r.l, Rosetti Superyachts Spa

Financial Statements at 31-12-2023

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v.2.14.1ROSETTI MARINO SPA

and Green Methane.

A selection of the key performance indicators is provided below:

31.12.23

31.12.22

Gross Internal Product - G.I.P. (in thousands of Euro)

213,719

181,329

(A1+A2+A3 of the Income Statement)

EBITDA (in thousands of Euro)

15,511

11,867

(A+B-10-12-13 of the Income Statement)

EBITDA / GIP

7.26%

6.54%

EBIT (in thousands of Euro)

11,543

5,694

(A+B of the Income Statement)

EBIT / GIP

5.40%

3.14%

Profit before tax (in thousands of Euro)

7,860

2,317

Profit before tax / GIP

3.68%

1.28%

Net profit (in thousands of Euro)

9,438

1,239

(item 21 of the Income Statement)

Net profit / GIP

4.42%

0.68%

R.O.E. (Net profit / Opening equity)

8.00%

1.10%

It should be noted that the interim performance indicators shown in the above table - in particular, EBITDA and EBIT

  • are not specifically defined under Italian GAAP. Therefore, the methods applied by the Company to determine them might not be consistent with those used by other companies and/or groups in the industry and, consequently, the figures might not be suitable for comparison.

An analysis of the various business segments in which the Company operates is provided below. Please refer to the Notes to the Financial Statements for more detailed analysis of the numbers themselves:

Oil&Gas Sector

The Oil&Gas Sector recorded a large increase in value of production (+18% compared to prior year) to reach Euro 180 million against Euro 152 million in 2022.

Production activities were carried out in the Oil & Gas Platforms segment (Euro 116 million), the Brown Field segment (Euro 31 million), the Engineering segment (Euro 3 million) and the Technical Services segment (Euro 30 million).

In the first half of the year, work continued on a Platform for Argentina that was being built at the Piomboni Yard and on the Brownfield project in Qatar; both of these projects were completed by the reporting date. Meanwhile, the second half of the year saw the start of work on the construction of both an LNG unloading platform and the mooring structures of the FSRU and the LNG carriers for the new offshore LNG terminal in Ravenna. Engineering activities for third parties were carried out continuously throughout the year, as was work on Technical Services projects. It is important to note that the volume of work and number of projects carried out in the Technical Services segment in 2023 reached levels never seen previously by the Company.

Renewables and Carbon Neutrality Sector

The Renewables and Carbon Neutrality Sector doubled its volume of business from Euro 11 million in 2022 to Euro 22 million in 2023. It should be noted that production activities were concentrated almost exclusively on the project for the new Green Tyres plant in Ravenna, the contract for which was acquired in the first quarter of 2023. The other important projects in this sector that currently form part of the Company's order backlog were only awarded in the third and fourth quarters of the year.

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

Shipbuilding Sector

Value of production realised the Shipbuilding Sector in 2023 amounted to Euro 11 million, down on the total of Euro 17 million generated in 2022 (-35%). Around Euro 6 million of this total value of production was generated in the Superyachts segment, around Euro 4 million in the Tugboats segment and around Euro 1 million in the Repair&Refit segment. In line with the decision taken at the end of 2022, no new orders were taken during the reporting period as the Company wants to wait for an improvement in the future prospects of this sector.

CAPITAL EXPENDITURE

In 2023, the Company incurred capital expenditure totalling Euro 2,011 thousand with Euro 39 thousand invested in intangible assets and Euro 1,972 thousand in tangible assets.

The main item of capital expenditure regards the purchase of land adjacent to the headquarters (over which land-use rights were already held) from associated company RigRos for Euro 1,642 thousand. This investment will enable a significant expansion of the production area in via Trieste (around 5 hectares) while providing direct access to the Candiano Canal.

The reporting period was also marked by the sale of two important assets (the San Vitale Yard and the AMT Carrier barge) for a total amount of Euro 45 million; this led to a significant improvement in the net financial position and to the realisation of significant gains on disposal.

EQUITY INVESTMENTS

There were no changes to the direct investments held in subsidiaries and associated companies during the reporting period.

Associated company RigRos S.r.l was put into liquidation in February 2024 as it no longer had any corporate objective following the pro-quota sale of the land owned by it to the two quotaholders.

The subsidiaries and associated companies continue to operate on their respective markets and with their own specialisations. They thus carry out the missions assigned to them and continue to integrate with the Company and with other Group companies when this is required by contracts for complex multi-purpose facilities. We would recall that the subsidiaries and associated companies (both direct and indirect) have operated in the following segments:

  • Fores Engineering S.r.l and Fores Engineering Algerie Eurl: design, construction and maintenance of automation and control systems;
  • Basis Pivot Ltd and Tecon S.r.l: engineering companies mainly involved in multi-disciplinary design of oil and petrochemical facilities;
  • Kazakhstan Caspian Offshore Industries Llp, Rosetti Ali & Sons Llc, Rosetti Marino for Trading Wll, Rosetti Libya Jsc, Rosetti Pivot Ltd, Rosetti Marino Project Ooo and Rosetti Marino UK Ltd: companies that construct offshore and onshore oil facilities;
  • Rosetti Kazakhstan Llp: supply of technical services;
  • Rigros Srl and Broadshore Energy Ltd: management of land designated for industrial use;
  • Rosetti SuperYachts Spa: building of superyachts;
  • GM Green Methane Srl: construction of biomethane facilities.

FINANCIAL SITUATION

For a more detailed analysis of cash flows during the year, please see the statement of cash flows included in an attachment to the financial statements.

At this point, we highlight the fixed asset coverage ratio (financed through equity) and the net financial position (including current financial assets) which is clearly positive; these figures confirm the Company's financial solidity.

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

Some of the key financial and equity ratios are shown below:

31.12.23

31.12.22

Short-term net financial position (in thousands of Euro)

54,657

18,599

(C.III + C.IV of Assets - D.4 current of Liabilities)

Fixed assets cover margin (in thousands of Euro)

100,643

60,445

(M/L term liabilities + total equity - fixed assets)

Fixed assets cover ratio

2.38

1.56

(M/L term liabilities + total equity / fixed assets)

Financial independence index

41.54%

47.95%

(Total equity / Total assets)

Ratio of financial income(expense) to GIP

(0.55%)

(1.08%)

(Income Statement items 16+17+17bis / GIP)

It should be noted that "Net financial position" is not specifically defined under Italian GAAP. Therefore, the methods applied by the Company to determine it might not be consistent with those used by other companies and/or groups in the industry and, consequently, the figure might not be suitable for comparison.

Moving onto the financial risks relating to trade receivables, we note that the Company operates primarily with longstanding clients, including leading oil companies or their subsidiaries and leading Italian shipping companies. Given the longstanding relationships with clients and their financial soundness, no specific guarantees are required for receivables from clients. Nonetheless, it should be noted that, as the Company tends to operate on a few, very large contracts, its receivables are highly concentrated on a small number of clients. Given this fact, it is common practice before acquiring an order, to conduct a thorough assessment of the financial impact of that order and a prior evaluation of the client's financial situation. The process continues during execution of the work with careful monitoring of outstanding receivables.

The Company's short-term net financial position is positive so there are no difficulties in raising financial resources or significant risks associated with interest rate fluctuation.

Some of the medium/long-term loans arranged by the Company are also subject to covenants which were respected as at 31 December 2023.

The Company is exposed to the exchange rate risk as a result of its operations on international markets. In order to protect itself against this risk, as in previous years and in compliance with the policy approved by the Executive Committee on 13 June 2018, the Company has arranged exchange rate risk hedging transactions when it has acquired significant orders from clients in foreign currencies and issued significant orders to suppliers in foreign currencies.

PERSONNEL

The skill and professionalism of our personnel and the way in which our people conduct themselves represent the Company's main resource.

Therefore, during the reporting period, a sum equal to 1.53% of personnel costs (0.87% in prior year) was invested in training and professional development which involved many employees.

This confirms the special attention that has always been paid to the professional development of all employees as we believe it is essential to the continued success and development of the Company.

At 31 December 2023, the Company headcount stood at 433 employees (excluding 14 employees currently on secondment whose contracts have been suspended) against 412 employees at 31 December 2022, an increase of 21 employees.

The increase wholly related to the number of employees in Italy - there were 395 employees in Italy at 31 December 2023, an increase of 21 employees compared to prior year. The number of white collar employees increased (+25

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

employees) while the number of managers remained unchanged and the number of blue collar workers decreased (-4 employees).

Meanwhile, the Company's foreign branches had a total of 38 employees, unchanged on prior year.

Due to the type of business conducted, the risk of accidents, including potentially fatal accidents, is high. For this reason, the Company has always devoted particular attention to safety issues by adopting a series of internal procedures and educational measures aimed at preventing such events. All production facilities have been certified compliant with the BS-OHSAS 18001 standard and we continue to promote initiatives aimed at further spreading a culture of safety among all internal and external workers who operate at our Italian and international production facilities.

OTHER INFORMATION ON OPERATIONS

As expressly required by Article 2428 of the Italian Civil Code, we report the following while referring the reader to the Notes for further information on the numbers reported:

Information on business risks

The inherent risks involved in the Company's business activities are those typical of enterprises that operate in the plant engineering and shipbuilding.

The responsibilities resulting from the design and construction of our products and the risks associated with normal operating activity are dealt with in advance by devoting adequate attention to such aspects when developing processes and implementing adequate organisational procedures, as well as by acquiring adequate insurance cover on a precautionary basis.

The potential risks pertaining to financial, environmental and workplace safety issues and an analysis of the uncertainties relating to the particular economic environment have been reviewed in advance and appropriate measures adopted, as described in the "Financial situation", "Information on the environment", "Personnel" and "Business outlook" paragraphs.

Activities relating to Legislative Decree 231/01 on administrative responsibility

For 2023, the Supervisory Board has duly issued Six Monthly Reports on its activities in the first and second halves of the year. The Board of Directors has acknowledged these reports which do not contain any facts or issues worthy of note.

Information on the environment and on climate change risks

The Company carries out EPC projects, building large metal structures whose construction involves limited environmental risks, mainly during the painting and sandblasting phases.

Although these risks are limited, they are thoroughly assessed by the unit responsible for environment and climate change issues. This is done also considering the increasing global attention to the consequences of climate change and to the potential economic, social and environmental issues which now require companies to assess the potential consequences for their business in the medium/long-term.

For these reasons, the Company is committed to the constant search for solutions that guarantee the responsible use of natural resources, efficient energy consumption, optimal use of raw materials (carefully separating non-recyclable or reusable waste) and management of atmospheric emissions.

The attention paid to environmental issues is borne out by the fact that the Company has been certified compliant with international standard ISO14001 for many years.

For some years, the Company has made a major effort to develop and spread a Culture of Sustainability with particular attention paid to the following objectives:

- minimising the environmental impact by reducing energy and water consumption, atmospheric emissions and waste

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

production;

  • constantly improving our systems for the detection and assessment of environmental risks and effects and implementing the necessary measures to prevent and reduce such risks and effects;
  • monitoring our sustainability performance based on well-defined ESG (Environment, Social, Governance) indicators linked to Sustainable Development Goals, in order to identify the related areas and actions for improvement;

Environmental protection and sustainability goals and principles are defined in Rosetti Marino's HSE and Sustainability Policies and reported in the company's Sustainability Report which is issued annually and published on the company website.

Transactions in treasury shares

No transactions in treasury shares were carried out during the reporting period. Therefore, the number of treasury shares owned by the Company remained unchanged at 200,000 shares with a nominal value of Euro 1.00 each i.e. 5.0% of share capital.

Intra-Group relations

As you are aware, the Company heads an industrial group including many companies, some of which (Fores Engineering S.r.l, Rosetti Marino UK, Rosetti Kazakhstan Llp, KCOI Llp, Rosetti Libya Jsc, Rosetti SuperYachts S.p.A., Tecon S.r.l., Rosetti Marino Project Ooo, GM Green Methane Srl and Rosetti Marino for Trading Wll ) are under the direct control and coordination of the Company.

The Group companies enter into industrial, commercial and financial transactions (exchanges of services, technical, commercial and administrative assistance plus the purchase and sale of materials, the rental of ships, short-term loans, etc.) between themselves. These transactions take place on an arm's length basis at normal market conditions.

The following table contains details of the income statement transactions (expressed in thousands of Euro) that took place in 2023 with subsidiaries, associated companies, parent companies and companies controlled by parent companies:

Description

Parent company:

Rosfin Spa

Subsidiaries:

Fores Engineering Srl Rosetti Superyachts Spa Rosetti Marino UK Ltd Rosetti Marino Project Ooo Rosetti Marino for Trading Wll Rosetti Kazakhstan Llp Rosetti Libya Jsc

Tecon Srl

GM Green Methane Srl KCOI Llp

Fores Algeria Eurl Associated companies:Rigros Srl

Rosetti Pivot Ltd Rosetti Ali & Sons Ltd Basis Pivot Ltd Broadshore Energy Ltd

Value of

Cost of

Dividends

Financial

production

production

income

10

0

0

0

393

2,651

0

211

2,567

0

0

0

0

0

0

0

7,247

0

0

0

420

0

0

0

0

(2)

0

0

0

0

0

0

125

2,238

0

0

402

0

0

188

2,045

(57)

0

278

0

0

0

0

0

0

0

5

322

(50)

0

171

234

0

0

0

0

0

0

0

0

0

0

0

Financial Statements at 31-12-2023

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ROSETTI MARINO SPA

The following table contains details of the financial relations (expressed in thousands of Euro) that took place in 2023 with subsidiaries, associated companies, parent companies and companies controlled by parent companies:

Description

Financial

Trade

Financial

Trade payables

receivables

receivables

payables

Parent company:

Rosfin Spa

12

0

0

0

Subsidiaries:

Fores Engineering Srl

14,500

384

0

720

Rosetti Superyachts Spa

0

10

0

791

Rosetti Marino UK Ltd

0

0

0

0

Rosetti Marino Project Ooo

0

5,818

0

0

Rosetti Marino for Trading Wll

0

63

0

0

Rosetti Kazakhstan Llp

0

0

0

0

Rosetti Libya Jsc

0

0

281

0

Tecon Srl

0

125

0

1,202

GM Green Methane Srl

5,000

447

0

0

KCOI Llp

5,000

1,939

0

13

Fores Algeria Eurl

0

0

0

0

Associated companies:

Rigros Spa

230

5

0

0

Rosetti Pivot Ltd

407

1,129

0

0

Rosetti Ali & Sons Ltd

0

847

0

0

Basis Pivot Ltd

0

0

21

0

Broadshore Energy Ltd

0

0

0

0

Research and development

In 2023, the Company carried out research and development activities and focused its efforts on projects considered particularly innovative and which demanded a major commitment of resources, primarily from our Business Development department.

R&D costs totalling Euro 412 thousand were incurred during 2023. These activities have regarded the following projects, in particular:

  • acquisition of new knowledge and technical skills for the experimental development process solutions for the reutilisation and/or transformation of CO2 in synthetic fuel;
  • acquisition of new skills and knowledge through technical feasibility studies and definition of fundamental design principles aimed at the development of an electrified reactor for a reverse-watergas-shift reaction;
  • acquisition of new knowledge and new technical skills through feasibility studies and technical comparison of various, innovative biological methanation processes aimed at overcoming resonance problems on the crankshaft;
  • acquisition of new knowledge and new skills through feasibility studies and pre-project analysis in preparation for the experimental development of new storage and regasification solutions for offshore hydrogen and/or ammonia;
  • acquisition of new knowledge and new technical skills through feasibility analyses and pre-project studies in preparation for the experimental and pre-competitive development of industrial solutions for the storage and production of green hydrogen from offshore windfarms;
  • acquisition of new knowledge and new technical skills through feasibility studies in preparation for the experimental and pre-competitive development of carbon capture and storage techniques downstream of industrial chemical and waste management processes;
  • acquisition of new knowledge and new technical skills through feasibility studies and pre-project analysis for the experimental development of technological and engineering solutions for the unloading of ships and storage of liquid CO2 from industrial processes and its subsequent pumping into depleted deposits in the vicinity.

We are confident that the success of these innovations will have a positive impact on the Company's future

Financial Statements at 31-12-2023

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Rosetti Marino S.p.A. published this content on 19 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 June 2024 07:19:01 UTC.