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Bonheur ASA – Annual Report 2022
Key figures
3
Bonheur ASA – Overview
4
Director’s Report 2022
6
Sustainability 2022
15
Bonheur ASA – Consolidated Accounts
44
Bonheur ASA -NGAAP accounts
107
Consolidated Income Statement
44
Income Statement (NGAAP)
107
Consolidated Statement of Comprehensive Income
45
Balance Sheet (NGAAP)
Consolidated Statement of Financial Position
46
Cash Flow Statement (NGAAP)
Statement of Changes in Equity
49
General information and summary of significant
Consolidated Cash Flow Statement
51
Accounting Principles
110
Notes to the Consolidated Financial Statements
Notes
112
Note 1 –
Principal accounting policies and key accounting estimates
52
Note 1 –
Personnel expenses, professional fees
112
Note 2 –
Determination of fair values
55
Note 2 –
Pensions / Employee Benefits
113
Note 3 –
Financial risk management
56
Note 3 –
Property, plant and equipment
115
Note 4 –
Operating segments
58
Note 4 –
Subsidiaries
116
Note 5 –
Revenue
61
Note 5 –
Shares in associated companies
Note 6 –
Operating expenses
64
and other investments
116
Note 7 –
Personnel expenses
64
Note 6 –
Bonds
118
Note 8 –
Finance income and expenses
67
Note 7 –
Receivables
118
Note 9 –
Income tax expense
68
Note 8 –
Share capital and shareholders
120
Note 10 –
Property, plant and equipment
70
Note 9 –
Liabilities
122
Note 11 –
Intangible assets
73
Note 10 –
Guarantees
122
Note 12 –
Investments in associates
77
Note 11 –
Tax
124
Note 13 –
Other investments
78
Note 12 –
Related party information
125
Note 14 –
Inventories
80
Note 13 –
Financial instruments
129
Note 15 –
Trade and other receivables
81
Note 14 –
Cash and cash equivalents
130
Note 16 –
Cash and cash equivalents
81
Note 15 –
Dividends
130
Note 17 –
Earnings per share
83
Note 16 –
Other financial expenses
132
Note 18 –
Interest bearing loans and borrowings
84
Note 19 –
Employee Benefits
87
Note 20 –
Deferred Income and other accruals
91
Note 21 –
Trade and other payables
91
Note 22 –
Financial Instruments
92
Note 23 –
Rental and leases
98
Note 24 –
Capital commitments
100
Note 25 –
Contingencies and provisions
100
Note 26 –
Related party information
101
Note 27 –
Group of companies
105
Note 28 -
Subsequent events
105
Directors’ responsibility statement
133
Statement of the Shareholders’ Committee
133
Auditor’s Report
134
Major Asset List per 31 December 2022
139
Definitions
140
Addresses
141
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Bonheur ASA – Annual Report 2022
2022
2021
2020
Income statement
Operating income
11 435,1
7 541,0
6 174,8
Operating profit before depreciation and impairment losses (EBITDA)
3 854,4
1 937,0
544,2
EBITDA-margin
34%
26%
9%
Operating profit/loss (-) (EBIT)
2 314,3
1 004,0
-881,9
Share of result in associates
-14,2
-6,3
-2,0
Net finance income / expense (-)
159,5
-82,2
-239,0
Profit / loss (-) before tax
2 459,6
915,8
-1 122,9
Tax income / expense (-)
-757,5
-482,2
-78,9
Net result from continuing operations
1 702,0
433,6
-1 201,7
Profit for the year
1 702,0
433,6
-1 201,7
Non-controlling interests
1 304,7
540,2
-3,1
Profit / loss (-) for the year (shareholders of the parent)
397,3
-106,6
-1 198,6
Statement of financial position
Non-current assets
13 020,8
12 645,2
12 807,3
Current assets
8 695,4
6 464,5
6 351,6
Equity ex non-controlling interests
5 719,1
4 622,1
4 459,6
Non-controlling interests
1 237,1
-197,7
165,1
Non-current interest-bearing liabilities
8 788,1
8 780,1
9 179,0
Other non-current liabilities
1 592,8
1 652,9
1 626,0
Current interest-bearing liabilities
1 389,0
1 644,6
1 610,6
Other current liabilities
3 026,6
2 607,7
2 118,6
Total assets / total equity and liabilities
21 752,6
19 109,7
19 158,9
Liquidity
Cash and cash equivalents as at 31 December
1)
5 458,5
4 039,2
4 350,5
Net change in cash and cash equivalents
1)
1 380,2
-282,0
-1 909,1
Net cash from operating activities
1)
2 529,9
1 462,1
-732,9
Capital
Share capital
53,2
53,2
53,2
Total number of shares outstanding as at 31 December
42 531 893
42 531 893
42 531 893
Parent Company - Bonheur ASA:
Equity-to-assets ratio
2)
73%
66%
68%
Booked equity
8 066
6 843
7 007
Total assets / total equity and liabilities
11 001
10 333
10 268
Key figures per share (Amounts in NOK):
Market price 31 December
287,00
355,00
242,00
Dividend per share
5.0
4.3
4.0
1) In accordance with cash flow statement. 2) Equity as per cent of total assets.
The non-controlling interests in the Bonheur Group of companies are included in the Consolidated Income Statement. The non-controlling interests consist of 43.28% of NHST Media Group AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
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Bonheur ASA – Annual Report 2022
Bonheur reports its results under four segments: Renewable Energy, Wind Service, Cruise and Other Investments.
Private Fred. Olsen related interests hold a total of 51.8% of the Company’s shares. The day-to-day management of Bonheur ASA is performed by Fred. Olsen & Co. (FOCO), a management company, which sole proprietor is Anette Sofie Olsen.
and Fred. Olsen Seawind ASA (FOS).
787.5 MW. The wind farm portfolio also consents for additional 292 MW onshore in Sweden and Norway and 148 MW onshore wind in UK. In addition, FOR has an onshore development portfolio of 3 270 MW.
engaged in development, construction and operation of offshore wind farms. In 2021 FOS is progressing the development of the consented offshore wind project Codling Bank, of approximately 1 000 MW in a 50/50 joint venture with EDF, and in January 2022 FOS awarded a floating offshore wind farm with capacity up to 798 MW in a joint venture with Vattenfall.
Renewable Energy Segment
Wind Service Segment
The Wind Service segment contains Fred. Olsen Ocean Ltd. (FOO) which main operating entities are:
•Fred. Olsen Windcarrier AS (FOWIC)
•Global Wind Service A/S (GWS)
•United Wind Logistic GmbH (UWL)
Subsidiaries of FOWIC own and operate three modern self-propelled jack-up vessels specially designed for transportation, installation and service of offshore wind turbines.
GWS (owned 92.2% by FOO) is an inter-national supplier of installation services, blade repair services and expertise to the global onshore and offshore wind turbine industry with a global footprint with operations in Europe, Asia, US and Australia.
UWL (owned 50% by FOO) provides marine transportation for offshore wind turbine components from manufacturing sites to pre-assembly ports with three owned vessels.
The Renewable Energy segment consists of Fred. Olsen Renewables AS (FOR) and Fred. Olsen Seawind ASA (FOS).
FOR is primarily engaged in development, construction and operation of wind farms. By the end of the year the installed capacity in operation was 787.5 MW. In addition, FOR has an onshore development portfolio of 3 700 MW of which 440 MW is consented.
FOS is engaged in development, construction and operation of offshore wind farms. In 2022 FOS progressed the development of the consented offshore wind project Codling Bank, with estimated capacity up to 1 500 MW in a 50/50 joint venture with EDF. In January 2022 FOS was awarded an option agreement for a Scottish floating offshore wind farm with capacity up to 798 MW in a joint venture with Vattenfall.
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Bonheur ASA – Annual Report 2022
Cruise Segment
The Cruise segment’s principal trading entity is Fred. Olsen Cruise Lines Ltd (FOCL), operating from the UK. FOCL and its fellow subsidiaries operate 3 ocean cruise ships with an overall berth capacity of approximately 4 100 passengers.
It offers cruise holidays ranging from two-night mini cruises in Europe, to more than 100 nights on a World cruise.
FOCL’s strategy is to develop unique itineraries and onboard experiences which allow passengers to get closer to the destinations, offering authentic and interesting experiences.
Other Investments Segment
Other investments include:
Fred. Olsen 1848 (FO 1848), a technology and innovation company. The main technologies of FO 1848 are aimed at solving some of the industry key challenges within floating wind and floating solar
Fred. Olsen Investments (FOI), is a company with an investment team which executes and manages investment opportunities to strengthen existing business and expand into new, but still related, business areas.
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Bonheur Overview
The consolidated financial statements for the year ended 31 December 2022 are for Bonheur ASA, its subsidiaries and associates (for accounting purposes only in the following referred to as the “Group of companies”). The Company’s head office is in Oslo, Norway. Numbers in (brackets) relates to 2021.
2022 turned out to be a year with continued economic recovery but also increasing interest rates and high inflation. Global real GDP growth in 2022, according to IMF was 3.4% (5.5%). Governments in the Europe, the US and China responded forcefully to COVID-19 in 2020 and 2021 with massive fiscal and monetary stimulus driving the unusual high growth in 2021. In 2022 global economic activity was slowing sharply mainly as a result of synchronized monetary policy tightening to contain very high inflation, less favorable financial conditions, and disruptions from the Russian invasion of Ukraine.
The Renewable Energy segment benefited from rising electricity prices throughout 2022. This was mainly due to high natural gas prices and CO2 quota prices during the year impacting the electricity price favourably. EBITDA in 2022 was NOK 3 486 million (NOK 1 764 million). The Wind Service segment performed well in 2022, mainly due to improved performance for Fred. Olsen Windcarrier, resulting in an EBITDA of NOK 921 million (NOK 753 million). Cruise operations had two ships in operation full year and one ship mobilised from May 2022, resulting in an EBITDA of NOK -424 million (NOK -544 million). The result was negatively affected by high fuel prices. Overall, the Group of companies achieved an EBITDA of NOK 3 856 million (NOK 1 937 million).
In addition to the improved financial results, the Group of Companies have made strategic progress in the following areas:
Fred. Olsen Renewables (FOR) entered in 3Q 2022 into agreements with the long-term infrastructure investors KLP, MEAG and Keppel, providing EUR 480 million equity financing for onshore windfarms in Norway, the UK and Sweden. EUR 175 million was deployed to indirectly acquire 49% in three Scandinavian wind farms, while the balance of EUR 305 million is committed for future wind farm developments in UK and Sweden. FORAS remain the 51% shareholder in such windfarms, while the other 49% will be acquired by subsidiaries of the newly established investment fund, Wind Fund 1.
Construction of Fäbodliden 2 windfarm project. The construction work for Fäbodliden 2 (17.2 MW) commenced in 2022. The project is an extension of Fäbodliden (79.2 MW) with shared infrastructure and with estimated project completion in 2023.
Continued growth of the onshore wind development portfolio. Adding net 430 MW of quality sites to the pipeline projects in UK, Sweden, Italy and Norway, summing up to a total onshore development portfolio of 3 700 MW.
Fred. Olsen Seawind (FOS) has made good progress in Ireland, Scotland and Norway:
oAdvancing the Codling wind park project together with EDF. FOS is progressing the development of Codling Wind Park project in the Irish Sea together with its Joint Venture partner, EDF. The Codling Wind Park represents one of the largest energy infrastructure investments in Ireland this decade and would become Ireland’s largest offshore windfarm. The first offshore wind auction in Ireland (ORESS-1) is planned for late April 2023.
oAdvancing the Muir Mhòr site in the Scotwind lease round in a joint venture with Vattenfall. The offshore floating wind site northeast of Aberdeen has a capacity when built of up to 798 MW.
oAdvancing the Blåvinge Co-Operation which includes a tri-partite co-operation comprising Hafslund ECO, Ørsted and FOS targeting both bottom-fixed and floating offshore wind development in Norway.
Continued the fleet upgrade program for FOWIC. With the following key events:
oIncreased the backlog to EUR 553 million and secured additional EUR 35 million bank financing, which is expected to fully finance the upgrade of the existing fleet.
oThe conversion of the Bold Tern was completed in 2Q 2022. The project will enable her not only to install the next generation turbines of 13-15 MW, but also such larger turbines that are expected to come to market. The first contract for installation of next generation turbines is already added to the contract back-log.
oPreparation for the conversion of the Brave Tern. A new crane has been ordered and the contract is signed with the Spanish year Navntia Ferrol. The project is expected to take place in 1H 2024.
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Global Wind Service emerging as a leading wind turbine installation company also in the US by executing some of the largest onshore wind projects to date and contributing successfully to offshore installations in Taiwan.
Fred. Olsen 1848 progressing several technologies and innovations within floating wind and floating solar, like the Brunel floating foundation and floating maintenance solutions for offshore wind turbines.
Cruise back to normalised operation. Fred. Olsen Cruise Lines’ three ships are back cruising with strong customer feedback in 2022 (Balmoral commenced operation in May 2022). The booking numbers are improving into 2023.
Bonheur ASA has a strong balance sheet and a solid financial position. At year end, the Company had book equity of NOK 8.1 billion (NOK 6.8 billion) and a cash position of NOK 3.0 billion (NOK 2.3 billion).
The Group of companies’ results (2021 in brackets)
Operating revenues for the year amounted to NOK 11 435 million (NOK 7 541 million). Operating expenses amounted to NOK 7 581 million (NOK 5 604) million.
Operating result before depreciation, amortization and impairment charges (EBITDA) was NOK 3 854 million (NOK 1 937 million). Depreciation amounted to NOK 1 088 million (NOK 932 million). Impairment related to property, plant and equipment and intangible assets were NOK 452 million (NOK 0 million). Operating result (EBIT) was NOK 2 314 million (NOK 1 004 million).
Net financial items were NOK 160 million (NOK -82 million). Profit for the year was NOK 1 702 million (NOK 434 million), After non-controlling interests of NOK 1 305 million (NOK 540 million), controlling interests’ share of result after estimated tax amounted to NOK 397 million (NOK -106 million). The main reason for the difference between controlling and non-controlling interests is the financial losses in the Cruise segment where Bonheur holds 100%, while the non-controlling interests own indirectly 49% of 11 of the 12 onshore wind farms which generated profit. At year-end, the non-controlling interests of the Group of companies mainly consisted of 43.28% of NHST Holding AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
Net cash from operating activities was NOK 2 530 million (NOK 1 463 million). Net cash from investing activities was NOK -1 356 million (NOK -831 million). Net cash from financing activities was NOK 207 million (NOK -913 million). Cash and cash equivalents at 31 December 2021 were NOK 5 458 million (NOK 4 039 million).
Results from the main business segments within which Bonheur ASA is invested
The financial results below are presented on 100% basis and net of intra-group eliminations.
Renewable Energy
The Renewable Energy segment consists of FORAS with subsidiaries (“FOR”) and Fred. Olsen Seawind (“FOS”).
FOR owns and operates onshore wind farms. Currently, these onshore wind farms have a total capacity of 787.7 MW.
Fred. Olsen Wind Ltd (FOWL) is a subsidiary of FOR, of which FOR holds 51%. FOWL owns 432.8 MW. The UK listed infra-structure fund The Renewable Infrastructure Group Limited (TRIG) owns the remaining 49% of FOWL.
Fred. Olsen CBH Ltd (FOCBH) is a subsidiary of FOR, of which FOR holds 51%. FOCBH owns 75.3 MW. Aviva Investors Global Services Ltd. (Aviva) owns the remaining 49% of FOCBH.
Three Scandinavian windfarms (Högaliden and Fäbodliden in Sweden, and Lista in Norway), with total installed capacity of 258 MW is owned 51% by FOR and 49% of Wind Fund 1. Wind Fund 1 is owned with 1/3 each by Kommunal Landspensjonskasse (KLP), MEAG Munich ERGO AssetManagement GmbH, and Keppel Infrastructure Trust/Keppel Corporation Limited. The fund has an exclusive right and obligation to invest 49% in all onshore windfarm projects in the UK and Sweden that FORAS takes forward to final investment decision until the current outstanding commitment of Euro 305 million is fully utilized or a period of five years from establishment has lapsed. Wind Fund 1 is managed by Hvitsten AS, which is licensed as an infrastructure fund manager owned by Fred. Olsen & Co.
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Bonheur Overview
The remaining 21.6 MW installed capacity is held by wholly owned subsidiaries of FORAS.
FORAS commenced the construction work for Fäbodliden 2 (17.2 MW) in 2022, an extension of Fäbodliden (79.2 MW) with shared infrastructure and with estimated project completion in 4Q 2023.
In addition, FOR has a portfolio of development projects onshore in the UK, Norway, Sweden and Italy.
The UK power market in 2022 was similar to that of the rest of Europe, affected by high commodity prices and variable renewable generation with particularly low renewable generation during the summer. Wind generation increased back towards normal levels after the summer which coupled with falling gas prices, lead to significantly lower power prices during October/November.
In 2022, the Nordics saw record low hydrological resources in the southern price areas during the first three quarters driving imported volumes from Europe and higher prices. Towards the end of the year, this was reversed by mild temperatures and high levels of precipitation.
In its draft national budget for 2023 the Norwegian Government has proposed significant changes to tax legislation for onshore windfarms. For existing wind farms the proposed change is a natural resource tax which would effectively confiscate up to 51.3% of the value of the wind farms. For new wind farms the proposed change is more negative than for oil and gas and hydroelectricity companies. These companies benefit from a system where tax deduction for investment is available as a cash contribution from the government during development and construction. The proposed tax for new windfarms will not have this feature, with the consequence of higher long-term power prices to reach a minimum level of profitability for new investments than a cash neutral tax. Furthermore, a fee of 23% is proposed to be imposed on all revenues above an electricity price of NOK 0.70 per KWh measured per hour production. The consultation process for the proposed new resource rent and high price contribution was concluded 15 March 2023. Subsequently the government will evaluate the comments and send, presumably a revised, proposal to the Parliament for legislative consideration.
In the EU, a revenue cap of EUR 180 per MWh is proposed to be implemented with the generator retaining only 10% of the revenue above the cap. This is proposed from the period 1 December 2022 to 30 June 2023 with a review at 30 April 2023.
In the UK, the Corporation Tax rate will increase from 19% to 25% from April 2023. In addition, there will be a temporary 45% levy on extraordinary profits, defined as electricity sold above GBP 75 per MWh (annual average), expected to be valid from January 2023.
The EU revenue cap proposal is presently expected to have limited effect for FOR as the prices in northern Sweden very seldom are above EUR 180 per MWh.
As an example, with a wholesale electricity price for onshore wind of £100 per MWh, the UK tax and levy proposal is estimated to result in an effective tax rate of 17% of revenues, while the Norwegian tax proposal is estimated in an effective tax rate of 64% of revenues at the same corresponding price in NOK. The marginal tax rate as a percent of revenues in the Norwegian tax proposal is 85%.
The Norwegian proposal stands out as prohibitive to further investments in onshore wind and implies a risk for investors to engage in offshore wind due to the large regulatory uncertainty created by the onshore wind tax proposal. This in stark contrast to both the running systems where tax deduction for investment is available for the oil and gas companies as a cash contribution and the large governmental stimulus the same companies received during the pandemic. In addition, the Norwegian wealth tax will favour foreign investors in offshore wind.
Based on the prerequisite that the above special taxes, levies and fees towards renewable energy will be implemented, they will be accrued for in the accounts in 2023.
FOS develops wind farms offshore, and currently has three major ongoing projects as well as early phase projects and site investigation activities. In January 2022, FOS was granted an option lease on the ScotWind project for the development of a floating wind farm off the coast of Scotland together with their JV partner Vattenfall. The project has a planned capacity of 798 MW, and the project will be managed through the JV-company Muir Mhòr Offshore Wind Farm Limited. Furthermore, FOS is progressing the development of Codling Wind Park project in the Irish Sea together with its Joint Venture partner, EDF. The Codling Wind Park represents one of the largest energy infrastructure investments in Ireland this decade and would become
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Bonheur ASA – Annual Report 2022
Ireland’s largest offshore windfarm. The first offshore wind auction in Ireland (ORESS-1) is planned for late April 2023. The Codling Wind Park is a planned bottom fixed offshore wind farm, and it is expected to be a major contributor to Ireland's target of 5 GW offshore wind by 2030. In addition, FOS is currently working on preparations for the bid on the projects in Utsira Nord and Sørlige Nordsjø II. The projects are managed by “Blåvinge”, a joint venture partnership together with Hafslund ECO and Ørsted.
Floating solar photovoltaics (FPV) in seawater is new to the industry and in 2022 FOR continued to strengthen our technology know-how as a competitive edge for near- and offshore FPV. This through i) the bilateral collaboration project with the Solar Energy Research Institute of Singapore (SERIS) for testing and comparing FPV technologies in seawater, and ii) the FOR established consortium with four other partners to test offshore floating solar in the “BOOST project”, partly funded by the EU (Horizon 2020), and iii) our collaboration with Fred. Olsen 1848 on the development of solutions to specific technological challenges related to near- and off-shore FPV. During 2022 FOR has also progressed commercial development opportunities for FPV in Southern Europe and Southeast Asia.
Operating revenues were NOK 4 392 million (NOK 2 391 million) and the annual production was 2 097 GWh (1 713 GWh). EBITDA was NOK 3 486 million (NOK 1 764 million). Operating result (EBIT) amounted to NOK 3 164 million (NOK 1 504 million), while net result was NOK 2 753 million (NOK 1 049 million).
The increased revenues in Renewable Energy as a consequence of the power prices in 2022 is further discussed in Note 5 of the financial statements.
Wind Service
The Wind Service segment comprises the holding company FOO with subsidiaries including Fred. Olsen Windcarrier (FOWIC), Global Wind Service (GWS), United Wind Logistics (UWL) and Universal Foundation (UF).
Subsidiaries of FOWIC provide services for transportation, installation and service of offshore wind turbines deploying the purpose-built jack-up vessels Brave Tern, Bold Tern and Blue Tern.
GWS, owned 92.2% by FOO, is an international supplier of skilled technicians and expertise to the global wind turbine industry. GWS provides a range of installation and maintenance services, both onshore and offshore.
UWL owned 50% by FOO, is offering services within marine transportation of offshore wind turbine components.
The offshore wind market continues to expand from Europe into Asia and US. There were approximately 2 600 MW* offshore wind capacities added to the market (excl. China) in 2022. With large projects in the pipeline for the next years a future growth is expected worldwide. Wind power auctions in Northern Europe see a fast-paced capacity growth, and there are also increased requirements for cost effective installations, as well as for operation and maintenance of the offshore wind parks. FOWIC has installed 17% of the global offshore wind capacity (excl. China) since entering the market in 2012, and is well positioned to continue to play an important role in providing these services
A crane upgrade program is in progress for the three wind turbine installation vessels, with installation of a new crane for Bold Tern completed in 2Q 2022 at Keppel FELS in Singapore. The new cranes bring the three vessels on par with announced newbuilds and will be able to install the 13-15 MW turbines, but also bigger turbines coming to market. Brave Tern is scheduled for upgrade during 2023/24, and a crane with equal specification as for the Bold Tern has been ordered, while Blue Tern is scheduled for a possible upgrade in 2025/2026 after completion of contracted work.
During 2022 the company has secured several new projects and been able to expand existing contracts, resulting in a strong backlog of EUR 553 million (EUR 355 million). The utilisation for the vessels in 2022 was 67%, compared to 76% 2021. The lower utilisation in 2022 is mainly due to Bold Tern being in yard for the upgrade for until June 2022.
GWS continued to grow both within offshore wind, taking on new scopes within preassembly and installations as well as establishing itself as a leading onshore turbine installation company in the US. GWS works closely with Fred Olsen Windcarrier on large offshore turbine installation scopes on all relevant continents. The company has experienced strong growth over the last years and had 1 788 employees in 2022 (1366 employees in 2021). GWS has established a training centre in Poland to educate
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Bonheur Overview
and train their own technicians, to partly meet the strong demand for skilled people. GWS had an organic growth of 7% in 2022, while margins came under pressure on certain projects.
UWL operated two vessels on long term charters and one vessel in the spot market. UWL produced solid financial results in 2022.
Operating revenues were NOK 4 091 million (NOK 3 527 million). Operating result before depreciation (EBITDA) was NOK 921 million (NOK 753 million). Operating result (EBIT) amounted to NOK 432 million (NOK 383 million) and net result was NOK 302 million (NOK 249 million).
*) Source World Forum Offshore Wind report February 2023
Cruise
The Cruise segment consists of the Company’s 100% ownership of First Olsen Holding AS with subsidiaries (“FOHAS”), i.a. First Olsen (Holdings) Ltd (“FOHL”) and Fred. Olsen Cruise Lines Ltd (“FOCL”), which own and operate the cruise vessels MS Balmoral, MS Bolette, MS Borealis and MS Braemar. During the COVID-19 pandemic period from March 2020, cruise operations remained severely disrupted; all ships remained out of service until the summer of 2021. Borealis commenced cruises from July 2021 and Bolette from August 2021. Balmoral commenced cruising in May 2022 and Braemar remained in lay up throughout 2022 and post year end. Braemar was made available for sale in the fourth quarter of 2022.
FOCL has witnessed a boost to consumer confidence since the easing of COVID-related restrictions in the UK. The return to cruising has taken longer than expected and 2022 ended up with disappointing financial results. Into 2023 the booking pattern has improved and provides grounds for optimism. The war in Ukraine results in a handful of itineraries being amended for the current year to avoid Russian and Ukrainian ports. Operational cost is also impacted by continuous high bunker prices.
Operating revenues were NOK 1 893 million (NOK 543 million). Operating result before depreciation (EBITDA) was NOK -424 million (NOK -544 million). Operating result (EBIT) amounted to NOK -1 055 million (NOK -755 million) and net result was NOK -1 097 million (NOK -778 million). The net result includes an impairment of the cruise vessels of MNOK 547.
Other Investments
The Other Investments of Bonheur ASA mainly consist of the 100% owned entities Fred. Olsen 1848 AS (FO 1848), Fred. Olsen Investments AS (FO Investments), Fred. Olsen Insurance Services AS (FOIS) and Fred. Olsen Travel AS (FOT), and Bonheur ASA’s ownership of 55.0% in NHST Media Group AS. In addition, the segment has various investments in real estate, bonds and shares.
FO 1848 is a wholly owned innovation company that focuses on development and commercialization of new technologies and solutions related to renewable energy. On the back of decades-long experience within renewables, a portfolio of innovative technical solutions has been developed within Bonheur-related companies. The solutions are aimed at solving some of the industry key challenges within floating wind and floating solar.
FO 1848 has developed the Mobile Port Solution, which is an offshore installation interface concept that uses jack-up installation vessels in sheltered waters for the integration of the turbine to the floating foundation structure. This solution formed an integral part of FOS and Vattenfall’s Muir Mohr project. FO 1848 is developing Brunel, a concept for floating wind turbines with strong technical and commercial capabilities. It is designed for the next generation of wind turbines, with a modular approach, suitable for serial and automized production in the existing global supply chain allowing for instant scale-up and low cost. FO 1848 is also working on a solution for efficient maintenance of floating wind turbines and solutions for floating solar PV.
FO Investments is a wholly owned subsidiary. Bonheur ASA has a unique track record of transformation and venturing into a variety of new industries. FO Investments invests in and manage new opportunities with a view to strengthen existing business segments of the Company and also to expand into new business areas. Facilitated by FO Investments the Company is seeking investments in innovative and ambitious companies within renewables, energy storage, travel and leisure, circular economy, maritime and shipping, and others. So far four investments have been made, i.e.,
•NPP Renewables, a renewable energy consulting company
•Cenate, a battery materials company
•Measurable Energy, a technology company within energy efficiency
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Bonheur ASA – Annual Report 2022
•Tepeo, a company within renewable energy storage for heating
•Celsia, a technology company with an EU Taxonomy scoring solution
NHST Media Group AS (NHST) has two business segments, DN Media Group and NHST Marketing Technology. DN Media Group consists of the publications Dagens Næringsliv, Recharge, Tradewinds, Upstream, Intrafish.no, Intrafish.com, Fiskeribladet and Europower. NHST Marketing Technology include the software-as-a-Service companies MyNewsdesk and Mention Solutions. NHST has in 2022 experienced a year with flat revenue, while the cost has inflated with 6%. DN Media Group has continued to invest in product improvements and improved support systems. The NHST Marketing Technology segment is in an investment phase with the segment’s companies giving priority to further improving product properties, strengthening the IT infrastructure and building the organizations. The number of employees in 2022 was 593 employees (2021: 573). Operating revenues were NOK 1 082 million (NOK 1 085 million) and EBITDA was positive with NOK 49 million (NOK 102 million). Operating result (EBIT) amounted to NOK -44 million (NOK 15 million).
FOR had capital expenditure of NOK 172 million (NOK 130 million) in the year mainly related to the completion of the wind farm Högaliden and construction of the wind farm Fäbodliden 2 in Sweden.
FOO had capital expenditure of NOK 572 million (NOK 385 million) mainly related to a new crane and upgrades of the vessel Bold Tern and class renewal work on the vessel Brave Tern.
FOCL had capital expenditure of NOK 156 million (NOK 185 million) mainly related to mobilisation of Balmoral and dry-docking of Borealis.
In total, investments (capex) in property, plant and equipment (PPE) during the year amounted to NOK 912 million (NOK 705 million). In addition, NOK 114 million (NOK 75 million) was capitalized, relating to IFRS 16, leasing – right-to-use assets. The Group of companies’ net investments paid, amounted to NOK 1 040 million (NOK 817 million), mainly financed with cash and financing activities.
Dividend payments to external shareholders of the Group of companies in total amounted to NOK 1 054 million (NOK 320 million), of which NOK 183 million (NOK 170 million) was to the shareholders of Bonheur ASA. See cash flow statement page 49.
Research and development activities
Research and development activities are carried out constantly within all main business segments. A close relationship exists with suppliers and customers in order to optimize operations and minimize environmental consequences. In 2022 NOK 68 million (NOK 32 million) was booked as cost and NOK 57 million (NOK 56 million) booked on the balance sheet for research and development activities.
The Group of companies’ overriding financial objectives target to secure long term visibility and flexibility through business cycles and are structured around three key principles:
i.The financial position of Bonheur ASA shall be strong and built on conservative leverage with a solid liquidity position.
ii.Each company within the Group of companies must optimize its own non-recourse debt financing taking into account underlying market fundamentals and outlook for the respective business and relative cost of capital.
iii.With the aim to accelerate growth, subsidiaries within the Company’s high growth and capital-intensive business segments, must actively be investigating and considering various means of sourcing external capital, hereunder a broad set of equity options including potential listing.
Further, to position the Group of companies for the upcoming implementation of the EU taxonomy directive and to formalize the Company’s commitment to sustainable financing, green financing frameworks were established during 2020 under which the Group of companies first green bond and green bank financing was raised, and in 2021 another green bond was raised. In 2022,
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Bonheur Overview
the green financing frameworks were updated to also take into account EU Taxonomy assessment rating. (For further information see the Sustainability Report on page 15).
At year-end 2022, Bonheur ASA’s interest-bearing debt relates to NOK 2 190 million (2 686 million) in unsecured bonds maturing between 2023 and 2025. With a cash position of NOK 3 037 million (2 288 million), net interest-bearing debt on parent level was positive with NOK 816 million compared to a net debt of NOK 398 million in 2021. Similarly, debt in the Group of companies excluding the Company amounted to NOK 7 987 million (7 739 million) divided on 5 different facilities. Alle these financings on group level are on a non-recourse basis to the Company. The split of such Group of companies’ debt on the respective business segments are NOK 5 180 million (5 540 million) related to Renewable Energy, NOK 2 147 million (1 538 million) related to Wind Service, NOK 267 million (265 million) related to Cruise and NOK 393 million (396 million) related to Other Investments.
For further details see Note 18 – Interest bearing loans and borrowings.
In the opinion of the Board of Directors, both the financial situation and the cash position of Bonheur ASA are satisfactory and sufficient to meet the Company’s current commitments.
Financial market risk
The international profile of Bonheur ASA and its operating subsidiaries results in exposure to financial market risks.
The financial market risks to which the Group of companies is exposed, are predominantly currency risks, interest rate risks, risks related to oil/fuel price and electricity prices. These financial risks are continuously monitored, and financial instruments are from time to time used to hedge economic effects of such and related exposures. There is also a credit risk related to customers within the individual companies, and risks associated with the general development of international financial markets.
Currency risk
The Group of companies’ financial statements are presented in NOK. Revenues consist primarily of EUR, GBP and NOK. The expenses are primarily in GBP, EUR, USD and NOK. As such, earnings are exposed to fluctuations in the currency market. Parts of the currency exposure are neutralized due to the majority of the debt and a large part of expenses being denominated in the same currencies as the main revenues. Forward exchange contracts are from time to time entered into in order to reduce future currency exposures.
Interest rate risk
The Group of companies is exposed to interest rate fluctuations, as loans are frequently based on floating interest rates. By the turn of the year, parts of the outstanding loans in Renewable energy had been hedged against interest fluctuations through interest rate swap agreement, the external loans in Cruise had a fixed interest rate and part of the det in UWL has a fixed interest rate. See note 3.
Oil / Fuel price
The Group of companies is exposed to fluctuations in bunker prices, which move in line to the price of crude oil. There were no financial contracts outstanding at the end of the year relating to securing part of the bunker costs, for the year 2022.
Electricity price
Electricity sales for the windfarms are on floating contracts and are subject to change in electricity prices apart from Paul’s Hill and Rothes. 75% of the electricity sales for Paul’s Hill wind farm was fixed for the winter of 2022 (4Q 2022 and 1Q 2023) at GBP 363.93 per MWh and 75% of production Rothes wind farm for winter of 2022 at GBP 351.45 per MWh. The electricity sales for the other ten windfarms are on variable contracts.
Credit risk
There is a governing principle within the Group of companies to continuously evaluate credit risks associated with customers and, when considered necessary, to require appropriate guarantees.
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Environmental, Social and Governance (ESG) and Sustainability Reporting
Due to the importance of ESG and sustainability reporting the main operating subsidiaries of the Company have strengthened and enhanced their respective Sustainability reports. The Board of Directors have decided to include the Sustainability report for 2022 in a separate chapter in the annual report. The Sustainability report includes the Governance section, including related party transactions, which in previous years was a separate chapter in the annual report. The Board of Directors report must be read in conjunction with the Sustainability report and vice versa.
Subsequent events
The Company is well positioned in several high growth segments and especially in the renewable energy eco-system. This includes interests within development and production of renewable energy, wind industry services, and renewable energy technology. We believe that this unique combination is likely to position the Company for new strategic opportunities. The cruise business is recovering from the losses during pandemic with improved booking performance and lower fuel costs so far in to 2023.
The macroeconomic and geopolitical environment in 2023 comes with a high degree of uncertainty and a significant downside risk. The war in Ukraine has increased the polarisation between the EU and the US on one side and Russia and China on the other side, resulting in deglobalisation and reduced growth in global trade, which may drive inflation further up and economic growth down. The war in Ukraine seems unlikely to end in the short term and Europe has had to overcome an energy price crisis due to the war and the unfortunate dependence on natural gas from Russia.
The high inflation, monetary policy tightening and increased interest rates, have leads to challenges in several parts of the economy. Examples are found in parts of the banking sector and in the property markets. The risk appetite in the capital markets have decreased significantly, and it is highly uncertain when these markets will return to normal.
The IMF has lowered its expectations for growth in the world economy to 2.9% for 2023 (down from 3.4% in January 2022). In the EU, the IMF has reduced expectations from 2.5% to 0.5% growth. It is a concern that even this estimate is too optimistic as that the war in Ukraine and rising interest rates may lead to stagflation in Europe, i.e., negative economic growth and rising inflation.
According to the IEA, financial support packages for clean energy totalling more than the value of the Norwegian oil fund have been adopted since the corona pandemic began. Higher energy prices initially made it more lucrative to develop renewable energy. On the other hand, both increased raw material prices and rapidly escalating prices for wind turbines have made renewable projects far more expensive during 2022. In addition, several governments in the EU, and particular Norway, have introduced aggressive levies and taxation on clean energy generation, thereby reducing the attractiveness of investments in renewable energy. The US Inflation Reduction ACT in the US that comes with large subsidies of clean energy investments currently shifts large amounts of capital away from Europe to the US due to the different governmental approach.
The long-term impact from the war in Ukraine is uncertain, both regarding our companies and the world economy. From an accounting perspective, such risks, increase the risk of impairments and may also affect accounting estimates going forward. Nevertheless, the Company is well capitalized and has demonstrated the ability to attract investments required for its substantial renewable energy investments opportunities and has options to manage its business through the current uncertainty.
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Bonheur Overview
Parent company information
Bonheur ASA’s annual result was NOK 1 368 million, compared to NOK 16 million in 2021. NOK 2 149 million was received of dividend in 2022 compared to NOK 225 million in 2021.In 2022 the Company had unrealized gain of NOK 67 million on various shareholdings. The Net result of NOK 1 368 million is proposed to be allocated as follows:
For dividendsNOK 212 million
To other equity NOK 1 156 million
Total allocatedNOK 1 368 million
In accordance with §3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the going concern assumption, on which the financial statements have been prepared, is considered to be appropriate. The accounts are prepared in accordance with International Financial Reporting Standards (IFRS) for the Group of companies and NGAAP for the parent company. Bonheur ASA’s total capital as per 31 December 2022 was NOK 11 001 million. The Company’s cash, cash equivalents, short-term securities and current receivables amounted to NOK 3 661 million.
Dividend/Annual General Meeting
With regard to the Annual General Meeting in 2023, the Board of Directors is proposing a dividend payment of NOK 5.0 per share subject no deviating views expressed by the Shareholders’ Committee prior to the Annual General Meeting. The Annual General Meeting is scheduled for Wednesday 25 May 2023.
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Environmental, Social responsibility and Corporate Governance (ESG)
Letter from the Managing Director
Dear shareholders and all other stakeholders,
Bonheur ASA is pleased to present our sustainability report for 2022. As an investor in and developer of renewable energy but also an owner of companies with vessels with a Co2 footprint, we aim to both provide clean and sustainable energy solutions and improve our operations to reduce environmental impact.
This report outlines Bonheurs position in this regard including efforts to increase the use of renewable energy sources and pursue reductions in greenhouse gas emissions.
In addition, we also continue to support various local communities, this includes providing funding for education and environmental conservation projects, as well as partnering with local organizations to provide job training and employment opportunities.
At Bonheur we believe that equality, diversity, and human rights are essential values that must be embedded in all aspects of our engagements.
We support our subsidiaries in their work towards being inclusive and supportive of all employees, regardless of their gender, age, ethnicity, religion, or sexual orientation. We recognize that fostering diversity and inclusivity is not only the right thing to do but also important to attract and retain top talent and fosters innovation and creativity.
As a company with investments in both the energy and transport sector Bonheur is exposed to geopolitical risk, such as Russia's invasion of Ukraine. The war has led to soaring energy prices and sanctions limiting activities. Bonheur has always been proactive in managing geopolitical risks and are closely monitoring developments around the World with a view to secure adequate preparedness.
We are looking forward continuing working to create a more sustainable future.
Sincerely,
Anette S. Olsen
Managing Director,
Bonheur ASA
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Introduction
Bonheur has a strong commitment towards integrating sustainability and social responsibility into its businesses, as this forms the base of a sound long-term business model and supports the decarbonisation of society and reduces the environmental footprint in our activities.
The Company was a pioneer in recognising the need to develop renewable energy sources and has for more than 25 years established numerous companies within the renewable energy sector, covering the entire value chain from developing to constructing and operating onshore windfarms as well as installation and service of both onshore and offshore windfarms. Bonheur is committed to driving progress and continue pushing boundaries. Through improvement of existing operations within subsidiary companies, the development of new technologies, and strategic investments with a long-term focus on sustainability. The Company has investments in subsidiaries owning vessels with a C02 footprint. Pursuing innovative ways to reduce fuel consumption and reduce emissions are important and high on the agenda.
The Company focuses on integrity and ethical standards, and this is reflected into the respective companies’ Codes of Conduct. All employees and suppliers are expected, to behave and conduct their business in accordance with the principles of such codes. It is equally rooted within the Group of companies that an active and sound corporate governance environment is essential to delivering a sustainable investment strategy that aligns with the best interests of the shareholders, employees and the society. Social awareness and active engagement with local stakeholders and communities are prerequisites for successful investments.
It is part of the inherent operating philosophy to focus on training and employing people from the local communities where practically possible and to ensure good working conditions, honouring labour rights and promoting diversity.
Given the importance of sustainability and increased focus on sustainability reporting, the main operating subsidiaries of the Company have further strengthened and enhanced their sustainability reports over the previous years.
The structure of the sustainability report is firstly to describe how the Company is governed with emphasis on transparency in corporate governance, with the composition and independence of both the Shareholders Committee and the Board of Directors and with internal control procedures in general. Secondly, the sustainability report describes the environmental aspects showing that the Group of companies consolidated has a significantly positive CO footprint resulting from the direct contribution from the
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wind farms and the indirect contribution from the Wind Service segment which are actively involved in transport, installation, service and maintenance of wind turbines.
The sustainability report elaborates on the Green Finance Framework which was established in 2020 and updated at the turn of the year 2022. Furthermore, the report describes the human resources aspects of the Group of companies, which strives to provide a good and safe working environment, equal opportunities without discrimination and compliance with applicable codes of conduct and anti-corruption policies. Eventually, the sustainability report describes the kind of local engagements in the countries of operations through employment of local people, taxes paid and the predominantly philanthropical contributions by the Fred. Olsen Social Engagement Group (FOSEG).
The sustainability report outlines both the commitment towards genuine environmental-friendly initiatives such as over 2 TWh production of renewable wind energy, new offshore wind and floating solar development projects, and also highlights ongoing efforts to reduce CO2 emissions in our operations.
Our subsidiary companies have identified and prioritized those sustainability topics that are considered the most significant to their respective operations through a materiality analysis involving processes with internal interviews and market analyses, in addition to considering relevant standards and the business context of the individual industry in question.
About the report
The development of sustainability disclosures is continuing to develop such that no one framework covers every aspect at present. Consequently, Bonheur is following a number of different frameworks to report across the different business areas.
The Group of companies’ sustainability reporting takes into account the World Economic Forum’s (WEF) Stakeholder Capitalism metrics which were published in September 2020. The metrics are drawn from existing voluntary standards such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD) and aim to provide a core set of common sustainability metrics, covering the topics of Governance, Planet, People, and Prosperity. In addition, the Group of companies started the implementation of the EU taxonomy.
Further information may also be found on the respective operating subsidiaries webpages:
This report is based on the World Economic Forum (WEF) framework. It provides a description of Bonheur’s sustainability performance in 2022 for the areas Environment, Social, Governance, and Prosperity.
Objectives for each of the areas defines our goals towards a sustainable future. Where available, the strategies, objectives and relevant KPIs for will be included for each of these areas in the introduction to each chapter. Additional work and focus will be done to include strategies, objectives and KPI’s for future reports.
The report covers and prioritizes information which is considered relevant to Bonheur. The information in this sustainability report aims at including significant actions or events in the reporting period and does not intentionally exclude relevant information that would influence or inform stakeholder assessments or decisions or that would reflect significant economic, environmental or social impacts.
For 2022, we have limited the sustainability report with the following boundaries:
WEF Theme: “Climate Change” – Scope 3 emissions: The Scope 1, 2 and 3 GHG emissions are reported in accordance with the GHG Protocol Corporate standard. Scope 3 emissions in this report covers Purchased goods and services,
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Capital goods, Waste, Fuel not included in Scope 1, and Business travel. Not all Scope 3 categories are covered, either due to lack of reliable data or that they are not applicable.
WEF Theme: “Nature Loss”: We recognize that our wind farms may have degrees of impact on nature, biodiversity, peatlands, local societies etc through area usage. These aspects are described in the chapter on Environment. It should be noted that there is limited data available to accurately determine effects of nature impact there is currently not available a clearly defined methodology from the Taskforce on Nature-related Financial Disclosures.
As the economic activity in Bonheur is the result of activities in its subsidiaries, this report is also a sum of these activities and initiatives. Hence, this is also the case for our risk and materiality assessment and the overall objectives, where applicable.
Going forward Bonheur aims to report according to European Sustainability Standard (ESRS) and the requirements set out in the EU’s CSRD. This means that we will work to establish an overarching sustainability strategy for Bonheur with corresponding objectives and targets. As we are preparing for this change the current report interchange the terms planet, people and prosperity with environment, social and governance.
Materiality assessment
Bonheur face an evolving landscape of diverse sustainability issues and topics. Material topics are those that have a significant impact on our operating subsidiaries’ business and financial performance, such as its ability to generate revenue. These topics also reflect our impact on the economy, environment, and society. Moreover, the material topics are considered crucial in shaping stakeholders' perceptions and decisions towards the organization.
The materiality assessment determines our most significant sustainability issues, and we will use this information to guide the Company’s sustainability strategy. The results help us prioritize our sustainability efforts and to ensure that we are addressing the issues that matter most to Bonheur’s stakeholders and to the long-term success of the Company. To Bonheur these issues are a condensed version of the risk-based assessments made by its operating subsidiaries. For further detail on these assessments, please see their respective sustainability reports.
In coming years, we will relate to materiality assessments both on our potential impact on sustainability issues and changes in the environment impacting us (a double materiality assessment), which will be input to Bonheurs’ sustainability strategy. Our goal is to align our approach with the European Union's Corporate Sustainability Reporting Directive (CSRD), which is set to be implemented.
We recognize the importance of ensuring that sustainability reporting reflect the business of our operating subsidiaries, both internally and externally. As such, evaluation of current practices, as a backdrop to implementing possible improvements in line with the standards set forth by the CSRD is in issue. The materiality assessment is performed as a desktop study and discussed with relevant stakeholders in the Bonheur group of companies. Below are five examples from the assessment:
1.For Bonheur climate change is considered a material financial risk, due to the potential impact on our subsidiaries’ operations and assets from severe weather events and regulations related to greenhouse gas emissions. At the same time, it may also be a material non- financial issue, due to the potential impact on society and the environment from some of Bonheur’s operating subsidiaries’ greenhouse gas emissions, mainly from vessels.
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2.Development of renewable energy is a material non-financial issue due to the potential impact on the environment and society from reducing greenhouse gas emissions, as well as a material financial issue as it could help be in line with future regulation and reduce cost of capital.
3.Community relations is a material non-financial issue for Bonheur due to the potential impact on the company’s reputation and relationships with local communities, especially when developing new sites. At the same time, the community engagement is also a material financial issue, due to the potential impact on the company's access to resources and ability to obtain permits and approvals for its operations.
4.Transparency and communication are material non-financial topics for good corporate governance, due to the potential impact on the company's reputation and relationships with stakeholders. It is also a material financial issue, due to the potential impact on the company's cost of capital, access to development sites, and attract and retain customers.
5.Human rights and labour standards are material non-financial issues due to the potential impact on the operating company's reputation and relationships with employees and other stakeholders. At the same time, human rights and labour standards are also material financial issues, due to the potential impact on ability to access resources, comply with regulations and legal issues.
For further detail on these assessments, please see the respective sustainability reports published on our subsidiaries’ websites.
The sustainability objectives going forward
Benefiting from 175 years’ experience Bonheur continue its strong focus on the balance and synergies between profitability and sustainable business and investment activities. As part of this focus, the Group of companies has strengthened its capabilities in sustainability reporting during the last couple of years, concentrating on the issues that are material to each segment. We expect to continue strengthening further in the years to come.
Beyond mere disclosure, Bonheur reflects sustainability principles in its investments to enhance existing operations and develop innovative technologies. The Company aims to reflect its commitment to sustainability and decarbonization through investments in offshore wind farms, floating solar technology, and more.
Additionally, the Company is targeting through its operating subsidiaries to pursue reducing CO2 emissions across all subsidiaries, both offshore and onshore.
Bonheur’s operating subsidiaries have set targets on emissions, enhanced reporting systems and reducing their impact on nature in their operations. Aligning and aggregating these targets and objectives to the Bonheur level will be an important task in advancing our sustainability agenda. Among the targets set by our subsidiaries are:
Fred. Olsen Windcarrier aimed to reduce their scope 1 and 2 emissions on projects in 2022 5% year-on-year through increased efficiency
Fred. Olsen Windcarrier aims to increase employee satisfaction with skills development
They will also reduce non-recyclable plastic, general waste, and food waste on vessels with 10% compared to 2021
Global Wind Service aim to reduce Lost Time Incidents compared to the previous year
Fred. Olsen Renewables aim to increase onshore wind capacity through realization of consented projects, subject to final investment decision
Development of offshore floating solar will continue
Continued implementation of route planning and machine learning software for fuel reduction in Fred. Olsen Cruise Lines
All operating subsidiaries in Bonheur have a zero corruption and business ethics cases target
We will in 2023 start the process of developing Science Based Targets for Bonheur, report according to the new European Sustainability Reporting Standard and improve disclosure on our impact on nature and biodiversity.
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Subsidiaries of the Company plan to offset its emissions by planting trees and transitioning to low-emission solutions such as electric vehicles, zero spill targets, and improved waste management. The target is to continuously increase the offsetting of emissions from service vehicles. The Company is dedicated to supporting the Paris Agreement and UN sustainability goals to create prosperity while protecting the planet for future generations.
We will relate to these objectives through actions such as:
1.Communication and commitments:
Communicate sustainability objectives to the financial market, including investors, analysts, and stakeholders, in annual reports, sustainability reports, press releases, and other relevant communication channels.
2.Metrics and KPIs:
Develop metrics and key performance indicators (KPIs) to measure progress towards each sustainability objective. For example, the reduction of CO emissions can be measured through emissions intensity, emissions per unit of production, or absolute emissions.
3.Regular Reporting:
Report on the progress made towards each ESG objective and target on a regular basis in sustainability reports and other relevant communications.
4.External Verification:
Engaging an external auditor or ESG ratings agency to verify the data and information reported, and to provide additional credibility to the objectives.
5.Stakeholder Engagement:
Engage with stakeholders, including investors and industry peers, to gather feedback and identify areas for improvement in the ESG objectives.
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Environment
Bonheur’s focus is on maintaining and further developing sustainable business models and to minimize the environmental footprint of our activities. This section will give an insight into both the positive and negative CO2 contribution from our operations within our business segments, in addition to information regarding the Company’s Green Finance Framework.
The Group of companies is engaged in activities which, to a varying degree, involve a potential risk to the environment.
To minimize the risk, safety and environmental protections are given high priority by the operations, and efforts are made on a continuous basis to prevent situations which might involve damage to health and environment. Important elements of this work are safe operations an active maintenance program and adequate handling of waste.
To report on our greenhouse gas emissions in a consistent manner, the operating subsidiaries follow the recommendations of the Greenhouse Gas Protocol and divide emissions into three categories:
Scope 1 - Direct GHG emissions occur from sources that are owned or controlled by Group of companies
Scope 2 - Indirect emissions from purchased electricity, heating and cooling consumed by Group of companies
Scope 3 – All other indirect emissions consumed by Group of companies not included in scope 2
While some of the operations, particularly those involving the use of fossil fuels, may have negative impacts on the environment, the operating subsidiaries prioritize safe operations and active maintenance programs to prevent accidents and minimize harm to the external environment.
However, the operating subsidiaries currently do not have comparable data on waste management, ecological impact measurements, and asset recycling for all of our companies, so we are not able to report consolidated figures for 2022. We will work to get this in place in 2023.
We are pleased to report that no major incidents occurred during the year that caused significant damage to the external environment within our business segments.
This chapter covers themes affecting the following UN Sustainable Development Goals:
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CO2 emission reporting
The significant increase in total Scope 1 emissions is mainly from the cruise vessels upon resumption of normal operations after the Covid-19 pandemic. The increase can be attributed to the low emission levels during the pandemic, which were primarily due to reduced sailing activity and energy consumption. As the vessel resumed full capacity sailing and increased energy consumption, their emissions rose correspondingly. To better understand the cruise vessel's environmental impact, it would be more useful to compare emissions per kilometer travelled, as this would provide a more accurate assessment of the vessel's emissions efficiency and enable effective tracking of our progress towards emission reduction goals. This approach is also aligned with international standards and reporting frameworks, such as the Greenhouse Gas Protocol. From 2021 to 2022 the emissions per kilometer travelled was reduced from 0.56 to 0.44. These numbers are still not fully comparable due to fuel consumption during lay-up and mobilization. Cruise Lines is working actively to reduce fuel consumption through:
Itinerary planning
Software optimization and machine learning for route planning and optimum sailing speeds
Optimized use of engine configuration
Technology improvements
Changes in estimates
The reported Scope 3 emissions have increased due to better estimations and measurements, which have led to a more accurate and comprehensive understanding of the emissions. This included previously unrecognized sources of emissions, refining measurement techniques, and improving data collection and analysis. It is important to emphasize that the increase in Scope 3 emissions does not necessarily mean that the actual emissions have increased.
Rather, it reflects a more accurate accounting of the emissions, which can provide valuable insights for developing effective emissions reduction strategies. We believe that better estimations and measurements in the coming years will give us a more comprehensive understanding of our Scope 3 emissions and may even lead to a further increase in the reported number as the real emissions are declining.
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Renewable energy production
CO2 avoided emissions
A MWh of renewable energy theoretically replaces a MWh of fossil energy, thus making it possible to calculate how many tons of CO2 have been avoided through our renewable energy production. The fossil energy percentage (natural gas, oil, coal) for each country is uses as input.
Our total production of 2 096 749 MWh is multiplied with conversion factor 0.429. Roughly estimated, we avoided 900 000 tonnes CO2 from being released to the atmosphere. Fred. Olsen Windcarrier also installed 54 wind turbines in 2022, the equivalent of 440 MW power.
About the EU Taxonomy
The EU taxonomy is a classification system that sets out a list of environmentally sustainable economic activities. It forms part of the EU’s plan to scale up sustainable investment and implement the European Green Deal. The Taxonomy Regulation has established six environmental objectives:
1.climate change mitigation,
2.climate change adaptation,
3.sustainable use and protection of water and marine resources,
4.the transition to a circular economy, waste prevention and recycling,
5.pollution prevention and control,
6.protection and restoration of biodiversity and healthy ecosystems.
The Bonheur Group of companies have conducted a thorough review of its business activities in line with the EU Taxonomy. This aggregated review is reflected in this report, while each operating subsidiary’s review and assessment is described in separate reports.
The taxonomy is a system of classification that establishes clear and consistent criteria for determining if economic activities are sustainable. It utilizes science-based technical screening criteria that must be met for an activity to be considered "green." The goal of the taxonomy is to enhance transparency, improve information to investors, reduce instances of greenwashing, encourage companies to adopt more environmentally friendly practices, improve reporting consistency, and enable investors to easily compare investments across different EU member states. By channeling investments into sustainable projects and activities throughout the EU, the taxonomy aims to contribute to the EU's efforts to achieve its 2030 and 2050 climate and energy goals.
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For an eligible activity to be considered aligned, it has to satisfy the following conditions:
1.The activity must make a substantial contribution to one or more of the climate and environmental objectives relevant to that activity.
2.The activity should not do significant harm to the other remaining objectives.
3.The company should fulfil the minimum social safeguard standards based on OECD and UN guidelines.
To assess our activities’ eligibility and alignment with the EU taxonomy we have used Celsia’s taxonomy software solution.
EU Taxonomy assessment
The operating subsidiaries of Bonheur have performed the taxonomy assessment using Celsia’s Taxonomy software solution. The methodology of taxonomy assessment has included the following steps:
1.Defining scope of assessment
Each company has performed a taxonomy assessment for all activities of the company. This has been done from a bottom-up approach, assessing the lowest level of reporting units and aggregated to the top company level, enabling a taxonomy assessment for the company total, per activity and per business division.
2.Defining eligibility and relevant activities
A taxonomy-eligible activity means an economic activity that is included in the taxonomy regulation. The activities have been mapped out according to the activities defined in the Climate Delegated Act and categorized as either eligible or non-eligible following the description stated in the regulation.
The eligible and non-eligible activities are listed below:
4.3 Electricity generation from wind power
Sea and coastal passenger water transport
7.7 Acquisition and ownership of buildings
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3.Assessment of criteria and defining alignment
Each of the activities under each of the companies’ reporting units have been assessed against the Do No Significant Harm and the technical screening criteria for the respective activities defined in the Climate Delegated Act. As the taxonomy regulation is still in an early phase of adoption, the focus has been on transparency, best intention, and providing explanation for choices made when interpreting the criteria.
Given that this is a new regulation and there is yet to be established a standard for interpretation, the choice of eligible activities for the subsidiary companies Fred. Olsen Windcarrier and Global Wind Service are explained below.
Taxonomy activity “7.6 Installation, maintenance and repair of renewable energy technologies” only includes activities related to installation, maintenance and repair of renewable energy technologies when such technologies are installed as technical building systems, that is in connection with buildings.
Fred. Olsen Windcarrier and Global Wind Service have therefore considered the activity “4.3 Electricity generation from wind power” to be the most relevant. Since their installation services are integral parts of the construction and maintenance of the wind farm, the activities are assessed to be eligible under this activity. The choice of activity should be considered as a best-effort approach, and Bonheur is monitoring the development of industry best practice and is ready to update the choice of taxonomy activity following any further clarifications from the Commission's side.
EU taxonomy assessment results
By the definitions on the previous page, most of Bonheur’s economic activities covered by the taxonomy significantly contribute to combating climate change. The major contributor to this is electricity production from wind power.
According to the Non-financial reporting directive (NFRD) article 19(a) and 29(a) non -financial undertakings which are public-interest entities (i.e. listed) with more than 500 employees, in the case of a group on a consolidated basis, are required to report on the taxonomy.
2022 is the first year that Bonheur ASA reports on the EU taxonomy. Based on the assessment for the group of companies, Bonheur ASA’s taxonomy results are:
80 % taxonomy aligned revenue
92 % taxonomy aligned Capex
88 % taxonomy aligned Opex
By adding financial data to each activity in the different subsidiaries, the proportion of the Bonheur group of companies’ taxonomy-eligible and taxonomy-aligned activities were calculated. This is done by calculating the three key performance indicators (KPIs): turnover, capital expenditures (Capex), and operational expenditures (Opex) as defined in In the Delegated Act (Regulation 2021/2178). The EU provides exact guidance on what constituted turnover, Capex and Opex in the taxonomy. For Opex it is stated that Opex “shall cover direct non-capitalised costs that relate to research and development, building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment by the undertaking or third party to whom activities are outsourced that are necessary to ensure the continued and effective functioning of such assets”’. The results were calculated for each reporting unit and activity and then aggregated for the company and to the Bonheur level.
Please see appendix 1, 2 and 3 for details on the classification of the different activities and how they are assessed against the do no significant harm criteria.
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Climate Risk
Task Force on Climate-Related Financial Disclosures
With climate change comes both risks and opportunities for all businesses. The Task Force on Climate-related Financial Disclosures” (TCFD) has developed a framework with recommendations for more effective climate disclosures within four thematic areas: Governance, Strategy, Risk Management and Metric & targets.
The overall purpose is to promote and share relevant information for investment, credit, and insurance decisions, and to help companies provide better information to support informed capital allocation.
A large part of the activities of Bonheur’s subsidiaries support, the world’s transition to green energy. Therefore, our operations are in general reviewed as green, but parts of the activities, like the use of fuel for the shipping related operations, are exposed to different climate related transition risks. The sustainability reports from the segments therefore includes several of the TCFD recommendations, including scenario analysis.
The actions taken involve the identification and initial definition of the individual operating subsidiary’s management and strategy regarding climate change, as well as the risks and opportunities that they bring.
The operating subsidiaries of the Company set reduction targets for their key environmental aspects. Bonheur is exposed to both risks and opportunities under the TCFD framework as a result of certain activities in our operating subsidiaries. On the right hand we have listed the most important of these that we have identified. The risks we have highlighted are deemed to be the
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ones most relevant for Bonheur as a whole based on the risk assessments made by its subsidiaries. For further detail on these assessments, please see the respective sustainability reports published on our operating subsidiaries’ websites.
Biodiversity and nature loss risk
Everyone should recognize the risk loss of biodiversity and nature poses to companies. Bonheur depend on nature through our operational activities and supply chains. All companies rely on nature for direct inputs, such as wind and water, as well as for ecosystem services, such as pollination, and through dependencies in their supply chains. In addition, companies in general also impact nature through direct or indirect overexploitation, pollution, land and sea use change, and other activities. The loss of biodiversity is already impacting businesses today, as seen in the devastating floods in Germany in 2021, which were partly made worse by the removal of natural protection mechanisms like trees for agriculture.
Bonheur takes nature risk into account by implementing sustainable practices that minimize impact on natural resources and ecosystems. This includes subsidiaries conducting assessments, implementing measures to mitigate negative effects, aiming to preserve biodiversity and protect endangered species, and actively engaging in conservation and restoration efforts.
We are also working to reduce greenhouse gas emissions and balancing renewable energy production with protecting and preserving nature.
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The term “nature positive” broadly means halting and reversing nature and biodiversity loss by 2030 and is quickly becoming nature's version of “net zero”. To achieve the goal of halting and reversing nature and biodiversity loss by 2030, as outlined in the Kunming-Montreal Global Biodiversity Framework, every government and industry must contribute.
Bonheur will use the results from our biodiversity and nature risk assessments to improve our business strategies, target setting and investment decisions, strengthening our business resilience and contributing to a more sustainable future.
Examples of initiatives:
Prior to building new wind farms, the relevant operating subsidiary will undertake comprehensive environmental studies to ensure that potential effects are taken into consideration. The studies are ordinarily conducted with support from external expertise and in close dialog with local authorities and stakeholders
For windfarms under development, the objective is to appropriately compensate for any negative impact on biodiversity. An example of such compensation in the UK is restoration of peat bogs and ecological habitats which has resulted in many types of plant and animal life having returned to moorlands
Fred. Olsen Windcarrier has installed Voith Schneider thrusters installed on two of its vessels. These produce lower noise levels than conventional thruster units and hence reduce the impact on marine animals
Fred. Olsen Cruise Lines is working with the marine wildlife charity ORCA who are sending teams of volunteers on a selection of Fred. Olsen Cruise Lines sailings. The conservationist team's objective is to locate whales and dolphins, observe their behavior, and to provide guests with a unique experience, offering them the opportunity to take an active role in marine science and conservation. The cruises will also enable ORCA to collect vital data on the species and numbers of marine life sighted and identify wildlife hotspots, feeding directly into the charity’s Cruise Conservationist Program and its conservation work.
At the Rothes II Wind Farm in the UK, Fred. Olsen Renewables established a “biodiversity corridor” to benefit the black grouse population. This included specific forestry clearance, furrow and drain blocking to restore bog habitats, broadleaf planting, conifer tree control and continued ecological monitoring.
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Waste management
Our operating subsidiaries adhere to compliance with local municipality recycling regulations, ensuring that all waste generated at our offices and actual site locations is carefully segregated and disposed of appropriately.
As part of our sustainability goals, we have set targets for waste reduction and work towards these. We understand that waste reduction is crucial for minimizing our environmental impact and promoting a more sustainable future.
Sustainability reports for the different business segments provide assessments of waste management measures and targets, including waste reduction efforts and progress.
Environmental spills
Our operating subsidiaries continuously work to reduce the risk of spills, and we document environmental incidents for reporting and future learning. Preventing spills is crucial for minimizing environmental impact, and the operating subsidiaries take proactive measures to manage the storage and handling of fuels, chemicals, and hazardous waste using appropriate operations.
Spill prevention efforts are further strengthened by the use of containment systems and spill kits, which are complemented by personnel training to ensure effective spill response.
The different business segments’ sustainability reports provide details on spill prevention and response.
Green Finance Framework
Bonheur reviewed and updated its Green Finance Framework at the end of 2022. The updated focused on including EU taxonomy assessments into the evaluation criteria for green financing, and the updated framework was subject to an external review by DNV.
The Framework enables issuance of Green Bonds and Green Loans (together referred to as “Green Finance Instruments”) to finance Green Projects and describes Bonheur’s use of proceeds, process for project evaluation and selection, management of proceeds and reporting for Green Projects.
The use of proceeds will finance investments dedicated to:
Renewable energy projects,
Offshore wind turbine transportation and installation vessels,
Installation, maintenance, repair and improvement of wind power installations
Based on DNV’s review, this Framework is found in alignment with the GBP and the GLP Principles from and meets the criteria in the Protocol.
DNV confirmed that Bonheur’s criteria for selecting Green Finance Instrument proceeds are found to be eligible under the EU Taxonomy.
Bonheur will on an annual basis issue a report on the use of the green finance framework, including allocation and impact of the facility.
The outstanding balance of 700 million NOK as of 31.12.2022 was in whole allocated to Fred. Olsen Seawind ASA by the Green Finance Committee. The committee approved 758 million NOK mainly related to funding of the wind projects Codling (Ireland) and Muir Mohr (Scotland) as eligible for green financing. As the current facilities had 700 million NOK unallocated funds, further allocation of the remaining 58 million NOK is contingent on Bonheur issuing a new green facility.
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People - Social
There are no employees in Bonheur ASA, but subsidiaries of the Company employed 5 709 people in 2022 (4 473 in 2021), of which 1 065 were female (922 in 2021). The below table show number of employees split by gender and whether they are onshore employees or offshore crew:
This chapter covers themes affecting the following UN Sustainable Development Goals:
Our group of companies is dedicated to providing good working conditions, with a strong focus on Health, Safety, and Environmental (HSE) standards. Our business segments have implemented comprehensive HSE management systems that comply with industry regulations, and we prioritize preventive measures to maintain a safe and healthy workplace. Continuously monitoring and improving our HSE practices, there were no significant incidents in 2022. The group’s Loss Time Incidents (LTI) are documented, and appropriate corrective actions are taken to prevent recurrence. Company specific HSE targets and working methodology can be found in their sustainability reports.
Our commitment to employee health is reflected in our low absence rate due to sickness, which was 1.4% in 2022. Detailed information on sickness rates and working environment can be found in this sustainability report and for the subsidiaries the reports are available on each company's website.
Equal opportunities
A governing principle throughout the Group of companies is for each business segment to promote equal opportunities, offering challenging and motivating jobs to all personnel regardless of nationality, culture, religion and gender. This includes the principle of equal pay for equal work, considering qualifications relating to knowledge, experience and performance with emphasis on the importance of a balanced work environment with a reasonable gender composition for the various position levels.
The share of women in the workforce for the Renewable Energy and the Wind Service segments continue to be lower than we aim for.
Emphasis is placed on higher and sustained presence of women in Bonheur’s subsidiaries. In Bonheur a female holds the position of Managing Director, and the CEO’s of the subsidiaries Fred. Olsen Windcarrier and Fred. Olsen 1848 are also female.
Increased diversity in the industry and our companies will also improve our access to a greater range of talent. Business innovation benefits from having employees from a wide variety of demographics and backgrounds.
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At the end of 2022, 19% (2021: 21%) of the employees throughout the Group of companies were female. Three out of six (50%) Board Directors of Bonheur ASA are female.
The Group of companies’ will always ensure that processes for recruitment, promotion and competence development are in accordance with our policies and thus free of prejudice and unlawful discrimination.
Transparency act and human rights
The following descriptions of Bonheur's engagements within human rights and responsible supply chains are prepared in accordance with the requirements relating to enterprises' transparency and work on fundamental human rights and decent working conditions (Transparency Act – “Åpenhetsloven”). Bonheur ASA is listed on the Oslo Stock Exchange and owns various companies in renewable energy, transport, and technology development.
Reporting requirements apply to Bonheur as a company domiciled in Norway, with a balance sheet of over 35 million Norwegian kroner and more than 50 full-time employees on average (the sum of employees in companies controlled by Bonheur).
The Company’s operating subsidiaries operates in several countries on different continents, but the majority of the businesses are located in Norway, Sweden, and the UK. As there is no operational activity out of Bonheur alone, the work of preventing human rights violations and ensuring decent working conditions in the supply chains lies with Bonheur’ operating subsidiaries.
This work is anchored within internal policies, code of conduct and procedures. The various companies' statements, human rights governance including their risk analysis, due diligence assessments, their actual negative consequences, and measures to reduce them, are described in the subsidiaries' annual reports.
Respecting human rights and minimizing adverse impact our activities our of these operating subsidiaries are important to Bonheur. Therefore, a zero tolerance for undue discrimination of any kind around gender, age, ethnic origin, disabilities, sexual orientation, religion, political opinion, or otherwise prevails.
The companies in Bonheur follow the OECD guidelines for due diligence for responsible business conduct in their work.
This means that these companies continuously monitor to identify where risks of violation of national and international guidelines is highest, and that our suppliers are expected to do the same throughout the supply chain, and that said operating subsidiaries follow up and take mitigating measures when violations are found. This is primarily done on a risk-based approach based on the size of contract and relationship and the geographical exposure of their vendors.
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Human rights due diligence in the Bonheur group of companies
As an example of how to work to reduce potential adverse impact on human rights, Fred. Olsen Windcarrier conduced a risk based responsible conduct due diligence in 2022. The purpose of the process was to promote the company’s respect for fundamental human rights and decent working conditions in the connection with the provision of Fred. Olsen Windcarrier’s services, and to ensure general public access to information regarding how the subsidiary addresses adverse impact on fundamental human rights and working conditions.
Fred. Olsen Windcarrier operations include ownership, management and operation of jack-up vessels, including execution of projects (engineering and transport and installation) for the offshore wind industry. The operations are geographically widespread, and current pipeline include operations in Asia, Europe and America.
Fred. Olsen Windcarrier used their experience gathered from years working in the different areas, as well as and external sources in the identification of adverse impact.
Among external sources used in the assessment were:
Business & Human Rights Resource Centre
Institute for Human Rights and Business (ihrb.org)
Amnesty International
Danske Rederier - Human rights (danishshipping.dk)
How EU steel production is violating human rights | Danwatch
ITUC GRI (globalrightsindex.org)
Based on the assessment Fred. Olsen Windcarrier identified several action points, some of them are listed below:
Implement ship recycling procedure
Include Code of Conduct in Supplier registration
Establish “Females in shipping” working group with action plan
Assess working hours deviation. Establish group to investigate root causes and implement actions to avoid further deviations
Implement grievance mechanism for external stakeholders
Conduct Human Rights audits on high-risk suppliers/subcontractors
Equality and anti-discrimination
Introduction
Operating subsidiaries in Bonheur have conducted its activity duty in accordance with the Norwegian Act relating to equality and a prohibition against discrimination (Equality and Anti-Discrimination Act).
The activity duty has the particular objective of improving the position of women and minorities and shall help to dismantle disabling barriers created by society and prevent new ones from being created.
Overall, we are content with the current gender and age distribution within our operating subsidiaries. However, we recognize that there are still risks of discrimination and barriers to achieving full equality. To address these issues, we are doing risk assessments, developing and implementing appropriate measures and are committed to continuously improving our efforts.
Going forward we will continue to assess the potential risks associated with discrimination and other barriers to equality. Analyses in the Group of companies identified the following as such risks:
1.Gender imbalance
2.Discrimination based on ethnic, religious, cultural, or national background
3.Barriers related to pregnancy, maternity, and paternity leave
4.Age discrimination
5.Physical disabilities
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The Company is working on policies and actions to mitigate the above risks.
Pay and remunerations are determined in individual work agreements and varies depending on skillset, responsibilities, education, age, and experience. The individual's pay is confidential, and information about it only available to HR, the employee, and his/her line manager.
On request and on a case-by-case basis, persons or entities meeting the criteria in the Equality and Anti-Discrimination Act, Section 26a may be given access to pay information.
Reviews have been performed in the subsidiaries to analyse whether there is gap in pay between male and female employees. Differences in pay exists due to responsibilities, education, years of relevant experience, and general job market value. The analysis has not found pay gaps due to gender in comparable functions.
Data on social issues
The operating subsidiaries of Bonheur have set clear targets on different indicators related to social issues. Among them are health and safety measures zero lost time incidents and zero work related sick leave, but also indicators related to gender balance, employee training on safety, code of conduct and corporate social responsibility, and employee satisfaction. Bonheur publishes the earnings ratio between males and females. Given the different nature of the business model, industries and idiosyncrasies of the subsidiaries, the KPIs used are not always comparable or calculated in the same way, hence they are not aggregated up to measurable target KPIs for Bonheur.
As Bonheur starts planning for the implementation process of ESRS and the requirements in the EU’s CSRD we will also establish overarching objectives and targets on these issues. To reach these targets the operating subsidiaries will have to develop targets in alignment with the targets set by Bonheur.
Governance
Bonheur remain focused on continuously adhering to principles on good corporate governance.
Private Fred. Olsen-related interests hold a total of 51.8% of Bonheur ASA’s shares. The day-to-day management of the Company is performed by Fred. Olsen & Co (FOCO).
Over decades, the Bonheur’s governance structure has proven successful and resilient. To ensure integrity within this structure, various measures and systems have over time been implemented, including such addressing related party transactions. Among these are:
Four Directors out of six, i.e., the majority of the Board of Directors of the Company, are independent of both the Company’s main shareholders and of FOCO. The guidelines to the Board of Directors addresses i.a. questions on potential conflict of interest, and policies for reporting on and handling potential conflict of interests are in place.
The Shareholders’ Committee has placed special emphasis on and have guidelines particularly addressing issues on potential conflicts of interest. All member of the Shareholder’s Committee are independent of both the Company’s main shareholder and of FOCO
The Company’s Audit Committee meet on a quarterly basis together with the Company’s auditor (KPMG) addressing systems for internal control and risk management and address as appropriate related party transactions.
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The Auditor of the Company, KPMG, performs audit and reporting procedures on related party transactions which are reported both to the Board of Directors and the Shareholder’s Committee.
The Company’s corporate governance practice is adapted to the recommendations and principles set out in the Norwegian Code of Practice for Corporate Governance, latest version (“NUES”)
The Board of Directors continuously monitors and evaluates the performance of the management services provided by FOCO. In addition, the Audit Committee on a quarterly basis reviews related party transactions.
Governance Model – overview
More particular on Corporate Governance
Bonheur is committed to continuously protect the integrity of its governance framework, recognizing this is essential for creating long-term value and fulfilling societal responsibilities.
Transparency, integrity, and responsibility are cornerstones of the Company's values, and they form the basis of the Company's ethical guidelines governing our responsibility towards society and overall conduct.
Good governance benefits all stakeholders, including customers, employees, shareholders, and the wider society. By prioritizing transparency, integrity, and responsibility, Bonheur and its operating subsidiaries are able to build trust and credibility with customers and suppliers, attract and retain top talent, mitigate risk, and enhance shareholder value.
Transparency points to confidence in procedures and decision makings and the way in which the various activities of the Company are executed.
The Shareholders’ Committee
The supervisory function of the Shareholders’ Committee constitutes an integral element of Bonheur ASA’s Corporate Governance. It follows from the Company’s Articles of Association that the Shareholders’ Committee is responsible for exercising a supervisory function relative to the administration of the Company by the Board and by Fred. Olsen & Co (FOCO). The way in which the Shareholders’ Committee execute these duties is adapted to NUES and equally follows established guidelines as calibrated with the corporate structure that the Company is part of. These guidelines i.a. address questions on potential conflicts of interest. The Shareholders’ Committee is attending to Bonheur ASA’s annual accounts and expresses its view thereon to the Annual General Meeting, hereunder on the Board’s proposals on dividends. The Shareholders’ Committee elect members to the
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Board following its own nomination procedure, propose appointment of the Auditor and provide recommendation to the Board on compensation and possible bonus to FOCO for its day-to-day management of the Company.
The Shareholders’ Committee consists of the following persons: Christian Fredrik Michelet (Chairman), Einar Harboe (Deputy Chairman), Ole Kristian Aabø-Evensen, Bård Mikkelsen and Jørgen Heje. At the Annual General Meeting in May 2021, Christian Fredrik Michelet (Chairman) and Ole Kristian Aabø-Evensen were re-elected as member of the Shareholders’ Committee.
The equity of Bonheur ASA is addressed in parent company note 8. The Board consider that the current equity level is satisfactory considering the Company’s financial position relative to strategy and risk profile.
The Company has no current authority to increase its share capital. To the extent proposals will be made to a General Meeting on authority to increase the share capital, caution will be exercised relative to the principle of preference for existing Shareholders on subscription for new shares. In the event the Board of Bonheur ASA should request a General Meeting for authority to increase the share capital or acquire treasury shares, such authority will in any event only be requested for a period of time limited to the next ordinary Annual General Meeting.
Dividend
When considering dividend payments, Bonheur ASA takes into account the development of the Company’ results together with the prevailing investment plans and the Company’s financial position in general. Specific situations may arise where it would be in the interest of the Shareholders that dividend payments are not recommended or - otherwise, that extraordinary dividend payments are recommended. Dividend payments are considered by the Board, which then resolves on proposals to the General Meeting subsequent to the Shareholders’ Committee having addressed this issue and expressed its view.
Equal treatment of Shareholders
The Company only has one class of shares, and each share equals one vote. The Company emphasizes the principle of equal treatment of all Shareholders.
Freely negotiable shares
The Company’s shares are traded as freely negotiable.
Annual General Meetings
The Company’s Annual General Meeting is normally held in May each year under the conduct of the Chairman of the Shareholders’ Committee paying due attention to NUES.
The summons, together with the appurtenant case papers, is distributed in lawful and ample time in advance of the General Meeting. Shareholders who are prevented from participating may vote by way of proxy. The Shareholders’ Committee, the Board and the Company’s auditor are all represented at the Annual General Meetings. The Annual General Meeting i.a. elect members to the Shareholders’ Committee.
Nomination committee
Bonheur ASA has no separate nomination committee. However, it follows from the Articles of Association that the Shareholders’ Committee elects’ members to the Board and, as also set out above, does so in accordance with its own nomination procedure.
Corporate Assembly and Board of Directors – composition and independence
The Company does not have a Corporate Assembly. A supervisory function similar to that of a Corporate Assembly, is exercised by the Shareholders’ Committee.
The conduct of the Board of Directors
The ultimate administration of the Company’s business, which implies securing that the Company’s business conduct is in line with the basic values of the Company, rests with the Board. The Board at present consists of six Directors, who are each elected for a two-year period. In addition to exercising the authorities on decision-making and control functions, the Board focuses on development of the Company’s strategy. FOCO is placing emphasis on providing the Board with information on which the Directors can adequately discharge their duties. All matters considered of material importance to the Company are placed before the Board.
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This i.a. comprises considering and approving quarterly and annual accounts, significant investment issues (hereunder acquisitions and divestments) and overall strategies. The composition of the Board reflects a broad level of competence.
The Company has not been engaged in transactions with its Shareholders, Board members, FOCO in its managerial capacity, or anyone related to these, except from what follows from the Group of companies’ note 26 to the respective Annual Accounts or as may otherwise have been reported in separate announcements to the Oslo Stock Exchange. A guideline for the Board regulates the documentation of related party transactions including procedures for contractual relationship between such parties and the deployment of independent transfer pricing benchmarking.
Bonheur ASA has the following Board Members:
Fred. Olsen, Chairman, Carol Bell, Bente Hagem, Jannicke Hilland, Nicholas (Nick) A. Emery and Andreas Mellbye.
All Board members participate regularly in the Company’s board meetings. Absence is exceptional and always distinctly justified. In 2022, 10 board meetings were conducted with full participation from all board members.
The Board members Carol Bell, Bente Hagem, Jannicke Hilland and Andreas Mellbye are independent FOCO and of the Company’s main shareholders.
The board evaluates its work and competence annually.
In Note 7 to the Group of companies’ accounts information on compensation to the Board is provided. The compensation to the Board is not depending on results and neither have the Directors been granted any options. The Company has support for identifying and holding liability insurances also for directors and officers.
Audit Committee
In its capacity as a preparatory and advisory working committee for Bonheur ASA’s Board, the Audit Committee - consisting of the Board Members Carol Bell and Nick Emery - review the financial reporting process, the system of internal control and management of financial risks, the auditing process and the Company’s process for monitoring compliance with laws and regulations. In performing these duties, the Audit Committee maintains effective working relationships with the Company’s Board, FOCO and the Company’s Auditor.
Risk management and internal control
The Group of companies’ risk management, as developed within each of the business segments, are designed to ensure that risk evaluation is a fundamental aspect of all business activities. Continuous evaluation of exposure to risk is essential to identifying and assessing risks at all levels.
The Group of companies’ risk management policies work to identify, evaluate and manage risk factors that affect the performance of the various business activities in which Bonheur ASA is invested. As such, continuous and systematic processes are deployed to mitigate potential damages and losses and to capitalize on business opportunities. These policies contribute to the success of both long and short-term strategies.
Risk management is based on the principle that risk evaluation extends to all business activities. The individual business segments within the Group of companies have procedures for identifying, assessing, managing and monitoring primary risk exposures. As part of cash management policy, the Group of companies may individually deploy derivative instruments, such as interest rate swaps and currency contracts in order to reduce exposures.
The Group of companies’ risk management and internal control procedures are reviewed by the Audit Committee in accordance with its charter. The operational risk management and internal control are carried out within each business segment in accordance with the nature of the operations and the governing legislation in the relevant jurisdictions. Financial risk management related to foreign exchange, interest rate management and short-term investments is handled in accordance with established policies and procedures.
Bonheur ASA does not operate a distinct formal internal audit function as part of its internal control system, but the Company interacts closely with KPMG to ensure that risks and controls are monitored. As a result of representation at board level in
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subsidiaries by managerial personnel of FOCO, the Company is able to follow developments appropriately within the operational subsidiaries, focus on business performance, market conditions, the competitive environment and identify strategic issues. The appropriate information flow from board meetings in such subsidiaries provide a solid contributor for the Company’s assessment of its overall financial and operational risks.
Board remuneration
Board remuneration reflects the Board’s responsibility, expertise, time spent, and the complexity of the business. The remuneration does not depend on the Company’s financial performance. There are no option programs for any Board Member. The Annual General Meeting determines the remuneration to the Board Members. Additional information on remuneration paid to Board members for 2022 is presented in note 7 to the consolidated accounts.
As an integral part of FOCO’s day-to-day management of the Company the sole proprietor of FOCO, Anette S. Olsen, holds the position as Managing Director of the Company. The compensation to FOCO for these managerial services (comparable with management remuneration) follows under the Group of companies’ note 7. As the Company has no employees it equally has no stock option programs.
Information and communications
Emphasis is placed on conducting a policy on information which aims at providing the market with relevant and timely information in a way that supports the principle of equal treatment of all of the Company’s shareholders. The Company provides presentations to shareholders and analysts in connection with announcement of the quarterly results. During 2022 the quarterly presentations have been conducted by means of webcasts. Annual and quarterly reports, together with the aforementioned presentations, are made available on the Company’s web site, www.bonheur.no. The Company has a preparedness on information for situations of an extraordinary character.
Take overs
Privately Fred. Olsen-related companies hold a total of 51.8 percent of the Company’s shares. Considering the corporate structure of which the Company forms part, the Company considers that the takeover guidelines recommendation in NUES is currently not relevant.
Auditor
The Company’s Auditor is annually providing an activity plan for the audit of the Company. As part of the established routines within the Company on Corporate Governance the Auditor is conducting presentations to the Audit Committee and the Shareholders’ Committee on the auditing carried out and the Auditor is hereunder addressing the Company’s risks, internal control and quality on reporting. The Auditor is conducting a similar presentation to the Board in connection with the Board considering the Annual Accounts.
In connection with the Auditor’s report, the Auditor also provides an affirmation on independency and objectivity. The Auditor participates at the Annual General Meeting. The Board is satisfied that FOCO on behalf of the Company and at its sound discretion, when considered both generally and specifically serviceable, may deploy the Auditor for services beyond the statutory auditing. In connection with the issue on compensation to the Auditor, it must and will however always be identified how such compensation is split between statutory auditing on the one side and other services on the other. The Board has established a guideline for pre-approval of non-audit services by the Board prior to such services being undertaken by the Auditor.
CV for the Board members, Shareholders’ Committee and the Managing Director
Board of Directors:
Fred. Olsen (b. 1929), Chairman. Mr Fred. Olsen was the proprietor of Fred. Olsen & Co. from 1955 till 1994 and has been chairman of the Board since 1955. Since 1994 he has assisted Bonheur on transition into renewable energy activities. He is an Honorary Doctor of the University of Heriot Watt, also of the Queen’s University Belfast, a Fellow of the Royal Institution of Naval Architects and further holds the titles of Industry Pioneer from the Offshore Energy Center Hall of Fame in Galveston, Texas and the Institutium Canarium’s Dominik Wölfel Medal, Vienna. He was chairman of the Aker Group from 1957 to 1975 and from 1977 to 1981, chairman of Timex Corporation from 1980 to 2002 and of Harland & Wolff, Belfast from 1989 to 2001. He co- founded
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and was later chairman of the Norwegian Oil Consortium AS (NOCO), 1965-1983, and was a board member of SAGA Petroleum AS from 1972 to 1983. He was further chairman of Widerøe’s Flyveselskap AS, 1970-1983. Mr Fred. Olsen pioneered within tanker developments, rig developments (Aker H3 drilling design), watch developments and he headed the transition of the Aker yards from shipbuilding into construction of semi-submersible drilling rigs. Mr Olsen is a Norwegian citizen and resides in Oslo, Norway.
Carol Bell (1958) joined the board in 2014. She holds an MA in Natural Sciences from the University of Cambridge and a PhD in Archaeology from University College London. Since 2000, after having worked within the oil and gas industry and investment banking (with JP Morgan and Chase Manhattan), she has divided her time between a range of activities, notably being nonexecutive director in the energy sector, conducting academic research and as a charity trustee. She currently sits on the boards of Tharisa plc and BlackRock Energy and Resources Income Trust plc. She has also served on the boards of TransGlobe Energy, Ophir Energy plc, PGS ASA, Salamander Energy plc., Hardy Oil & Gas plc., Revus Energy ASA, Det norske oljeselskap ASA and Caracal Energy Inc. She is also a Director of the Development Bank of Wales and the Football Association of Wales and a founder Director of Chapter Zero, which engages with non-executive directors on climate risk. She is a Trustee of the National Museum of Wales, Museum of London Archaeology, a Council Member of Research England and a Director of the National Physical Laboratory. Dr Bell is a British citizen and resides in London and Cardiff.
Bente Hagem (1953) joined the board in 2020. She holds a master’s degree in Economics and Agriculture from the University of Life Sciences in Norway. In the nineties she held different positions as a vice president in Equinor. In 2001 she started working as an executive vice president in Statnett, the Norwegian system operator (TSO), responsible for European/Nordic market design, trading agreements for cables, tariffication, and settlement of the wholesale market. She was also a CFO of Statnett for a period. From 2013-2019 she was a chair and vice chair of the board of ENTSO-E (an association for 43 TSOs in Brussels) and chair and member of the Board of Nord Pool Spot from 2008-2014. She was a co-chair of the Market Coupling project delivering one daily auction for electricity in Europe. She has also served on several boards in the energy industry. Bente Hagem is a Norwegian citizen and resides in Oslo.
Jannicke Hilland (1967) joined the board in 2020. She holds a PhD in Physics from the University of Bergen, a BSc Honours in Electrical and Electronic Engineering from the University of Manchester Institute of Science and Technology and a study in Strategic Leadership from the Norwegian Business School. She is at present EVP of digital Infrastructure in Telenor. In the period 2015 – 2022 she was the CEO of Eviny, one of the larger renewable energy companies in Norway. In the period 2008 - 2015 she held different positions in Statoil, among other Head of Gullfaks operations, Vice President of Joint Operations on the Norwegian Continental Shelf and Senior Vice President for Safety, Security and Emergency Preparedness in the Corporate Executive Committee. In the last position responsible for the Statoil BoD Safety, Security, Sustainability and Ethics Committee. In the period 1998 - 2008 she held different positions in Hydro, amongst others as platform manager on the Troll Field. She is deputy Head of Board in Yara International, member of the Yara Board Audit and Sustainability Committee and member of Board in the Confederation of Norwegian Enterprise (NHO). She has been member of the board of Nysnø Klimainvesteringer in the period 2018 – 2023. Jannicke Hilland is a Norwegian citizen and resides in Bergen.
Nicholas (Nick) A. Emery (b. 1961) was appointed to the board in 2014. He is a qualified Management Accountant. He has worked in various Fred. Olsen- related companies for over 30 years and until April 2013 was the CEO of Fred. Olsen Renewables AS. As from April 2013 he holds the position of CEO of the privately owned Fred. Olsen Ltd. (UK). He is Chairman of the following Fred. Olsen Limited subsidiaries: The Natural Power Consultants Limited and Zephir Limited. In addition, he is a director of a number of other companies including Fred. Olsen Travel Limited. Mr Emery is a British Citizen and resides in London and Cornwall, England.
Andreas Mellbye (1955) has been a member of the Board since 2001 and before that served as alternate. Mr Mellbye was trained as an officer in the Norwegian Navy (1975-1977) and later became a candidate in jurisprudence from the University of Oslo in 1983. He became partner of Wiersholm 1989. Before joining Wiersholm he worked in the legal department of Norsk Hydro, including one year on secondment to Legal & Acquisition dep. in Conoco, London. Mr Mellbye was admitted to the Norwegian Supreme Court in 1995. Besides litigation within company law, Mr Mellbye specializes in corporate transactions, mergers & acquisitions, securities/stock exchange law. He holds various board and committee positions, including chairman of Martina Hansens Hospital and Lorentzens Skibs AS. Previously Mr Mellbye was chairman of Pareto Wealth Management and was also
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member of the previous Securities Law Forum of the Oslo Stock Exchange. Mr Mellbye is a Norwegian citizen and resides in Bærum, Norway.
Shareholders’ Committee:
Christian Fredrik Michelet (1953) has been the chairman of the Shareholders’ Committee since 2007. He became a candidate in jurisprudence at the University of Oslo in 1980, and holds an MBA from INSEAD, France in 1981. He has served as lieutenant in the Norwegian Army. He was partner in the law firm Arntzen de Besche from 1985-2015. In the period 1989 – 1992 Mr Michelet was Vice President in Total Norge AS. He was partner in the law firm Michelet & Co 2015-2018 and is now partner in the law firm Schjødt law from 2019. He is specialized in the petroleum and energy sectors. Mr Michelet is an advisor on legal and strategic matters to various corporate actors in these sectors, to Norwegian petroleum and energy authorities and to petroleum authorities in countries in several parts of the world on policies, legislation and state contracts. In addition to working with transactions and acting as a litigator, he regularly serves as arbitrator. He is admitted to the Norwegian Supreme Court. Mr Michelet is a Norwegian citizen and resides in Oslo, Norway.
Jørgen G. Heje (1953) has been a member of the Shareholder’s Committee since 1988. He has a Lic. Oec. HSG degree from Hochschule St. Gallen Switzerland. Mr Heje spent several years with Chase Manhattan Bank N. A. in London and Oslo before he held different executive and non-executive positions within the shipping and finance industry. Mr Heje served as CEO in Eidsiva Rederi ASA and Chairman of Norwegian Car Carriers ASA up until 2010. He has been Chairman, and member of boards and nomination committees in a range of companies and organizations among others: Chase Manhattan Bank (Norge AS), Orkla Finans AS, Nordisk Skibsrederforening, J. B. Ugland Shipping AS, Norwegian Ship-owners Association and a number of ship-owning partnerships. Mr Heje is Vice-Chairman and co-owner of the Agra Group, a market leading, family-owned industrial company within fast moving consumer goods in the Scandinavian markets. Mr Heje is a Norwegian citizen and resides in Oslo, Norway.
Bård Mikkelsen (1948) joined the Shareholders’ Committee in 1997. He is a graduate from the Norwegian Army Military Academy, Norwegian School of Management and INSEAD Executive Programme. He has served as the CEO of Statkraft, the largest utility in Norway and the largest European renewable energy company. Mr Mikkelsen has also served as the CEO of Oslo Energy Group, Ulstein Group and Wideroe Group. He has previously a.o. also served as a member of the Supervisory Board of E.ON as Chairman of Cermaq, Store Norske Spitsbergen Kulkompani and Multiconsult, and Vice Chairman of Saferoad. Currently he is a.o. the Chairman of Clean Energy Group, Clean Energy Invest, and Nettpartner. Mr Mikkelsen is a Norwegian citizen and resides in Bærum, Norway.
Ole Kristian Aabø-Evensen (1964) has been a member of the Shareholders Committee since 2017. Mr Aabø-Evensen was originally trained as a police officer and became later a candidate in jurisprudence from the University of Oslo in 1988. He also received a scholarship from the British Council (1992) and has studied English and International Law at King’s College University of London (1992). Mr Aabø-Evensen is founding partner of the M&A and Capital Markets boutique law firm Aabø-Evensen & Co (2002-). Before establishing Aabø-Evensen, he was partner and head of M&A and corporate legal services at KPMG in Norway (1995-2002), an associated partner with the de Besche & Co (now Arntzen de Besche) and has also worked as a trainee in Sinclair Roche Temperley, London (now part of Stephenson Harwood) and Essex Court Chambers, London. As a leading transaction lawyer Mr Aabø-Evensen has specialized in corporate transactions, public and private mergers & acquisitions and securities/stock exchange law. He holds various board and committee positions. Mr Aabø-Evensen is also the author of the leading textbook on M&A in Norway in addition to numerous international publications on mergers and acquisitions. He’s a member of the Norwegian Bar Association, the American Bar Association, the International Bar Association and the International Fiscal Association. Mr Aabø-Evensen is a Norwegian citizen and resides in Oslo, Norway.
Einar Harboe (1950) has served on the Shareholder’s Committee since 1988. He passed his final law exams in 1974 at the university of Oslo. He then held positions in the Ministry of finance and also worked as assistant judge, university teacher and division head in the Tax directorate until 1983. In 1983 Mr Harboe joined the law firm of Bugge, Arentz-Hansen & Rasmussen (BAHR) where he remained for some 14 years, the last 12 years as partner. In 1997 Mr Harboe left BAHR to establish a boutique law firm (now Advokatfirmaet Harboe & Co AS) specializing in tax. Harboe & Co is among the leading firms in this field. Mr Harboe is among the most experienced tax lawyers in Norway, having handled a number of major cases in court, including the Supreme Court. He is also an established author, having published a number of books about Norwegian tax. Mr Harboe is a Norwegian citizen and resides in Bærum, Norway.
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Managing Director:
Anette S. Olsen (1956) has been the proprietor of Fred. Olsen & Co. since 1994. Fred. Olsen & Co. is responsible for the day-to-day operation of Bonheur ASA. As part of these services, she holds the position as managing director of Bonheur ASA. Ms Olsen is the Chairman of the boards of Fred. Olsen Renewables AS, Fred. Olsen Ocean Ltd., Fred. Olsen Windcarrier ASA, Fred. Olsen Seawind ASA, Fred. Olsen Ltd, NHST Media Group AS and Fred. Olsen Cruise Lines Ltd. from July 2022. She is also a board member of Global Wind Service A/S and Tanager Group BV. Anette S. Olsen holds a bachelor’s degree in business organization and a master’s degree in business administration (MBA). Anette S. Olsen is a Norwegian citizen and resides in Oslo.
Prosperity
Prosperity relates to our role in contributing to a prosperous society. Bonheur contribute to economic growth by providing decent employment and creating societal value through our operating subsidiaries. Prosperity is divided into wealth creation, continuous improvement, new technologies, tax payments, and community contributions.
Profitability is a prerequisite for the wealth creation and for long term commitment to create sustainable business opportunities. To be able to maintain our strong market position and enable future growth, we are focusing strongly on continuous improvement of existing operations, development of new technologies and new investments. Contributions to the local societies are an essential component in our sustainability efforts
Bonheur’s operating subsidiaries develop and operates renewable energy, affordable and sustainable shipping services while facilitating economic growth and job creation across different industries.
As per 31.12.2022 our operating subsidiaries employed more than 5 700 people between our different onshore offices and our offshore marine crew. In addition to the day-to-day operations our employees’ have initiated several new developments and improvements leading to improved efficiency, profitability and new business opportunities. The Group of companies invest in training for reskilling, upskilling and development of our employees.
Our activities have led to tax contribution totaling over NOK 800 million in 2022 across different countries.
This chapter covers themes affecting the following UN Sustainable Development Goals:
Objectives:
Be in compliance with all national, local, and maritime laws, rules and regulation that apply for our activity
Contribute to local communities through business activities, job creation, tax payments and the use of local suppliers
Zero corruption incidents
All employees should complete anti-corruption and CSR training
Further improve our whistleblower mechanism
Align the sustainability governance and management across Bonheur group of companies
Continue to develop new technologies
Competence enhancement of our employees
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Anti-corruption and business ethics
To ensure integrity, Bonheur and the Group of companies have implemented whistleblower channels and processes where suspected behavior in breach of the ethical policies such as HSE rules, harassment, insider trading, fraud, bribes or other violations of ethical guidelines can be reported.
As a result of this, and to avoid that the positive result is due to lack of control, the Group of companies will continue to focus on training and further implementation of these policies.
With operations across different sectors and some areas with high corruption risk, it is important that the operating subsidiaries in Bonheur continuously map their corruption risks throughout the business segments, geographies, and our value chain. As part of the onboarding program for new employees within the Group of companies, all new employees are required to participate in the established e-learning modules (which currently consist of Code of Conduct, Corporate Social Responsibility, Anti-Corruption/Anti-Bribery and GDPR). The content of these courses is regularly reviewed, and relevant updates are implemented accordingly.
Tax contributions
Bonheur’s approach to tax payments and advocacy for clear and predictable tax regulations demonstrate our commitment to the development of regulations that benefit the society, businesses and the people living there. By working collaboratively with policymakers, we aim to promote an environment that contributes to the people and that facilitates business growth.
Our society contributions were made through tax payments to the governments, divided in social security tax, property tax and corporate tax. Note that the indirect society contribution through our employee’s income tax and other taxes is not included in the calculation.
It is crucial that tax systems for wind power production stimulate the green transition, as we strive towards a more sustainable future. However, recent developments in Norway and the UK have done the opposite so far this year. Despite being at the forefront of renewable energy, Norway's government has proposed wind power tax which makes it prohibitive to invest profitably. It is essential that governments incentivize and support the transition towards green energy, rather than creating barriers that hinder its growth. Instead, to accelerate the transition towards green energy and mitigate the devastating impacts of climate change, it is crucial that governments incentivize and support the growth of the renewable energy sector.
New technology and sustainable business developments
New technology and cruise itinerary planning
New artificial intelligence and forecasting systems has been installed on two of Fred. Olsen Cruise Line's vessels. The technology calculates the most fuel-efficient route based on weather forecast, currents and a high number of sensors installed on the ships. This should be viewed as a start and similar systems will be installed at Balmoral in 2023.
The itineraries for the cruises are carefully reviewed for the calculated speeds, to ensure the average speed across every passage are achievable, as well as taking into account the cruising conditions that time of year. If speeds are deemed too high or unachievable for that time of year, the itinerary is changed to allow for slower speeds.
Overall, for “Bolette” cruise vessel consumption was reduced by 316 MT, and for Borealis by 297 MT. This was mainly by reducing call times to try and keep running on 2 engines where possible. This has resulted in a potential emission reduction of 613 MT / *3204.745 = ~1964 t CO2e.
*combined VLSFO MGO DEFRA conversion factor
Hybrid onshore wind and solar
To optimise land usage and infrastructure usage for renewable energy, Fred. Olsen Renewables began investigating sites for both wind and solar in combination, seeking to develop a hybrid power plant. A hybrid power plant could increase power production from a wind power regulated area with 25%, introducing solar at the same area.
Offshore floating solar
Floating solar photovoltaics (FPV) in seawater is a new technology and in 2022 and subsidiaries of Bonheur continued to strengthen their know-how as a competitive edge for near- and offshore FPV.
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This was done through a bilateral collaboration project with the Solar Energy Research Institute of Singapore (SERIS) for testing and comparing FPV technologies in seawater. There was also established a consortium with four other partners to test offshore floating solar partly funded by the EU, and a collaboration between Fred. Olsen Renewables and Fred. Olsen 1848 on the development of solutions to specific technological challenges related to FPV.
During 2022 progress have been made on our commercial development opportunities for FPV in Southern Europe and Southeast Asia and processes have been initiated aiming at securing utility-sized nearshore FPV projects.
Upgrading of fleet
With its new crane and additional improvements to deck space and stability, Fred. Olsen Windcarrier's Bold Tern is capable of installing foundations up to 1500t and handling all known next generation turbines from different manufacturers.
Value creation and economic growth
What we do?
The green energy sector is forecasted to grow the coming decades driven by climate change, increasing population, policy changes and economic growth. The increased activity level will create many new jobs. To stay competitive within this industry each subsidiary involved in this must drive improvements, optimize the use of resources, and ensure stability for its employees. Bonheur’s subsidiaries employ more than 5 700 people across different sectors across the globe. In addition to these employees, the activities support jobs in the local communities where operations are ongoing, including manufacturing, installation, maintenance and supplies.
Financial results
For financial results, reference is made to the quarterly and annual reports at
Social contributions
Bonheur has a history of contributing to local communities through different social and other initiatives.
The Fred. Olsen Social Engagement Group (FOSEG) was established with a view to expand such contributions to also comprise commendable local activities and entrepreneurship that connect to the interests and value base of Bonheur and with direct engagement from employees across the board of Bonheur-related companies.
These initiatives take account of the UN Sustainable Development Goals, with emphasis on
1.Support projects that contribute to "self-help", and
2.Contribute to increased sustainability - both for people and the environment
Through FOSEG employees of Bonheur-related companies participate in positive contributions to local societies beyond their commercial activities. Bonheurs believes that personal engagement by and between people create a win-win situation that benefits all and promotes stronger local societies. FOSEG’s task is thus to search and evaluate suitable projects and to follow up supports provided.
FOSEG granted NOK 5 million in 2022 to selected projects and activities, with an additional NOK 1 million for needs consequent on the war in Ukraine.
Furthermore, Subsidiaries of FOR have established a community benefit fund as part of their ongoing commitments to support communities in the vicinity of their wind farms. In 2022 NOK 10 million was granted to different civil society and community organizations. The purpose of the fund is to enable communities to carry out improvements to their local area, including the environment, local amenity or tourism.
Among organizations that FOSEG supported was Mental Health and Human Rights Info (MHHRI). MHHRI is an NGO with the mission to supplying information about the consequences of human rights violations on mental health in the contexts of disaster, conflict and war. The give an overview of experiences in the field as well as ways of dealing with such consequences on individual, group and community level. MHHRI is dedicated to training and support health professionals working within the field of human rights violations, conflict and health and the development of the training manual, “Mental Health and Gender Based Violence” is funded by the Norwegian Ministry of Foreign Affairs and Bonheur.
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Oslo, 12 April 2023
Bonheur ASA – The Board of Directors
Fred. Olsen
Carol Bell
Bente Hagem
Jannicke Hilland
Andreas Mellbye
Nick Emery
Chairman
Director
Director
Director
Director
Director
Sign.
Sign.
Sign.
Sign.
Sign.
Sign.
Anette Sofie Olsen
Managing Director
Sign.
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Bonheur ASA – Group of companies
Bonheur ASA – Annual Report 2022
Consolidated Income Statement
For the period 1 January - 31 December
(Amounts in NOK 1 000)
Note
2022
2021
Revenues
5
Gain on sale of property, plant and equipment
Total operating income
Cost of sales
-955 020
-673 656
Salaries and other personnel expenses
7,19
-2 006 242
-1 815 558
Other operating expenses
6,19
-4 618 077
-3 115 258
Loss on sale of property, plant and equipment
-1 337
Total operating expenses
-7 580 676
-5 604 472
Operating profit / loss (-) before depreciation and impairment losses
Depreciation and amortisation
10,11
-1 088 063
-932 165
Impairment of property, plant and equipment and intangible assets
10,11
-452 045
-43
Total depreciation and impairment losses
-1 540 107
-932 208
Operating profit / loss (-)
Share of profit / (loss-) in associates
12
-14 243
-6 310
Interest income
Other finance income
Finance income
8
Interest expenses
-440 385
-433 103
Other finance expenses
-255 594
-140 018
Finance expenses
8
-695 979
-573 121
Net finance income / expense (-)
-82 196
Profit / (-loss) before tax
Tax income / expense (-)
9
-757 529
-482 203
Profit / (loss-) for the year
Allocated to:
Shareholders of the parent
-106 563
Non-controlling interests
Profit / (loss-) for the year
Basic and diluted earnings per share (NOK)
17
-2.5
The non-controlling interests in the Bonheur Group of companies are included in the Consolidated Income Statement. The non-controlling interests consist of 43.28% of NHST Holding AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
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Bonheur ASA – Annual Report 2022
Consolidated Statement of Comprehensive Income
For the period 1 January - 31 December
(Amounts in NOK 1 000)
Note
2022
2021
Profit/Loss for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Actuarial gains/(losses) on pension plans
19
Other comprehensive income for the period
-2 890
-9 280
Income tax on other comprehensive income
-1 906
Total items that will not be reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation effects:
- Foreign currency translation differences from foreign operations
-321 723
- Foreign currency translation differences from foreign operations transferred to profit or loss
Fair value effects related to financial instruments:
- Financial assets at fair value over OCI
-3 664
Income tax on other comprehensive income
9
Total items that are or may be reclassified subsequently to profit or loss
-321 616
Other comprehensive income for the period, net of income tax
-318 844
Total comprehensive income for the period
Allocated to:
Shareholders of the parent
-397 845
Non-controlling interests 1)
Total comprehensive income/loss for the period
1) As at 31 December 2022 non-controlling interests consist of 43.28% of NHST Media Group AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (FOCBH) (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
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Bonheur ASA – Annual Report 2022
Consolidated Statement of Financial Position
(Amounts in NOK 1 000)
Note
31.12.2022
31.12.2021
ASSETS
Non-current assets
Development costs
Publishing rights
Customer relationship, technology, patents, other
Goodwill
Intangible assets
11
Deferred tax asset
9
Windfarms
Ships
Other fixed assets
Property, plant and equipment
10
Investments in associates
12
Investments in other shares
13
Bonds and other receivables
13
Pension funds
19
Financial fixed assets
Total non-current assets
Current assets
Inventories
14
Trade receivables and contract assets
15
Other receivables and shares
15
Restricted cash
16
Other cash and bank deposits
16
Total current assets
Assets held for sale
10
Total assets
The non-controlling interests in the Bonheur Group of companies are included in the Consolidated Statement of Financial Position. The non-controlling interests consist of 43.28% of NHST Media Group AS (adjusted for own shares), 49.00% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
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Bonheur ASA – Annual Report 2022
Consolidated Statement of Financial Position
(Amounts in NOK 1 000)
Note
31.12.2022
31.12.2021
EQUITY AND LIABILITIES
Equity
Share capital
Additional paid in capital
Total paid in capital
Retained earnings
Share of equity attributable to shareholders of the parent
Non-controlling interests
-197 697
Total equity
Liabilities
Employee benefits
19
Deferred tax liabilities
9
Interest bearing loans and borrowings
18
Other non-current liabilities
20
Total non-current liabilities
Current tax
9
Investments in associates
12
Interest bearing loans and borrowings
18
Other accruals and deferred income
20
Trade and other payables
21
Total current liabilities
Total liabilities
Total equity and liabilities
The non-controlling interests in the Bonheur Group of companies are included in the Consolidated Statement of Financial Position. The non-controlling interests consist of 43.28% of NHST Media Group AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
Oslo, 12 April 2023
Bonheur ASA – The Board of Directors
Fred. Olsen
Carol Bell
Bente Hagem
Jannicke Hilland
Andreas Mellbye
Nick Emery
Chairman
Director
Director
Director
Director
Director
Sign.
Sign.
Sign.
Sign.
Sign.
Sign.
Anette Sofie Olsen
Managing Director
Sign.
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Bonheur ASA – Annual Report 2022
Statement of Changes in Equity
(Amounts in NOK 1 000)
Share
Capital
Share
premium
Transl.
reserve
Fair value
reserve
Retained
earnings
Total
Non-controlling interest
Total
equity
Balance at 1 January 2021
Reclassification
-728 000
Total comprehensive income for the period
-286 218
-111 734
-397 845
Effect from transactions with non-controlling
interests
Dividends to shareholders in parent company
-170 128
-170 128
-170 128
Dividends to non-controlling interests in subsid.
-149 699
-149 699
Balance at 31 December 2021
-119 574
-197 697
Balance at 1 January 2022
-119 574
-197 697
Total comprehensive income for the period
-2 895
Effect from transactions with non-controlling
interests
Transaction costs
-57 162
-57 162
-57 162
Dividends to shareholders in parent company
-182 887
-182 887
-182 887
Dividends to non-controlling interests in subsid.
-870 859
-870 859
Balance at 31 December 2022
-20 318
-2 363
A reclassification of NOK 728 million between retained earnings (Majority share) and non-controlling interests was booked in second quarter 2021 to reflect a correct treatment of intra group eliminations.
Share capital
Par value per share
NOK 1.25
Number of shares issued
Shares outstanding and dividends
2022
2021
Number of shares outstanding at 1 January
New shares issued
Number of shares outstanding at 31 December
Note 17
Total dividends per share
The board will propose to the Annual General Meeting on 25 May 2023 to approve a dividend of NOK 5.0 per share.
Translation reserve
The reserve represents exchange rate differences resulting from the consolidation of associates and subsidiaries having functional currencies other than NOK.
Fair value reserve
The reserve includes the cumulative net change from investments at fair value through other comprehensive income until the investment is derecognised.
Non-controlling interests
As at 31 December 2022 the non-controlling interests consist of 43.28% of NHST Media Group AS (adjusted for own shares), 49% of Fred. Olsen Wind Limited (UK), 49% of Fred. Olsen CBH Limited (UK), 49% of Hvitsten II JV AS, 49% of Hvitsten II JV AB, 49% of Blue Tern Limited, 50% of United Wind Logistics GmbH and 7.84% of Global Wind Service A/S.
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Consolidated Cash Flow Statement
(Amounts in NOK 1 000)
Note
2022
2021
Cash flow from operating activities
Net result after tax
Adjustments for:
Depreciation / amortisation / impairment
10,11
Impairment of financial investments / net change in fair value of financial assets
8
-392 791
-209 031
Pension costs
7
Net unrealized foreign exchange gain (-) / loss
8
-35 062
Interest income and dividends
8
-97 989
-147 496
Interest expenses
8
Share of result in associates
12
Net gain (-) / loss on sale of property, plant and equipment
10
-732
-500
Net gain (-) / loss on sale of investments
8,13
-2 942
Tax income (-) / expense
9
Cash generated before changes in working capital and provisions
Increase (-) / decrease in trade and other receivables
-554 037
-450 754
Increase / decrease (-) in current liabilities
Cash generated from operations
Interest paid
-317 277
-289 785
Tax paid
9
-714 373
-241 845
Net cash from operating activities
Cash flow from investing activities
Proceeds from sale of property, plant and equipment
10
Proceeds from sale of investments
12
Interest received
Dividends received
Acquisitions of property, plant and equipment
10,11
-1 040 029
-805 613
Acquisitions of other investments
13
-469 382
-253 944
Net cash from investing activities
-1 356 261
-830 958
Cash flow from financing activities
Proceed from sale of shares in subsidiaries as part of financing
Increase in borrowings
18
Repayment of borrowings
18
-1 445 143
-1 398 515
Dividends paid
-1 053 746
-319 827
Net cash from financing activities
-913 204
Net increase in cash and cash equivalents
-281 183
Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations on cash held
-30 146
Cash and cash equivalents at 31 December
16
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
The consolidated financial statements of Bonheur ASA as at and for the year ended 31 December 2022 comprise Bonheur ASA and its subsidiaries (together referred to as the “Group of companies” and individually as “Group entities”) and the Group of companies’ interests in associates.
The Group of companies is primarily involved in Renewable Energy, Wind Service and Cruise.
The annual accounts together with the appurtenant financial statements were addressed by the Board of Directors on 12 April 2023. In a meeting 14 April 2023, the Shareholders’ Committee recommended to the Annual General Meeting that the proposal to the annual accounts for 2022 together with the appurtenant financial statements as addressed and resolved upon by the Board in the said meeting on 12 April 2023, is approved. Eventual approval of the annual accounts together with the appurtenant financial statements lies with the Annual General Meeting scheduled for 25 May 2023.
Basis of accounting
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and its interpretations, as adopted by the European Union and the disclosure requirements following from the Norwegian Accounting Act, that are mandatory to apply at 31.12.2022.
Basis of preparation
These consolidated financial statements are presented in Norwegian Kroner (NOK), the functional currency of Bonheur ASA. All financial information presented in NOK has been rounded to the nearest thousand.
The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Reassessment of accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Judgements and estimates made by management in the application of IFRSs that have significant effect on the financial statements and estimates that have a significant risk of material adjustment in the next year are discussed in the specific notes.
The accounting policies have been applied consistently to all periods presented in these consolidated financial statements by all Group entities. The Group of companies’ accounting policies are described in the individual notes to the Consolidated Financial Statements.
Basis of consolidation
Subsidiaries
The consolidated financial statements include Bonheur ASA and its subsidiaries (the Group of companies). See note 27 for details of the subsidiaries.
Associates (investments accounted for using the equity method)
Associates are those entities in which the Group of companies has significant influence, but not control, over the financial and operating policies. See note 12 for details of the associates.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any realised and unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with
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associates 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 unrealised gains, but only to the extent that there is no evidence of impairment.
Realised foreign currency differences from intra-group transactions which are recognised in profit or loss are not eliminated, because the Group of companies has a real exposure to a foreign currency. Unrealised foreign currency differences from intra-group transactions which are recognised in profit or loss are eliminated, but only to the extent that the currency difference is due to permanent financing.
Non-controlling interests
Non-controlling interests within the consolidated subsidiaries are identified as a separate item within the Group of companies’ equities. Non-controlling interests consist of interests at the date of the original transaction and the non-controlling interests’ share of changes in equity since that date. Losses applicable to the non-controlling interests in excess of the non-controlling interests in the subsidiary’s equity are allocated to the majority interests of the Group of companies as there is no obligation for the non-controlling interests to make an additional investment to cover the losses. Acquisitions and sales of non-controlling interests are accounted for entirely as an equity transaction as long as the subsidiary is still under the control of the Bonheur Group of companies.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group of companies’ entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign operations
The assets and liabilities of subsidiaries with other functional currency than NOK, are translated into NOK at the exchange rate at the statement of financial position date. Revenues and expenses are translated using average monthly foreign exchange rates, which approximates exchange rates on the dates of the transactions. Foreign exchange differences arising on translation are recognised directly as a separate component of equity. When a foreign operation is disposed of, in part or in full, the relevant amount of the component in equity is transferred to profit or loss.
Provisions
A provision is recognised if, as a result of a past event, the Group of companies has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability.
Principal accounting policies
The Group of companies’ accounting policies are described in the individual notes to the Consolidated Financial Statements. Considering all the accounting policies applied, Management regards the notes listed below as the most significant notes for the recognition and measurement of reported amounts.
Accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that Management considers reasonable and appropriate under the circumstances. The resulting accounting estimates may differ from the eventual outcome, but the Group of companies’ regards this as the best estimate at the balance sheet date. The notes in this report provide further information on the specific topics including key accounting estimates and judgments.
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
The amended standards and interpretations had no significant impact on the Group of companies consolidated financial statements in 2022.
Forthcoming requirements
The amended standards and interpretations are not expected to have a significant impact on the Group of companies consolidated financial statements.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
•Derivative financial instruments are measured at fair value
•Financial assets measured at fair value through profit or loss or through other comprehensive income
•Employee benefits are measured at fair value
The methods used to measure fair values are discussed further in note 2.
(i) Property, plant and equipment (PPE)
The fair value of PPE is estimated when impairment tests are performed. The market value of items of vessels is based on broker valuations, for other items it is based on quoted market prices for similar items. Fair value may also be based on value in use for the purpose of impairment testing. Value in use is the present value of the future net cash flows from continuing use and ultimate disposal of the asset.
(ii) Intangible assets
(iii) Investments in equity and debt securities
The fair value of financial assets at fair value through profit or loss and through other comprehensive income is determined by reference to their quoted bid price at the reporting date.
If such a quoted bid price does not exist at the statement of financial position date, the following items are considered when estimating the fair value:
▪the latest known trading price
▪average price from transactions
▪transactions with high volume
(iv) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of expected future cash flows.
(v) Derivatives
The fair value of forward exchange contracts is based on available market information. The fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds).
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(vi) Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For lease liabilities the market rate of interest is determined by reference to similar lease agreements.
The Group of companies is exposed to certain financial risks related to its activities. The financial risks are continuously monitored and from time-to-time financial derivatives are used to economically hedge such exposures. The monitoring within the various business segments is carried out by the respective companies, in accordance with their policies and procedures, through internal reporting and online based information of movements and market values of relevant financial instruments. Reports on the companies’ financial risk exposure are regularly submitted to the respective entities’ Board of directors.
For more information – see notes 18 and 22.
Financial market risk
Currency risk
The Group of companies’ financial statements are presented in NOK. The Group of companies’ revenues consist primarily of EUR, GBP and NOK. The revenues within the Wind Service segment in 2022 were in EUR. The GBP revenues in 2022 are within the Renewable Energy and cruise segments. Consequently, out of the group’s gross revenues of NOK 11 435 million in 2022, approximately 49% were in GBP, approximately 36% were in EUR and approximately 2% were in SEK. The remaining 13% were in NOK. The Group of companies’ expenses are primarily in EUR, GBP, USD and NOK. As such, the Group of companies’ earnings are exposed to fluctuations in the currency market. However, in the longer-term parts of the currency exposure are neutralized due to the majority of the Group of companies’ debts being denominated in the same currencies as the main revenues.
The Group of companies is exposed to interest rate fluctuations, as loans are frequently based on floating interest rates. By the turn of the year, parts of the outstanding loans in Renewable energy had been hedged against interest fluctuations through interest rate swap agreement, the external loans in Cruise had a fixed interest rate and part of the det in UWL has a fixed interest rate. At year-end 36% (2021: 35%) of total loans were swapped into fixed rate obligations by use of interest rate swap agreements.
Fuel / bunker price
The Group of companies is exposed to fluctuations in bunker prices, which are fluctuating with the oil price. This exposure is primarily within the Cruise segment. In 2022 approximately 8% (2021: 3%) of total operating expenses within the Group of companies were bunker expenses within the Cruise segment, while approximately 1.5% (2021: 1.5%) were bunkers expenses within Wind Service. By the end of the year, there were no short-term derivative contracts outstanding relating to securing part of the bunker costs for the year 2023.
Electricity price
Electricity sales for the windfarms are on floating contracts and are subject to change in electricity prices apart from Paul’s Hill and Rothes. 75% of the electricity sales for Paul’s Hill wind farm was fixed for the winter of 2022 (4Q 2022 and 1Q 2023) at GBP 363.93 per MWh and 75% of production Rothes wind farm for winter of 2022 at GBP 351.45 per MWh. The electricity sales for the other ten windfarms are on variable contracts. In 2022 3% (2021: 12%) of the generation was based on fixed prices which expires at the end of 1Q 2023.
Credit risk
The Group of companies continuously evaluates the credit risk associated with customers and, when considered necessary, seeks to obtain certain guarantees. The credit risk within the Group of companies is in general considered to be moderate without significant changes from the previous year. Customers within Renewable Energy, which in 2022 provided 38% (2021: 32%) of total revenues, are large electricity distributors. Customers within Wind Service are large and well reputed entities from the Wind Service industry, although the turbine manufacturers are going through a period with negative profitability. Customers within the Wind Service segment provided in 2022 36% (2021: 47%) of total revenues. Credit risk within cruise 17% of total revenues in 2022 (2021: 7%)) is also regarded to be moderate, due to cruise tickets being paid in advance. Within the segment Other 9% (2021: 14%) of total revenues), credit risk is regarded moderate due to prepayment of subscriptions being a major part of the revenues.
Liquidity risk
Gross interest-bearing debt of the Group of companies at year end was NOK 10 177 million (2021: NOK 10 424 million). Cash and cash equivalents amounted to NOK 5 458 million (2021: NOK 4 039 million). Net interest-bearing debt of the Group of companies was NOK 4 719 million (2021: 6 385 million). Equity to assets ratio for the parent company was 73% (2021: 66%).
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
The Group of companies’ interest-bearing debt consists of several loans. Some of the main business segments have arranged separate loans to cover their investments. In 2022 investments were financed by cash from operations, bank credit facilities and bond loans. Dividend payments from Bonheur ASA in 2022 amounted to NOK 183 million (2021: 170 million).
The Group of companies’ short-term cash investments are mainly limited to cash deposits in the Group of companies’ relationship banks and bonds. Derivative financial instruments are normally entered into with the Group of companies’ main relationship banks.
A Minimum of NOK 500 million of other restricted cash reflects deposits required according to covenants in Bonheur ASAs bond loans.
The Group of companies’ overriding financial objectives target to secure long-term visibility and flexibility through business cycles in order to sustain future development of the separate business and the group as a whole and maintain market and stakeholder confidence.
The FOCO on behalf of Bonheur ASA performs capital management for the Company’s operations and oversees activity on an overall level for the Group of companies. Capital management is carried out within the various business segments, based on their respective policies and procedures.
The majority of the Group of companies’ free available cash and cash equivalents have traditionally been held as bank deposits, however, investments in short- and long-term securities are also made. As a governing principle the wholly owned subsidiaries distribute free available excess cash to the Company.
To position the Group of companies for the upcoming implementation of the EU taxonomy directive and to formalize Bonheur’s commitment to sustainable financing, Bonheur during 2020 established a green finance framework with an eligibility assessment from DNV. Since then, two green bond loans of NOK 700 million each, have been issued to be used for eligible green investments as defined in the framework, in addition to two external green loans in Wind Services of EUR 50 million and in Blue Tern of EUR 35 million. In 2022, the green financing frameworks were updated to also take into account EU Taxonomy rating.
The Group of companies is in compliance with all external loan covenants as per 31 December 2022 and 12 April 2023.
Accounting policies
A segment is a distinguishable component of the Group of companies that is engaged in providing related products or services (business segment), which is subject to risks and returns that are different from those of other segments. Segment information is presented in respect of the Group of companies' business segments. The business segments are determined based on the Group of companies' management and internal reporting structure. Inter-segment pricing is determined on an arm’s length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment other than capital expenditure according to IFRS 16, and intangible assets other than goodwill.
The Group of companies has four reportable segments, as described below, which are the Group of companies' strategic business areas. The strategic business areas offer different products and services and are managed separately because they require different technology and marketing strategies. For each of the strategic business areas, the Group of companies' chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. Information regarding the results of each reportable segments is included below. Performance is measured based on segment operating profit and profit after tax, as included in the internal management reports that are reviewed by the Group of companies' CODM. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.
The Group of companies comprise the following business segments:
1)Renewable Energy
The companies included in the segment are Fred. Olsen Renewables and Fred. Olsen Seawind. The companies are engaged in development, construction and operation of wind farms in Scotland, Norway, Sweden, Ireland, Italy and USA.
2)Wind Service
The companies included in the segment are mainly Fred. Olsen Windcarrier, Global Wind Service and United Wind Logistics. The companies are engaged in logistics and services within the offshore wind industry.
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3)Cruise
Cruise Lines operates three cruise ships and provides a diverse range of cruises.
4)Other Investments
The segment includes entities Fred. Olsen 1848 AS, Fred. Olsen Investments AS, Fred. Olsen Insurance Services AS, Fred. Olsen Travel AS, and the Company’s ownership of 55.0% in NHST Media Group AS. In addition, the segment has various investments in real estate, bonds and shares.
Fully consolidated companies
Renewable Energy 1)
Wind Service 2)
Cruise 3)
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
Operating income - external
4 391 711
2 390 599
4 048 912
3 505 843
1 893 168
542 523
Operating income - internal
0
0
41 843
21 542
0
0
Operating costs
-906 093
-627 086
-3 170 227
-2 774 618
-2 316 768
-1 086 073
Depreciation
-307 525
-259 387
-507 144
-369 699
-175 098
-211 448
Impairment
-13 714
-43
18 243
0
-456 573
0
Operating profit/loss
3 164 378
1 504 084
431 627
383 066
-1 055 271
-754 998
Interest income
20 318
4 911
3 618
452
752
73
Interest expenses
-203 057
-262 020
-79 472
-72 996
-39 820
-12 512
Tax income / expense (-)
-697 519
-425 500
-54 406
-53 090
-553
-554
Profit / (loss-) for the year
2 752 708
1 049 057
302 014
248 808
-1 097 398
-777 634
Total assets
8 848 864
7 546 833
6 945 228
5 964 349
1 056 123
1 439 665
Total liabilities
7 024 623
7 250 045
3 223 478
2 703 934
2 638 764
1 916 209
Total equity
1 824 242
296 788
3 721 750
3 260 415
-1 582 641
-476 544
Capital expenditures
955 070
147 380
613 930
387 737
156 569
191 826
Fully consolidated companies
Other Investments 4)
Eliminations
Group of companies total
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
Operating income - external
1 101 273
1 102 038
0
0
11 435 064
7 541 003
Operating income - internal
41 494
16 292
-83 337
-37 834
0
0
Operating costs
-1 253 245
-1 154 529
65 657
37 834
-7 580 676
-5 604 472
Depreciation
-98 295
-91 631
0
0
-1 088 063
-932 165
Impairment
0
0
0
0
-452 045
-43
Operating profit/loss
-208 772
-127 829
-17 681
0
2 314 281
1 004 323
Interest income
76 335
26 009
-28 597
-13 844
72 426
17 601
Interest expenses
-124 023
-101 032
5 988
15 457
-440 385
-433 103
Tax income / expense (-)
-5 052
-3 058
0
0
-757 529
-482 203
Profit / (loss-) for the year
1 282 844
129 283
-1 538 120
-215 899
1 702 047
433 614
Total assets
11 177 618
11 323 751
-6 275 194
-7 156 183
21 752 639
19 118 415
Total liabilities
2 858 490
4 141 335
-948 901
-1 317 536
14 796 453
14 693 987
Total equity
8 319 127
7 182 417
-5 326 292
-5 838 648
6 956 186
4 424 428
Capital expenditures
69 997
51 946
0
0
1 795 565
778 890
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Bonheur ASA – Group of CompaniesNotes
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Associates *)
Renewable Energy 1)
Wind Service 2)
Other Investments 4)
Group of companies total
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
2022
2021
Operating income
0
0
33 643
0
50 667
3 774
84 310
3 774
Operating costs
-3 601
-1 546
-34 724
0
-46 658
-4 009
-84 983
-5 554
Depreciation / Impairment
-700
-293
0
0
-3 171
-404
-3 871
-698
Operating result
-4 301
-1 839
-1 081
0
838
-639
-4 544
-2 479
Share of profit in associates
-12 079
-5 620
-1 592
0
-572
-690
-14 243
-6 310
Share of equity
140 603
0
123
0
32 142
0
172 868
0
*) For information on associates please refer to note 12.
Fully consolidated companies
Europe
Asia
Americas
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
Operating income
9 422 660
5 873 655
1 442 137
813 136
525 591
658 659
Capital expenditure
1 792 693
776 226
576
0
2 296
2 623
Africa
Other regions
Group of companies total
2022
2021
2022
2021
2022
2021
Operating income
0
51
44 676
195 502
11 435 064
7 541 003
Capital expenditure
0
0
0
40
1 795 565
778 890
The distribution of the operating revenue reported above is based on the geographical location of the customers. The Group of companies' operating income is primarily originating in Europe from ownership and operation of windfarms, Wind Service activities, cruise activities and from NHST Media Group. The capital expenditures are based on the location of the company that is actually doing the investment.
Major customer
Of the total revenue in 2022 within the Group of companies, UK, Germany, Netherlands, Asia and Norway contributed 24%, 23%, 13%, 13% and 11% respectively (2021: 18%, 23%, 12%, 11% and 14% respectively). Revenues from four major customers within the Renewable Energy segment, constituted 37% (2021: 31%) of the total revenue in the Group of companies. In the Wind Service segment three major customer constituted 20% (2021: 16%) of the total revenue in the Group of companies.
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Accounting policies
Revenue from the Renewable Energy segment
Revenue from sale of electric power is recognized in the period the power is generated and supplied to the customers, at rates in the relevant contracts, as there is a right to bill the customer for each MWh produced. Payment is due the month after.
In 2022 revenues from the Renewable Energy segment have increased significantly. Power generation increased with 22% from 2021 due to better wind conditions and full year production from the Högaliden wind farm. The main reason for increase in revenues is the power price development as visualized in the below graph:
The graph includes power prices from the NO2 price area in Norway, which is where Lista windfarm is located. In NO2 prices are normally more correlated with UK and European prices than price area SE2, in the northern part of Sweden where the Högaliden and Fäbodliden windfarms are located. The lower correlation is due to lack of grid capacity within Sweden.
The UK power market in 2022 was similar to that of Europe, affected by high commodity prices in particular natural gas prices and variable renewable generation with low renewable generation during the summer. Wind generation increased back towards normal levels after the summer coupled with falling gas prices, lead to significantly lower power prices during October/November. In 2022, the Nordics saw record low hydrological resources in Southern price areas during the first three quarters driving imported volumes from Europe and higher prices. Towards the end of the year, this was reversed by mild temperatures and high levels of precipitation.
The Green Certificates are classified as other operating revenues. The Green Certificates are to be considered as a government assistance. The grants are issued when the electricity is generated and are therefore considered as a subsidy linked to production. The Green Certificates are recognized under the income approach and accrued in the Profit or Loss on a monthly basis based on the monthly generation of the windfarms.
Revenue from the Wind Service segment
Revenue from Transport & Installation
Operating revenue from charter rate contracts is split into two elements, income from rentals, which is accounted for in accordance with IFRS 16, and services, which is accounted for under IFRS 15.
Revenue on long term contracts is recognized during the operational phase of the contract (from the delivery of the vessel at the designated port and to the end of demobilization). During the mobilization phase no goods or services are transferred to the customer. Costs incurred to fulfil the contract during the mobilization phase is capitalized and amortized over the contract term if they meet the criteria in the standard. Mobilization fees paid up front by the customers are recognized as a contract liability until services are delivered.
Variable consideration that specifically relates to a distinct good or service is allocated specifically to this good or service. Variable consideration that does not relate specifically to a distinct good or service is included within the transaction price and recognized in line with progress. Time elapsed, i.e., voyage days, is used to measure progress.
Revenue from Wind services
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Revenue from the Cruise segment
Cruise fares are recognized evenly over number of nights of the cruise together with revenue from drink packages. Flight revenue is recognized evenly over the duration of the cruise contract (from the flight occurs to the end of the cruise) as the fly/cruise holiday is sold as one item and is considered as one performance obligation. Prepayments from sale of cruises are classified as contract liabilities until the cruise commences.
Prebooked shore excursions are recognized as revenue when the tour is completed.
The revenues of the Bonheur group of companies are summarised in the below tables:
(Amounts in NOK 1000)
2022
2021
Sales of electricity
3 371 603
1 639 098
Sales of other goods
75 226
25 255
Service revenue
5 951 575
4 362 071
Other operating revenue
87 130
53 149
Total revenue from goods and services
9 485 536
6 079 573
Lease revenue
922 424
667 619
Green Certificate revenue
762 623
666 547
Other operating revenue
262 412
126 787
Other operating revenue
1 947 460
1 460 953
Other operating income
2 069
477
Total operating income
11 435 064
7 541 003
Service revenue arises mainly from the business segments Wind Service, Cruise and the subsidiary NHST Media Group AS.
Lease revenue arises mainly from the business segment Wind Service and consists of Bare Boat Charter hire to the vessel owners.
The following table provides information about receivables, contract assets and contract liabilities from contract with customers:
31 December
31 December
(Amounts in NOK 1000)
Note
2022
2021
Receivables, which are included in "trade and other receivables"
15
1 047 643
924 652
Contract assets
15
466 007
280 084
Contract liabilities
20
1 343 539
1 303 630
Contract assets are mainly related to work performed in the Wind Service segment. No impairment losses on contract assets have been recognized during 2022.
Contract liabilities are mainly related to subscriptions in NHST, prepayment of tickets and tours in the Cruise segment and deferred revenue and mobilization fees from external customers in the Wind Service segment.
At 31.12.21 the value of contract liabilities amounted to NOK 1.304 million of which NOK 976 million has been recognized as income in 2022. The change in contract assets and liabilities relates to natural progression of the project portfolio, as well as the current project mix.
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Order backlog
2023
2024
2025
Order backlog per year (NOK million)
2 256
1348
844
Contracts with duration of more than 12 months are included as order backlog.
Capitalized project costs
The following table shows costs directly attributable to the projects:
31 December
31 December
(Amounts in NOK 1000)
2022
2021
Cost to fulfil contracts
73 144
48 359
Cost to fulfil contracts is related to capitalized project costs in note 14 and are mainly related to projects from Transport & Installation and wind services in the Wind Service segment.
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Note 6 - Operating expenses
(Amounts in NOK 1000)
2022
2021
Administrative expenses 1)
565 587
410 238
Other operating expenses 2)
4 052 491
3 472 721
Total
4 618 077
3 882 959
1) Inclusive administration costs and fee to Fred. Olsen & Co of NOK 92.2 million (2021: NOK 114.8 million) See note 26. 2) Other operating expenses are mainly related to operation of the cruise vessels (Fred. Olsen Cruise Lines Ltd.), Wind Service (Global Wind Service AS and United Wind Logistics GmbH). In 2022 cruise vessels operation amounts to NOK 2012.3 million (2021: NOK 895.9 million) which are mainly onboard expenses, vessel operations expenses and Selling & Marketing expenses. Operation of Wind Service amounts to NOK 1878 million (2021: NOK 2420.2 million). Research and development expenditures of NOK 68 million are recognised in profit or loss in 2022 (2021: NOK 32 million).
Professional fees to the auditors
A breakdown of professional fees to the auditors, which is included in "Administrative expenses", is given below.
The fees encompass group auditor, KPMG, including affiliates of KPMG, and non-KPMG auditors of the Group.
Professional fees to the auditors
2022
2021
Statutory audit
24 358
20 002
Other attestation and audit related services
3 954
5 590
Tax services
868
1 020
Other non-audit services
4 801
2 016
Total (VAT exclusive)
33 981
28 629
Bonheur ASA has no employees. The position as managing director is held by Anette S. Olsen as part of the day-to-day operation of the Company provided by FOCO. See note 26.
At year end 2022 subsidiaries of Bonheur had 5 709 employees (4 475 employees). Main reason for the increase from 2021 is the mobilization of a third cruise vessel in FOCL and growth in service technicians in GWS.
Personnel expenses for the Group of companies were:
(Amounts in NOK 1000)
Note
2022
2021
Salaries etc.
Salaries
1 674 477
1 492 228
Social security costs
166 180
160 040
Pension costs
19
107 295
102 318
Other
58 290
60 972
Total
2 006 242
1 815 558
Loan to employees in the Group of companies
1 213
1 812
Subsidiaries within the Group of companies have established bonus systems. In 2022, the total bonuses paid within the Group of companies amounted to NOK 39.2 million (2021: NOK 18.1 million).
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Remuneration to the Board of Directors and the Shareholders Committee
In 2022, the members of the Board received the following directors’ fees:
(Amounts in NOK 1000)
2022
2021
Fred. Olsen, Chairman of the Board
1 550
1 420
Andreas Mellbye
405
350
Carol Bell *)
459
393
Nick Emery *)
446
393
Bente Hagem
405
350
Jannicke Hilland
405
350
Total compensations
3 670
3 256
*) Includes compensation for the audit committee fee.
Anette S. Olsen received in 2022 a remuneration of NOK 230 000 as chairman of the Board in NHST Media Group AS (2021: NOK 230 000).
Remuneration to the Shareholders’ Committee:
(Amounts in NOK 1000)
2022
2021
Christian Fr. Michelet
205
190
Einar Harboe
175
160
Jørgen G. Heje
175
160
Bård Mikkelsen
175
160
Ole Kristian Aabø-Evensen
175
160
Total compensations
905
830
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Bonheur ASA – Group of CompaniesNotes
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Accounting policies
Finance income comprises interest income on funds invested in financial assets, dividend income, gains on the disposal of financial assets, positive changes in the fair value of financial assets at fair value through profit or loss, exchange gain/loss and gains on hedging instruments that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss. Dividend income is recognised in profit or loss on the date that the Group of companies’ right to receive payment is established, which in the case of quoted securities is the ex-dividend date. Dividends from non-listed securities are recognised in profit or loss at the date the Group of companies receives the dividends.
Finance expenses comprise interest expense on borrowings, losses on the disposal of financial assets, negative changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, currency losses and losses on hedging instruments that are recognised in profit or loss.
(Amounts in NOK 1000)
2022
2021
Interest income on bonds
8 883
5 164
Interest income on receivables
11 840
5 816
Interest income on bank deposits
51 703
6 622
Interest income
72 426
17 601
Dividend income on financial assets
25 563
129 925
Net gain on disposal of financial assets recognised directly in profit or loss (see note 12)
162
3 065
Foreign exchange gain
352 513
107 134
Net change in fair value of financial assets at fair value through profit or loss
402 907
233 200
Other finance income
1 946
0
Other finance income
783 091
473 323
Interest expense on financial liabilities measured at amortised cost
-440 385
-433 103
Interest expense
-440 385
-433 103
Foreign exchange loss
-226 697
-120 335
Net loss on disposal of financial assets recognised directly in profit or loss
-257
-123
Net change in fair value of financial assets at fair value through profit or loss
0
2 135
Impairment of financial assets
5 213
1 997
Various finance expenses
-33 853
-23 693
Other finance expenses
-255 594
-140 018
Net finance expense recognised in profit or loss
159 538
-82 196
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Accounting principles
Income tax
Income tax expense comprises current and deferred tax. The Group of companies is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the provisions for income tax.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using enacted tax rates at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is recognized from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured using the tax rates that are based on the laws that have been enacted by the reporting date.
Deferred tax assets and liabilities are recognized with the net amount if:
i.there is a legally enforceable right to offset current tax liabilities and assets,
ii.they relate to income taxes levied by the same tax authority on the same taxable entity,
iii.on different tax entities if the intent to settle current tax liabilities and assets on a net basis or tax assets and liabilities will be realized simultaneously.
Income taxes
(Amounts in NOK 1000)
2022
2021
Profit/loss (-) before tax
Norway
1 144 943
185 186
Other countries
1 314 633
730 631
Total
2 459 575
915 817
Taxes paid (-) / received
Norway
-2 034
0
Other countries
-712 339
-241 845
Total paid taxes
-714 373
-241 845
1) Current tax expense (-) / income
Norway
-119 768
-40 168
Other countries
-515 294
-204 641
Total current tax expenses
-635 062
-244 809
2) Deferred taxes expense (-) / income
Norway
-19 405
-11 029
Other countries
-103 062
-226 364
Total deferred tax expenses
-122 467
-237 393
Total income tax expenses 1) + 2)
-757 529
-482 203
The income tax expense differs from the amounts computed when applying the Norwegian statutory tax rate to income before income taxes as a result of the following:
(Amounts in NOK 1000)
2022
2021
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Bonheur ASA – Group of CompaniesNotes
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Income/(-)loss before tax
2 459 576
915 817
Norwegian statutory tax rate
22%
22%
Income tax using the Company´s domestic tax rate
-541 107
-201 480
Increase (-reduction) in income taxes from:
Effect of tax rates other than statutory tax rate in Norway
105 339
73 251
Effects on change in tax rates
-4 142
0
Effects on tax incentives / tonnage tax
-240 360
-139 480
Impairment on tangible and intangible assets
0
-1 201
Prior period adjustments
-30 927
-105 429
Change in recognised deductible temporary differences
12
-7 286
Change in unrecognized deferred tax assets
-39 622
-43 437
Non-deductible and non taxable expenses/income
-14 202
-52 087
Currency effects (a)
19 646
-3 166
Income/expenses recognised directly in equity
-12 166
-1 886
Tax expenses
30,8 %
-757 529
52,7 %
-482 203
(a) Currency effects primarily relate to translating tax positions in functional currency to NOK.
Payable tax as presented in the Statement of Financial Position
Current tax payable Norway
98 807
10 840
Current tax payable other countries
34 833
20 934
Current tax payable
133 640
31 774
Deferred tax:
The tax effects of temporary differences and tax loss carryforwards giving rise to deferred tax assets and liabilities were as follows as of 31 December 2022, and 31 December 2021:
(Amounts in NOK 1000)
Assets
2022
Liabilities
2022
Assets
2021
Liabilities
2021
Property, plant and equipment
4 806
-566 059
6 398
-423 872
Intangible assets
1 605
-28 098
1 796
-27 977
Gain and loss accounts
3 689
-3 842
0
-23 267
Loans and borrowings
5 867
-11 771
3 092
-9 605
Shares and bonds
10 859
2 604
0
-4 253
Other
8 491
-95 265
41 433
-9 515
Tax loss carryforwards
237 675
-726
142 925
0
Subtotal
272 992
-703 157
195 644
-498 489
Set off of tax
-143 990
143 990
-76 257
76 257
Net tax assets / (-) liabilities
129 002
-559 167
119 387
-422 232
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Deferred tax assets have not been recognized in respect of the following items:
(Amounts in NOK 1000)
2022
2021
Deductible temporary differences
162 894
147 366
Tax losses
483 337
458 556
Total
646 231
605 922
As at 31 December 2022, approximately NOK 2.3 billion of tax losses carried forward for subsidiaries in Norway. These losses are not recorded as a deferred tax asset due to uncertainty of the level of the future suitable taxable profits in taxable jurisdictions. The tax losses carried forward have no expiry date.
Tax disputes:
In December 2022 a subsidiary, Fred. Olsen Ocean Ltd was notified by the tax authorities of a possible change in taxable income for 2017. The amount involved is a taxable loss of NOK 313 million. This is not expected to result in any payable tax, since the group of companies have significantly amount in loss carry forward. The company has contradicted the correctness of the tax office' s opinion.
Accounting policies
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, other costs directly attributable to bringing the asset to a working condition for its intended use and costs related to decommissioning of windfarms, including restoration of the site on which they are located. Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Costs for special periodic surveys/renewal surveys (SPS/RS) on ships and offshore units required by classification societies, are capitalised and depreciated over the anticipated period between surveys, generally five years. Extensive upgrading and repairs after termination of contracts, are depreciated either over the assumed period to next survey or over the same profile as the unit if the unit's remaining useful life is shorter. Other maintenance and repair costs are expensed as incurred.
Development costs for wind farm projects are booked as operating expenses until a project is defined and firm. Thereafter development costs are capitalized, and when the projects are in the construction phase these costs are transferred to property, plant and equipment. Auction/lease fees will be capitalized in the balance sheet. The asset will be depreciated over the estimated lifetime of the wind farm.
Borrowing costs are capitalised as part of cost of certain qualifying assets in accordance with IAS 23, “Borrowing cost”. A qualifying asset is one which necessarily takes a substantial period of time to be made ready for its intended use, generally items that are subject to major development or construction projects.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for separately.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in profit or loss.
(ii) Residual values / decommissioning provision
Residual values are assessed at the beginning of each accounting year and constitute the basis of the depreciation for the year. Residual values for ships are estimated based on recoverable material reduced by other demobilisation costs related to the unit. Recoverable material for ships are calculated as market steel price multiplied by the recoverable lightweight of the unit. Any changes in residual values are accounted for prospectively as a change in accounting estimate.
Decommissioning provisions within the Renewable segment are made for the costs of removing the windfarms from the time at which a commitment arises. The decommissioning provision is calculated on the basis of current technology and regulations. When a removal commitment is expensed as a liability a corresponding amount is capitalised as an operating asset which is depreciated over the useful life of the windfarms. Any changes in the estimates concerning the decommissioning provision are adjusted against book value and is recognised in the Income Statement over the remaining useful life. The decommissioning provision has been calculated using the cost levels, and where applicable this has been adjusted for inflation. The increase in the liability as a consequence of adjustment for inflation is classified as a financial expense. The
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estimated useful lives, residual values and decommissioning costs are reviewed on yearly basis. Any change is accounted for prospectively as a change in accounting estimate.
(iii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group of companies and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iv) Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Financially leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group of companies will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows:
Windfarms
24 years
Vessels
10 to 42 years
Wind installation vessels
20 years
Plant and Buildings
5 to 50 years
Machinery and Equipment
3 to 10 years
Cars
7 years
IT Equipment
5 years
Furniture and fixtures
5 to10 years
The estimated useful lives, residual values and decommissioning costs are reviewed on a yearly basis. Any changes are accounted for prospectively as a change in accounting estimate.
(v) Impairment
The carrying amounts of the Group of companies' property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
When considering impairment indicators, the Group of companies considers both internal (e.g., adverse changes in performance) and external sources (e.g., adverse changes in the business environment). For vessels these are analysed as cash generating units (CGU) by reviewing day rates and broker valuations. If an indicator of impairment is identified, management estimates the amount, if any, of impairment. In order to measure potential impairment, the carrying amount is compared to the recoverable amount, which is the higher of its fair value less costs to sell and value in use. The value in use is calculated as the present value of the expected future cash flows for the individual units, requiring significant management estimates of assumptions including discount rates as well as the timing and amounts of cash flows.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised 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.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a positive 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.
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(Amounts in NOK 1000)
Windfarms
Vessels
Other fixed assets
Total
Costs
Balance at 1 January 2021
9 706 423
9 742 879
956 536
20 405 838
Acquisitions
115 625
518 048
71 552
705 225
Right to use asset (leasing IFRS 16)
17 744
4 646
52 673
75 063
Disposals
0
-115 046
-46 329
-161 375
Effect of exchange rate fluctuations
8 451
-202 652
-3 231
-197 432
Balance at 31 December 2021
9 848 243
9 947 875
1 031 201
20 827 319
Balance at 1 January 2022
9 848 243
9 947 875
1 031 201
20 827 319
Acquisitions
167 457
494 707
249 666
911 830
Right to use assets (leasing IFRS 16)
36 859
0
76 983
113 842
Reclassified to assets held for sale
0
-1 621 394
0
-1 621 394
Disposals
-74 462
-359 312
-7 368
-441 142
Effect of exchange rate fluctuations
-57 901
248 042
60 913
251 054
Balance at 31 December 2022
9 920 196
8 709 918
1 411 395
20 041 509
Depreciation and impairment losses
Balance at 1 January 2021
4 302 490
4 573 725
513 900
9 390 115
Depreciation charge for the year
250 157
522 592
85 868
858 617
Impairment losses
0
0
0
0
Disposals
0
-114 706
-33 106
-147 812
Effect of exchange rate fluctuations
56 970
-44 303
-8 507
4 160
Balance at 31 December 2021
4 609 617
4 937 308
558 155
10 105 080
Balance at 1 January 2022
4 609 617
4 937 308
558 155
10 105 080
Depreciation charge for the year
293 740
605 524
117 914
1 017 178
Impairment losses
0
456 573
0
456 573
Reclassified to assets held for sale
0
-1 585 483
0
-1 585 483
Disposals
0
-359 312
-1 299
-360 611
Effect of exchange rate fluctuations
-22 208
121 582
-41 777
57 598
Balance at 31 December 2022
4 881 149
4 176 192
632 993
9 690 335
Carrying amounts
At 1 January 2021
5 403 933
5 169 154
442 636
11 015 723
At 31 December 2021
5 238 626
5 010 567
473 046
10 722 239
At 1 January 2022
5 238 626
5 010 567
473 046
10 722 239
At 31 December 2022
5 039 047
4 533 725
778 403
10 351 175
Depreciation schedule is linear for all categories.
In 4Q 2022 Cruise announced that the cruise vessel Braemar is available for sale. Due to that decision the asset value for the vessel of NOK 35.9 million is reported on the account “Assets held for sale” in the balance sheet. In Disposals of vessels (cost and depreciation) in the table above Braemar represents NOK 1 621 million and the old crane from Bold Tern represents an assets value of NOK 359 million.
Impairment
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
The calculation of the value in use, and the resulting impairment charge, is based on a probability weighted assessment of three different scenarios, base case, high case and low case. The key assumptions applied in the impairment tests were occupancy, net ticket income, onboard income, fuel prices, carbon taxes and other vessel operations expenses and onboard expenses. In addition, sales & marketing and head office expenses are included.
The calculation of value in use is based on a weighted average cost of capital (WACC) of 11,9% after tax. All scenarios are based on the same assumptions including fuel except for occupancy and yield per pax day.
The impairment testing resulted in an impairment of GBP 39 million (NOK 457 million) which was allocated to the two older cruise vessels. Braemar, which is held for sale, is recognized at fair value less cost of disposal.
Braemar was made available for sale in the fourth quarter of 2022.
In 2023 FOCL has seen good booking-numbers and the war in Ukraine has not had material negative effect on bookings or operation, other than change in some itinerates. Fuel prices have improved compared to 2022.
Within the Group of companies, an impairment NOK 457 million (NOK 0 million) was recognized on property, plant and equipment in 2022:
(Amounts in MNOK)
2022
2021
Cruise
457
0
Total impairment
457
0
Accounting policies
(i) Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures.
In respect of acquisitions goodwill is recognised initially at cost. Goodwill represents the excess of the cost of the acquisition over the Group of companies’ interests in the net fair value of the net identifiable assets. When the excess is negative (negative goodwill), it is recognised immediately in profit or loss.
Subsequent measurement
Goodwill is measured at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is tested annually for impairment. The carrying amount of goodwill for associates is included in the carrying amount of the investment in the associates.
(ii) Research and development
Expenses for research activities with the prospect of gaining new technical knowledge, are recognised in profit and loss when incurred.
Development expenditures are capitalised only if the development costs can be measured reliably, and the product or process is both technically and commercially feasible with probable future economic benefits. The capitalised expenditures include the cost of materials, direct labour, overhead costs that are directly attributable and borrowing costs related to the development. When a project is ready for intended use, it is reclassified from intangible assets to the respective groups of property, plant and equipment.
Capitalised development expenditures are measured at cost less accumulated impairment losses.
(iii) Technology, customer relationships and publishing rights
Technology and customer relationships are measured at cost less accumulated depreciation and impairment losses.
Technology relates to computer software, patented or unpatented technology or databases.
Customer relationships represent the value of the existing customers and are recognised as a separate component.
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Technology
5 years
Customer relationships
9 years
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item. The estimated useful lives are reviewed on a yearly basis. Any changes are accounted for prospectively as a change in accounting estimate.
Publishing rights/brand names comprise trade name, mastheads, domain name and content rights which contribute significantly to future expected economic benefit. Publishing rights and brand names are assumed to have indefinite remaining lives and are impairment tested on a regular basis.
(iv) Impairment
The carrying amounts of the Group of companies' intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
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. Impairment losses are recognised in profit or loss. Impairment losses recognised 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 recognised in prior periods are assessed at each reporting date for any 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.
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(Amounts in NOK 1000)
Development costs
Publishing
rights 1)
Goodwill
Customer relationship, technology, patents, other
Total
Cost
Balance at 1 January 2021
522 178
162 000
544 611
636 859
1 865 648
Acquisitions
51 568
0
4 082
40 876
96 526
Right to use asset (leasing IFRS 16)
0
0
0
0
0
Disposals
0
0
-1 751
-34 840
-36 591
Effect of exchange rate fluctuations
5 211
0
-9 212
-16 432
-20 433
Balance at 31 December 2021
578 957
162 000
537 730
626 463
1 905 151
Balance at 1 January 2022
578 957
162 000
537 730
626 463
1 905 151
Acquisitions 2)
56 549
0
0
75 534
132 083
Right to use asset (leasing IFRS 16)
0
0
0
0
0
Reclassifications
-17 420
0
3
-166
-17 583
Disposals
-112 112
0
0
-158 018
-270 130
Effect of exchange rate fluctuations
-1 544
0
5 685
9 811
13 953
Balance at 31 December 2022
504 430
162 000
543 418
553 624
1 763 473
Depreciation and impairment losses
Balance at 1 January 2021
177 706
0
116 541
515 367
809 614
Depreciation charge for the year
11 726
0
0
61 822
73 548
Impairment losses
43
0
0
0
43
Disposals
0
0
0
-34 840
-34 840
Effect of exchange rate fluctuations
3 597
0
-3 653
-16 673
-16 729
Balance at 31 December 2021
193 072
0
112 888
525 676
831 636
Balance at 1 January 2022
193 072
0
112 888
525 676
831 636
Depreciation charge for the year
13 171
0
0
57 713
70 884
Impairment losses
13 714
0
0
-18 243
-4 529
Reclassifications
-10 521
0
0
22 197
11 676
Disposals
-112 108
0
0
-158 018
-270 126
Effect of exchange rate fluctuations
-6 685
0
-2 053
4 494
-4 244
Balance at 31 December 2022
90 643
0
110 835
433 819
635 297
Carrying amounts
At 1 January 2021
344 472
162 000
428 070
121 492
1 056 034
At 31 December 2021
385 885
162 000
424 842
100 787
1 073 514
At 1 January 2022
385 885
162 000
424 842
100 787
1 073 514
At 31 December 2022
413 787
162 000
432 583
119 805
1 128 175
Expected economic life
3 years
5-10 years
Depreciation is linear
1) Publishing rights are mainly connected to the newspaper Dagens Næringsliv within NHST Media Group AS.
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2) Acquisition of development costs, NOK 57 million (NOK 52 million), are mainly expenditures arising from own development of potential onshore wind farms projects. For offshore wind farms development costs is booked in associates and not included in the balance sheet of Bonheur. NOK 58 million (NOK 41 million) relates to various IT development project within NHST and NOK 17 million (NOK 0) relates to various patents within renewable energy acquired by Fred. Olsen 1848 AS.
Impairment
Within the group of companies all intangible assets have been impairment tested as per 31 December 2022, and impairment of NOK – 5 million (2021 NOK 0 million) was recognized in 2022:
(Amounts in MNOK)
2022
2021
Renewable Energy
14
0
Wind Service
-18
0
Total Impairment
-5
0
Development costs:
FOR has intangible assets with a book value of NOK 412 million, which are development costs related to onshore wind farms. The projects are evaluated regularly. Some development projects may not come through to fruition, in which case, previously capitalized costs will be impaired. In 2022 NOK 14 million was impaired. For FOS, the offshore wind farms intangible assets are included in cost from associates.
Wind Service:
Impairment of NOK -18 million was recorded, and the amount relates to a reversal of previous impairment related to the exclusive rights of use of the vessel Jill in offshore wind projects in the US.
Other Investments:
NHST Media Group AS
The carrying amount of goodwill and intangible assets with indefinite useful lives allocated to NHST is NOK 319 million and NOK 162 million, respectively. Goodwill is not depreciated according to IFRS and Publishing rights has indefinite useful lives and is not depreciated. The recoverable amount for the cash generating units (CGU) Norwegian publications and Global publications is based on a value in use approach (discounted cashflows). The value in use approach is based on NHST’s strategic plans for the different segments and budget and forecast figures for the period 2023-2027. The weighted average cost of capital (WACC) used in the calculation of discounted cash flows for Norwegian and Global publications are 10,6% and 10,7% respectively. The terminal value in the cash flow model is based on 2% growth for Norwegian and Global publications. The cash flow model has been tested for changes in forecasted revenues and discount rate. The sensitivity analysis provides sufficient headroom and comfort for the value in use compared to book values in the Bonheur Group of companies. The recoverable amount for the CGUs Mynewsdesk and Mention is based on a fair value using a market value approach. The reason for using a market value approach is that the marketing service business is currently in an investment phase with negative cash flows for a few years, where a value in use approach would possess high uncertainty. A market value approach is believed to lower the uncertainty, as observed market transactions will give a better indication of value. The market value approach is based on budgeted revenue for Mynewsdesk and Mention multiplied with EV/Revenue multiples from relevant observed M&A transactions.
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Accounting policies
Consolidated
(Amounts in NOK 1000)
Codling Holding Ltd 1)
Muir Mhor Ltd
Other associates
2)
Total
Business office
Ireland
Scotland
Bonheur Group's ownership per 31 December 2021
50,00%
0,00%
Bonheur Group's percentage of votes per 31 December 2021
50,00%
0,00%
Bonheur Group's ownership per 31 December 2022
50,00%
50,00%
Bonheur Group's percentage of votes per 31 December 2022
50,00%
50,00%
Share of equity per 31.12.2021
-16 162
0
7 490
-8 672
Adjustment opening balance
-2
0
-2 155
-2 157
Profit from the company accounts
-11 990
-89
-2 164
-14 243
Net profit included in Bonheur Group of companies
-11 990
-89
-2 164
-14 243
Share issue / Capital increase
0
170 019
0
170 019
Acquisition / disposal
0
0
26 747
26 747
Currency translation differences
-1 175
1
193
-981
Other
0
0
2 155
2 155
Share of equity per 31.12.2022
-29 329
169 932
32 266
172 868
The presentation shows the accounts for the most significant associates as of 31 December 2022.
1) The Codling Project is financed by a shareholder’s loan to Codling Holding Ltd (Codling) from the joint venture partners. Originally the entire shareholder’s loan was treated as part of the investment in Codling. In December 2020, a new loan agreement was signed between Codling Holdings Ltd and the joint venture partners. Based on the new loan agreement a reassessment of the accounting treatment was performed and the loan was reclassified from part of the investment to loan granted to associates in the statement of financial position.
2) Mainly Norkon Computing systems AS and New Power Partners ApS.
The Group of companies continuously evaluates its assets in associates on an individual basis at each reporting date to determine whether there is objective evidence of impairment. As per 31 December 2022 no indications on need for impairment were found.
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Codling Holding Ltd
(Amounts in NOK 1 000)
2022
2021
Profit for the year
-23 670
-11 400
Total assets
706 229
476 899
Total liabilities
764 887
509 228
Total equity
-58 658
-32 329
Fred. Olsen Seawind is progressing the development of the Codling Wind Park project in the Irish Sea together with its Joint Venture partner, EDF. The Codling Wind Park represents one of the largest energy infrastructure investments in Ireland this decade, with estimated capacity up to 1 500 MW, and would become Ireland’s largest offshore windfarm. The first offshore wind auction in Ireland (ORESS-1) is planned for late April 2023.
Muir Mhor Ltd
(Amounts in NOK 1 000)
2022
Profit for the year
-175
Total assets
392 576
Total liabilities
52 717
Total equity
339 859
Fred. Olsen Seawind was, in 1Q 2022, awarded the Muir Mohr project in Scotland together with its Joint Venture partner, Vattenfall. The Muir Mohr project is an offshore floating wind site northeast of Aberdeen with a capacity of up to 798 MW.
Accounting policies
Financial assets
The Group of companies' short-term investments in equity securities and certain debt securities are measured at fair value through profit or loss (FVTPL). Long-term investments are measured at fair value through other comprehensive income (FVTOCI).
Other non-derivative financial instruments, including financial liabilities, are recognized initially at fair value and any directly attributable transaction costs. Subsequent to initial recognition, assets and liabilities are measured at amortised cost when the objective is to hold 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.
Impairment
IFRS 9 applies an expected credit loss model. This model applies to contract assets, financial assets at amortised costs and bonds measured at FVTOCI, but not to investments in shares. Shares are measured at fair value, see note 2.
Shares classified as financial investments
(Amounts in NOK 1000)
Fair value as per 31.12.22
Fair value as per 31.12.21
Total short-term liquid share portfolio
72 574
67 302
Total long-term liquid share portfolio
148 812
126 778
Total liquid share portfolio
221 386
194 081
Bonds and other receivables (non-current assets)
(Amounts in NOK 1 000)
2022
2021
74
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Bonds and securities (specification below)
267 754
280 148
Loans granted to associates
338 823
233 862
Financial instruments
327 820
0
Other interest-bearing loans
4 162
4 324
Other non interest-bearing receivables *)
74 113
11 778
Total Bonds and other receivables (long-term assets)
1 012 672
530 113
*) Accrued interests on the shareholder’s loan to Codling Holding Ltd and asset under construction (drydock expenses related to the cruise vessel “Bolette”) are included for the year 2022.
Bonds classified as long-term investments 1)
(Amounts in NOK 1000)
Cost price
Average interest rate 2022
Fair value as per 31.12.22
Fair value as per 31.12.21
Long-term assets:
Utility companies
41 171
2,4 %
40 732
41 172
Real Estate companies
40 995
2,5 %
40 259
56 138
Industrial companies
106 282
3,2 %
104 998
110 575
Financial and investment companies
68 000
4,2 %
66 776
42 213
Municipalities and public administration
15 003
1,9 %
14 990
30 051
Total
271 452
3,1 %
267 754
280 148
1) Fair value is based on quoted market prices.
Accounting policies
Inventories and bunkers are recorded at the lower of cost and net realisable value. The Group of companies categorizes spare parts into two groups, spare parts and spare assets. Spare parts are consumables that are not depreciated but expensed when used against repair and maintenance cost. Consumables are measured at cost less a reserve for overstocked items. Spare assets are larger spare items that is recorded as a component and depreciated.
(Amounts in NOK 1 000)
Note
2022
2021
Inventories and consumable spare parts
101 838
87 570
Bunkers
78 012
37 634
Articles of consumption onboard
38 215
25 786
Work in progress
5
73 144
48 359
Total
291 209
199 349
Per year end the Group of companies had inventories and consumable spare parts related to windfarms, installation vessels for offshore wind turbines and cruise vessels. In addition, there were bunkers and articles of consumption onboard. The book value of inventories is cost price. In 2022 inventories and consumable spare parts recognised as cost of sales amounted to NOK 955 million (2021: NOK 674 million), i.e., expensed. In 2022 there have been no write downs of inventories or reversals of write downs. Work in progress is mainly related to capitalized project costs in the Wind Service segment.
75
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Accounting policies
Trade receivables that do not have a significant financing component are measured on initial recognition at their transaction price, which is the amount of consideration to which the entity expects to be entitled for transferring the promised goods or services to the customer.
Trade receivables with a significant financing component are measured on initial recognition at their transaction price if the entity has chosen not to adjust the promised amount of consideration for the effects of a significant financing component. In other cases, the receivables are measured at fair value on initial recognition.
The impairment model applicable to financial assets, measured at amortized cost, is based on an “expected credit loss” (ECL) model, which require forward looking judgements of two classifications:
-12-month ECLs resulting from possible default events within the 12 months after the reporting date.
Trade and other receivables (current assets)
(Amounts in NOK 1 000)
Note
2022
2021
Other trade receivables
1 047 643
924 652
Contract assets
5, 22
466 007
280 084
Total trade receivables and contract assets
1 513 649
1 204 736
Other receivables and prepayments
1 359 988
950 713
Short-term liquid share portfolio
13
72 574
67 337
Fair value derivatives
0
3 163
Total other receivables
1 432 563
1 021 213
Total trade and other receivables
2 946 212
2 225 949
Contract assets relate to consideration for work completed, but not yet invoiced at the reporting date. The contract assets are transferred to customer receivables when the right to payment become unconditional, which usually occurs when invoices are issued to the customers.
Accounting policies
Cash and cash equivalents include cash, bank deposits and other short-term highly liquid assets that are readily convertible to known amounts of cash and which are subject to insignificant changes in value.
(Amounts in NOK 1 000)
2022
2021
Cash related to payroll tax withholdings
27 534
25 774
Other restricted cash *)
585 072
588 479
Total restricted cash
612 606
614 253
Unrestricted cash **)
4 845 866
3 424 951
Total cash & cash equivalents
5 458 472
4 039 204
Unused credit facilities
0
0
*) NOK 500 million of other restricted cash reflects deposits required according to covenants in the Company's bond loans. NOK 28 million of the restricted cash relates to the windfarms in FORAS, and NOK 32 million relates to guarantees required by customers in FOO during operations.
**) In 2020 the Company established a green finance framework with an eligibility assessment from DNV and issued a NOK 700 million green bond loan to be used for eligible green investments as defined in the framework. Another green bond loan of NOK 700 million was issued in 2021. Separate green bank deposits have been established and are included in unrestricted cash.
76
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
As part of establishing the Green Finance Framework, Bonheur established an internal Green Finance Committee who approves eligible green investments in the green investment portfolio.
Note 17 – Earnings per share
Accounting policies
The Group of companies presents basic earnings per share (EPS) data for its shares. Basic EPS is calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of shares outstanding during the period. Average number of outstanding shares during the period are based on number of outstanding shares per year end. Shares outstanding is total shares issued net of treasury shares.
Profit attributable to ordinary shareholders
(Amounts in NOK 1 000)
2022
2021
Net result for the year (Majority share)
397 307
-106 563
Average number of outstanding shares during the year 1)
42 531 893
42 531 893
Basic and diluted earnings per share
9.3
-2.5
Within the Group of companies there are no financial instruments with possible dilutive effects.
1) Weighted average number of ordinary shares
(Amounts in NOK 1 000)
2022
2021
Issued ordinary shares at 1 January
42 531 893
42 531 893
Weighted average number of ordinary shares at 31 December
42 531 893
42 531 893
77
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
(Amounts in NOK 1 000)
2022
2021
Non-current interest-bearing liabilities
Secured bank loans
5 297 562
5 265 453
Unsecured loans
2 225 216
2 361 510
Lease liability, IFRS 16
435 558
366 626
Other loans
829 765
786 481
Total
8 788 101
8 780 070
Current interest-bearing liabilities
Current portion of secured bank loans
667 618
802 747
Current portion of unsecured loans
146 257
526 648
Current portion of lease liability, IFRS 16
86 486
78 559
Other loans
488 650
236 618
Total
1 389 011
1 644 572
Fred. Olsen Renewables Ltd. had as at 31 December 2022, through its 51% owned subsidiary Fred. Olsen Wind Ltd., drawn a total of GBP 400 million under a bank loan facility and leases, with current loan balance at year end 2022 was GBP 290 million (GBP 328 million). The interest rates of the bank loan facility are fixed 3.17% for 75% and GBP Libor plus a margin of 1.40% for 25% of the facility. The bank loan facility matures in 2032.
Fred. Olsen Renewables Ltd. had through its 100% owned subsidiary Fred. Olsen CB Ltd. per year end 2022 drawn GBP 57 million from a secured credit facility agreement, with current loan balance at year end 2022 was GBP 53 million (GBP 55 million). The interest rates of the loan are fixed 3.55% for 75% of the loan and GBP Libor plus a margin of 1.80 % for the rest of the loan. The bank loan facility matures in 2036. In addition, Fred. Olsen CB Ltd. had through its 51% owned subsidiary Fred. Olsen CBH Ltd, per year end 2022 drawn GBP 66 million (GBP 62 million) from an unsecured shareholder loan from Aviva Investors Global Services Limited, which holds 49% of the shares in the company. The interest rate of this loan is GBP LIBOR plus a margin of 6%, and the loan matures in 2036. Fred. Olsen CBH Ltd. has also drawn a shareholder loan with corresponding terms of GBP 69 million from Fred. Olsen CB Ltd., which is eliminated in the consolidated accounts.
Fred. Olsen Ocean group, through its subsidiary Fred. Olsen Windcarrier has two long-term non-recourse debt financing arrangements related to the three offshore wind turbine transportation and installation jack-up vessels under its indirect ownership (Brave Tern, Bold Tern and Blue Tern). In conjunction with the financing, a green loan framework was established with an eligibility assessment from DNV, which enables new investments to be financed with green loans. For Brave Tern and Bold Tern, the arrangement is a EUR 75 million 6-years facility with DNB Bank ASA and SpareBank 1 SR-Bank ASA. On 24 January 2022, FOWIC entered into an agreement for an increase of the available amount under the Fleet Financing Facility Agreement by a EUR 35 million revolving facility tranche (RCF) with a margin of 3.20%. The current balance per 31 December 2022 is EUR 84.4, including a drawdown of the EUR 35 million under the RCF.
On 19 December 2022, Blue Tern (51% owned), entered into a senior secured green term loan facility agreement with Clifford Capital Pte. Ltd, replacing the debt financing with NIBC and Clifford. The new arrangement is a EUR 35 million facility with a margin of 2,15 %. In addition, Blue Tern AS has shareholder loans of USD 27.7 million. A wholly owned subsidiary of Keppel Offshore and Marine Ltd holds 49% of the loan and Fred. Olsen Windcarrier ASA, through its 51% indirectly owned subsidiary Blue Tern AS, holds 51% of the latter loan. FOWIC’s part is eliminated in the consolidated accounts. The interest rate of this loan is fixed 7.5 %.
GWS has a credit facility (net of interest-bearing debt and cash and cash equivalents) of EUR 35 million, of which approximately EUR 33.0 million is outstanding as per 31 December 2022.
United Wind Logistics (UWL), has two long-term loan arrangements of total EUR 28 million with Sparkasse Holstein related to two newbuilds delivered in 2020 of which EUR 16.4 million was outstanding as per 31 December 2022. The interest rate regarding EUR 14.3 million of this loan is fixed 3.33% and 3 month EURIBOR plus a margin of 2.65% for EUR 2.2 million. In addition, UWL has a shareholder loan of EUR 6.75 million where Fred. Olsen Ocean Ltd holds 50 % of the loan. The current loan balance to the external shareholder and FOO is EUR 3.375 million each. The interest rate is fixed 3%.
78
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
(Amounts in NOK 1 000)
2022
2021
Bonheur ASA, bond-loans
Bond issue ticker, terms
Issued
Maturity
BON07 3 month NIBOR + 4.00%
24 May 17
24 May 22
0
499 875
BON09 3 month NIBOR + 2.50%
4 Sep 19
4 Sep 24
797 840
796 400
BON10 ESG 3 month NIBOR + 2.75%
22 Sep 20
22 Sep 25
696 714
695 520
BONHR01 ESG 3 month NIBOR + 2.90%
13 Jul 21
13 Jul 26
695 672
694 435
Total
2 190 226
2 686 230
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
31.12.2022
31.12.2021
(Amounts in NOK 1000)
Currency
Nominal interest rate
Year of maturity
Carrying amount
Carrying amount
Renewable Energy:
Secured bank loan 1)
GBP
75% fixed 3.17%, 25% LIBOR + 1,40%
2032
3 436 145
3 825 827
Secured bank loan 2)
GBP
75% fixed 3,55%, 25% LIBOR + 1.80%
2036
622 873
650 890
Shareholder loan 3)
GBP
LIBOR + 6.0%
2036
784 806
739 760
Lease liability, IFRS 16
GBP
291 432
277 187
Other
GBP
44 959
46 720
5 180 215
5 540 384
Wind Service:
Secured bank loan
EUR
3 month EURIBOR + 3.20%
2026
0
310 372
Secured green bank loan
EUR
3 month EURIBOR + 3.15%
2026
0
278 248
Secured green bank loan 4)
EUR
3 month EURIBOR + 3.10%
2026
519 581
0
Secured bank loan 4)
EUR
3 month EURIBOR + 3.20%
2026
367 983
0
Secured bank loan
EUR
3 month EURIBOR + 3.25%
2022
0
114 871
Secured bank loan
USD
3 month LIBOR + 3.25%
2022
0
123 811
Secured green bank loan 5)
EUR
3 month EURIBOR + 2.15%
2025
367 983
0
Shareholder loan 6)
USD
Fixed 7,50%
134 314
116 074
Shareholder loan 6)
EUR
Fixed 7,50%
0
20 773
Secured bank loan 7)
EUR
Fixed 3,33%
2027
71 336
82 048
Secured bank loan 7)
EUR
3 month EURIBOR + 2.65%
2023
4 206
19 978
Secured bank loan 7)
EUR
Fixed 3,33%
2028
78 854
89 190
Secured bank loan 7)
EUR
3 month EURIBOR + 2.65%
2024
17 527
29 966
Shareholder loan 8)
EUR
Fixed 3,00%
2028
37 850
40 455
Lease liability, IFRS 16
EUR
45 493
39 056
Other 9)
DKK/EUR
501 740
271 242
2 146 865
1 536 084
Cruise:
Sellers credit 10)
GBP
Fixed 2,50%
2025
264 678
265 424
Lease liability, IFRS 16
GBP
2 357
3 894
267 035
269 318
Other:
Unsecured Bonheur ASA bond loans 11)
NOK
NIBOR / 2.50% / 2.75% / 2.90%
2024/ -25/ -26
2 190 226
2 686 234
Lease liability, IFRS 16
NOK
182 772
142 622
Other 12)
NOK
210 000
250 000
79
79
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
2 582 998
3 078 856
Total interest-bearing debt
10 177 112
10 424 642
1)Financing facility for Fred. Olsen Wind 2 Ltd.
2)Financing facility for Fred. Olsen CB Ltd.
3)A total of GBP 66.2 million has been drawn by Fred. Olsen CBH Ltd. on a shareholder loan from Aviva Investors Global Services Limited. Remaining balance includes accrued interest.
4)Financing facility for Fred. Olsen Windcarrier of the jack-up vessels Brave Tern, Bold Tern and Blue Tern.
5)Financing facility for Blue Tern Ltd. for the jack-up vessel Blue Tern.
6)Two shareholder loans from a wholly owned subsidiary of Keppel Offshore and Marine Ltd. to Blue Tern AS of USD 12.8 million.
7)Financing facilities for UWL regarding 2 newbuilds.
8)A shareholder loan from Lars Rolner, who is a 50% owner of the shares in UWL, EUR 3.60 million.
9)As per 31 December 2022 a bank overdraft of EUR 46.4 regarding GWS, is included.
10)Sellers credit from HAL Nederland NV in connection with the acquisition of two cruise vessels, GBP 22.3 million.
11)The market value of the four outstanding Bonheur bond loans maturing in 2024, 2025 and 2026 were per year end 99.38, 98.81 and 98.81, respectively.
12)Financing facility for NHST
Lease liabilities
Lease liabilities are payable as follows:
(Amounts in NOK 1000)
Future minimum lease payment 2022
Interest 2022
Present value of minimum lease payments 2022
Future
minimum
lease
payment
2021
Interest 2021
Present value of minimum lease payments 2021
Less than one year
55 293
1 449
53 844
48 809
2 657
78 559
Between one and five years
145 369
16 001
129 368
14 371
929
13 442
More than five years
209 771
55 761
154 010
7 092
280
6 812
Total
410 433
73 211
337 222
70 273
3 866
98 813
Booked value of collateral
Book value
(Amounts in NOK 1 000)
31.12.2022
31.12.2021
Windfarms
2 967 643
3 178 703
Vessels
3 526 507
3 445 497
Other fixed assets
273 622
0
Total book value of collateral
6 767 772
6 624 200
Guarantees
Guarantees granted to associates
Guarantees granted to Group companies' entities
654 186
500 820
Total
654 186
500 820
Guarantees are granted in connection with the following investments
Cruise ships
471 793
494 520
Windfarms
176 093
0
Wind vessels
0
0
Other*)
6 300
6 300
Total
654 186
500 820
*) Related to Koksa Eiendom AS.
80
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Reconciliation of movements of liabilities to cash flows arising from financing activities
Liabilities
Equity
Lease
liabilities
Other
interest bearing loans
Equity
holders of
the parent
Non-
controlling interest
Total
Balance as per 1 January 2021
447 905
10 341 662
4 459 629
165 134
15 414 330
Changes from financing cash flows
Proceeds from long-term loans and borrowings
0
805 138
0
0
805 138
Repayment of long-term loans and borrowings
0
-1 372 540
0
0
-1 372 540
Repayment of lease liabilities
-25 975
0
0
0
-25 975
Dividend paid
0
0
-170 128
-149 699
-319 827
Total changes from financing cash flows
-25 975
-567 402
-170 128
-149 699
-913 204
Increase lease liabilities (IFRS 16)
26 771
0
0
0
26 771
Effect on liabilities of changes in foreign exchange rates
0
201 681
0
0
201 681
Effects from transactions with non-controlling interests
0
0
2 469
2 253
4 722
Other
0
0
728 000
-728 000
0
Comprehensive income for the period *)
0
0
-397 845
512 615
114 770
Balance as per 31 December 2021
448 701
9 975 941
4 622 125
-197 697
14 849 070
Balance as per 1 January 2022
448 701
9 975 941
4 622 125
-197 697
14 849 070
Changes from financing cash flows
Proceeds from long-term loans and borrowings
0
957 338
0
0
957 338
Repayment of long-term loans and borrowings
0
-1 445 143
0
0
-1 445 143
Dividend paid
0
0
-182 887
-870 859
-1 053 746
Total changes from financing cash flows
0
-487 805
-182 887
-870 859
-1 541 551
Change lease liabilities (IFRS 16)
77 173
0
0
0
77 173
Effect on liabilities of changes in foreign exchange rates
-3 830
86 216
0
0
82 386
Effects from transactions with non-controlling interests
0
0
776 703
971 395
1 748 098
Other
0
80 716
-57 162
0
23 554
Comprehensive income for the period *)
0
0
533 945
1 360 623
1 894 568
Balance as per 31 December 2022
522 044
9 655 068
5 692 724
1 263 462
17 133 298
*) According to statement of changes in equity, page 48.
Accounting policies
Defined benefit plans
The Company and certain of its subsidiaries have pension plans for employees which provide for a defined pension benefit upon retirement (Defined benefit plans). These pension schemes are accounted for in accordance with IAS19
81
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Net pension cost, which consists of gross pension cost, less estimated return on plan assets adjusted for the impact of changes in estimates and pension plans, are classified as an operating cost, and is included in the line item “operating expenses”.
Pension schemes base the discount rate on the yield of long term covered bonds (OMF) at the statement of financial position date, adjusted to reflect the terms of the obligations. The calculation is performed by a qualified actuary using the projected unit credit method.
When the calculation results in a benefit to the Group of companies, the recognised asset is limited to the net total of any unrecognised past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.
When benefits of a plan are improved, the portion of the increased benefit relating to past service is recognised as an expense in the income statement on a straight-line basis until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised in the income statement.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted 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 if the Group of companies 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.
Accounting estimate – pension obligation
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost for pensions include the discount rate. Any changes in these assumptions will impact the calculated pension obligations. The Group of companies determines the appropriate discount rate at the end of each year. This rate is used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. The rate used for Norwegian subsidiaries is based on 10-year government bonds or the OMF rate. Beyond 10 years the rate has been based on an extrapolation of the government bond rate and long-term swap rates for the relevant period. Other key assumptions for pension obligation are based on current market conditions.
Pension plans
Employees within of the Group of companies have the right to future pension benefits (defined benefit plans) based upon the number of contribution years and the salary level at retirement. The scheme of each entity is administered by individual pension funds or by separate insurance companies. Some subsidiaries have defined contribution schemes for all or some of their employees. In 2022, total costs incurred for defined contribution schemes were NOK 79 million (NOK 63 million). The pension plans in the Norwegian companies meet the Norwegian requirements for a Mandatory Company Pension (OTP).
The status of the defined benefit obligations is as follows:
(Amounts in NOK 1 000)
2022
2021
Present value of unfunded obligations
-551 964
-605 828
Present value of funded obligations
-776 927
-840 305
Total present value of obligations
-1 328 891
-1 446 133
Fair value of plan assets
856 609
912 536
Net liability for defined benefit obligations
-472 282
-533 597
Financial fixed assets / pension funds
78 130
81 876
Liabilities / Employee benefits
-550 412
-615 473
Net liability as at 31. December
-472 282
-533 597
82
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Plan assets:
At the balance sheet date, plan assets are valued using market prices. This value is updated yearly in accordance with statements from the Pension Fund. There are no investments in the Company or in property occupied by the Group of companies.
Major categories of plan assets:
2022
2021
Equity instruments
37%
41%
Corporate bonds
42%
40%
Government bonds
12%
11%
Other assets
9%
8%
Total Plan Assets
100%
100%
Movement in defined benefit obligations:
Movement in defined benefit obligations:
Funded obligation
Unfunded obligation
Net obligation
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
Balance at 1. January
72 231
56 497
-605 829
-584 349
-533 598
-527 852
Correction previous year
0
0
0
0
0
0
72 231
56 497
-605 829
-584 349
-533 598
-527 852
Pension contribution
19 014
29 715
0
0
19 014
29 715
Benefits paid by the plan *)
0
0
11 975
10 799
11 975
10 799
19 014
29 715
11 975
10 799
30 989
40 514
Included in profit and loss:
Interest on obligation / Interest on plan assets
976
-1 557
-11 997
-10 132
-11 021
-11 689
Current service cost
-28 382
-29 603
-13 966
-18 926
-42 348
-48 529
Past service cost
0
0
0
0
0
0
Currency effects / Corrections
0
0
0
0
0
0
Net pension cost
-27 406
-31 160
-25 963
-29 058
-53 369
-60 218
Included in other comprehensive income:
Actuarial gain/(loss) arising from:
Financial assumptions
79 377
-10 963
58 516
-7 021
137 893
-17 984
Experience adjustments
464
12 103
9 337
3 800
9 801
15 903
Transferred value
1 003
0
0
0
1 003
0
Return on plan assets
-65 003
16 039
0
0
-65 003
16 039
15 841
17 179
67 853
-3 221
83 694
13 958
Foreign currency translation
0
0
0
0
0
0
Balance as at 31. December
79 680
72 231
-551 964
-605 829
-472 284
-533 598
*) Payment of benefits from the funded defined benefit plans were in 2022 NOK 25,0 million (2021: NOK 25,3 million). Figure netted out in the table above
Principal actuarial assumptions at the balance sheet expressed as weighted averages:
2022
2021
Discount rate / Expected return on plan assets at 31. December
3,30%
2,00%
Future salary increase
3,50%
2,25%
Yearly regulation in official pension index (G)
3,50%
2,25%
Future pension increases
2,00%
1,50%
Social security costs
14,10%
14,10%
Mortality table
K2013
K2013
Disability table
KU
KU
83
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Discount rate in Defined Benefit Plans
The discount rate was determined by reference to high quality corporate bonds, where a deep enough market for such bonds exists. Covered bonds are in this context considered to be corporate bonds. In Norway the discount rate is determined with reference to covered bonds.
Sensitivity:
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts below:
Increase in PBO *)
(Amounts in NOK 1 000)
2022
Future salary increase with 0.25%
15 671
Future pension increase with 0.25%
36 390
Discount rate decreases with 0.25%
3 384
Future mortality assumption, increased lifetime by 1 year
35 812
*) Projected Benefit Obligation (PBO)
Expected contributions to funded defined benefit plans in 2023 are NOK 40 million.
Expected payment of benefits in connection with unfunded plans are in 2023 estimated to be NOK 18 million.
Risks:
The major risks for the defined benefit plans are interest rate risk, investment risks, inflation risk and longevity risk.
84
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Current items
(Amounts in NOK 1000)
2022
2021
Accrued interest other
137 166
116 763
Other accruals
696 341
386 943
Contract liabilities
1 343 539
1 303 630
Other accruals and deferred income
2 177 046
1 807 336
The Group of companies has short-term contract liabilities of NOK 1 344 million per 31 December 2021 (NOK 1 304 million). NOK 899 million is due to prepayments from sale of cruises (NOK 686 million), NOK 135 million (NOK 308 million) is prepayment from customers within Wind Service and NOK 310 million (NOK 307 million) is prepayment received from subscribers within NHST.
Non-current items
Decommissioning costs related to windfarms of NOK 440 million (NOK 500 million) is included under “Other non-current liabilities”.
Note 21 - Trade and other payables
(Amounts in NOK 1000)
2022
2021
Other trade payables
715 904
768 222
Total trade payables
715 904
768 222
Fair value of derivatives 1)
0
402
Total other payables
0
402
Total trade and other payables
715 904
768 624
1) For further information about derivatives see note 22.
85
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Accounting policies
Classification of financial assets and liabilities
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. The Group of companies holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Since the profiles, maturities and other terms of the swaps do not match the underlying liabilities perfectly, the swaps are not accounted for using hedge accounting.
All equity instruments are measured at fair value with gains and losses either through profit or loss (FVTPL) or in other comprehensive income (FVOCI). All financial debt instruments are classified based on the entity’s business model for managing the asset and the asset’s contractual cash flow characteristics, as follows:
•Amortised cost - a financial asset is measured at amortised cost if both of the following conditions are met:
•the asset is held within a business model whose objective is to hold 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.
•Fair value through other comprehensive income (FVOCI) - financial assets are classified and measured at FVTOCI if they are held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
•Fair value through profit or loss (FVTPL) - any financial assets that are not held in one of the two business models mentioned are measured at FVTPL.
All financial liabilities are measured at amortized cost, except for financial liabilities at FVTPL. Such liabilities include derivatives, and liabilities that an entity designates to be measured at fair value through profit or loss.
Impairment
The impairment model applicable to financial assets, measured at amortized cost or FVOCI, is a forward-looking "expected credit loss" (ECL) model. This requires forward looking judgements of two classifications:
- 12-month ECLs resulting from possible default events within the 12 months after the reporting date.
- Lifetime ECLs resulting from possible default events over the expected life of a financial instrument.
Accounting classifications and fair values
Financial assets and liabilities in the Group of companies consist of investments in other companies, trade and other receivables, cash and cash equivalents, interest rate instruments, forward foreign exchange contracts, trade and other payables, right-of-use liabilities, and borrowings.
The following table below shows the carrying amounts and fair values of the financial assets and financial liabilities, including their levels in the fair value hierarchy. Fair value disclosure of lease liabilities is not included.
For financial instruments measured at fair value, the levels in the fair value hierarchy are:
•Level 1: Fair values are based on prices quoted in an active market for identical assets and liabilities.
•Level 2: Fair values are based on price input other than quoted prices. Such prices are derived from observable market transactions in an active market for identical assets or liabilities. Level 2 includes currency or interest derivatives, typically when the Group of companies uses forward prices on foreign exchange rates or interest rates as inputs to valuation models.
•Level 3: Fair values are based on unobservable input, mainly based on internal assumptions used in absence of quoted prices from an active market or other observable price inputs.
Financial Instruments as of 31 December 2022
Carrying value
Fair value
Equity investments 1)
86
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
(Amounts in NOK 1 000)
Hedging instruments
at FVTPL
at FVOCI
Amortized cost
Total
Level 1
Level 2
Level 3
Total
Other Shares 2)
0
72 574
117 979
30 833
221 386
73 220
148 167
221 386
Bonds 2)
0
267 754
0
0
267 754
267 754
0
0
267 754
Interest rate swaps
327 820
0
0
0
327 820
0
327 820
0
327 820
Loans granted to associates
0
0
0
338 823
338 823
0
0
0
0
Other interest-bearing loans
0
0
0
4 162
4 162
0
0
0
0
Other non interest-bearing receivables
0
0
0
74 113
74 113
0
0
0
0
Trade and other receivables
0
0
0
2 873 638
2 873 638
0
0
0
0
Cash and cash equivalents
0
0
0
5 458 472
5 458 472
0
0
0
0
Financial assets
327 820
340 329
117 979
8 780 040
9 566 168
340 974
327 820
148 167
816 961
Bank overdrafts
0
0
0
488 645
488 645
0
0
0
0
Interest bearing bond loans
0
0
0
2 190 226
2 190 226
0
0
0
0
Secured bank loans
0
0
0
5 964 930
5 964 930
0
0
0
0
Unsecured loans
0
0
0
1 011 024
1 011 024
0
0
0
0
Finance lease liabilities
0
0
0
2 357
2 357
0
0
0
0
Right-of-use liabilities
0
0
0
519 931
519 931
0
0
0
0
Trade and other payables
0
0
0
715 904
715 904
0
0
0
0
Financial liabilities
0
0
0
10 893 016
10 893 016
0
0
0
0
1) FVTPL is short for value through Profit and loss. FVOCI is short for value through other comprehensive income.
2) Investments in level 1 consist of listed shares and bonds with quoted market market prices, and investments in level 3 are shares where fair value cannot be measured reliably as the financial instrument is not traded in an active market. The best estimate of fair value is initial purchase price.
Financial Instruments as of 31 December 2021
Carrying value
Fair value
Equity investments 1)
(Amounts in NOK 1 000)
Hedging instruments
at FVTPL
at FVOCI
Amortized cost
Total
Level 1
Level 2
Level 3
Total
Other Shares 2)
0
67 337
95 859
30 919
194 116
68 152
0
95 044
163 196
Bonds 2)
0
280 148
0
0
280 148
280 148
0
0
280 148
Forward exchange contracts
3 163
0
0
0
3 163
0
3 163
0
3 163
Non-current receivables
0
0
0
238 186
238 186
0
0
0
0
Trade and other receivables
0
0
0
2 155 449
2 155 449
0
0
0
0
Cash and cash equivalents
0
0
0
4 039 207
4 039 207
0
0
0
0
Financial assets
3 163
347 485
95 859
6 463 762
6 910 269
348 300
3 163
95 044
446 507
Interest rate swaps
86 043
0
0
0
86 043
0
86 043
0
86 043
Forward exchange contracts
402
0
0
0
402
0
402
0
402
Bunker swaps
0
0
0
0
0
0
0
0
0
Bank overdrafts
0
0
0
236 615
236 615
0
0
0
0
Interest bearing bond loans
0
0
0
2 686 230
2 686 230
0
0
0
0
Secured bank loans
0
0
0
6 050 629
6 050 629
0
0
0
0
Unsecured loans
0
0
0
1 368 717
1 368 717
0
0
0
0
Finance lease liabilities
0
0
0
3 894
3 894
0
0
0
0
Right-of-use liabilities 3)
0
0
0
486 188
486 188
0
0
0
0
Trade and other payables
0
0
0
768 222
768 222
0
0
0
0
87
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Financial liabilities
86 445
0
0
11 600 495
11 686 940
0
86 445
0
86 445
1) FVTPL is short for value through Profit and loss. FVOCI is short for value through other comprehensive income.
2) Investments in level 1 consist of listed shares and bonds with quoted market prices, and investments in level 3 are shares where fair value cannot be measured reliably as the financial instrument is not traded in an active market. The best estimate of fair value is initial purchase price.
3) Right-of-use liabilities, according to IFRS 16 - Leases, amounts to NOK 486 million per 31 December 2021, of which NOK 422 million is interest bearing liabilities.
General
The Group of companies is exposed to various financial risk factors through its operating activities. The factors include market risks (currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The management seeks to minimise the risks and monitors the financial markets closely.
Fair values versus carrying amounts
Unless otherwise stated, the net book values are presumed to reflect the fair value of financial assets and liabilities.
Credit risk
The Group of companies continually evaluates the credit risks associated with customers and counterparties and, when necessary, requires guarantees or collaterals. The Group of companies' short-term investments are mainly limited to cash deposits with its relationship banks. The credit risk related to trade receivables is mainly within the business segments Renewable Energy and Wind Service from customers located in the EURO zone and United Kingdom. For further information, see note 3 - Financial Risk Management.
The Group of companies' financial assets were considered to have low credit risk per 1 January 2022. Historically, losses on receivables have been insignificant in the Group of companies. A large proportion of the Group of companies’ receivables are advance payments from customers in the business segment Cruise and in NHST Media Group AS in the Other investments segment. The Group of companies has considered that the credit risk has not increased significantly during 2022. Based on the group’s assessment, no significant changes in loss allowance are deemed necessary per 31 December 2022.
The carrying amounts of financial assets represent the maximum credit exposures. The maximum exposure to credit risk at the reporting date was:
(Amounts in NOK 1000)
Carrying amount
2022
2021
Financial assets, shares
221 386
194 116
Financial assets, bonds
267 754
280 148
Loans granted to associates
338 823
233 862
Other interest-bearing loans
4 162
4 324
Other non interest-bearing receivables
74 113
0
Trade and other receivables *)
2 407 631
1 875 365
Contract assets *)
466 007
280 084
Cash and cash equivalents
5 458 472
4 039 207
Derivatives
327 820
3 163
Total
9 566 168
6 910 269
*) Trade receivables (which also includes i.a. prepayments) and contract assets are to be collected from the following business segments:
(Amounts in NOK 1 000)
Carrying amount
2022
2021
Renewable Energy
1 243 990
917 265
Wind Service
1 399 151
972 568
Cruise
99 326
111 101
Other Investments
131 172
154 515
Total
2 873 638
2 155 449
88
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Carrying amount
(Amounts in NOK 1 000)
2022
2021
UK
1 320 371
944 336
EURO-zone incl. Norway
893 410
732 696
America
172 903
228 188
Africa
32
140
Asia
470 358
243 482
Other
16 564
6 607
Total
2 873 638
2 155 449
Impairment losses
Loss allowances have been measured on the following bases:
•12-month ECLs that result from possible default events within the 12 months after the reporting date; and
•Lifetime ECLs that result from all possible default events over the expected life of a financial instrument.
The aging of trade and other receivables at the reporting date was:
Gross
Provisions
Balance
Gross
Impairment
Balance
(Amounts in NOK 1 000)
2022
2022
2022
2021
2021
2021
Not past due
2 728 909
-27
2 728 881
1 279 481
0
1 279 481
Past due 0-30 days
114 035
-61
113 974
807 185
0
807 185
Past due 31-180 days
14 910
-606
14 304
28 847
-1 200
27 647
Past due 181-360 days
2 705
-403
2 301
1 057
0
1 057
More than one year
23 530
-9 354
14 177
48 869
-8 789
40 080
Total
2 884 089
-10 451
2 873 638
2 165 438
-9 989
2 155 449
Based on historic default rates, the Group of companies believes that limited impairment allowance is necessary in respect of trade receivables not past due or past due by up to 30 days. Due to conditions related to specific customers in NHST Media Group AS and Transport & Installation in the Wind Service segment, a provision for losses has been made to certain receivables past due 31-180 days and 181-360 days respectively. Lifetime expected credit losses has been assessed and a provision for losses has been made to certain receivables related to specific customers in Global Wind Service in the Wind Service Segment.
Liquidity risk
The Group of companies is exposed to liquidity risk when payments of financial liabilities do not correspond to the cash flow from operations and/or financing. In order to effectively mitigate liquidity risk, the Group of companies’ risk management strategy focuses on maintaining sufficient cash, marketable securities and/or committed credit facilities and targets a long-term funding profile. Moreover, the liquidity risk management strategy focuses on maximising the return on surplus cash as well as minimising the cost of short-term borrowing and other transaction costs. In order to uncover future liquidity risk, the Group of companies forecasts both short-term and long-term cash flows. Cash flow forecasts include cash flows stemming from operations, investments and financing activities.
The liquidity risk is considered as moderate.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
(Amounts in NOK 1 000)
Due in
Carrying
Contractual
2027 and
31 December 2022
amount
cash flows
2023
2024
2025
2026
thereafter
Non-derivative financial liabilities
10 177 112
9 803 791
771 532
1 798 998
2 290 825
1 654 380
3 288 056
Derivative financial liabilities
327 820
272 686
53 059
46 799
40 255
33 925
98 648
89
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
(Amounts in NOK 1 000)
Due in
Carrying
Contractual
2026 and
31 December 2021
amount
cash flows
2022
2023
2024
2025
thereafter
Non-derivative financial liabilities
10 424 642
10 140 567
1 471 748
862 535
1 457 380
1 614 586
4 734 318
Derivative financial liabilities
86 043
332 104
59 017
53 164
46 889
40 328
132 706
Currency Risk
The Group of companies’ financial statements are presented in Norwegian kroner (NOK). Most of the subsidiaries use Euro (EUR) or British Pound (GBP) as their functional currencies. The revenues mainly consist of GBP, EUR and NOK. The operating expenses mainly consist of USD, GBP, EUR and NOK.
The Group of companies is exposed to foreign currency risks related to its operations and debt instruments. As such, the earnings are exposed to fluctuations in the currency markets. The future foreign currency exposure depends on the currency denomination of future operating revenues and expenses. In the longer term, parts of the currency exposures are neutralised due to the majority of the Group of companies’ debt is denominated in the same currencies as the revenues.
The management monitors the currency markets closely. In order to reduce the impact of currency rate fluctuations on the net income and the
statement of financial position, currency contracts are entered into when considered appropriate.
The Group of companies’ exposure to foreign currency risk was as follows based on notional amounts:
The figures are not directly comparable to the figures in the statement of financial position, as the statement of financial position shows the figures in actual currencies, net of intra group eliminations.
31 December 2022
31 December 2021
(Amounts in 1 000)
USD
GBP
EUR
USD
GBP
EUR
Gross statement of financial position exposure
3 820
-257 054
64 920
-24 050
-242 151
19 768
Forward exchange contract
0
0
0
0
0
317
Net exposure
3 820
-257 054
64 920
-24 050
-242 151
20 085
90
90
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Currency sensitivity analysis
A 10 percent strengthening of the NOK against the following currencies at 31 December would have affected the measurement of financial instruments denominated in a foreign currency and increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for the previous year.
Effect in NOK 1 000
Equity
Profit or loss
31 December 2022
USD
-3 766
0
GBP
304 714
0
EUR
-101 796
0
31 December 2021
USD
21 210
0
GBP
287 857
0
EUR
-19 746
-316
The following significant exchange rates applied during the year:
Average rate
Reporting date spot rate
2022
2021
2022
2021
1 USD
9,6245
8,5991
9,8573
8,8194
1 GBP
11,8464
11,8254
11,8541
11,8875
1 EUR
10,1040
10,1648
10,5138
9,9888
Interest rate risk
When the Group of companies borrows funds externally, the interest rate payable is in most cases based on a floating interest rate. In order to reduce the fluctuations of interests payable, interest rate swap agreements are entered into. The Group of companies is exposed to fluctuations in interest rates for GBP, EUR, USD and NOK.
All the interest rate swaps that are entered into are used for economical hedging. Therefore, the changes in the valuation of the interest rate swaps are taken over the profit or loss statement. The quarterly update of the valuations of the interest rate swaps may result in substantial financial gains and losses, depending on the changes in the interest rate levels.
The management monitors the interest rate markets closely and enters into interest rate swap agreements when this is considered appropriate. At the reporting date approximately 37% of the financial liabilities were interest hedged.
At the reporting date the interest rate profile of the Group of companies’ interest-bearing financial instruments was:
(Amounts in NOK 1 000)
2022
2021
Fixed rate instruments
8 000
12 000
Financial liabilities (interest-hedged portion of interest-bearing debt)
-3 110 399
-3 815 938
Total
-3 102 399
-3 803 938
Variable rate instruments
Financial assets (cash and cash equivalents)
5 458 472
4 039 207
Financial liabilities (non-interest-hedged portion of interest-bearing debt)
-7 066 713
-6 608 704
Total
-1 608 241
-2 569 497
Interest rate sensitivity
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts indicated below. This analysis is on a pre-tax basis and assumes that all other variables, in particular foreign currency rates, remain constant. Changes in the market value of interest rate swap agreements are not included. The analysis is performed on the same basis as for the previous year.
Profit or loss
Equity
100 bp
100 bp
100 bp
100 bp
91
91
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
increase
decrease
increase
decrease
31 December 2022
Net interest costs
-16 082
16 082
-16 082
16 082
31 December 2021
Net interest costs
-25 695
25 695
-25 695
25 695
Leases as lessee
Accounting principles
At inception of a contract, the Group of companies assesses whether a contract is, or contains, 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 of companies uses the definition of a lease in IFRS 16.
At commencement or on modification of a contract that contains a lease component, the Group of companies allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.
Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant and equipment (see note 10). See also note 18 for information on the lease liabilities.
Land and
Other
Total
(Amounts in NOK 1000)
Vessels
buildings
fixed assets
2022
2022
Balance at 1 January
4 434
427 936
14 876
447 246
Depreciation charge for the year
-462
-54 879
-6 162
-61 504
Impairment
0
0
0
0
Additions to right-of-use assets
0
116 746
15 876
132 622
Derecognition of right-of-use assets
0
-4 696
-4 842
-9 538
Currency differences
-13
-1 633
522
-1 124
Balance at 31 December
3 959
483 474
20 270
507 703
Land and
Other
Total
(Amounts in NOK 1000)
Vessels
buildings
fixed assets
2021
2021
Balance at 1 January
17 362
423 663
15 106
456 131
Depreciation charge for the year
-16 744
-47 593
-1 449
-65 785
Impairment
0
-4 097
-3 895
-7 992
Additions to right-of-use assets
4 666
57 420
11 318
73 404
Derecognition of right-of-use assets
-339
-944
-5 623
-6 905
Currency differences
-511
-513
-582
-1 606
Balance at 31 December
4 434
427 936
14 876
447 246
Amounts recognized in profit or loss
(Amounts in NOK 1000)
Leases under IFRS 16
2022
2021
Depreciation charge for the year
61 504
65 785
92
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Interest on lease liabilities
21 352
15 576
Expenses related to short-term leases
348 838
505 187
Amounts recognized in statement of cash flows
(Amounts in NOK 1000)
2022
2021
Total cash outflow for leases
71 943
123 344
Most of the lease rentals in the Group of companies are related to office rental contacts in several countries, land leases regarding wind farms. The additions to right-of-use assets in 2022 are mainly related to new office rental contracts and new land lease contract in the Renewable Energy segment. Expenses included in profit or loss from short-term leases are mainly related to lease of cranes and various equipment in the Global Wind Service Group.
The office rental contracts are mainly within the subsidiary NHST Media Group AS. The most significant leases are related to the main offices in the Europe and has a duration of 5-10 years, some which contain renewal options. The renewal period is a significant proportion of the leasing liability. It is assessed that it is most likely to exercise the options to extend the lease period and the calculation of the liability and right-of-use asset is based on this assumption.
Also included are land leases, with fixed payments, regarding wind farms within Renewable Energy. These contracts are mainly compensation for road access, use of a compound or a minimum rent to the landowners. The land rent contracts normally have variable lease terms based on turnover or usage. These lease payments depending on turnover or usage will continue to be recognized in profit or loss when the use occurs. These payments are not included in the lease liability that is recognized under IFRS 16, due to their variable nature. The total expense relating to variable lease payments which is not included in the measurement of lease liabilities is NOK 132 million in 2022 (NOK 53 million). The cash outflow from variable leases is estimated to NOK 154 million in 2023.
The Group of companies has some short-term office rental contracts and leases of low-value items which the Group of companies has elected not to recognize as right-of-use assets and lease liabilities.
Leases as lessor
Accounting principles
At inception or on modification of a contract that contains a lease component, the Group of companies allocates the consideration in the contract to each lease component based on their relative stand-alone prices.
When the Group of companies act as a lessor, it determines at lease inception whether each lease is a lease liability or an operating lease. To classify each lease, the Group of companies 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 lease liability; if not, then it is an operating lease. As part of this assessment, The Group of companies consider certain indicators such as whether the lease is for a major part of the economic life of the asset.
If an arrangement contains lease and non-lease components, then the Group of companies applies IFRS 15, Revenue from contracts with customers, to allocate the consideration in the contract. The Group of companies applies the derecognition and impairment requirements in IFRS 9, Financial instruments, to the net investment in the lease.
For further details, see note 5.
93
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
(Amounts in NOK 1000)
Per year end 2022
Per year end 2021
Project
Committed
Capitalised
Remaining
Committed
Capitalised
Remaining
Renewable Energy
Högaliden
13 896
0
13 896
772 162
724 675
47 487
Fäboliden 2
304 142
100 802
203 340
0
0
0
Total
217 236
47 487
Wind Service
New crane and upgrade of Bold Tern
0
0
0
612 313
349 021
263 292
New crane Brave Tern
384 805
56 853
327 952
365 590
36 010
329 580
Total
327 952
592 872
Cruise
Bolette
0
0
0
6 236
0
6 236
Borealis
0
0
0
5 579
0
5 579
Braemar
0
0
0
447
0
447
Balmoral
2 371
0
2 371
6 136
0
6 136
Misc.
608
0
608
8 747
0
8 747
Total
2 979
27 145
Remaining capital commitments
548 167
667 504
The Group of companies is subject to various legal and tax claims arising in the normal course of business which the Group of companies assesses on a regular basis.
Outstanding receivables from customers
Universal Foundation (UF) is a company involved in the design and installation support for two Mono Bucket foundations at the Deutsche Bucht project. UF received a notification of liability from Van Oord in late 2019 under the Foundation Design Agreement. In the fourth quarter of 2021 there was further communication between the parties, and Van Oord and now also their customer argue that they have incurred significant losses and may seek to pursue claims beyond contractual limitations of liability. The position of UF is that any such claim would be without merit and consequently the accounts have made no provision for the same matter. The Company has reported on this issue in the quarterly reporting during 2021 and 2022.
Outstanding issues from suppliers
No significant outstanding issues recognized as per year end 2022.
Tax disputes
In December 2022 a subsidiary, Fred. Olsen Ocean Ltd was notified by the tax authorities of a possible change in taxable income for 2017. The amount involved is a taxable loss of NOK 313 million. This is not expected to result in any payable tax, since the group of companies have significantly amount in loss carry forward. The company has contradicted the correctness of the tax office' s opinion.
94
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
In the ordinary course of business, the Group of companies recognizes certain business transactions with accounting wise related parties. This note addresses the background, the services included the compensation principles as well as the governance principles applied to such main arrangements.
Fred. Olsen & Co.
The origin of the firm FOCO dates back to 1848. The current proprietor of Fred. Olsen & Co. (FOCO), Anette Sofie Olsen, identifies the fifth generation Olsen and can draw an uninterrupted line of business conduct back to 1848. Whilst some Fred. Olsen-related activities are investments by the Company, others remain private - but they all stem from the private entrepreneurship back in 1848.
A good example is the Renewable Energy business segment, which in the early nineties of the last century evolved out of private Fred. Olsen-related green energy activities in the moorlands of Scotland. At the time this was far from what the maritime oriented the Company were focusing on. However, on the back of these activities an opportunity was made available for The Company to expand its business interests into investing in constructing, owning and operating windfarms, initially primarily in the UK.
FOCO has for generations managed, the day-to-day operation of the Company. The public sphere of the Fred. Olsen-related activities was in earlier years centred around five shipping companies, all listed on the Oslo Stock Exchange and each engaged in distinct business activities and operated by FOCO. Following various mergers, the latest in May 2016, The Company became the sole surviving entity out of these five companies, but now with investments in a variety of diversified business segments, each subject to autonomous corporate structures and accordingly with distinct managements.
Over the years FOCO has in addition also been engaged in day-to-day operation or provision of professional services to other companies and investment funds.
In addition to being in charge of the day-to-day operation of The Company, FOCO today also provides a variety of professional services market terms to predominantly subsidiaries of the Company engaged in the various business segments within which the Company is invested. FOCO only to a very limited degree provides services to private Fred. Olsen-related companies, and then at rates equal to those applied to subsidiaries of the Company.
The Board of Bonheur is satisfied that the arrangement with FOCO in charge of the day-to-day operation of the Company, which for decades has proved successful, also today is very suitable.
The Board is of the view that the business segments within which the Company at any one point in time is invested through subsidiaries, must be operated on an autonomous basis. At the same time, and partly for the same reason, it is of significant value to the Company that FOCO with its experience and knowledge on a professional basis assist each of these business segments in achieving their respective goals. That in turn provides a unique platform for FOCO to be able to efficiently provide such day-to-day operation of the Company that is needed. By FOCO being in charge of both the day-to-day operation of the Company and the provision of a variety of services to subsidiaries of Bonheur, the Company and FOCO achieve cost and competence synergies. Such benefits are realized without any interests being compromised.
For its services to the Company, FOCO is compensated through a cost-plus model. A profit margin commensurable with margins used in comparable uncontrolled transactions is applied on top of a cost base consisting of documented expenses mainly related to personnel, external consultancy services, rent and IT expenses (see below table). Defined contribution pension relative to FOCO is included in the above cost base, while defined benefit pension costs relative to FOCO, hereunder pension to Mr. Fred. Olsen, do not form part of this cost base but are charged directly to the Company. The profit margin on the ordinary services by FOCO has in recent years been set at 12 %.
The compensation model also allows for a potential limited annual bonus to FOCO on top of the ordinary compensation. Over the last three years a total of NOK 1.9 million has been paid in bonus.
The compensation model is monitored by the Shareholders’ Committee who applies it in connection with its annual recommendation to the Board on compensation and possible bonus to FOCO. The five members of the Shareholders’ Committee are all independent of the majority shareholders of the Company. When dealing with these recommendations, the Board will be constituted by its, in this regard non-conflicted Directors. The Board of the Company consists of six Directors out of which four Directors are independent of the majority shareholders of the Company and of FOCO.
The aforementioned compensation - together with a possible bonus - is the only compensation FOCO receives for its services to the Company. The profit margin and the maximum obtainable bonus is subject to regular third-party benchmarking and review, performed every 3 years, last time in 2022, also monitored by the Shareholders’ Committee.
(Amounts in NOK 1000)
2022
2021
95
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Costs together with profit margin and bonus to Fred. Olsen & Co., charged to the Company
92 211
114 768
Costs and fees charged to subsidiaries
81 416
59 826
Amount outstanding between Fred. Olsen & Co. and the Company *)
-15 824
-12 938
Amount outstanding between Fred. Olsen & Co. and subsidiaries of the Company *)
-5 635
-2 699
*) Short term outstanding in connection with current operations.
In 2022 Hvitsten AS was established as a subsidiary of FOCO as an alternative investment fund manager, as well as naturally associated activities. Hvitsten AS's operations are subject to the Act on the Management of Alternative Investment Funds of 20 June 2014 No. 28. On 22 June 2022, the company received permission to manage funds from the Norwegian Financial Supervisory Authority. The permit is limited to management of funds with an investment strategy within private equity and infrastructure investments, ref. § 2-4 fifth paragraph.
Hvitsten AS has a management assignment with Wind Fund I AS which invested EUR 175 million to indirectly acquire three Scandinavian wind farms. In addition, EUR 305 million is committed for future wind farm developments. Hvitsten AS is not exposed to significant credit, interest rate and currency risks. The company has a long-term management agreement with Wind Fund I AS but may also manage other alternative investment funds in the future.
Hvitsten AS charge a fixed administration fee to Wind Fund I AS with a stairstep fee-model for each new wind farm, in addition to a one-time investment fee for each new wind farm investment.
Renewable Energy
The Natural Power Consultants Ltd. (NPC) are an international renewable energy consultancies providing high level analytics and advice across multiple technologies to FOR, FOS and many unrelated 3rd parties. They operate across all areas of the project life cycle from consenting, environmental studies, site design, construction management and operations.
Zephir Ltd. (ZX Lidar) provide high technology laser powered wind measurement tools (Wind Lidars) used in windfarm Development, Site Construction, Project Operations as well as many other wind monitoring applications.
ZX Measurement Services Ltd. (ZX MS) provide wind measurement services such as Wind Lidar rental, campaign design and optimisation.
NPC, ZX Lidar, ZX MS are owned by Fred. Olsen Ltd. (FOL) which is owned by the private Fred. Olsen-related companies AS Quatro and Invento AS; both major shareholders in the Company.
In late 2021, Bonheur and NPC acquired 25.5% each of the Danish consultancy company New Power Partners (NPP). Transactions between NPP and Bonheur group of companies have therefore been reported as related party transactions in 2022.
Scope of services:
NPC and NPP provides both consultancy services and operations-related services for FOR’s wind farms and FOS projects in the UK. FOR has contracted NPC to provide site and asset management services for its wind farms in the UK and also to provide specific consultancy services mainly related to planning, environmental, technical, construction, and geotechnical services within renewable energy.
Invoiced from related parties (NOK 1 000)
2022
2021
Natural Power Consultants Ltd. (NPC with subsidiaries - asset management services)
104 093
96 339
Natural Power Consultants Ltd. (NPC with subsidiaries - other consultancy services)
33 699
23 853
Fred. Olsen Travel Ltd.
419
0
Fred. Olsen Ltd.
5 747
4 924
Fred. Olsen & Co.
30 513
20 658
Fred. Olsen Ocean AS
0
684
ZX Measurement Services Ltd.
2 854
4 773
New Power Partners ApS
16 294
0
Zephir Ltd.
1 159
2 596
Total paid to related parties
194 778
153 827
FOR hires and shares office locations and other administrative services such as HR and IT support from FOL in London.
96
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Governance
All contracts between the related parties are based on the arm’s length principle. The contracts are at regular intervals, and with advice from independent experts, benchmarked and tested against comparable contracts tendered in the market to ensure they are at terms comparable to those available in the market.
In July 2022, FORAS entered into agreements providing Euro 480 million equity financing for onshore windfarms in Norway, the UK and Sweden. FORAS will remain the 51% shareholder in such windfarms, while the other 49% will be acquired by the newly established investment fund, Wind Fund 1. Kommunal Landspensjonskasse ("KLP"), MEAG Munich ERGO AssetManagement GmbH ("MEAG") acting on behalf of various entities of Munich Re Group including ERGO, and Keppel Infrastructure Trust ("KIT") / Keppel Corporation Limited ("Keppel") all own 1/3 of the fund. On 8th September, the fund acquired an indirect ownership of 49% in three operative windfarms with a combined capacity of 258 MW (Lista Vindkraftverk AS, Fäbodliden Vindkraft AB and Högaliden Vindkraft AB) for net cash proceeds (adjusted for NIBD and leakage) of EUR174 million. Further, the fund has an exclusive right and obligation to invest 49% in all onshore windfarm projects in the UK and Sweden that FORAS takes forward to final investment decision until the current outstanding commitment of Euro 305 million is fully utilized or a period of five years has lapsed.
FOCL has its commercial operation located in Ipswich (UK) while its technical operation is located in Oslo. The segment is subject to the following related party interests:
Shared Services with Fred. Olsen Ltd.
FOCL has for many years been part of and has benefited from a wide range of shared services, such as HR, IT and administration, under an office community with FOL in an office building at White House Road, Ipswich. The rents are at market terms and subject to annual review. The other services from FOL are paid for at cost.
For further enhancement of the office situation in Ipswich, it has been decided to extend and improve the office building at White House Road, Ipswich. Together with FOL, FOCL have established a joint venture company (Fred. Olsen House (JV) Ltd. (FOHJV)) for the purpose of having the building transferred and for funding of the necessary extension and improvement works. FOCL has made a cash investment of GBP 2.6 million as its 50% share in FOHJV. The investment is included under Financial fixed assets.
Travel agency services from Fred. Olsen Travel Ltd. FOTL is a subsidiary of FOL.
FOTL (UK) facilitates relevant flight bookings for the crew employed by FOCL and some passengers and also acts as an ordinary sales agent for cruise holidays operated by FOCL. These services, however, only amount to a minor share of FOTL’s total revenues. The crew flights services are based on cost plus a service fee per booking. The sales agency is paid a commission on similar terms to other commercial agreements in place between FOCL and independent agents.
Crewing services from Bahia Shipping Services Inc.
FOCL deploy crew partly from the Philippines with Bahia Shipping Services Inc. based in Manila (Bahia). Bahia came about in 1987 out of a need for a professional crewing company to provide qualified personnel and secure fair treatment of the crew. The majority of the crewing companies in the Philippines at that time did not meet FOCL’s HSEQ requirements in this respect, which was the key reason for Bahia coming into existence. Fred. Olsen jnr. owns 25% of Bahia Shipping Services, while the remaining 75% is owned by non-related Philippine third parties. Fred. Olsen Jnr. resigned from the board of FOCL in July 2022, and Bahia will therefore not be reported as a related party for 2023 and forward.
In 2022 Fred. Olsen Jnr. received NOK 0.8 million (2021: NOK 1.7 million) as an aggregate compensation as chairman of the board of FOCL and for other work carried out to FOCL and subsidiaries. Fred. Olsen Jnr. resigned from the board of FOCL in July 2022. He is one of the indirect ultimate owners of AS Quatro and Invento AS.
Bahia is delivering a complete set of crewing services for crew out of the Philippines, including recruitment, interviewing, testing, training, legal matters, travel arrangements etc. Bahia also facilitates flight bookings for crew travelling from the Philippines to the cruise vessels. The major part of what is paid to Bahia is a pass-through service of wages to crew members (allotment) being funds transferred via Bahia for payment to the crew in the Philippines. Bahia provides crewing services also to other, non-Fred. Olsen-related shipping companies. Cost of crew flights are based on actual cost. Recruitment fees are based on market rates and subject to market testing. Bahia’s agency fee is a flat fee negotiated between FOCL and Bahia and based both on market rate and assessment of hours effort required. The numbers in the first table below reflect net amounts, pass-through expenses are excluded.
Invoiced from related parties (NOK 1 000)
2022
2021
Fred. Olsen Ltd (commission/ mark-up paid on head office/ establishment services)
1 080
600
Fred. Olsen Travel Ltd (commission paid on crew flights etc)
1 819
1 842
Fred. Olsen Travel Ltd (commission earned on sale of cruise tickets)
6 676
4 273
Bahia Shipping Services Inc. (agency fee for crewing services)
8 955
1 574
Fred. Olsen & Co. (invoiced for admin fee for Group services)
2 527
1 614
97
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Commissions and fees paid to related parties
21 057
9 903
The table below reflects gross numbers and thus also pass-through expenses.
Invoiced from related parties (NOK 1 000)
2022
2021
Fred. Olsen Ltd. (Infrastructure and establishment services)
8 606
7 190
Fred. Olsen Ltd. (Office management and personnel services)
24 200
15 142
Cost for office premises, Infrastructure and office management paid to Fred. Olsen Ltd.
32 807
22 332
Other transactions with related parties
The Wind Service segment of the Company was invoiced NOK 20 million (2021: NOK 22 million) for services from Fred. Olsen & Co. (FOCO).
Bahia has provided certain crewing services to the Wind Service segment of which a commission of NOK 1.1 million (2021: NOK 0.7 million) was paid.
In 2022, FOCO paid NOK 5.4 million (2021: 5.7 million) to the Group of companies for rent of office space. The rent is market based and on similar terms as for other tenants in the quarter in Fred. Olsens gate 2 in Oslo.
The Company rents an office building in Hvitsten from a private Fred. Olsen-related company. Rent paid in 2022 as well as in 2021 was NOK 0.4 million.
Mr. Fred. Olsen is party to a consultancy agreement with FOCO. In 2022, NOK 5.2 million was paid under this consultancy agreement (2021: NOK 5.2 million). Such payment is part of the costs charged to Bonheur.
Members of the Board of Directors, the managing director and other related parties hold per year end 2022 in total NOK 6 million of BON09 bond loan (2021: NOK 13 million).
As per 31 December 2022 the members of the Board, members of the Shareholders' Committee and the Managing Director owned and/or controlled directly and/or indirectly, the following number of shares in the Company:
Board of directors:
Shareholders' committee:
Managing Director:
Fred. Olsen
40 586
Einar Harboe
109
Anette S. Olsen
2 942
Bente Hagem
1 505
Jørgen G. Heje
2 180
Carol Bell
1 200
Bård Mikkelsen
0
Nick Emery
325
Ole Kristian Aabø-Evensen
0
Andreas Mellbye
0
Christian F. Michelet
0
Jannicke Hilland
0
Private Fred. Olsen related interests directly and/or indirectly owned or controlled 22 013 380 shares in the Company.
98
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Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Accounting policies
Bonheur ASA is the parent in the Group of companies with the following subsidiaries:
Country of incorporation
Ownership interest
Votes, percentage
2022
2021
Fred. Olsen Seawind ASA
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Renewables AS
Oslo, Norway
100,00%
100,00%
100,00%
- Fred. Olsen Wind Ltd.
UK
51,00%
51,00%
51,00%
- Fred. Olsen CBH Ltd.
UK
51,00%
51,00%
51,00%
- Hvitsten II JV AS
Oslo, Norway
51,00%
0,00%
51,00%
- Hvitsten II JV AB
Sweden
51,00%
0,00%
51,00%
Fred. Olsen Ocean Ltd.
Hamilton, Bermuda
100,00%
100,00%
100,00%
- Fred. Olsen Windcarrier ASA
Oslo, Norway
100,00%
100,00%
100,00%
- Global Wind Services A/S
Fredericia, Denmark
92,16%
92,16%
92,16%
First Olsen Holding AS
Oslo, Norway
100,00%
100,00%
100,00%
NHST Media Group AS
Oslo, Norway
55,00%
55,00%
55,13%
Fred. Olsen Travel AS
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Insurance Services AS
Oslo, Norway
100,00%
100,00%
100,00%
AS Stavnes Byggeselskap
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Spedisjon AS
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen 1848 AS
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Investments AS
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Cruise Lines Pte Ltd
Singapore
100,00%
100,00%
100,00%
Ganger Rolf AS 1)
Oslo, Norway
100,00%
100,00%
100,00%
Fred. Olsen Canary Lines S.L. 1)
Spain
100,00%
100,00%
100,00%
Felixstowe Ship Management Ltd. 1)
UK
99,85%
99,85%
99,85%
Number of shares
Book value shares
Result for the year
Equity
Fred. Olsen Seawind ASA
10 000 000
71 000
-72 074
95 496
2)
Fred. Olsen Renewables AS
30 000
1 779 107
2 824 781
1 728 746
2)
- Fred. Olsen Wind Ltd.
399 840
1 704 335
1 966 218
398 879
2)
- Fred. Olsen CBH Ltd.
153
606 931
180 101
104 269
2)
- Hvitsten II JV AS
57 607 438
389 059
-243 098
763 402
- Hvitsten II JV AB
12 750
1 251 794
2 473 468
2 460 477
Fred. Olsen Ocean Ltd.
39 993 796
2 749 285
302 014
3 721 750
2)
- Fred. Olsen Windcarrier ASA
5 000 000
182 312
260 604
2 977 731
2)
- Global Wind Services A/S
940 000
476 391
-16 598
223 935
2)
First Olsen Holding AS
1 000 100
587 131
-1 102 756
-1 579 104
2)
NHST Media Group AS
882 371
271 622
-57 535
-127 365
2)
99
99
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Fred. Olsen Travel AS
4 482
7 914
2 830
11 738
Fred. Olsen Insurance Services AS
1 500
0
335
30 198
AS Stavnes Byggeselskap
11 000
28 533
-2 248
26 379
Fred. Olsen Spedisjon AS
700
7 771
-1 554
6 335
Fred. Olsen 1848 AS
30
35 000
-28 839
9 495
2)
Fred. Olsen Investments AS
1 000
10 000
893
10 804
Fred. Olsen Cruise Lines Pte Ltd
1 000 000
6 230
628
19 343
Ganger Rolf AS 1)
30 000
31
0
15
Fred. Olsen Canary Lines S.L. 1)
100
96
0
0
Felixstowe Ship Management Ltd. 1)
15 151
965
0
0
Voting rights in the companies equal the ownership interest.
1) Based on the Company’s ownership interest the companies are classified as subsidiaries, but due to no or insignificant activity the companies are not consolidated in the Group of companies.
2) Group Company result and equity.
There have been no material subsequent events post year-end 2022.
100
100
Bonheur ASA – Annual Report 2022
Income Statement (NGAAP)
(Amounts in NOK 1000)
Note
2022
2021
Other income
12
18 081
17 982
Total income
18 081
17 982
Operating expenses
1
-149 294
-149 415
Depreciation
3
-4 638
-5 014
Total operating expenses
-153 932
-154 429
OPERATING RESULT
-135 851
-136 447
Interest income
7
114 025
31 952
Dividends
15
2 149 656
224 517
Foreign exchange gains
41 265
22 798
Gain on sale of bonds and securities
5
162
140
Other financial income
3 499
2 263
Total financial income
2 308 607
281 670
Other interest expenses
9
-111 471
-91 592
Foreign exchange losses
-13 745
-30 259
Loss on sale of bonds and securities
5, 6
-257
-123
Other financial expenses
16
-679 014
-7 562
Total financial expenses
-804 487
-129 536
Net financial items
1 504 120
152 134
RESULT BEFORE TAX
1 368 269
15 687
Current tax
11
0
0
Deferred taxes
11
0
0
RESULT FOR THE YEAR
1 368 269
15 687
Proposed allocations:
Dividends
8
212 659
182 887
Other equity
8
1 155 610
-167 200
Total allocations
1 368 269
15 687
101
101
Bonheur ASA – Annual Report 2022
Balance Sheet (NGAAP)
(Amounts in NOK 1000)
Note
2022
2021
Assets
Non-current assets
Real estate
3
36 285
37 853
Other property, plant and equipment
3
31 101
28 428
Total property, plant and equipment
67 386
66 281
Investments in subsidiaries
4
5 553 719
6 205 479
Investments in associates
5
16 747
0
Investments in other shares
5
117 084
94 803
Bonds
6
267 451
279 046
Other receivables
7
1 293 460
955 472
Pension funds
2
25 679
12 996
Financial fixed assets
7 274 140
7 547 796
Total non-current assets
7 341 526
7 614 077
Current assets
Short-term securities
5
67 977
39 710
Current receivables
7
554 516
391 194
Restricted cash
14
502 135
501 916
Cash and cash equivalents
14
2 535 074
1 786 001
Total current assets
3 659 702
2 718 821
TOTAL ASSETS
11 001 228
10 332 898
Equity and liabilities
Equity
Share capital
8
53 165
53 165
Additional paid in capital
143 270
143 270
Total paid in capital
196 435
196 435
Other equity
7 869 840
6 646 850
Total equity
8
8 066 275
6 843 285
Liabilities
Pension liabilities
2
446 742
493 100
Total provisions
446 742
493 100
Bond loans non-current
2 190 226
2 186 355
Other non-current loans
12 555
0
Total non-current liabilities
9
2 202 781
2 186 355
Bond loans current
0
499 875
Other current liabilities
285 431
310 283
Total current liabilities
9
285 431
810 158
Total liabilities
2 934 953
3 489 613
TOTAL EQUITY AND LIABILITIES
11 001 228
10 332 898
Guarantees
10
654 186
500 820
Oslo, 12 April 2023
Bonheur ASA – The Board of Directors
Fred. Olsen
Carol Bell
Bente Hagem
Jannicke Hilland
Andreas Mellbye
Nick Emery
Chairman
Director
Director
Director
Director
Director
Sign.
Sign.
Sign.
Sign.
Sign.
Sign.
Anette Sofie Olsen
Managing Director
102
102
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Sign.
Cash Flow Statement (NGAAP)
(Amounts in NOK 1000)
Note
2022
2021
Cash flow from operating activities:
Net result after tax
8
1 368 269
15 687
Adjustments for:
Depreciation
3
4 638
5 014
Impairment of investments
16
661 693
2 364
Pension costs
26 601
29 642
Amortisation of borrowing costs
3 996
4 052
Unrealized currency gains (-) / losses
-12 125
8 668
Interest income
-114 025
-31 952
Dividends
-2 149 656
-224 517
Interest expenses
111 470
91 592
Gains (-) / losses on sale property, plant and equipment
3
0
-75
Gains (-) / losses on sale of shares and bonds
95
-17
Taxes
11
0
0
Cash generated before changes in working capital and provisions
-99 044
-99 542
Increase (-) / decrease in trade and other receivables
-16 265
-2 769
Increase / decrease (-) in current liabilities
-3 159
865
Net cash generated from operations
-118 468
-101 446
Interest paid
-107 999
-90 919
Tax paid
11
0
0
Net cash from operating activities
-226 467
-192 365
Cash flow from investing activities:
Proceeds from sale of property, plant and equipment
3
0
75
Proceeds from sale of shares and bonds
61 000
106 029
Interest received
76 977
19 709
Dividends received
2 038 746
173 636
Acquisitions of property, plant and equipment
-5 743
-1 971
Acquisitions of shares in subsidiaries, other shares and bonds
4
-98 417
-554 788
Net change in long term receivables
7
-444 365
-184 135
Net cash flow from investing activities
1 628 198
-441 445
Cash flow from financing activities:
Increase in borrowings
9
2 043 631
784 018
Repayment of borrowings
9
-2 513 183
-600 000
Dividends paid
8
-182 887
-170 128
Net cash flow from financing activities
-652 439
13 890
Net change in cash and cash equivalents
749 292
-619 920
Cash and cash equivalents at 1 January
14
2 287 917
2 907 837
Cash and cash equivalents at 31 December
14
3 037 209
2 287 917
103
103
Bonheur ASA – Group of CompaniesNotes
Bonheur ASA – Annual Report 2022
Bonheur ASA is an investment company performing Group Management, Corporate Functions, and the Group’s internal bank (Group Treasury).
The accounts have been prepared in accordance with the Norwegian accounting act and generally accepted accounting principles in Norway. The annual accounts give a true and fair view of assets and liabilities, financial status and result.
All figures presented are in NOK unless otherwise stated.
The annual accounts are based on basic policies related to historical cost, comparability, going concern, congruence and prudence. Specific transactions are recognized at fair value of the date of the transactions. Revenues from house rental, which is invoiced monthly, is recognized in the income statement once invoiced.
Assets related to receivables payable within one year are classified as current assets. Other assets are classified as non-current assets. An equivalent principle is applied to liabilities. Instalments related to long term debt payable within one year are classified as short-term liabilities.
Bonheur ASA’s significant accounting principles are consistent with the accounting principles for the Group, as described in note 1 and in the separate notes of the consolidated financial statements. Where the principles for the parent company are substantially different from the principles for the Group, these are explained below. Otherwise, refer to the notes to the consolidated financial statements. The sequence of the notes for the Company is not in the order of the profit and loss and the balance sheet, but this will be implemented for the 2023 annual report.
Foreign currency items and derivatives
Short and long-term assets and liabilities are valued at currency rates prevailing at year end. Unrealized losses are expensed, and unrealized gains are accounted for as financial income.
Currency- and interest rate swaps are valued according to the lower of cost and market value principle, i.e. unrealized losses are accounted for in the income statement and balance sheet.
Shares and other securities
Long term investments in subsidiaries and associated companies are classified as financial fixed assets in the balance sheet and measured at the lower of cost and fair value. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or have rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Long term and short-term investments in other shares and bonds held to maturity date, are classified as financial fixed assets or current assets in the balance sheet and measured at the lower of cost and fair value. Average cost is used when gains/losses on sale of shares and bonds are calculated. Gains/losses on sale of securities are recognized in the income statement as financial income/losses.
At the reporting dates, the carrying amounts of fixed assets are reviewed to determine whether there is an indication of impairment. Fixed assets are written down to their recoverable amount if this is lower than the carrying amount, and the decline is expected to be permanent. The recoverable amount is the higher of an asset or cash generating unit’s fair value less cost of disposal and its value in use. For investments that are not actively traded in the market, fair value is determined using valuation techniques such as e.g. using recent arm’s length market transactions. Value in use is the present value of future cash flows expected to be derived from an asset or cash generating unit.
Cash and cash equivalents
Cash and cash equivalents include cash and bank deposits held with financial institutions, both unrestricted and restricted, and other current, liquid investments.
Management expenses
The Company’s relative share of Fred. Olsen & Co.'s management expenses are charged to «operating expenses» in the income statement.
Pension cost/-commitments
The Company has chosen to follow IAS 19 also for the parent company’s presentation of the pension costs, as optionally granted in NRS 6.
Net pension cost, which consists of gross pension cost, less estimated return on plan assets adjusted for the impact of changes in estimates and pension plans, are classified as an operating cost, and is presented in the line item “operating expenses” whereas the changes in estimates are recognized in equity.
Dividends received
Dividend income is recognised in profit or loss on the date that the company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date. Dividends from non-listed securities are recognised in profit or loss at the date the company receives the dividends.
104
104
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Transactions with related parties
Purchase and sale transactions with related parties in Norway, in line with the Norwegian Companies Act § 3-9, are carried out to the general business terms and principles. The same applies to the purchase from and sale to foreign related parties. Recognition, classification etc follow the Act’s general principles. There are written agreements for significant transactions. Transactions with related parties are specified in note 12.
Bonheur ASA’s share of revenues, expenses (e.g., administration fee and IT fee), gains and losses not attributable to a particular company in the same group is based on allocation keys in accordance with good business practice.
The Company has no employees. The position as managing director is held by Anette S. Olsen as part of the day-to-day operation of the Company provided by FOCO. See note 12.
FOCO has for the same period charged subsidiaries and other company related parties for comparable services under separate agreements
(Amounts in NOK 1 000)
Note
2022
2021
Remuneration etc.
Admin. costs together with profit margin and bonus to FOCO, charged the Company
12
65 610
85 126
Admin. cost to subsidiary
9 820
0
Employee benefits/pension costs related to FOCO, charged the Company
2,12
26 601
29 642
Fees to the Board of Directors and Shareholders' Committee
4 575
4 086
Other operating expenses **)
42 689
30 561
Total Operating expenses
149 295
149 415
(Amounts in NOK 1 000)
2022
2021
**) Hereof professional fees to the auditors
Statutory audit
5 941
4 696
Other audit related services
0
0
Tax advice
0
0
Other services outside the audit scope
260
69
Total (VAT included)
6 201
4 765
Remuneration to the Board of Directors and the Shareholders Committee
In 2022, the members of the Board received the following directors’ fees:
(Amounts in NOK 1000)
2022
2021
Fred. Olsen, Chairman of the Board
1 550
1 420
Andreas Mellbye
405
350
Carol Bell *)
459
393
Nick Emery *)
446
393
Bente Hagem
405
350
Jannicke Hilland
405
350
Total compensations
3 670
3 256
*) Includes compensation for overnight stops in connection with Board Meetings.
105
105
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Remuneration to the Shareholders’ Committee:
(Amounts in NOK 1000)
2022
2021
Christian Fr. Michelet
205
190
Einar Harboe
175
160
Jørgen G. Heje
175
160
Bård Mikkelsen
175
160
Ole Kristian Aabø-Evensen
175
160
Total compensations
905
830
Note 2 – Pensions / Employee benefits
The Company has no employees, although the position of managing director is held by Anette S. Olsen as part of the overall managerial services under an agreement with FOCO, comprising also financial, accounting and legal services. The Company is charged for the execution of these services and is liable for the pension obligations related to the employees of FOCO. See note 12.
Employees of FOCO, who were employed before 1 June 2012, are members of FOCO’s Pension Fund. Members of the pension fund have the right to future pension benefits (defined benefit plan) based upon the number of contribution years and salary level at retirement. The pension scheme is administered by FOCO’s Pension Fund, which is a separate legal entity, mainly investing its funds in interest bearing securities and shares in Norwegian listed companies. As per 31 December 2022, 89 employees in FOCO were members of the defined benefit scheme in the pension fund (2021: 98), whereof 69 pensioners (2021: 77).
All persons employed after 1 June 2012 are offered a Defined Contribution Scheme. All employees as at June 2012 decided to keep their defined benefit plans. The pension schemes are accounted for in accordance with IAS19. The pension plans are in compliance with the Norwegian requirements for Mandatory Service Pension (OTP)
The Company has unfunded (unsecured) pension obligations towards 23 of FOCO’s directors and senior managers with a salary exceeding 12 G (of whom 12 pensioners). The directors have the right to an early pension upon reaching 65 years of age, while other managers have a retirement age of 70 years. The pension obligations represent 66% of the relevant salary at the time of retirement.
(Amounts in NOK 1 000)
2022
2021
Present value of unfunded obligations
-446 742
-493 101
Present value of funded obligations
-221 451
-241 838
Total present value of obligations
-668 193
-734 939
Fair value of plan assets
247 129
254 834
Net liability for defined benefit obligations
-421 064
-480 105
Hereof unfunded pension plans
-446 742
-493 101
Hereof funded pension plans
25 678
12 996
Recognized net defined benefit obligations
-421 064
-480 105
Expected payment of benefits from the funded plans are in 2023 estimated to be 11.0 million.
Expected contributions to funded defined benefit plans in 2023 are NOK 8.7 million.
Expected payment of benefits from the unfunded plans are in 2023 estimated to be 15.1 million.
106
106
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Movement in net liability of defined benefit obligations:
Funded obligations
Unfunded obligations
Total obligation
(Amounts in NOK 1000)
2022
2021
2022
2021
2022
2021
Balance at 1. January
12 996
9 935
-493 100
-477 041
-480 104
-467 106
Pension contribution
8 491
3 178
0
0
8 491
3 178
Benefits paid by the plan *)
0
0
9 771
9 741
9 771
9 741
8 491
3 178
9 771
9 741
18 262
12 919
Included in profit and loss:
Interest
260
174
-9 764
-8 263
-9 504
-8 089
Current Service cost
-6 425
-6 458
-10 672
-15 095
-17 097
-21 553
Net pension cost
-6 165
-6 284
-20 436
-23 358
-26 601
-29 642
Included in equity
Actuarial gain/(loss) arising from:
Financial assumptions
20 532
7 568
57 024
-2 442
77 556
5 126
Return on plan assets
-10 176
-1 401
0
0
-10 176
-1 401
10 356
6 167
57 024
-2 442
67 380
3 725
Balance as at 31. December
25 678
12 996
-446 741
-493 100
-421 063
-480 104
*) Payment of benefits from the funded defined benefit plans were in 2022 NOK 11.0 million (2021: NOK 11.8 million). Payments are covered by funds from the pension trust and are netted out in the table above.
The principal actuarial assumptions at the balance sheet date are the same as used for the Group of companies, please see note 19 in the consolidated accounts. Assumptions are based on the guidance from The Norwegian Accounting Standards Board (NASB), and other relevant sources.
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts below:
Increase in PBO: 1)
(Amounts in NOK 1 000)
2022
Future salary increase with 0.25%-points
-5 317
Future pension increase with 0.25%-points
-20 208
Discount rate decreases with 0.25%-points
-25 514
Future mortality, increased by 1 year longevity
-30 864
1) Projected Benefit Obligation
107
107
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 3 - Property, plant and equipment
(Amounts in NOK 1000)
Real estate
Other assets
Total
Cost price as per 01.01.21
113 961
62 755
176 716
Purchases
943
1 029
1 972
PPE acquired from subsidiary
0
-792
-792
Cost price as per 31.12.21
114 904
62 992
177 896
Cost price as per 01.01.22
114 904
62 992
177 896
Purchases
1 737
4 006
5 743
Disposals
-3
2
-1
Cost price as per 31.12.22
116 638
67 000
183 638
Accumulated depreciation as per 01.01.21
-73 368
-34 025
-107 393
Depreciation current year
-3 683
-1 331
-5 014
PPE acquired from subsidiary
0
792
792
Accumulated depreciation as per 31.12.21
-77 051
-34 564
-111 615
Accumulated depreciation as per 01.01.22
-77 051
-34 564
-111 615
Depreciation current year
-3 305
-1 333
-4 638
Accumulated depreciation assets sold
3
-2
1
Accumulated depreciation as per 31.12.22
-80 353
-35 899
-116 252
Carrying amount as per 01.01.22
37 853
28 428
66 281
Carrying amount as per 31.12.22
36 285
31 101
67 386
Expected economic life
25 years
Cars: 7 years
Depreciation schedule is linear for all categories
108
108
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 4 - Subsidiaries
(Amounts in NOK 1000)
Business Office
Owner-ship
Votes, percentage
Number of shares
Book value shares
Result for the year
Equity
Fred. Olsen Seawind ASA
Oslo
100%
100%
10 000 000
71 000
-72 074
95 496
1)
Fred. Olsen Renewables AS
Oslo
100%
100%
30 000
1 779 107
2 824 781
1 728 746
1)
Fred. Olsen Ocean Ltd.
Oslo
100%
100%
39 993 796
2 749 285
302 014
3 721 750
1)
First Olsen Holding AS
Oslo
100%
100%
1 000 100
587 131
-1 102 756
-1 579 104
1) 2)
NHST Media Group AS
Oslo
55%
55%
882 371
271 622
-57 535
-127 365
1) 3)
Fred. Olsen Insurance Services AS
Oslo
100%
100%
1 500
0
335
3 198
Fred. Olsen Travel AS
Oslo
100%
100%
4 482
7 914
2 830
11 738
Stavnes Byggeselskap AS
Oslo
100%
100%
11 000
28 533
-2 248
26 379
4)
Fred. Olsen Spedisjon AS
Oslo
100%
100%
700
7 771
-1 554
6 335
5)
Fred. Olsen 1848 AS
Oslo
100%
100%
30
35 000
-28 839
9 495
1) 6)
Fred. Olsen Investments AS
Oslo
100%
100%
1 000
10 000
893
10 804
Fred. Olsen Cruise Lines PTE Ltd.
Singapore
100%
100%
1 000 000
6 230
628
19 343
Ganger Rolf AS
Oslo
100%
100%
30 000
31
0
15
7)
Fred. Olsen Canary Lines S.L.
Spain
100%
100%
100
96
-
0
7)
5 553 719
1) Group Company Equity based on IFRS.
2) The Group of companies continuously evaluates its assets on an individual basis at each reporting date to determine whether there is an objective evidence of impairment within the various business segments (for more information see note 10 for the Group of companies.
Based on the challenging situation the cruise business has experienced during 2022 and in previous years, there were indications on need for impairment within Cruise and the shares in First Olsen Holding AS. A cash flow model has been applied and is based on strategic plans for the cruise fleet and budget and forecast figures for the period 2023-2042 for three underlying cruise vessels. The calculation is based on different economic lifetime for the individual vessels. The calculation of the impairment is based on three different scenarios, base case, high case and low case with different probabilities and a calculated equity value of GBP 47 million (weighted average). Based on this, Bonheur ASA's investment in First Olsen Holding AS was impaired with GBP 59 million (NOK 687 million).The calculation is based on a weighted average cost of capital (WACC) of 11,9%. All scenarios are based on the same assumptions except for occupancy and yield per pax day.
3) An impairment assessment was made by year end with the conclusion that no impairment is required for the Company's investment in NHST. The assessment is based on Bonheur’s continuous ownership in NHST, and the underlying values of the assets in NHST. The impairment assessment is based on the principles and assumptions made when the impairment testing was performed for the underlying CGUs. See further information in note 11 for the Group Financial statement.
The Company performed sensitivity analysis to the changes in revenue and WACC to test the impairment estimates.
4) In 2022 there was an increase of the paid in capital of NOK 2,2 million (2021: NOK 2 million).
5) In 2022 there was an increase of the paid in capital of NOK 1 million (2021: NOK 2.6 million).
6) In 2022 there was an increase of paid in capital of NOK 32 million (2021: NOK 3 million).
7) Based on the Company's ownership interest the companies are classified as subsidiaries, but due to no or insignificant activity the companies are not consolidated in the Group of companies.
109
109
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 5 - Shares in associated companies and other investments
(Amounts in NOK 1 000)
Cost price
Book value as per 31.12.22
Market value as per 31.12.22
Book value as per 31.12.21
Market value as per 31.12.21
Total short-term liquid share portfolio
233 965
67 977
72 574
39 710
67 302
Shares in associated companies and other long-term investment portfolio
217 826
133 831
134 352
94 803
95 493
Total liquid share portfolio
451 791
201 808
206 927
134 512
162 796
The market value of listed shares is determined by using the listed prices of the companies at year end. Market value of non-listed companies is based on cost (book value) if no reliable measure of fair value exists. See note 16 for impairment of financial assets.
Note 6 - Bonds
(Amounts in NOK 1 000)
Cost price
Currency
Book value as per 31.12.22
Market value as per 31.12.22
Average interest rate 2022
Book value as per 31.12.21
Market value as per 31.12.21
Fixed assets
Energy Services companies
41 171
NOK
40 715
40 732
2,4 %
41 069
41 172
Real Estate companies
40 995
NOK
40 259
40 259
2,5 %
55 992
56 138
Industry companies
106 282
NOK
104 808
104 998
3,2 %
110 108
110 575
Finance companies
66 000
NOK
64 721
64 818
4,3 %
39 849
40 200
Insurance companies
2 000
NOK
1 958
1 958
4,0 %
2 000
2 013
Public administration
15 003
NOK
14 990
14 990
1,9 %
30 027
30 051
Total
271 452
NOK
267 451
267 754
3,1 %
279 046
280 148
110
110
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 7 - Receivables
(Amounts in NOK 1 000)
2022
2021
Current assets - interest bearing
Subsidiaries 4)
463 390
380 216
Current assets - non-interest bearing
Accounts receivable 1)
1 309
769
Accrued interest income 2)
55 520
721
Other 3)
34 298
9 488
Total short-term receivables
554 516
391 194
Financial fixed assets - interest bearing
Fred. Olsen Ocean Ltd
262 845
259 666
Fred. Olsen Cruise Lines Ltd
1 019 453
684 804
First Olsen Holding AS
5 927
6 085
AS Stavnes Byggeselskap
1 735
1 417
Total subsidiaries 5)
1 289 960
951 972
Other
3 500
3 500
Total long-term receivables
1 293 460
955 472
Interest income group companies
68 718
20 360
1) Hereof subsidiaries and other related parties
889
592
2) Hereof subsidiaries and other related parties
54 058
0
3) Hereof subsidiaries and other related parties
17 528
0
4) Fred. Olsen Seawind ASA (2022: NOK 455 million), Fred. Olsen 1848 AS (2022: NOK 8 million) and Fred. Olsen Renewables AS (2021).
5) For further information see note 13 - Financial instruments.
111
111
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 8 – Share capital and shareholders
Number
%
Major shareholders as of 31.12.2022:
Invento A/S (private Fred. Olsen related company)
12 328 547
28,99%
A/S Quatro (private Fred. Olsen related company)
8 736 550
20,54%
Folketrygdfondet
3 512 101
8,26%
Fløtemarken AS
1 407 000
3,31%
Skagen Vekst Verdipapirfond
1 194 000
2,81%
MP Pensjon PK
880 615
2,07%
Trassey Shipping Limited (private Fred. Olsen related company)
793 740
1,87%
The Bank of New York Mellon SA/NV
754 858
1,77%
Verdipapirfondet DNB Norden
594 893
1,40%
Pareto Askje Norge Verdipapirfond
575 667
1,35%
Verdipapirfondet Alfred Berg Gambak
513 890
1,21%
JPMorgan Chase Bank, N.A., London
394 999
0,93%
Verdipapirfondet DNB Grønt Norden
359 027
0,84%
Verdipapirfondet KLP AksjeNorge
351 694
0,83%
State Street Bank and Trust Company
351 008
0,83%
JPMorgan Chase Bank, N.A., London
300 000
0,71%
Salt Values AS
291 278
0,68%
Verdipapirfondet DNB Norge
247 401
0,58%
Verdipapirfondet KLP AksjeNorge Indeks
212 580
0,50%
Pareto Invest Norge AS
208 870
0,49%
Other
8 523 175
20,04%
Total
42 531 893
100,00%
As of 31 December 2022 the share capital of Bonheur ASA amounted to NOK 53 164 866.25 divided into 42 531 893 shares at nominal value of NOK 1.25 each. As of 31 December 2022 total number of shareholders were 5 085. The Company has only one class of shares and each share equals one vote.
112
112
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
AS per 31 December 2022 the members of the board, members of the shareholders' committee and the managing director owned and/or controlled directly and indirectly, the following number of shares in the Company:
Board of directors:
Fred. Olsen
40 586
Bente Hagem
1 505
Carol Bell
1 200
Nick Emery
325
Jannicke Hilland
0
Andreas Mellbye
0
Shareholders' committee:
Jørgen G. Heje
2 180
Einar Harboe
109
Bård Mikkelsen
0
Ole Kristian Aabø-Evensen
0
Christian F. Michelet
0
Managing Director:
Anette S. Olsen (indirectly owned and controlled)
2 942
Private Fred. Olsen related interests directly and/or indirectly owned or controlled 22 013 380 shares in the Company.
Equity
(Amounts in NOK 1 000)
Note
Paid in share
capital
Additional paid in capital
Other
equity
Total
Equity 01.01.2021
53 165
143 270
6 810 326
7 006 761
Actuarial gain / loss (-)
2
0
0
3 724
3 724
Result for the year
0
0
15 687
15 687
Proposed dividends
0
0
-182 887
-182 887
Equity 31.12.2021
53 165
143 270
6 646 850
6 843 285
Equity 01.01.2022
53 165
143 270
6 646 850
6 843 285
Actuarial gain / loss (-)
2
0
0
67 380
67 380
Result for the year
0
0
1 368 269
1 368 269
Proposed dividends
0
0
-212 659
-212 659
Equity 31.12.2022
53 165
143 270
7 869 840
8 066 275
113
113
Bonheur ASANotes
Bonheur ASA – Annual Report 2022
Note 9 - Liabilities
(Amounts in NOK 1 000)
2022
2021
Current liabilities:
Dividends
212 659
182 887
Accounts payable 1)
2 070
15 953
Bond-loans 3)
0
499 875
Other short term liabilities 2)
70 702
111 443
Total current liabilities
285 431
810 158
Non-current liabilities:
Bond-loans 3)
2 190 226
2 186 355
Other non-current liabilities
12 555
0
Total non-current liabilities
2 202 781
2 186 355
Interest paid to subsidiaries
3 318
0
1) Hereof subsidiaries and other related companies
1 222
12 656
2) Hereof subsidiaries, associates and other related companies
53 939
98 411
3) Bond-loans
Ticker Terms
Issued
Maturity
BON07 3 month NIBOR + 4.00%
24 May 17
24 May 22
0
499 875
BON09 3 month NIBOR + 2.50%
4 Sep 19
4 Sep 24
797 840
796 400
BON10 ESG 3 month NIBOR + 2.75%
22 Sep 20
22 Sep 25
696 714
695 520
BONHR01 ESG 3 month NIBOR + 2.90%
13 Jul 21
13 Jul 26
695 672
694 435
Total
2 190 226
2 686 230
According to the covenants in the bond agreements the Company, including companies owned 100%, has to maintain cash and cash equivalents of minimum NOK 500 million. In addition, the Company must maintain a book equity of minimum NOK 2 280 million and a book equity ratio of minimum 35%. As per 31 December 2022 the Company is not in breach with the covenants.
Note 10 - Guarantees
Bonheur ASA
(Amounts in NOK 1 000)
2022
2021
Guarantee in favour of subsidiaries:
ABTA bonds, Fred. Olsen Cruise Lines *)
471 793
494 520
Offshore Windfarm development project **)
176 093
0
Total guarantee commitments subsidiaries
647 886
494 520
Koksa Eiendom AS **)
6 300
6 300
Total guarantee commitments 31.12
654 186
500 820
*) Bonheur ASA is severally liable for the guarantee as per 31 December 2022.
**) Bonheur ASA is pro rata liable for the guarantees as per 31 December 2022. NOK 6.3 million is Bonheur share of the guarantees.
114
114
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Bonheur ASA – Annual Report 2022
Note 11 – Tax
(Amounts in NOK 1 000)
2022
2021
Result before tax
1 368 269
15 687
+/- permanent differences, tax exempt dividends, impairment of shares
-1 479 223
-217 727
+/- Changes in temporary differences
-55 693
11 031
+/- Income / expenses recognised directly in equity
67 380
3 725
Basis for tax payable
-99 268
-187 285
Tax payable, 22%
0
0
Total payable tax - Balance sheet
0
0
Tax cost estimated as follows
Tax payable, 22%
0
0
Tax income / (-) cost
0
0
Reconciliation of tax income / (-) cost
Result before tax
1 368 269
15 687
Income tax using the domestic corporation tax rate
-301 019
-3 451
Permanent differences
326 089
47 919
Income / expenses recognised directly in equity
-14 824
-819
Change in limitation of deferred tax assets related to tax loss carryforward
-10 246
-43 648
Tax income / (-) cost
0
0
115
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Bonheur ASA – Annual Report 2022
Basis for deferred tax
(Amounts in NOK 1 000)
2022
2021
Change
Fixed assets
16 672
16 607
65
Deferred taxable gain/loss account
-2 334
-2 918
584
Receivables / financial instruments
-4 182
-4 182
0
Pension premium funds
-421 062
-480 104
59 041
Miscellaneous differences
9 774
13 770
-3 996
Net temporary differences
-401 132
-456 825
55 693
Shares, bonds and partnerships
-10 283
-7 283
-3 000
Loss carried forward / deferred allowance
-1 654 287
-1 555 019
-99 268
Interest deductible carried forward
-213 022
-213 022
0
Allowances for deferred tax assets
2 278 724
2 232 149
46 575
Deferred tax basis
0
0
0
Deferred tax benefit (-) / deferred tax liabilities
0
0
0
The Company evaluates the criteria for recognizing deferred tax assets at the end of each reporting period. The Company recognizes deferred tax assets when they are "more likely than not" of being realized based on available evidence at the end of the reporting period, hereunder forecasted taxable profit and consolidated budgets. As of 31.12.22 there is no other evidence that future taxable profit may be available against which the unused tax losses or unused tax credits can be utilized by the Company.
In the ordinary course of business, the Group of companies recognizes certain business transactions with accounting wise related parties. This note describes the background, the services included, the compensation principles as well as the governance principles applied to such main arrangements.
Transactions within the Group of companies and with related parties
Internal short and long-term Group loans and commitments carry market interest rates according to agreement as at the date of issue. Depending on the terms of the loan agreement, the interest rates set are based on an arm’s length principle and follow the market interest rates taking into account the relevant risks involved. The risk involved includes type of business, geographical affiliation, security, duration etc.
(Amounts in NOK 1 000)
2022
2021
Revenues
Subsidiaries
8 176
8 339
Other related parties
566
593
Fred. Olsen & Co.
6 782
7 069
Total
15 524
16 001
Operating expenses
Subsidiaries
9 869
0
Other related parties
1 176
879
116
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Bonheur ASA – Annual Report 2022
Fred. Olsen & Co.
92 211
114 768
Total
103 256
115 647
Financial income
Interest income from subsidiaries
68 718
20 360
Guarantee income from subsidiaries:
3 426
2 263
Total
72 144
22 623
Accounts receivable
Subsidiaries
889
592
Other related parties
5
0
Fred. Olsen & Co.
169
0
Total
1 063
592
Accounts payable
Subsidiaries
9 820
0
Other related parties
29
44
Fred. Olsen & Co
14 768
12 612
Total
24 617
12 656
Non-current Interest-bearing receivables
Subsidiaries
1 289 960
951 972
Total
1 289 960
951 972
Current Interest-bearing receivables
Subsidiaries
463 390
0
Total
463 390
0
Current Interest-bearing payables
Subsidiaries
30 448
0
Total
30 448
0
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Bonheur ASA – Annual Report 2022
Fred. Olsen & Co.
The origin of the firm Fred. Olsen & Co. (FOCO) dates back to 1848. The current proprietor of FOCO, Anette Sofie Olsen, identifies the fifth generation Olsen and can draw an uninterrupted line of business conduct back to 1848. Whilst some Fred. Olsen-related activities are investments by the Company, others remain private - but they all stem from the private entrepreneurship back in 1848.
A good example is the Renewable Energy business segment, which in the early nineties of the last century evolved out of private Fred. Olsen-related green energy activities in the moorlands of Scotland. At the time this was not a business segment in which the maritime focused the Company was invested and which in turn brought a new line of focus to the Company. However, on the back of these activities an opportunity was made available for the Company to expand its business interests into investing in constructing, owning and operating windfarms, initially primarily in the UK.
FOCO has for generations managed, the day-to-day operation of the Company. The public side of the Fred. Olsen-related activities was in earlier years centered around five shipping companies, all listed on the Oslo Stock Exchange, and each engaged in distinct business activities and operated by FOCO. Following various mergers, the latest in May 2016, the Company became the sole surviving entity out of these five companies, but now with investments in a variety of diversified business segments, each subject to autonomous corporate structures and accordingly with distinct managements.
Over the years FOCO have in addition also been engaged in day-to-day operation or provision of professional services to other companies and investment funds.
In addition to overseeing the day-to-day operation of the Company, FOCO today also provides a variety of professional services at market rates to predominantly subsidiaries of the Company engaged in the various business segments within which the Company is invested. FOCO only to a very limited degree provides services to private Fred. Olsen-related companies, and then at rates equal to those applied to subsidiaries of the Company.
The Board of Bonheur is satisfied that the arrangement with FOCO in charge of the day-to-day operation of the Company, which has proved successful for decades, also today is very suitable.
The Board is of the view that the business segments within which Bonheur at any one point in time is invested through subsidiaries, must be operated on an autonomous basis. At the same time, and partly for the same reason, it is of significant value to Bonheur that FOCO with its experience and knowledge on a professional basis assist each of these business segments in achieving their respective goals. That in turn provides a unique platform for FOCO to be able to efficiently provide such day-to-day operation of the Company that it needs. By FOCO both being in charge of the day-to-day operation of the Company and also providing a variety of services to subsidiaries of Bonheur, the Company and FOCO achieve cost and competence synergies. Such benefits to both parties are then realized without any interests being compromised.
For its services to the Company, FOCO is compensated through a cost-plus model. A profit margin commensurable with margins used in comparable uncontrolled transactions is applied on top of a cost base consisting of documented expenses mainly related to personnel, external consultancy services, rent and IT expenses (see below table). Defined contribution pension relative to FOCO is included in the above cost base, while defined benefit pension costs relative to FOCO, hereunder pension to Mr. Fred. Olsen, do not form part of this cost base but are charged directly to the Company. The profit margin on the ordinary services by FOCO has in recent years been set at 12 %.
The compensation model also allows for a potential limited annual bonus to FOCO on top of the ordinary compensation. Over the last three years a total of NOK 1.9 million has been paid in bonus.
The compensation model is monitored by the Shareholders’ Committee who applies it in connection with its annual recommendation to the Board on compensation and possible bonus to FOCO. The five members of the Shareholders’ Committee are all independent of the majority shareholders of Bonheur. When dealing with these recommendations, the Board will be constituted by its, in this regard non-conflicted Directors. The Board of Bonheur consists of six Directors out of which the majority, i.e. four Directors, are independent of the majority shareholders of Bonheur.
The aforementioned compensation, together with a possible bonus, is the only compensation FOCO receives. The profit margin and the maximum obtainable bonus is subject to regular third-party benchmarking and review, performed every 3 years, last time in 2022, also monitored by the Shareholders’ Committee.
(Amounts in NOK 1 000)
2022
2021
Costs together with profit margin and bonus to Fred. Olsen & Co., charged to the Company
92 211
114 768
Amount outstanding between Fred. Olsen & Co. and the Company *)
-14 768
-12 938
*) Short term outstanding in connection with current operations.
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Bonheur ASA – Annual Report 2022
Mr. Fred. Olsen is party to a consultancy agreement with FOCO. In 2022, NOK 5.2 million was paid under this consultancy agreement (2021: NOK 5.2 million). Such payment is part of the costs charged to Bonheur.
There have not been any changes to the board of directors or the shareholders committee, and thereby no compensation for resignment have been granted.
Members of the Board of Directors, the managing director and other related parties holds in total NOK 6 million of BON09 bond loan (2021: NOK 13 million).
In 2022 Hvitsten AS was established as a subsidiary of FOCO as an alternative investment fund manager, as well as naturally associated activities. Hvitsten AS's operations are subject to the Act on the Management of Alternative Investment Funds of 20 June 2014 No. 28. On 22 June 2022, the company received permission to manage funds from the Norwegian Financial Supervisory Authority. The permit is limited to management of funds with an investment strategy within private equity and infrastructure investments, ref. § 2-4 fifth paragraph.
Hvitsten AS has a management assignment with Wind Fund I AS which invested EUR 175 million to indirectly acquire three Scandinavian wind farms. In addition, EUR 305 million is committed for future wind farm developments. Hvitsten AS is not exposed to significant credit, interest rate and currency risks. The company has a long-term management agreement with Wind Fund I AS but may also manage other alternative investment funds in the future.
Hvitsten AS charge a fixed administration fee to Wind Fund I AS with a stairstep fee-model for each new wind farm, in addition to a one-time investment fee for each new wind farm investment.
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Bonheur ASA – Annual Report 2022
Note 13 – Financial instruments
The Company’s ordinary operations involve exposure to credit-, interest-, currency- and liquidity risks.
Credit risk
Transactions with financial derivatives are carried out with counterparties with good credit ratings. The counterparty risk is therefore considered to be low. The maximum exposure of the credit risk is reflected in the balance sheet value of each financial asset, including financial derivatives. No financial derivatives were entered into during 2022. There is a credit risk related to loans to subsidiaries.
Interest rate risk
The Company is exposed to fluctuations in interest rates, as the debt is partly based on floating interest rates, primarily in NOK. From time to time, the Company enters into interest rate swap agreements in order to reduce the interest rate risk. Per 31 December 2022 there are no interest rate swap agreements. Please refer to note 9 for an overview of Company loan commitments.
Currency risk
The Company is exposed to currency risk by purchases, sales, assets and liabilities in other currencies than NOK, primarily the currencies GBP, EUR and USD.
The Company accounts are presented in NOK. The Company is closely monitoring the currency markets and may enter into forward exchange contracts if this seems appropriate. No currency contracts were entered into during 2022.
From the beginning to the end of 2022 the GBP weakened against NOK by 0.3% from 11.8875 to 11.8541, the EUR strengthened against NOK by 5.3% from 9.9888 to 10.5138 and the USD strengthened against NOK by 11.8% from 8.8194 to 9.8573.
Total cash and cash equivalents as per 31 December 2022 were NOK 3 037 million, of which GBP represents 7.7%, EUR 19.8% and USD 0,3%.
As per 31 December 2022 the company had granted loans to subsidiaries of NOK 1 807 million. The distribution of the loans was as follows: Renewable Energy NOK 476 million, Wind Service NOK 280 million (EUR 27.0 million), Cruise NOK 1 042 million (GBP 88.0 million) and other minor loans of NOK 9.8 million.
Liquidity risk
A conservative handling of liquidity risk involves having sufficient cash, securities and available financing, as well as the possibility of closing market positions. Bonheur ASA is exposed to the risk of not being able to sell unlisted shares at prices close to fair value. The management is of the opinion that this risk is low, as the investments in unlisted shares are long term investments.
Solidity
The Company had an equity ratio of 73% per 31 December 2022.
Assessment of fair value
The most important methods and assumptions applied when evaluating the fair value of financial instruments are summarized below.
Shares and bonds
Fair value is based on listed market prices on the balance sheet date without deduction for transaction costs. Where no listed market price is available, the fair value is estimated based on information received from the Group of companies.
Accounts receivable and accounts payable
The carrying amount is considered to reflect the fair value of accounts receivable/payable with duration of less than one year. Other accounts receivable/payable are discounted in order to assess the fair value.
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Bonheur ASA – Annual Report 2022
Fair value of financial instruments
Fair values and carrying amounts are as follows:
(Amounts in NOK 1 000)
Carrying amount 2022
Fair value 2022
Carrying amount 2021
Fair value 2021
Cash and cash equivalents
3 037 209
3 037 209
2 287 917
2 287 917
Trade debtors and other short term receivables
623 559
628 156
430 904
458 496
Shares and bonds
5 955 002
5 955 827
6 579 329
6 581 121
Unsecured bond-loans
-2 190 226
-2 200 000
-2 186 355
-2 200 000
Trade creditors and other short term liabilities *)
-285 431
-285 431
-810 158
-810 283
7 140 113
7 135 761
6 301 637
6 317 251
Unrealized gains / (losses)
0
-4 352
0
15 614
*) Inclusive short-term portion of unsecured bond-loans in 2021.
Note 14 - Cash and cash equivalents
(Amounts in NOK 1 000)
2022
2021
Cash related to payroll tax withholdings
2 135
1 916
Other restricted cash *)
500 000
500 000
Total restricted cash
502 135
501 916
Unrestricted cash **)
2 535 075
1 786 001
Total cash & cash equivalents
3 037 210
2 287 917
Unused credit facilities
0
0
*) According to covenants in bond agreements the Company, including subsidiaries owned 100%, has to maintain cash and cash equivalents of minimum NOK 500 mill.
**) In 2020 the Company established a green finance framework with an eligibility assessment from DNV and issued a NOK 700 million green bond loan to be used for eligible green investments as defined in the framework. Another NOK 700 million bond loan was issued in 2021. Separate green bank deposits have been established and are included in unrestricted cash.
As part of establishing the Green Finance Framework, the Company established an internal Green Finance Committee who approves eligible green investments in the green investment portfolio.
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Bonheur ASA – Annual Report 2022
Note 15 - Dividends
(Amounts in NOK 1 000)
2022
2021
Subsidiaries:
Fred. Olsen Renewables AS *)
2 013 183
220 881
Fred. Olsen Insurance Services AS
95 155
0
Fred. Olsen Ocean Ltd.
15 756
0
Other:
Otello corporation ASA
25 550
0
Other investments
13
3 636
Total
2 149 657
224 517
*) Dividend from Fred. Olsen Renewables in 2022 is due to sale of 49% of the Scandinavian
Windfarms to external investors and profit in the segment.
Note 16 - Other financial expenses
(Amounts in NOK 1 000)
Note
2022
2021
Impairment of shares in subsidiaries 1)
686 960
5 461
Reversal impairment of other shares 2)
-28 267
-3 182
Various financial expenses
20 322
5 283
Total
679 015
7 562
1) Subsidiaries:
First Olsen Holding AS *)
686 960
0
Various subsidiaries
0
5 461
Sum
686 960
5 461
2) Other shares:
Short-term liquid shares
-28 267
-3 182
Long-term liquid shares
0
0
Sum
-28 267
-3 182
*) See also note 4
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The Board of Directors of Bonheur ASA (the Company) and Fred. Olsen & Co. together with the Managing Director of the Company have in a board meeting 12 April 2023 reviewed and in their respective capacities approved the Board of Directors’ Report and the consolidated and separate annual financial statements for the Company for the year ending 31 December 2022 (Annual Report 2022) subject to corresponding recommendation from the Shareholders’ Committee on the following basis:
To the best of our knowledge:
▪The consolidated and separate annual financial statements for 2022 have been prepared in accordance with applicable accounting standards.
▪The consolidated and separate annual financial statements give a true and fair view of the assets, liabilities and financial position and profit as a whole as of 31 December 2022 for the Group of companies (i.e. the Company including subsidiaries and associated companies) and the Company.
▪The Board of Directors’ report for the Group of companies and the Company includes a true and fair review of
-the development and performance of the business and the position of the Group of companies and the Company, and
-the principal risks and uncertainties which the Group of companies and the Company face.
Oslo, 12 April 2023
Bonheur ASA – The Board of Directors
Fred. Olsen
Carol Bell
Bente Hagem
Jannicke Hilland
Andreas Mellbye
Nick Emery
Chairman
Director
Director
Director
Director
Director
Sign.
Sign.
Sign.
Sign.
Sign.
Sign.
Anette Sofie Olsen
Managing Director
Sign.
The annual report and accounts for 2022 were addressed by the Shareholders’ Committee on 14 April 2023. The Shareholders’ Committee resolved to recommend to the Annual General Meeting that the Board’s proposal to the annual accounts for 2022 is approved. The Shareholders’ Committee hereunder resolved to recommend to the Annual General Meeting that the Board’s proposal on an ordinary dividend equal to NOK 5.0 per share, in total for the company NOK 212.6 million, is approved.
Oslo, 14 April 2023
Christian Fredrik Michelet,
Chairman of the Shareholders’ Committee
Sign.
Statementss
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Auditor’s Reports
Auditor’s Reports
Auditor’s Reports
Auditor’s Reports
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Bonheur ASA – Annual Report 2022
Segment / Asset
Built year
Type
Capacity/ length/ water depth/ tonnage
Ownership
Renewable Energy:
Capacity
Crystal Rig
2004/-07
25 Nordex 2.5 MW
62.5 MW
51,0 %
Rothes
2005
22 Siemens 2.3 MW
50.6 MW
51,0 %
Paul's Hill
2006
28 Siemens 2.3 MW
64.4 MW
51,0 %
Crystal Rig II
2010
60 Siemens 2.3 MW
138.0 MW
51,0 %
Rothes II
2013
18 Siemens 2.3 MW
41.4 MW
51,0 %
Mid Hill
2014
33 Siemens 2.3 MW
75.9 MW
51,0 %
Brockloch Rig Windfarm
2017
30 Senvion 2.05 MW
61.5 MW
51,0 %
Brockloch Rig 1
1996
36 Nordtank 0.6 MW
21.6 MW
100,0 %
Crystal Rig III
2016
6 Siemens 2.3 MW
13.8 MW
51,0 %
Lista
2012
31 Siemens 2.3 MW
71.3 MW
51,0 %
Fäbodliden
2015
24 Vestas 3.3 MW
79.2 MW
51,0 %
Högaliden
2021
25 Vestas V150 4.3 MW
107.5 MW
51,0 %
Wind Service:
Length
Brave Tern
2012
Offshore wind turbine installation vessel
132 metres
100,0 %
Bold Tern
2013
Offshore wind turbine installation vessel
132 metres
100,0 %
Blue Tern
2012
Offshore wind turbine installation vessel
151 metres
51,0 %
VestVind
2016
Module Deck Carrier
130 metres
50,0 %
BoldWind
2020
Module Deck Carrier
148.5 metres
50,0 %
BraveWind
2020
Module Deck Carrier
148.5 metres
50,0 %
Cruise:
Tonnage
Braemar
1993/-01/-08
Cruise
24 344 grt
100,0 %
Balmoral
1998/-08
Cruise
43 537 grt
100,0 %
Borealis
1996
Cruise
61.849 grt
100,0 %
Bolette
2000
Cruise
62.735 grt
100,0 %
Major Asset List as per 31 December 2022
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List of Alternative Performance Measures (APM):
Bonheur ASA discloses alternative performance measures as a supplement to the financial statements prepared in accordance with IFRS.
In the quarterly report the following alternative performance measures are most frequently used. Below is a list followed by a definition of each APM.
General financial Alternative Performance Measures:
EBITDA:
Earnings before Depreciation, Impairment, Result from associates, Net financial expense and Tax
EBIT:
Operating result after depreciation (EBITDA less depreciation and impairments)
EBT:
Earnings before tax
EBITDA margin:
The ratio of EBITDA divided by operating revenues
NIBD:
Net Interest-Bearing Debt is the sum of non-current interest-bearing debt and current interest-bearing debt, less the sum of cash and cash equivalents. Financial leasing contracts are included.
Capital employed:
NIBD + Total equity
Equity ratio:
The ratio of total equity divided by total capital
Abbreviations – Company Names per segment
Renewable Energy:
FORAS: Fred. Olsen Renewables AS
FOR:Fred. Olsen Renewables group
FOS:Fred. Olsen Seawind ASA
FOWL:Fred. Olsen Wind Limited
FOCB:Fred. Olsen CB Limited
FOCBH:Fred. Olsen CBH Limited
AVIVA investors:Aviva Investors Global Services Ltd
TRIG:The Renewables Infrastructure Group Limited
Wind Service:
FOO:Fred. Olsen Ocean Ltd
GWS:Global Wind Service A/S
FOWIC:Fred. Olsen WindCarrier AS
UWL:United Wind Logistics GmbH
UF:Universal Foundation A/S
Cruise:
FOCL:Fred. Olsen Cruise Lines Ltd
Other Investments:
NHST:NHST Media Group AS
FO 1848:Fred. Olsen 1848 AS
FO Investments:Fred. Olsen Investments AS
Abbreviations – Related party names
FOCOFred. Olsen & Co.
FOIS:Fred. Olsen Insurance Services AS
FOLFred. Olsen Ltd
FOTLFred. Olsen Travel Ltd
NPCNatural Power Consultants Ltd
Definitions
126
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Renewable Energy
Fred. Olsen Renewables AS
Enterprise no: 983 462 014
Fred. Olsens gate 2
0152 Oslo, Norway
Telephone: +47 22 34 10 00
www.fredolsenrenewables.com
Fred. Olsen Renewables Ltd.
Enterprise no: 2672436
36 Broadway
London, SW1H 0BH, England
Telephone: +44 207 963 8904
www.fredolsenrenewables.com
Fred. Olsen Seawind AS
Enterprise no: 983 462 014
Fred. Olsens gate 2
0152 Oslo, Norway
Telephone: +47 22 34 10 00
www.fredolsenseawind.com
Fred. Olsen Seawind Ltd.
Enterprise no: 2672436
36 Broadway
London, SW1H 0BH, England
Telephone: +44 207 963 8904
www.fredolsenseawind.com
Wind Service
Fred. Olsen Ocean Ltd.
c/o Fred. Olsen Ocean AS
Enterprise no: 970 897 356
Fred. Olsens gate 2
P.O.Box 581 Sentrum
0106 Oslo, Norway
Telephone: +47 22 34 10 00
www.fredolsen-ocean.com
Fred. Olsen Windcarrier AS
Enterprise no: 988 598 976
Fred. Olsens gate 2
P.O. Box 581 Sentrum
0106 Oslo, Norway
Telephone: +47 22 34 10 00
www.windcarrier.com
Global Wind Service A/S
Enterprise no: 31166047
Strevelinsvej 28
7000 Fredericia
Denmark
Telephone: +45 76 203 660
www.globalwindservice.com
United Wind Logistics GmbH
Enterprise no: HRB 139861
Am Kaiserkai 69
20457 Hamburg
Germany
Telephone: +49 40 308 54 2470
wind@unitedwindlogistics.de
Cruise
Bonheur ASA Fred. Olsens gate 2 
Enterprise no: 830 357 432
P.O. Box 1159 Sentrum
0107 Oslo , Norway
Telephone: +47 22 34 10 00
www.bonheur.no
Fred. Olsen & Co.
Enterprise no: 970 942 319
Fred. Olsens gate 2
P.O. Box 1159 Sentrum
0107 Oslo, Norway
Telephone: +47 22 34 10 00
www.fredolsen.com
Fred. Olsen Cruise Lines Ltd.
Enterprise no: 2672435
Fred. Olsen House, 42 White House Rd, Ipswich, Suffolk, IP1 5LL
England
www.fredolsencruises.com
Other Investments
NHST Media Group AS
Enterprise no: 914 744 121
Christian Kroghs gate 16
PO Box 1182 Sentrum
0107 Oslo, Norway
Telephone: +47 22 00 10 00
www.nhst.no
Fred. Olsen Travel AS
Enterprise no: 925 619 655
Prinsensgate 2B
0152 Oslo, Norway
Telephone: +47 22 34 11 11
www.fredolsentravel.no
Addresses
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Bonheur ASA – Annual Report 2022
Annual General MeetingThe annual general meeting will be held at the company’s office, Fred. Olsens gt. 2, Oslo, Norway (entrance Tollbugt. 1b) Thursday 25 May 2023, at 2pm.
Fred. Olsens gate 2, P.O. Box 1159 Sentrum, N-0107 Oslo Telephone: +47 22 34 10 00, Homepage: www.bonheur.no