Consolidated financial report 3Q 2014

Transcription

1 Consolidated financial report 3Q 2014

2 Consolidated statement of comprehensive income unaudited unaudited audited (USD 1 000) Notes 3Q 2014 YTD (full year) Vessel operating revenue Total revenue Vessel operating expenses Employee benefits expence Depreciation and amortisation expenses Other operating expenses Total operating expenses Operating profit (1 399) (10 549) (4 782) Interest income Other financial income Interest expense 4,5,6, Other financial expense Net financial items (7 398) (13 109) (5 073) Profit before income tax (8 797) (23 658) (9 855) Income tax expense Net profit (9 416) (24 349) (9 855) Exchange rate gain(+)/loss(-) Total comprehensive income (9 167) (24 118) (6 193) Net profit attributable to: Controlling interest (9 416) (24 349) (9 855) Total comprehensive income attributable to: Controlling interest (9 167) (24 118) (6 193)

3 Consolidated statement of financial position unaudited audited (USD 1 000) Notes 30 Sep Dec 2013 Assets Norshore Atlantic (vessel) Norshore Pacific (newbuild) Machinery and other equipment Total tangible assets Pension funds Total financial fixed assets Total fixed assets Trade receivables Other receivables Cash and bank deposit - restricted Cash and bank deposit Total current assets Total assets Equity and liabilities Share capital Share premium reserve Other reserves Retained earnings (36 911) (27 544) Total equity Pension obligations Total provisions Convertible loans 4, Bond loan Other non-current liabilities Total non-current liabilities Convertible loans 4, Trade creditors Public duties payable Other short-term liabilities 6, Total current liabilities Total liabilities Total equity and liabilities

4 Consolidated statement of changes in equity (USD 1 000) Notes Share capital Share premium Other reserves Retained earnings Total equity Balance as at 1 January (31 595) Net profit/loss for the year (9 855) (9 855) Proceeds from issuance of new shares Currency translation differences (10 231) (12) Balance as at 31 December (27 544) Balance as at 1 January (27 544) Net profit/loss as of 3Q (24 349) (24 349) Currency translation differences (2 140) (1) (4 649) Reduction of nominal value of shares ( ) (128) At 30 September (36 911)

5 Consolidated statement of cash flow unaudited unaudited audited (USD 1 000) Notes 3Q 2014 YTD (full year) Cah flow from operating activites Profit before income tax (8 797) (23 658) (9 855) Depreciation and impairment loss Interest expense 4, Interest paid 4,5 (9 000) (9 000) (1 061) Unrealised agio/disagio (446) 713 Change in receivables and payables (1 708) (1 656) 340 Other changes in working capital (3 257) Net cash flow from operating activitites (13 092) (14 071) (747) Cash flow from investing activities Investments 2 (2 875) (99 550) (34 578) Net cash flow from investing activities (2 875) (99 550) (34 578) Cash flow from financing activities Proceeds from issuance of convertible debt Net proceeds from other non-current debt Net cash flow from financing activities Net (decrease)/increase in cash and bank (1 575) Cash and bank at beginning of period Cash and bank at end of period Cash and bank deposit - restricted Cash and bank deposit Cash and bank at end of period

6 Notes to the consolidated financial report Accounting principles General Norshore Holding AS (the Company ) and its subsidiaries (together, the Group ) own and operate the vessel "Norshore Atlantic". The Company is a limited company incorporated and domiciled in Norway. The head office is located at Straume in the municipality of Fjell, Norway. These condensed interim financial statements were approved for issue on 28 November These condensed interim financial statements have not been audited. Basis of preparation These condensed interim financial statements have been prepared in accordance with IAS 34, Interim financial reporting. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in accordance with IFRS. Estimates The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December Going Concern The group has no long term charter for the vessel and is dependent on securing new contracts in order to be able to fulfill it's obligations. Management is working to secure such contracts and is in discussion with several oil companies. At the date of this report, there are no firm committments. Management is also working to secure further funding. The group accounts is prepared on a going concern basis as management expect to secure new contracts during the coming period.

7 Notes to the consolidated financial report Note 1 Revenue 3Q-2014 revenues of USD 9 million are coming from work under two contracts. Operation under the TAC Pertamina Blue Sky Langsa contract in Indonesia in July contributed with USD 2,2 million and work for Sabah Shell in Malaysia during September with USD 6,8million. The work for Blue Sky was well inspection and well intervention of 3 old wells offshore in Langsa, Indonesia. For Shell, the operation was top-hole drilling. Note 2 Tangible assets 2014 Norshore Atlantic* Norshore Pacific** Other tangibles Total Cost 1 January Additons Cost 30 September Accumulated depreciation Book value 30 September Depreciation New-building contract* ** Other tangibles Total Cost 1 January Conversion differences 930 (40) 890 Additons Cost 31 December Accumulated depreciation Book value 31 December Depreciation * Norshore Atlantic was delivered from the shipyard on March 6, The historic cost of the vessel is USD 241 million as of 30 September The average third party valuation of Norshore Atlantic from 2 shipbrokers is USD 250 million. ** On 31 December 2013 the group signed a new-building contract with CIMC Raffles, China. The contract value is USD 265 mill. Paid installments and other cost by 30 September 2014 under this contract amounts to USD 11,3 million. Expected delivery is in 4Q In addition, the company has options for three more vessles under this contract The company's objective is to have five vessels by Note 3 Share capital Shareholders Ocean Champion Holdings Ltd A ,3 % 44,8 % Ocean Champion Holdings Ltd B * ,1 % 0,0 % Ability Holding AS ,1 % 13,4 % AID Invest AS ,6 % 10,7 % SJA Invest AS ,0 % 11,1 % PIR AS ,0 % 5,5 % Nord-Peko Holding AS ,9 % 3,3 % Ability Invest Holding AS ,0 % 2,2 % Lande Investering AS ,3 % 1,5 % Other ,8 % 7,5 % Total ,0 % 100,0 % Total number of Shares % of shareholding % of sharevoting rights * In 2013 an Extraordinary General Assembly approved to divide the shares into A and B shares, where only A shares have voting rights. Both A- and B-shares have a nominal value of NOK 1. The nominal value of each share was reduced from NOK 10 to NOK 1 on an extraordinary General Meeting the 11th July The reduced amount has covered losses from previous years in the parent company. The remaining part is transferred to a fund to be used as decided by the General Meeting and presented as "Other reserves" in the consolidated statement of financial position. The Chairman of the Board, Geir Nordahl Pedersen, owns 9,169,676 shares through Ability Holding AS and 1,512,391 shares through Ability Invest Holding AS. Of the other Board members, Svein Fløysand owns 7,602,624 shares, Per Inge Remmen owns 3,775,862 shares and Per Haugum owns 800,324 shares. CEO Petter H. Tomren owns 500,000 subscription rights for shares at 10 NOK/share.

8 Notes to the consolidated financial report Note 4 Convertible loans from Shareholders 30 Sep Dec 2013 Long-term convertible loans Short-term convertible loans Total convertible loans The carrying amounts of the convertible loans are denominated in the following currencies: 30 Sep Dec 2013 US dollar (USD) Norwegian krone (NOK) Total convertible loans All convertible loans are from existing shareholders. The loans can be converted to shares at a conversion price of 10 NOK per share. The loans are unsecured. The long term convertible loans have a maturity at 31 December All loans converted into equity shall be converted at an exchange rate that equals the exchange rate on the date of payment of the loan from the lender. Note 5 Bond loan 30 Sep Dec 2013 Bond loan (represented by Nordic Trustee) The bond loan was issued in 1Q-2014 as a part of the refinancing of the group. The maturity of the loan is 21 December The loan carries an interest of 12 %. The loan will be repaid with USD 3 mill each 6 months, starting in August In connection with the loan, Norshore established an Interest Retention Account with the minimum amount of USD 18 mill (one year of interest payments). By end 3Q-14, this account carried USD 19,5 mill. In addition, an Escrow Account of USD 19,7 mill was established for final payments to the shipyard and NOV. USD 4,7 mill will be paid to NOV when NOV has fulfilled all requirement for the last milestone, while USD 15 mill will be released after 6 months of operation of Norshore Atlantic. The amount of USD 19,7 mill was still in place by end 3Q-14. Note 6 Other short-term liabilities 30 Sep Dec 2013 Accruals for bonus payment to employees and holiday pay Remaining payment under shipbuilding contract (Otto) and NOV Loan from North Sea Intelligence AS Short term debt from shareholders Accruals for interest expenses Bond Loan Other short-term liabilities Other short-term liabilities

9 Notes to the consolidated financial report Note 7 Related parties The following transactions were carried out with related parties: YTD Rent of office facilities (Straume Teknologisenter AS) Interest convertible loan Total transactions with related parties Period-end balances arising from sales/purchase of goods/services 30 Sep Dec 2013 Straume Teknologisenter AS Total short-term balances with related parties Loans from related parties 30 Sep Dec 2013 Long-term convertible loans Short-term convertible loans Other short term liabilities Total short-term balances with related parties Note 8 Group companies Norshore Holding AS is the parent compant in the Norshore Group. The consolidated financial statement include the parent company and the following subsidiaries: Company Country Ownership Norshore Management AS Norway 100 % Norshore AS Norway 100 % Norshore Atlantic BV Netherlands 100 % Norshore Pacific BV Netherlands 100 % Norshore Atlantic II BV Netherlands 100 % Norshore Shipping Ltd. Cyprus 100 % The vessel "Norshore Atlantic" is owned by Norshore Atlantic BV. Note 9 Financial risk management Liquidity risk: The group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This means assuring that the company maintains sufficient cash or other facilities to meet debt repayments, payments under the construction contract and the cost of the daily operations. The group has no long term charter for the vessel and is dependent on securing new contracts in order to be able to fulfill it's obligations. Management is working to secure such contracts and is in discussion with several oil companies. At the date of this report, there are no firm committments. Management is also working to secure further funding. The group accounts is prepared on a going concern basis as management expect to secure new contracts during the coming period. Foreign exchange risk: USD is the group's reporting currency. The majority of the debt is in USD, while some of it is in NOK. Interst rate risk: All debt is based on a fixed interst rate so the group is not subject to fluctuation interst rates. The group expects that all future revenues will continue to be nominated in USD. The majority of the cost is in USD, while some is in NOK. Changes in the exchange rates could expose the group to currency risk. To minimize such risk, the group periodically evaluates the need for hedging arrangements. Note 10 Subsequent events In October 2014, Norshore signed a Term Sheet for financing of Norshore Pacific. In November 2014, Norshore paid the final milestone to NOV for Norshore Atlantic (NOK 28 million). This amount was released form the Escrow Account, ref Note 5. This reduced the Escow account from USD 19,7 million to USD 15 million.