Gorthon Lines Annual Report 1997.

Transcription

12° 40'
56°
00'
Annual General Meeting.
The Annual General Meeting of the company will be held on Tuesday, 21 April
1998 at 5.00 p.m. in the Öresund Room at the Hotel Marina Plaza in
Helsingborg, Sweden.
Right to participate.
To participate and exercise the right to vote a shareholder must be
∑
registered in the shareholders’ register
∑
made known to the company.
Registration in the shareholders’ register maintained by the Swedish Securities
Register Centre (VPC AB) must be effected by Thursday, 9 April 1998 at the
latest. Shareholders whose shares are held in the name of a nominee must temporarily re-register their shares in their own name by Thursday, 9 April 1998 at
the latest. This means that such shareholders must inform the nominee of their
intention to do so in due time prior to this date.
Notification of intent to participate.
Shareholders wishing to participate in the Annual General Meeting must notify
the company in one of the following ways:
∑
by telephone on (+46)-42-17 27 00
∑
or by post to:
Gorthon Lines AB
Box 1063
SE-251 10 Helsingborg, Sweden
When notifying the company, please state:
∑
your name
∑
personal/corporate identity number or similar
∑
address and telephone number
∑
registered shareholding.
Dividends.
Friday, 24 April 1998 is proposed as the record date for dividend payments. It is
anticipated that dividends will be sent via VPC on 4 May 1998.
The Board of Directors and President of the Company propose that a dividend
of SEK 2 per share be paid out for 1997.
Contents:
This is Gorthon Lines......................................................................................................2
The year in brief ..............................................................................................................4
A word from the President and the Executive Vice President ......................................6
Five-year summary ..........................................................................................................8
Comments on the financial trends ...............................................................................10
Shares and shareholders ...............................................................................................12
Directors’ Report ................................................................................................2:1
Consolidated Income Statement.......................................................................2:2
Consolidated Balance Sheet ..............................................................................2:3
Group – Statement of Changes in Financial Position......................................2:5
Parent Company’s Income Statement .............................................................2:6
Parent Company’s Balance Sheet .....................................................................2:7
Parent Company – Statement of Changes in Financial Position....................2:9
Accounting principles and notes ....................................................................2:10
Auditors’ Report ...............................................................................................2:13
Market overview, customers and competitors ..............................................................14
Aim, strategy and visions ..............................................................................................16
Sea Partner .....................................................................................................................17
Cargo handling ..............................................................................................................18
Environmental policy....................................................................................................20
The Board ......................................................................................................................22
Senior Executives and Auditors ....................................................................................23
Definitions and Glossary of Nautical Terms ................................................................24
The Gorthon Lines fleet ................................................................................inside cover
Addresses .........................................................................................................back cover
Financial information.
The following information will be published for the Financial Year 1998:
Interim report, first quarter
21 April 1998
Half-yearly report
14 August 1998
Interim report for the first three quarters 20 October 1998
Unaudited figures for 1998
February 1999
Annual Report for 1998
April 1999
Annual Report 1997
The Gorthon Lines fleet
The fleet, which consists of 18 vessels, is regularly upgraded. Most of the ships are already equipped with effective stabiliser systems to reduce roll in heavy seas and all the vessels are built to ice class 1A or above, enabling
them to safely navigate ice-bound areas in the Baltic and the Gulf of Bothnia, as well as the St. Lawrence River
in Canada.
The three most recently delivered vessels – M/S Obbola, M/S Östrand and M/S Ortviken – all of which
are operated on behalf of SCA Transforest, are leased on a bareboat charter basis with an option to purchase.
M/S Viola Gorthon, which carries pulp and paper for the MoDo company, is also leased on a bareboat
charter, with a share in the residual value. The other fourteen vessels in the fleet are wholly owned by
Gorthon Lines.
Ortviken
Ragna Gorthon
Corner Brook
Ivan Gorthon
Ingrid Gorthon
Joh. Gorthon
Abitibi John Cabot
Viola Gorthon
Maria Gorthon
Specification of the Gorthon Lines fleet
Name of vessel
Type
Length (metres)
Dwt
Alida Gorthon
Ingrid Gorthon
Margit Gorthon
Side-loader
Side-loader
Side-loader
141
141
141
14,240
14,240
14,240
1977/90
1977/91
1977/90
Humber Arm
Corner Brook
Side-loader
Side-loader
136
136
7,600
7,650
1976/97
1976/96
Joh. Gorthon
RoRo with sideports
156
8,350
1977/82/87
Ivan Gorthon
RoRo with sideports
118
3,400
1974/82
Maria Gorthon
Ada Gorthon
RoRo with sideports
RoRo with sideports
156
156
11,490
11,490
1984
1984
Ragna Gorthon
Lovisa Gorthon
Stig Gorthon
RoRo with sideports and cargo hatches
135
135
135
7,600
7,600
7,600
1979/93
1979/94
1979/94
Viola Gorthon
RoRo
166
11,400
1987
Obbola
Östrand
Ortviken
RoRo
RoRo
RoRo
156
156
156
9,600
9,600
9,600
1996
1996
1996
Munksund
Abitibi John Cabot
LoLo
LoLo
153
153
12,300
12,300
1968
1967
Total
Year built/rebuilt
177,350
12° 40'
56°
00'
This is Gorthon Lines:
Organizational structure:
Canada
- Cargo handling
- Marketing
- Chartering
- Project
- Insurance
- Finance/treasure
- Cargo handling
- Cargo handling
- Workshop
Associated company:
Sea Partner
- Crewing
- Technical management
The company’s home port is Helsingborg on the Swedish side of the strait of Öresund between Sweden and Denmark – the busiest waterway in the world.
Gorthon Lines, whose head office is
located in the port of Helsingborg,
Sweden, is a shipping company
specialised in handling forest products.
The company commenced operations in 1915 as a traditional shipping company, sailing with cargoes
of coal, wood and timber across the
North Sea, the Baltic and the North
Atlantic. Over the past few decades,
however, Gorthon Lines has consolidated its role as a specialist in
2•3
T H I S
I S
G O R T H O N
L I N E S
transporting paper, even designing
special-purpose vessels in close
consultation with its customers.
Today the company’s main routes run between Scandinavia and
the USA and from the USA and
Canada to Europe, but also has a
substantial amount of traffic across
the North Sea and in the Baltic
region, as well as from Canada to
the United States’ eastern seaboard
and Central America.
Our operations are characterGorthon Lines has been transporting refined
forestry products by sea for more than 80 years.
ised by long-term relationships
with our customers in which
Gorthon Lines participates actively
in solving customers’ transport and
logistics requirements.
Mission statement.
Gorthon Lines offers customised,
cost-effective seaborne transportation of refined forestry products by
providing a high degree of expertise
and tonnage specially adapted to
customer requirements.
Operational structure.
Gorthon Lines has a subsidiary in
Montreal, Canada, and a facility for
minor repairs and a certain amount
of maintenance work in Sundsvall,
Sweden.
The company owns 14 vessels
and is currently operating a further
four on bareboat charter contracts.
To provide assistance, notably with
matters such as cargo handling, the
head office works with outside companies associated with its operations
in Great Britain and the United
States, as well as with its subsidiary
in Canada.
Ship management – crewing
and technical management – is
handled by Sea Partner AB in
which Gorthon Lines holds a 30%
share. At the year-end 1997 Sea
Partner had management of a
total of 42 vessels with some 900
employees, 450 of whom were
assigned to Gorthon Lines’ vessels.
12° 40'
56°
00'
This year’s major event:
Gorthon Lines makes its entrance
on the stock market.
tions M/S Ada Gorthon ran aground
while making her approach off
Pointe au Pic in Canada. The vessel
was subjected to considerable stress
and strain and may well have been
lost had it not been for the skill and
dedication of the crew and the salvage team. Negative impact on the
profit was SEK 2.5 million.
After eight years as a subsidiary to Bilspedition (BTL) and B&N, Bylock & Nordsjöfrakt AB,
Gorthon Lines was introduced onto the Stockholm Stock Exchange in 1997.
1997 was an eventful year for
Gorthon Lines – not least as a consequence of the company’s re-introduction onto the Stockholm Stock
Exchange, a move which has had
many far-reaching and positive
effects for the organisation.
Another important milestone
was, of course, the good result for
the year – at SEK 100 million it was
the best in over 80 years of illustrious company history.
Gorthon Lines acquires a 30%
share in Sea Partner.
On 1 January 1997 Gorthon Lines
acquired a 30% interest in Sea
Partner for a book value of SEK
2 million. The remaining shares in
Sea Partner are owned by B&N,
Bylock & Nordsjöfrakt, and Svenska
Orient Linien.
Investment in M/S Humber Arm.
On 23 December 1996 work began
on an extensive SEK 24 million
refit for M/S Humber Arm. Just
eight weeks later the vessel was
back in service for Kruger Inc. in
Canada.
Full speed ahead for Atlantic traffic.
A good balance between east-going
and west-going Atlantic traffic provided the opportunity for Gorthon
Lines to reduce the number of ballast days and maximise its utilisation of the fleet. Between June and
September the company succeeded
in consistently utilising 98% of full
capacity, producing a result for the
period in excess of expectations.
M/S Ada Gorthon sails our Atlantic routes.
introduced to the Stockholm Stock
Exchange’s OTC list via a distribution to B&N shareholders. At the
end of the first day of trading, the
total market value of the shares
stood at SEK 900 million.
ISO accreditation.
In December Gorthon Lines was
accredited as complying with the
ISO 9001 quality management system.
The dollar.
Over the year the US dollar rallied
steadily from SEK 6.87 in January to
SEK 7.87 in December. While this
affected Gorthon Lines’ result positively (more than 50% of company
turnover is invoiced in dollars) the
overall effect was nevertheless reduced by forward exchange contracts.
Pre-tax profit.
The profit before tax and one-off
expenses in conjunction with the
company’s stock exchange introduction was SEK 100 million.
The corresponding figure for
1996 was SEK 88 million.
Profit per share.
The profit per share for the year
after the payment of tax in full was
SEK 5.41 (2.62).
Gorthon Lines on the Swedish
Stock Market.
On 6 June Gorthon Lines was
M/S Holmsund sold.
On 8 January M/S Holmsund
was sold, realising a capital gain of
SEK 3.8 million.
M/S Ada Gorthon runs aground.
During the most hectic period of
the year, with overbooked vessels
and troublesome weather condiM/S Holmsund was sold on 8 January 1997.
4•5
T H E
Y E A R
I N
B R I E F
Gorthon Lines received its ISO 9001 certificate
in 1997.
Traffic across the Atlantic was booming in 1997, contributing strongly to a successful year’s result for Gorthon Lines.
12° 40'
56°
00'
Mats Nilsson, President:
Lars Petersson, Executive Vice President & Director of Marketing:
‘Stock market introduction sends
positive signals.’
‘We are on the threshold of an
era of expansion.’
Mats Nilsson, President.
June 6, 1997 will go down in the
annals of Gorthon Lines’ history as
the day when the company became
independent after an eight-year
period as a subsidiary to Bilspedition (BTL) and B&N, Bylock &
Nordsjöfrakt and was again quoted
on the Stockholm Stock Exchange’s
OTC list.
For us this has brought a host
of advantages. Decision processes
have become swifter, motivation
among employees has increased
and the opportunities for Gorthon
Lines to create its own presence on
the market have improved.
1997 – our best year. So far.
It is with great pride and pleasure
that we will be recording our profit
for 1997 as the best ever in over 80
years of company history. The profit before tax and the expenses
incurred in conjunction with our
stock market introduction was
SEK 100 m. While the rally in the
US dollar, the currency in which
we invoice slightly more than 50%
of our turnover, must take some
credit for this result, improved utilisation of capacity and greater operating efficiency have also played
their part. We have virtually doubled our pre-tax profit over the past
five years, at the same time as we
have invested almost SEK 230 m in
our fleet.
Gorthon Lines’ financial standing is very good indeed. We have an
equity/assets ratio of 50.1%, with
an 18% return on capital employed
in 1997 and a debt/equity ratio that
continues to shrink. Cash flow too
is very good. Taken as a whole, this
presents us with excellent opportunities to invest in new tonnage
and to develop new cargo handling
systems which will enhance our
market potential even further.
Swedish shipping tomorrow.
Gorthon Lines has always been
committed to employing Swedish
staff. 16 of the 18 ships sail under
the Swedish flag. Today salary-related costs are several million kronor
higher on each ship than if they
were registered in, for example,
Holland or the Norwegian International Ship Register. If political
action to rectify this situation is not
forthcoming soon, no doubt more
shipping companies will feel compelled to leave Sweden. Like them,
Gorthon Lines is part of an international market and, as far as payroll
costs go, we must strive to achieve
the same terms as our competitors
if we are to succeed.
The future looks promising.
During the past year hopes were
raised for an improvement in the
business cycle for the forestry
industry. Sadly, these hopes were
not realised: as Asia was engulfed
in financial turbulence, the price of
pulp and paper was pressed down.
However, although the long-term
consequences are difficult to foresee, there are no signs to suggest
that the Asian crisis will exert a
negative effect on our operations
over the coming years. The North
American market is likely to compensate for any fall in its exports of
newsprint to Asia with increased
sales in Europe, which will increase
the volumes in our traffic area.
I look to the future with assurance. Even if it may yet be some
years before the forestry industry is
once again working at full capacity,
I remain confident that Gorthon
Lines can continue to grow and
yield good returns. It is a confidence
based on the strength of our market
position, on our highly motivated
and knowledgeable employees, and
genuine commitment among the
members of the board.
Gorthon Lines was introduced on the Stockholm
Stock Exchange on 6 June 1997.
6•7
A
W O R D
F R O M
T H E
P R E S I D E N T
A N D
T H E
E X E C U T I V E
V I C E
P R E S I D E N T
results even before the end of 1997,
M/S Humber Arm, one of our
older vessels, was given a complete
refit. Together with M/S Corner
Brook, which underwent a similar
refit in 1996, she is currently sailing
on contract to Kruger Inc. of Canada
up to the turn of the century.
Lars Petersson, Executive Vice President and
Director of Marketing.
Development is crucial. If we are to
maintain our position as a market
leader we need high levels of expertise and a tonnage specially adapted
to the increasingly demanding specifications of the industry.
We are investing heavily in the
work of developing our fleet in close
consultation with our customers, as
testified by our decision to build
three high-tech Ro-Ro vessels in
1996, M/S Obbola, M/S Östrand
and M/S Ortviken, all specially
designed for SCA shipments.
Acquisitions and new tonnage.
Investments in new ships are planned over the next few years, but
while discussions are already underway concerning new acquisitions
and new tonnage, expansion will
not be allowed to jeopardise our current, sound financial position. Our
long-term aim is to keep our equity/
assets ratio above 30% at all times.
Last year, in an investment which
had already begun to yield good
Increased demands on safety and
environmental responsibility.
Demands on safer, more environmentally friendly shipping are increasing for each year that passes
and Gorthon Lines is in the front
line of developments. Quality assurance work conducted in preparation for the International Maritime
Organisation’s ISM Code accreditation was intensive during 1997 and
cipant in the environmental debate
and, in order to ensure that we live
up to the objectives we set ourselves, we have introduced regular
internal environmental audits to
examine our performance. As the
ISM Code, in addition to its quality
management and safety regulations
also embraces far-reaching environmental measures, we have decided
to wait with ISO 14000 environmental accreditation until after the
completion of the ISM certification
process.
Ready for the new millennium.
With a modern fleet, highly developed expertise in a specialist area
and a viable environmental policy
Gorthon Lines stands well equip-
M/S Ortviken, one of the vessels specially built for SCA.
is now expected to be concluded in
1998-99. The IMO is demanding
that the entire world’s merchant
fleet be ISM accredited by 2002 at
the latest.
Gorthon Lines is an active parti-
ped to meet the new millennium.
Our ambition is to provide a service with a flexible, competitive
fleet wherever our customers need
us – be it in Europe, in North
America or in South America.
12° 40'
56°
00'
Five-year summary.
INCOME STATEMENTS
(All figures in millions of SEK)
KEY RATIOS
1994
1995
1996
1997
1993
1994
1995
1996
1997
Cash flow from operations (in millions of SEK) ..................
98
110
131
131
138
Operating income .................................................................
547
596
597
607
668
Equity/assets ratio, % ...........................................................
36
39
48
38
50
Operating expenses...............................................................
-423
-465
-443
-460
-513
Portion of risk-bearing capital % ..........................................
45
49
54
48
59
Operating profit before depreciation
124
131
154
147
155
Debt/equity ratio, % ..............................................................
128
106
78
65
36
Depreciation ..........................................................................
-35
-38
-40
-43
-44
Operating profit after depreciation
89
93
114
104
111
Capital employed (in millions of SEK)..................................
639
617
669
581
715
Financial income and expenses:
Return on capital employed, %.............................................
15
15
19
18
18
Equity (in millions of SEK) ....................................................
276
286
363
322
423
Interest income......................................................................
1
4
5
4
4
Return on equity after actual tax, %......................................
26
26
28
26
25
Interest income from parent company/group companies..
3
3
3
3
-
Return on equity after standard rate tax (28%), % ..............
18
18
20
19
18
Interest expenses and similar income items .......................
-30
-28
-31
-23
-21
Return on equity after full taxes, %.......................................
20
22
40
14
27
Profit after financial income and expenses
63
72
91
88
94
Gross margin, % ...................................................................
23
22
26
24
23
Profit margin, % ....................................................................
12
12
15
15
14
Interest coverage ratio, times ...............................................
3.3
3.9
4.4
5.4
5.9
Transfers and appropriations:
Group contributions received ...............................................
Group contributions granted................................................
15
-12
10
-30
Profit before tax
51
42
106
98
94
Profit per share after actual tax, SEK ....................................
3.38
3.85
4.89
4.74
5.03
Deferred taxes1) ......................................................................
-15
-11
38
-39
7
Profit per share after standard rate tax (28%), SEK.............
2.44
2.77
3.52
3.41
3.62
Profit for the year
36
31
144
59
101
Profit per share after full taxes, SEK .....................................
2.62
3.26
6.93
2.62
5.41
Shareholder’s equity per share, SEK.....................................
14.79
15.32
19.47
17.26
22.67
Number of employees...........................................................
22
23
23
22
20
Net investments, (in millions of SEK)..................................
27
54
85
46
17
1)
Actual tax has been extremely low during the 5-year period.
EXTRACTS FROM THE BALANCE SHEETS
(All figures in millions of SEK)
1993
1994
1995
1996
1997
650
618
674
677
657
Other fixed assets..................................................................
42
37
20
20
16
Other current assets..............................................................
60
53
36
105
32
Vessels....................................................................................
Liquid assets ..........................................................................
11
29
22
49
139
Total assets
763
737
752
851
844
Equity......................................................................................
276
286
363
322
423
Deferred tax liability...............................................................
71
77
43
83
75
Long-term interest-bearing liabilities ...................................
322
287
260
211
213
Short-term interest-bearing liabilities...................................
41
44
46
48
79
Short-term non-interest-bearing liabilities ...........................
53
43
40
187
54
763
737
752
851
844
Total liabilities and shareholders’ equity
8•9
1993
F I V E - Y E A R
S U M M A R Y
All per-share key ratios have been calculated on the basis of 18,644,858 shares outstanding.
Please see page 24 for key ratio definitions.
12° 40'
56°
00'
Comments on the financial trends.
Operating income.
Over the course of the past five
years, a period characterised by a
high degree of vessel utilisation,
increased volumes and improved
contractual conditions, Gorthon
Lines’ income has risen steadily
from SEK 547 m in 1993 to
SEK 668 m at the end of 1997.
Operating expenses.
The dominant items on the list of
expenses are shipping costs and
operating costs. Shipping costs,
which cover the cost of fuel and
bunkers, stowage, port fees etc.,
stood for 36% (34%) of the overall
bill for operating costs in 1997.
Operating costs, which include
the costs for crewing, dry docking
and technical maintenance, came
to 50% (55%) of operating costs.
With effect from 1997 the accounting principles for dry docking have
been amended, with the costs
being capitalised and written off
over a three-year period. The effect
of this on the 1997 profit has been
an improvement of SEK 5.4 m
after tax when compared to what
the former accounting principles
would have yielded.
Investments/divestments.
Net investments for the the year
amounted to SEK 17 m. However,
investments in new tonnage and
extensive refits and conversions
10•11
C O M M E N T S
O N
T H E
represent very large amounts of
money, so the investment level can
show considerable variations from
one year to another.
Total investments for the year
amounted to SEK 27 m, including
a SEK 24-million refit for M/S
Humber Arm that upgraded the
vessel to improve speed, reduce
fuel consumption and minimise
the risk of cargo damage.
Future investments will concentrate on Gorthon Lines’ flexibility
in order to offer customers even
better service. All investments in
new tonnage, which are anticipated
to be substantial during the next
three years, are made in close consultation with the customers.
Cash flow.
Gorthon Lines’ operations generate
a strong cash flow, enabling the
company to pay off its loans at a
quick and uniform pace. In theory,
the company could be completely
free of debt within two years, provided no new investments are made.
The cash flow from operations
for 1997 was SEK 138 m (131).
Result and profitability.
The result after financial income
and expenses has increased from
SEK 63 m in 1993 to SEK 94 m in
1997. The level of return on capital
employed has remained very good,
amounting to 18% in 1997, the
F I N A N C I A L
T R E N D S
lent to SEK 30 m, or approximately
5% of turnover.
Over the course of the year
SEK 56 m was amortised from
long-term loans, while new loans
were raised for SEK 88 m. The
dividend to B&N, Bylock & Nordsjöfrakt has reduced liquidity for
the year by SEK 90 m.
same figure as for the year before.
Financial position.
The development of shareholders’
equity has been affected not only
by the annual results but also to a
great extent by dividends and group
contributions to B&N, Bylock &
Nordsjöfrakt, and by the translation differences in foreign subsidiaries. SEK 50 m has been paid
in dividends in 1995, and SEK
100 m in 1996.
Equity/assets ratio has risen
over the past twelve months from
38% to 50% and the company’s net
interest-bearing liabilities, a figure
which is arrived at by reducing the
amount of interest-bearing liabilities by liquid assets, fell by
SEK 57 m to SEK 153 m.
Jane Lindestam, Chief Accountant, and
Anette Henriksson, Financial Controller.
During 1997 Gorthon Lines was
given a ‘triple A’ credit rating by
Dun & Bradstreet, the highest
rating possible.
Liquidity and capital resources.
On 31 December 1997 liquid assets
for the group, including short-term
placements, totalled SEK 139 m.
Liquid funds are placed on the
Swedish money market, in government securities where possible,
with maturities of 1–6 months.
However, to ensure that the group
remains solvent at all times, measures are taken to safeguard constant and immediate access within
the group to liquid assets equiva-
Profit after financial income and expenses excluding one-off costs in connection with the company’s introduction on the Stock Exchange.
The M/S Lovisa Gorthon was rebuilt in 1994,
becoming one of the company’s most
flexible freighters complete with stern ramp,
sideports and loading hatches.
Financial risks.
Gorthon Lines operations are, to a
very large degree, based on transactions in US dollars and the company works with forward contracts
to minimise exposure to currency
risks. The policy is that between
50% and 75% of the net currency
flows for the next 12 months
should be hedged in this way, falling to a portion of between 25%
and 50% for the subsequent 12month period. In order to further
reduce the company’s dollar exposure, all ship loans have been posted in this currency.
As far as exposure to interestrate risks is concerned, Gorthon
Lines’ strategy is to do all it can to
remain independent of short-term
borrowing requirements. At the
year-end 1997, the average maturity of loans was four years, with an
average fixed-interest period of just
twelve months. The average rate of
interest as of 31 December 1997
was 6.8%.
Below you can see what effects
changes in a number of variables
can have on the results after net
interest income/expenses.
Variable
Change
Profit after net
interest inc./exp.
Bunker costs
+/- 5%
SEK +/- 2 million
Interest rate
+/- 1% point
SEK +/- 2 million
Sensitivity to currency, USD
+/- SEK 0.1
SEK +/- 4 million
12° 40'
56°
00'
Shares and shareholders.
Shareholder structure.
In accordance with VPC AB’s
public register of shareholders
there were 5,081 shareholders in
the company as of 31 December
1997. The 25 shareholders holding
the greatest amount of shares are
shown in the table opposite.
Share trends.
The development of share prices
from 6 June, the day of issue, up to
and including February 15, 1998 is
illustrated by the diagram on the
right. On 30 December 1997 the
Gorthon share stood at SEK 43.70
per share, which represents a stock
market value for the company of
SEK 815 m and a P/E ratio of 8.
Dividends policy.
Gorthon Lines’ long-term ambition
is to issue dividends for 30-50% of
the group’s net profit after making
deductions for standard rate tax.
Dividends should provide a sound
balance between the shareholders’
demands for good direct yields and
the group’s needs to finance its
own activities.
On 6 June 1997 Gorthon Lines was quoted on the Stockholm Stock
Exchange’s OTC list. During the course of 1997 a total of 4.5 million Gorthon Lines shares were traded worth SEK 208 million.
The Board proposes to issue a
cash dividend of SEK 2 per share
for 1997.
Share issues.
In conjunction with the company’s
stock market introduction a 50:1
split was made along with a bonus
issue, increasing capital from SEK
30 m to SEK 37 m, divided among
1,208,980 Series A shares carrying
10 votes each and 17,435,878 Series
B shares carrying one vote each.
All shares carry equal rights to participate in the company’s assets
and profits.
Series A
Series B
Total shares
% of share
% of
shares
shares
held
capital
voting rights
Bylock, Lennart with family and company............................
640,772
136,820
777,592
4.17
22.17
Patriksson, Folke and family .................................................
119,160
Svolder ...................................................................................
Shares traded
(in thousands)
Share
Afv Shipping index
Afv Share index
60
50
1000
800
45
600
1.76
4.75
7.30
4.61
1,229,100
1,229,100
6.59
4.16
Swedish Employers’ Confederation (SAF) ...........................
1,000,000
1,000,000
5.36
3.39
928,600
928,600
4.98
3.15
Karlsson, Sven .......................................................................
Fourth AP Fund......................................................................
68,728
226,186
294,914
1.58
3.09
Axelsson, Göte.......................................................................
68,730
204,986
273,716
1.47
3.02
Chase Manhattan Bank, New York .......................................
865,000
865,000
4.64
2.93
SPP .........................................................................................
844,800
844,800
4.53
2.86
Carlson Investment Mgt AB..................................................
572,000
572,000
3.07
1.94
Haraldsson, Uno ...................................................................
37,130
Karlsson, Roger......................................................................
29,303
Bengtsson, Jan and company ...............................................
55
328,793
1,360,400
S/A Odin Fonderne, Norway.................................................
SE-Bankens Fonder ...............................................................
Gorthon Lines
209,633
1,360,400
Andersson, Kenth ..................................................................
36,021
Andersson, Mats ...................................................................
36,032
535,500
535,500
2.87
1.81
66,853
103,983
0.56
1.48
124,698
154,001
0.83
1.41
403,400
403,400
2.16
1.37
36,612
72,633
0.39
1.34
36,032
0.19
1.22
Swedish Trade Union Confederation (LO) and unions .......
306,000
306,000
1,64
1.04
SE-Banken, Luxembourg .......................................................
303,880
303,880
1.63
1.03
Norman, Bengt and family....................................................
285,000
285,000
1.53
0.97
Euroclear, Belgium.................................................................
248,650
248,650
1.33
0.84
Kristiansson, Jan-Erik ............................................................
20,055
22,095
42,150
0.23
0.75
Pettersson, Tore.....................................................................
19,650
19,138
38,788
0.21
0.73
Håkansson, Jan......................................................................
15,455
50,000
65,455
0.35
0.69
200,920
200,920
1.08
0.68
1,091,036
10,180,271
11,271,307
60.45
71.43
117,944
7,255,607
7,373,551
39.55
28.57
1,208,980
17,435,878
18,644,858
100
100
Myrberg & Partners ...............................................................
400
200
Total
40
JUN
1997
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
1998
Other shareholders
© SIX Findata
Total number of shares
The development of the Gorthon share.
12•13
S H A R E S
A N D
S H A R E H O L D E R S
12° 40'
56°
00'
Market overview, customers and
competitors.
Millions of ton
1200
1120
1100
1000
900
CUSTOMER
COUNTRY
TRAFFIC AREA
Abitibi-Price
Canada
Canada-Great Britain/Continent
ATC
USA
USA-Canada
Avenor
Canada
Canada-South America
800
Bowater
700
600
Canada
554
Donohue
Canada
500
435
400
Gorthon Lines sails 1,402,125
nautical miles. Every year.
The major routes run from Scandinavia to the USA and from the USA
and Canada to Europe, but Gorthon
Lines also has substantial amounts
of traffic across the North Sea and
in the Baltic region, as well as from
Canada to the US eastern seaboard
and Central America.
200
Remaining period on freight contracts
*) Munksund and Abitibi John Cabot have been sold for handover March/April 1998.
14•15
M A R K E T
O V E R V I E W ,
C U S T O M E R S
A N D
C O M P E T I T O R S
Canada-Great Britain/
the Continent
Sverige-Great Britain/
the Continent
U.S.-Canada
Gorthon Lines transport volumes 1997.
forest-product groups. The nine
largest customers accounted for in
excess of 90% of both turnover
and result in 1997, with the three
largest customers alone generating
almost 60% of turnover.
• Requirement contract
This offers a fixed price and preferential rights for volumes to be shipped.
• Contract of affreightment
This is a volume contract with a fixed
price where a minimum quantity of
business is guaranteed.
*
*
Scandinavia-U.S.
Kenny Pettersson, Chartering Manager,
and Kristina Svensson, Operations.
The following types of contract are
used:
• Time charter
This means that a vessel is leased to a
charterer for a fixed period of time.
The shipowner assumes all operating
costs other than bunker charges and
port fees.
Canada
154
100
Three types of contract.
Gorthon Lines mainly works with
long-term contracts generally running for periods of between one
and three years, although contracts
extending up to 15 years also occur.
Experience has shown that the
renewal rate is high.
Kruger
Canada-USA
Canada-U.S./South America
Gorthon Lines has a 25% share of
the market.
Although there are many shipping
companies only a handful specialise
in carrying refined forestry products,
and, with around 25% of this market, Gorthon Lines feel duly entitled
to regard themselves as market leaders in this segment.
The overwhelming majority of
Gorthon Lines’ customers are large
Canada-USA
280
300
Finland-Great Britain/
the Continent
Paper consumption increases.
Forestry products is a broad category covering everything from the
pulp transported in bulk carriers to
highly processed, coated fine
papers which impose high demands
on handling and vessels. Gorthon
Lines has elected to specialise in
the refined products, carrying for
the most part coated papers, copy
paper and newsprint.
Historically world demand for
paper has been rising at a rate of
about 3% a year, and there is nothing to suggest that this increase
will lose momentum over the next
ten years or so. In the USA demand
accelerated by more than 6% in
1997 and the companies with
whom we cooperate were working
at full capacity.
415
The majority of Gorthon Lines’
contracts are of the requirement
contract type and, as the company
is, in principle, free to use any vessel at its disposal, this helps ensure
that the fleet is used in an efficient
manner.
Gorthon Lines’ position on the
market is strong.
The fact that the Gorthon Lines
fleet consists of vessels of varying
sizes enables the company to cope
better with seasonal variations than
most of its competitors can do.
Regardless of the size of the
vessel, however, the cargo is always
Modo
Sweden
Sweden-Great Britain/Continent
SCA
Sweden
Sweden-Great Britain/Continent
Transfennica
Finland
Finland-USA
Finland-Great Britain/Continent
In 1997 Gorthon Lines’ 9 largest customers accounted for more than 90% of turnover and profits.
handled using the same techniques
and Gorthon Lines is actively engaged in cargo loss prevention work
in close consultation with its customers to support and promote new
developments in this field.
This all adds up to ensure
Gorthon Lines of a strong position
on the market and one which is
consolidated even further by the
fact that the company does not currently have a single competitor
who is active in all of the Gorthon
Lines traffic areas.
FinlandUSA
Canada/USA
-Europe
CanadaUSA/
Venezuela
Sweden
Great Britain/
Continent
FinlandContinent
Gorthon Lines
x
x
x
x
x
F-Ships
x
x
Spliethoff
x
x
x
Kent Line
x
x
Star Shipping
x
x
Armada
x
x
Company
x
Seatrans
x
Sealink
x
Charterfrakt
x
Swan Shipping
x
Dag Engström
x
x
Finncarriers
x
United Shipping
x
Bror Husell
x
Engship
x
Gustav Eriksson
Gearbulk
An assessment of the company’s competitors.
x
x
12° 40'
56°
00'
A new millennium: new thinking,
new technology, new markets...
In its efforts to secure an appreciation in value for its shareholders
Gorthon Lines has staked out a clear
course encompassing four prime
objectives:
• To defend its position as a first-class
shipping company for forestry products
while always maintaining good profitability.
• To take new shares of the market in its
existing markets.
• To be in position when new markets
develops.
• To adapt costs closely to the competitive situation.
The company’s financial position is
strong and provides a firm foundation for new investments and projects. In order to grow within current
markets it will be necessary for the
company to build or buy new vessels
as well as to continue developing and
improving concepts within transport
and logistics.
South America – a growing market.
Over the past 5 years the consumption of paper has been increasing by
around 3% a year and there is no
sign yet of this growth stagnating.
On the contrary, the market is getting bigger every year, not least in
South America. In the years to come,
the specialist knowledge that
Gorthon Lines possesses will be
much in demand in that part of the
world, and as this market geographicly fits well into Gorthon Lines traffic
routes, the company is keeping a
close eye on developments there.
Tomorrow’s ships.
The Gorthon Lines strategy of gradually devising new transport solutions
and commissioning new tonnage in
The shape of ships to come – by courtesy of Mariterm AB.
16•17
A I M ,
S T R A T E G Y
A N D
V I S I O N S
Claes Fänge, Project Manager.
close consultation with its customers
has proved successful, and the next
generation of vessels will be even
more highly specialised than today’s.
A number of development projects carried out during the year are
now being evaluated. Many years’
experience of transporting paper in
difficult weather conditions has
endowed us with an invaluable fund
of information which we can share
with the various consulting companies involved in the construction
of tomorrow’s ships.
High-tech development projects.
One of the year’s projects has investigated the possibilities of designing a
new type of hull ideally suited for
traffic across the North Atlantic. This
is an area notorious for bad weather
and high seas and our research has
set out to determine what shape the
hull need have to minimise loss of
speed in these conditions and keep
cargo damage as low as possible.
During spring 1998 Gorthon
Lines will be supervising the work of
final-year students engaged in a hightech project in the Department of
Marine Technology at Chalmers
University of Technology in Gothenburg, Sweden. Together they will be
evaluating the possibilities for using
unconventional design solutions and
innovative technology to build a merchant vessel with ice-breaker properties which is able to break ice in difficult conditions solely with the aid of
its own engines.
Preparing for the new millennium.
Few companies indeed can now be
unaware of the inevitability of preparing their computer systems for
the new millennium. For Gorthon
Lines this will mean the introduction
of a new administrative system in
1998 which will start to be operative
with effect from January 1999. The
company’s other computer systems
will be developed and modified to
avoid any interruptions in operations. In all, the cost of this invest-
The bridge on M/S Obbola is one of the most modern in the world.
ment programme is estimated at
around SEK 2 million.
As far as the vessels themselves
are concerned, Sea Partner has been
carrying out investigations into the
possible operative consequences of
the millennium date change since
July 1997. This includes compiling a
list of all identified systems, computer supported and embedded alike,
and sending them to the relevant
supplier for a thorough appraisal
and evaluations of actions to be
taken.
Sea Partner crews the vessels.
The crews on Gorthon Lines’ vessels
are supplied by the ship management company, Sea Partner, which
is also responsible for operations
and maintenance on-board. Since 1
January 1997 Gorthon Lines has had
a 30% stake in Sea Partner, 40% of
the shares being owned by B&N,
Bylock & Nordsjöfrakt AB, and the
remaining 30% by Svenska Orient
Linien.
More responsibility delegated
to the crews.
Sea Partner focuses on decentralised
operations where each vessel functions as an independent unit, with
short decision processes which tend
to increase the sense of commitment
and efficiency on board. Thanks to
the new opportunities opened up by
telecoms and IT, today’s ships are
increasingly able to take on many of
the tasks that were previously landbased, thus reducing the demands
for administration on shore.
ISM certification due in 1998.
IMO, the International Maritime
Organisation, has stipulated that by
the year 2002 at the latest the entire
world’s merchant fleet must be
accredited in accordance with the
International Safety Management
Code (ISM). Sea Partner has been
actively engaged in work concerning
this project – which necessitates a
comprehensive review of safety routines and environmental protection
procedures – since 1993 and it now
looks certain that all the vessels will
be ISM approved during the course
of 1998.
Developing skills,
improving opportunities.
The shortage of Swedish senior officers is a problem in the Swedish
merchant fleet and one which Sea
Partner is attempting to alleviate by
offering a substantial number of onboard trainee posts and education
opportunities for external recruits.
Efforts have also been intensified
to develop levels of skill internally
within the company and 143 crew
members have taken part in training
and further education programmes
at the company’s purpose-built conference centre at Skärhamn.
Distance learning programmes in
computing, mathematics, languages
and technical specialities such as
radio communications and the transportation of hazardous goods, have
also been offered during the year.
12° 40'
56°
00'
We work pro-actively
to prevent damage.
The essential characteristics of
paper can be summed up in just
two words: sensitive and expensive.
Gorthon Lines loads about 14,000
rolls of paper on every voyage –
and every single one of them is
treated with the same care and
consideration. That is why, for us,
damaged cargo is more or less an
unknown concept. Total damage
for an entire year amounts to less
than one tenth of one per cent of
the cargo value.
In 1996 Gorthon Lines’ work in
this field was brought to the attention of the Transportation Damage
Prevention Council and the
Finnish Forest Industries who
awarded the company the accolade
of ‘best carrier’ on routes between
Finland and USA. The citation
accompanying the award praises
the company for ‘actively striving
towards and encouraging damage
prevention measures that work
and yield visible results.’
Gorthon Lines offers customised
tonnage.
Specialising in carrying paper has
enabled the company to develop
customised solutions that make
handling cargo as simple and
straightforward as possible.
Gorthon Lines prides itself on working closely with its customers and,
Practical rain and wind shelters ensure that
loading and discharging is not interrupted by
bad weather – and there is no risk of damage to
the precious cargo.
The M/S Alida Gorthon, one of the largest sideport ships in the world.
Bo Johnsson, Cargo Handling Manager.
on a number of occasions, has
commissioned vessels specially
adapted to customer requirements.
M/S Obbola, M/S Ortviken and
M/S Östrand delivered in 1996
illustrate this point well. Intended
to work with the M/S Viola
Gorthon, they were specially designed to handle Baltic and North
Sea transports for SCA and MoDo.
Quick despatch.
Time alongside is not only an
expensive business, it is an unnecessary one as well. That is why
Gorthon Lines is constantly in
Special transport of glass-fibre cylinders from Canada to South America.
18•19
C A R G O
H A N D L I N G
Cargo handling using a stern ramp.
search of new ways of making loading and discharging more efficient. The company works with different types of vessels, many with
a choice of loading options: stern
ramps, sideports and through hatches in the weather deck. Computer-controlled elevators and
conveyors make both loading and
discharging safe and secure.
Cargo handling.
Major investments are made in
damage prevention measures –
partly via new technical solutions,
partly via the on-going training of
crews whose long experience of
transporting paper represents an
important asset for the company.
In addition, daily updates with detailed information about the cargo
are sent to the main office in Sweden using one of the most sophisticated communication systems on
the market – all to improve even
further the quality of transport for
the customer.
Air dryers and ventilation equipment prevent
any damage from condensation.
Many Gorthon Lines vessels have their own
cargo-handling equipment on board.
Once on board the cargo is safely stowed in boxshaped holds with no sharp edges in sight.
Large gaps between the load are filled with air
dunnage bags to prevent cargoes from shifting at
sea.
12° 40'
56°
00'
Adopting a consistent approach to
sustainable development.
The transport sector gets bigger
with every year that passes, and so
too does the amount of effort needed to come to terms with the increasing problem of environmental
pollution. From an environmental
point of view, marine transport is a
good alternative as only relatively
little energy is necessary to move
large quantities of goods from A to
B. However, to capitalise on the
energy-efficiency of this mode of
transport it is essential to reduce
air-borne and water-borne emissions to an absolute minimum.
Environmental impact has become
a significant factor and one that
Gorthon Lines accords considerable importance when commissioning new tonnage.
Internal environmental audits at
Gorthon Lines.
Gorthon Lines’ aim is unambiguous: to anticipate possibly harmful effects on the environment so
exactly and effectively that they
never need become reality. For this
reason substantial sums of money
are invested every year in making
operations environmentally compatible. The results of this preventive work are checked at regular
intervals via a programme of internal environmental audits designed
to certify compliance with international laws and requirements.
At the same time strenuous efforts
are made to keep abreast of environmental research, as yet another
way of carving out a competitive
advantage for the company.
Gorthon Lines endeavours to
set an example in environmental
matters for the shipping industry
in the same way as it leads the way
in cargo handling. The company
also takes an active part in the current debate and adopts a pro-active
approach in numerous issues related to the environment, not least
under the auspices of the Swedish
Shipowners’ Association.
One of the top 30 companies in
environmental issues.
Every year a Swedish foundation,
The Natural Step, carries out an
environmental analysis of
Sweden’s companies on behalf of
the Swedish Environmental Fund.
This is a unit trust savings programme which is open to the public. It invests in environmentally
sound companies which, in its opinion, have the future before them.
The fact that Gorthon Lines is now
rated by the fund as one of
Sweden’s top 30 companies from
this perspective is further proof of
the success of the company’s environmental work.
Some examples of Gorthon Lines’
environmental activities:
• Gorthon Lines’ customers are
increasing their transportation of
recycled paper. Volumes doubled
between 1996 and 1997 and are
expected to continue to rise steeply over the next few years, both
in Europe and the USA. To support this new development
Gorthon Lines has invested in
specially adapted cargo-handling
equipment.
• Environmental work is an integral part of the ISM (International Safety Management) certification which will be completed
on all the company’s vessels
during 1998.
Gorthon Lines has been ranked as one of Sweden’s Top 30 companies for environmental awareness and concern.
20•21
E N V I R O N M E N T A L
P O L I C Y
Transportation by sea is an environmentally friendly alternative, a way of using relatively low amounts
of energy to carry huge volumes of goods.
• In co-operation with designers
we are looking at the possibility
of carrying out improvements to
our vessels’ exhaust emissions.
Catalytic convertors and new
engine designs are currently
being evaluated.
• Sea Partner is constantly examining alternatives to conventional
cleaning agents, chemicals,
paints and other environmentally
harmful products and is introducing new solutions wherever
possible.
• Our vessels on North Sea and
Baltic routes are fuelled by more
environmentally friendly bunker
oils with a low sulphur content.
• A statement of purchasing policy
and an environmental handbook
have been distributed to all
ships to make crews aware of
the responsibility they have to
the environment while they are
at sea.
• Separators have been installed on
board to improve the handling of
incinerated waste, reducing the
amount of residual waste that
needs to be disposed of ashore.
12° 40'
56°
00'
The Board of Directors.
THE BOARD OF DIRECTORS
AUDITORS
Lennart Bylock
Born 1940.
Chairman.
Board member since 1990.
Chairman of B&N, Bylock & Nordsjöfrakt AB, CellMark AB, Svenska Orient
Linien AB, Varta AB, Varta Bosch
Holding AB. Board member of Cloetta
AB, L-E Lundbergföretagen AB, Midway
Holding AB, Swede Ship Invest AB and
Stiftelsen Natur & Kultur.
Shares held: 640,772 series A, 136,820
series B.
Pension fund shares: 36,860 series B.
Carl-Eric Bohlin
Born 1946.
Authorised Public Accountant, Price
Waterhouse Revisionsbyrå KB.
Company auditor since 1990.
Sten K. Johnson
Born 1945.
Chairman and CEO of Midway Holding
AB. Chairman of Gandalf AB, Industrifonden, Liljeholmens Stearinfabriks AB
and Nordifagruppen. Board member of
Aktiefrämjandet, AB Custos, ECMI,
Sydkraft AB and others.
Shares held : via companies 131,000
series B.
Lennart Nilsson
Born 1941.
Chairman of Sveriges Verkstadsindustrier, Lund University and Celsius
AB. Vice Chairman of Cardo AB and
Trelleborg AB. Board member of AB
Industrivärden, Henry and Gerda
Dunkers Donationsfond nr 2,
Industriförbundet and SAF:s arbetsutskott, Stig and Ragna Gorthon’s Stiftelse
and Crafoordska Stiftelsen.
Shares held : 8,400 series B.
22•23
T H E
Senior Executives
and Auditors.
B O A R D ,
S E N I O R
Magnus Willfors
Born 1963.
Authorised Public Accountant, Price
Waterhouse Revisionsbyrå KB.
Company auditor since 1994.
Deputy auditors
Michael Bengtsson
Born 1959.
Price Waterhouse Revisionsbyrå KB.
Deputy auditor to the company since
1992.
The Board of Gorthon Lines (left to right), Sten K. Johnson, Folke Patriksson, Lennart Nilsson,
Lennart Bylock, Mats Nilsson, Christer Zetterberg and Executive Vice President Lars Petersson.
Mats Nilsson
Born 1956.
President of Gorthon Lines.
Chairman of Provinsbanken Skåne
Helsingborg. Board member of Sea
Partner AB, Morgan Wedlin & Son AB
and Sveriges Redareförening –
Europasektionen.
Shares held : 116 series A, 1,000 series B.
Folke Patriksson
Born 1940.
President and CEO of B&N, Bylock &
Nordsjöfrakt AB. Chairman of Sea
Partner AB. Vice Chairman of Sveriges
Redareförening, The Swedish Club and
Sjöräddningssällskapet. Board member
E X E C U T I V E S
A N D
A U D I T O R S
of Svenska Orient Linien AB, Swede
Ship Invest AB and Svenska Skeppshypotekskassan.
Shares held : 119,160 series A, 209,633
series B.
Pension fund shares: 29,180 series B.
Christer Zetterberg
Born 1941.
Chairman of IDI AB, Ekman & Co, AB
Segerström & Svensson and TurnIT AB.
Board member of L-E Lundbergföretagen AB, MoDo AB and Linjebuss
AB. Member of IVA, Ingenjörsvetenskapsakademien.
Senior Executives of Gorthon Lines (left to right): Mats Nilsson, Lars Petersson, Bo Johnsson,
Anette Henriksson and Kenny Pettersson.
SENIOR EXECUTIVES
Mats Nilsson
Born 1956.
President. Employed since 1989.
Shares held : 116 series A, 1,000 series
B.
Bo Johnsson
Born 1953.
Manager – Cargo handling. Employed
since 1993.
Shares held : 0.
Lars Petersson
Born 1951.
Executive Vice President – Marketing.
Employed since 1982.
Shares held : 116 series A.
Kenny Pettersson
Born 1951.
Manager – Chartering. Employed since
1980.
Shares held : 0.
Anette Henriksson
Born 1962.
Financial Controller. Employed since
1986.
Olov Karlsson
Born 1949.
Price Waterhouse Revisionsbyrå KB.
Deputy auditor to the company since
1992.
Definitions and
Glossary of nautical terms.
DEFINITIONS
Capital employed
Interest bearing liabilities and shareholders’ equity.
Cash flow from operations
Income after financial items plus depreciation according to plan.
Debt/equity ratio
Interest-bearing liabilities less liquid
funds divided by equity.
Return on equity
a) Income after financial items, less
actual tax, divided by the average
amount of shareholders’ equity.
b) Income after financial items, less
standard rate 28% tax divided by average
shareholders’ equity.
Share of risk-bearing capital
Shareholders’ equity plus deferred tax
divided by the balance sheet total.
and safety in the world merchant fleet
that is stipulated by the IMO. Certification in accordance with the ISM code
is administered by national shipping
authorities, such as the National
Maritime Administration in Sweden.
ISO 9000
An international standard governing
quality management in companies. ISO
9001 certification is granted by classification societies or other accredited
agencies.
GLOSSARY OF NAUTICAL TERMS
Equity/assets ratio
Shareholders’ equity divided by balance
sheet total.
Equity per share
Shareholders’ equity divided by the
number of shares outstanding.
Gross margin
Income before depreciation divided by
operating income.
Interest coverage ratio
Income after financial items plus interest expense divided by interest expense.
Price-earnings ratio (P/E ratio)
Market price per share divided by earnings per share after taxes.
Profit margin
Income after financial items divided by
operating income.
Profit per share
a) Income after financial items less
actual tax divided by the number of shares outstanding.
b) Income after financial items less
standard rate 28% tax divided by the
number of shares outstanding.
c) Income after financial items less full
tax (actual tax plus deferred tax) divided
by the number of share outstanding.
Return on capital employed
Income after financial items plus interest expenses divided by the average capital employed.
24
D E F I N I T I O N S
A N D
G L O S S A R Y
Bare-boat charter
Leasing of a vessel, without a crew, to a
charterer for a specific period, normally
of extended duration.
Bulk cargo vessel
A vessel used to transport large quantities of unpackaged goods such as coal,
ore, fertiliser, lime or staples such as
grain, sugar, steel etc.
Bunkers
Fuel used to power a vessel.
Cassette vessel
A Ro-Ro vessel adapted to transport
ready-stowed goods.
Charterer
A cargo owner or the party that charters
a ship.
Contract of affreightment
A ‘volume’ contract guaranteeing a
minimum quantity at a fixed price.
Deadweight (dwt)
The total weight in tonnes of cargo, bunkers and loose equipment which a vessel
can carry.
IMO
International Maritime Organisation, a
United Nations agency which acts in the
capacity of an international supervisory
authority for shipping.
ISM
International Safety Management. A
code of regulations governing quality
O F
N A U T I C A L
T E R M S
Lo-Lo vessel
(Lift on-Lift off) A vessel loaded and
unloaded using its own derricks or
shore-based cranes.
Requirement contract
A contract offering a fixed price and preferential rights for volumes shipped, but
providing no guarantees as to those
volumes.
Ro-Lo vessel
(Roll on/off-Lift on/off) A vessel that
combines both cargo hatches and
ramps, so that loading and unloading
can be carried out with trucks and/or
cranes.
Ro-Ro vessel
(Roll on-Roll off) A vessel that is loaded
and unloaded by driving trucks or flatbeds up one or more ramps.
Ship management
All services, including the provision of a
crew, that are required to operate a vessel. The cost for these services is sometimes referred to as the daily cost.
Alexandria • Amsterdam • Antwerpen • Baie Comeau • Baltimore • Bilbao • Birkenhead • Blyth •
Botwood • Boulogne • Bremen • Bremerhaven • Bristol • Brunswick • Bråviken • Buena Ventura •
Buenos Aires • Cadiz • Cartagena • Casablanca • Chandler • Charleston • Chatham • Convoys Wharf •
Corner Brook • Corpus Christi • Dalhousie • Dublin • El Ferrol • Falmouth • Felixstowe • Fowey •
Fredrikshavn • Fredrikstad • Galveston • Gandia • Gibraltar • Grand Anse • Gros Cacouna • Gävle •
Göteborg • Halden • Halifax • Halmstad • Hamburg • Hamina • Hanko • Haraholmen • Helsingborg •
Side-loader
A vessel loaded by driving trucks or flatbeds through sideports in the hull, generally combined with elevators between
decks.
Helsingfors • Holmsund • Houston • Husum • Iggesund • Inkoo • Jacksonville • Jakobstad • Kemi • Kiel
• Kingston • Kokkola • Kolding • Kotka • La Guaira • La Pallice • Lake Charles • Landskrona • Lissabon
• Liverpool • Lovisa • Lübeck • Lysekil • Maracaibo • Marseille • Matane • Miami • Mobile • Monfalcone
• Montevideo • Montreal • Montrose • Morehead City • New Bedford • New London • New Orleans •
Newark • Norfolk • Oskarshamn • Oulu • Paranagua • Pascagoula • Pensacola • Philadelphia • Pictou
• Point au Pic • Port Alfred • Port Arthur • Port Canaveral • Port Everglades • Port Hawkesbury • Port
Time charter (T/C)
Leasing a vessel to a charterer for a specified period of time. The shipping company assumes all operating costs except
those for bunkers and port charges.
Limon • Portland • Porto Alegre • Portocel • Providence • Puerto Cabello • Purfleet • Quebec • Rauma
• Recife • Richmond • Rio de Janeiro • Rio Grande • Rio Haina • Rostock • Rotterdam • Rouen • Saint
John´s • Saint John • Salvador • San Fransisco do Sul • San Juan • Santa Marta • Santander • Santo
Domingo • Santos • Savannah • Savona • Searsport • Sete • Sevilla • Sheerness • Stephenville •
Sundsvall • Södertälje • Tampa • Terneuzen • Three Rivers • Tilbury • Tunadal • Turku • Tyne • Varberg
• Velsen • Veracruz • Vitoria • Warrenpoint • Wilmington
Gorthon Lines AB
Gamla Tullhuset, Hamntorget, Box 1063, SE-251 10 Helsingborg, Sweden
Tel: +46-42-17 27 00 • Fax: +46-42-14 63 43
Gorthon Shipping Inc
465 rue St Jean, Suite 505, Montreal, Quebec H2Y 2R6, Canada
Tel: +1-514-697 5660 • Fax: +1-514-697 7997
Gorthon Lines AS
Strandg 9, Postboks 147, N-1705 Sarpsborg, Norway
Tel: +47-69 15 40 22 • Fax: +47-69-15 46 91
Gorthon Lines AB
Box 761, SE-851 22 Sundsvall, Sweden
Tel: +46-60-19 35 71 • Fax: +46-60-19 39 61
Sea Partner AB
Box 102, SE-471 22 Skärhamn, Sweden
Tel: +46-304- 67 92 00 • Fax: +46-304-67 05 12
12° 40'
56°
00'
Director’s Report
ANNUAL REPORT
The Board of Directors and President of Gorthon Lines AB (publ) have pleasure in presenting the company’s Annual Report for 1997.
DIRECTORS’ REPORT
Gorthon Lines has been a public limited company since 6 June 1997 and is
quoted on the Stockholm Stock Exchange.
Operations
Parent company
Most of the operations are carried out in the parent company which owns 12
of the group’s 14 vessels. During January and March two vessels were sold
to the Norwegian subsidiary Gorthon Lines AS and registered in the Norwegian International Ship Register (NIS). In addition to its wholly-owned
vessels Gorthon Lines operates a further four on bareboat charters for
periods of between 4 and 13 years. The group has customer contracts for
these vessels which run for the corresponding lengths of time.
Contracts for the company’s wholly owned vessels run for 1 to 3 years.
Contracts were renewed in 1997 for Transfennica’s Atlantic and continental
traffic and for ATC on the American east coast.
Capacity utilisation levels for the company’s vessels sailing the Atlantic and
serving the eastern seaboard of North America were good throughout 1997.
The seven vessels sailing between Scandinavia, England and the continent
operate on time charter contracts, whereby the income for Gorthon Lines is
not affected by the quantities shipped.
Last year turnover for the company amounted to SEK 630.1 m (607.2) and
the result before tax was SEK 46.2 m (77.3).
New loans have been raised for SEK 88 m in 1997 (0), while SEK 56 m (45.8 )
has been amortised.
Since a considerable portion of the company’s operations is dollar-based,
the company has benefited from the increasing strength of this currency
over the year. The exchange rate has increased from USD 1 = SEK 6.87 in the
beginning of the year to USD 1 = SEK 7.87 at the end of the year, peaking at
SEK 8.12 on 10 August. This has not, however, affected the result for the year
to the same degree because of the company’s policy of using futures and forward contracts to hedge 50-75% of its income for the coming 12 month-period and 25-50% for the following 12 months.
In connection with the company’s stock market introduction a 50:1 split was
made together with a new share issue which increased the share capital from
SEK 30 million to SEK 37 million, distributed among 1,208,980 A shares
carrying 10 votes each and 17,435,878 B shares carrying one vote each. All
shares carry equal rights to participate in the company’s assets and profits.
Group
Gorthon Lines carried 2.9 million tonnes of paper in 1997 (2.7) valued at
around SEK 12 billion.
Turnover was SEK 664.5 m (607.2) yielding a profit before tax of SEK 93.7 m
(98.2). By the end of the year equity/assets ratio was 50.1% (37.8) calculated
on the balance sheet total. Return on capital employed was 18% (18).
The cash flow from operations remains strong, amounting to SEK 138 m for
the year (131). Group liquid assets for the period, including short-term placements, were SEK 139 m (49). Investments during the year amounted to
SEK 27.0 m (46.8), the majority of which, SEK 24 m, was related to the refit
of M/S Humber Arm, a conversion designed to increase the speed of the
vessel, reduce bunker consumption and minimise cargo damage. A total of
SEK 56 m was paid off long-term loans during the year while new loans were
raised for SEK 88 m. A non-recurring dividend payment of SEK 90 m net was
made to B&N, Bylock & Nordsjöfrakt AB in connection with Gorthon Lines’
introduction on the stock exchange.
Important events
M/S Holmsund, which had been used to transport cargoes for SCA until
replaced by new tonnage in 1996, was sold in January, resulting in a capital
gain of SEK 3.8 m. During the first quarter the sister ships M/S Munksund
and M/S Tunadal (later renamed M/S Abitibi John Cabot) were sold by the
parent company in Sweden to the subsidiary in Norway and registered under
the NIS flag. Subsequent to the year-end the two vessels have been sold to
an external party for handover in March and April 1998. This sale will realise
a small capital gain.
On 17 February 1997 B&N, Bylock & Nordsjöfrakt AB, issued a press release
with information about its decision to present before the Annual General
Meeting proposals for restructuring the company. The proposal included
that Gorthon Lines, a subsidiary to B&N, be apportioned to B&N shareholders. Each B&N share gave entitlement to one share in Gorthon Lines
and the company was subsequently introduced onto the Stockholm Stock
Exchange’s OTC list. The restructuring proposals were approved by the
Annual General Meeting and the company has been quoted on the Stock
Exchange since 6 June.
During the accounting period a 30% share in Sea Partner AB was acquired at
a cost of SEK 1.8 m. This company is responsible for ship management and
maintenance of all the group’s vessels.
Projected future sales
Gorthon Lines is involved in industrial shipping activities and is an important link in the logistical system serving the industry as a whole. The
demands on swift, safe, reliable transportation are increasing all the time.
Mergers between companies in the forestry industry have already taken
place and this trend is continuing both in Europe and North America.
Gorthon Lines sees improved opportunities in all this and is continually seeking to work in close cooperation with industry and are actively involved in
pioneering technological advances. Cargo handling systems, ship design
and the efficiency of engines will be crucial factors for the success of the next
generation of ships. The current fleet has been regularly rebuilt, refitted and
adapted to the changing requirements of the market and all the vessels have
now been specially converted for the transportation of forestry products.
The company’s firm financial footing provides a good foundation for new
investments and projects. Gorthon Lines’ future aim is to expand by both
organic growth and new corporate acquisitions.
Proposed appropriation of profits
Group
The group’s non-restricted equity amounts to SEK 43.315 m of which
SEK 100.909 m is the profit for the year. The Board proposes that the sum of
SEK 4.624 m be transferred to restricted reserves in the group.
Parent company
The Board and President propose that the profits of
Profit brought forward
Profit for the year
Total
SEK
47,066,219
46,240,799
93,307,018
be allocated as follows:
Transfers to statutory reserve
To shareholders, a dividend of SEK 2. 00 per share
To be carried forward
Total
4,624,080
37,289,716
51,393,222
93,307,018
For other details concerning the operations and financial statements of the
group and the parent company, you are referred to the Income Statements,
Balance Sheets, Financial Analyses, Notes and Comments that follow.
12° 40'
56°
00'
Consolidated Income Statement
Consolidated Balance Sheet
31 Dec 1997 31 Dec 1996
(all figures in thousands of SEK)
1997
1996
ASSETS
Net revenues................................................................................
Capital gain from sale of vessels ................................................
Sailing and operational costs...........................................(Note 1)
Other external costs ....................................................................
Personnel costs ................................................................(Note 2)
Depreciation .....................................................................(Note 4)
Costs for stock exchange introduction .......................................
Operating profit
664,543
3,781
-488,983
-5,970
-11,038
-44,400
-6,501
607,179
—
-440,821
-7,851
-12,353
-42,621
—
111,432
103,533
Tangible assets:
(Note 4)
Buildings ......................................................................................
Land..............................................................................................
Vessels..........................................................................................
Investment in long-term leased tonnage ..................................
Machinery and other technical equipment ................................
Equipment, tools, fixtures and fittings .......................................
2,557
993
653,102
3,922
2,607
872
2,616
993
677,099
4,215
4,974
1,280
Total tangible assets
664,053
691,177
Shares and participations in associated companies ...............(Note 6)
Other shares ................................................................................
Other long-term assets ...............................................................
1,800
—
6,681
—
80
6,273
Total financial assets
8,481
6,353
672,534
697,530
5,671
3,347
—
487
4,252
18,591
55,000
84,272
4,752
9,991
66,824
502
5,678
16,398
—
48,992
TOTAL CURRENT ASSETS
171,620
153,137
TOTAL ASSETS
844,154
850,667
Profit from financing activities
Interest income from group companies ....................................
Interest income............................................................................
Interest expenses and similar income statement items............
—
3,698
-21,397
2,793
4,316
-22,407
Profit after financial items
93,733
88,235
Financial assets
Transfers and appropriations
TOTAL FIXED ASSETS
Group contribution received.......................................................
Profit before tax
Tax on the profit for the year ............................................(Note 3)
Net profit for the year
2•3
F I N A N C I A L
S T A T E M E N T S
—
10,000
93,733
98,235
7,176
-39,422
100,909
58,813
Current assets
Inventories ...................................................................................
Accounts receivable - trade .........................................................
Receivables from group companies ...........................................
Prepaid taxes................................................................................
Other receivables.........................................................................
Prepaid expenses and accrued income...........................(Note 9)
Other current investments..........................................................
Cash and bank balances..............................................................
12° 40'
56°
00'
Group
– Statement of Changes in Financial Position
Consolidated Balance Sheet
31 Dec 1997 31 Dec 1996
1997
1996
EQUITY AND LIABILITIES
FUNDS SUPPLIED FROM OPERATIONS
Equity
(Note 7)
Restricted equity:
Share capital ...........................................................................
Restricted reserves..................................................................
37,290
342,028
30,000
287,723
Non-restricted equity:
Profit brought forward ............................................................
Profit for the year.....................................................................
Dividend (anticipated)............................................................
-57,594
100,909
—
45,188
58,813
-100,000
TOTAL EQUITY
422,633
321,724
Provisions
Provisions for taxation......................................................(Note 3)
75,464
82,640
TOTAL PROVISIONS
75,464
82,640
Net revenues................................................................................
Operating costs ...........................................................................
Financial income and expenses..................................................
Taxes.............................................................................................
Capital gain on sale of fixed assets.............................................
Translation difference ..................................................................
Change in deferred tax ................................................................
664,543
-512,492
-17,699
7,176
3,781
—
-7,176
607,179
-460,710
-15,613
-39,422
-525
-25
39,513
Total funds generated internally
138,133
130,397
Change in current receivables.....................................................
Change in current liabilities
excluding short-term portion of ship loans................................
Change in long-term receivables ................................................
21,797
-19,294
-30,489
-409
44,287
863
129,032
156,253
10,016
-1,720
-27,291
—
—
-46,008
110,037
110,245
GROUP CONTRIBUTIONS
—
10,000
DIVIDEND
—
-100,000
Change in intra-group financing .................................................
Change in ship loans...................................................................
Change in long-term liabilities ....................................................
-50,000
4,446
25,797
50,000
-43,752
—
Change in liquid assets
90,280
26,493
INVESTING ACTIVITIES
Long-term liabilities:
Ship loans .........................................................................(Note 8)
Other liabilities to credit institutions..........................................
186,593
26,520
213,118
723
TOTAL LONG-TERM LIABILITIES
213,113
213,841
Current liabilities:
Short-term portion of ship loans .....................................(Note 8)
Accounts payable - trade .............................................................
Liabilities to group companies ...................................................
Liabilities to associated companies............................................
Other liabilities ............................................................................
Accrued expenses and deferred income ........................(Note 10)
78,481
7,111
—
9,857
5,134
32,361
47,510
14,690
126,271
—
8,649
35,342
TOTAL CURRENT LIABILITIES
132,944
232,462
TOTAL EQUITY AND LIABILITIES
844,154
850,667
542,054
550
None
487,534
750
None
Pledged assets and contingent liabilities
Ship mortgages with regard to ship loans .................................
Property mortgages with regard to liability to credit institutions
Contingent liabilities....................................................................
4•5
F I N A N C I A L
S T A T E M E N T S
Sales of fixed assets.....................................................................
Purchase of shares ......................................................................
Purchase of vessels and equipment ...........................................
FINANCING
12° 40'
56°
00'
Parent Company’s Income Statement
Parent Company’s Balance Sheet
1997
1996
31 Dec 1997 31 Dec 1996
ASSETS
Net revenues................................................................................
Capital gain from sale of vessels ................................................
Sailing and operational costs...........................................(Note 1)
Other external costs ....................................................................
Personnel costs ................................................................(Note 2)
Depreciation .....................................................................(Note 4)
Costs for stock exchange introduction .......................................
Operating profit
630,081
7,537
-456,344
-5,750
-10,590
-48,708
-6,501
607,179
—
-441,289
-7,851
-11,905
-47,693
—
109,725
98,441
Tangible assets:
(Note 4)
Buildings ......................................................................................
Land..............................................................................................
Vessels..........................................................................................
Investment in long-term leased tonnage ..................................
Machinery and other technical equipment ................................
Equipment, tools, fixtures and fittings .......................................
2,557
993
699,805
3,922
2,607
807
2,616
993
748,354
4,215
4,974
1,215
Total tangible assets
710,691
762,367
Shares in subsidiaries.......................................................(Note 5)
Shares in associated companies .....................................(Note 6)
Other shares ................................................................................
Other long-term receivables .......................................................
260
1,800
—
6,681
470
—
80
6,272
Total financial assets
8,741
6,822
719,432
769,189
Inventories ...................................................................................
Accounts receivable - trade .........................................................
Prepaid taxes................................................................................
Other receivables.........................................................................
Prepaid expenses and accrued income...........................(Note 9)
Other current investments..........................................................
Cash and bank balances..............................................................
4,506
2,813
25,849
487
4,252
17,506
55,000
82,913
4,752
9,951
66,861
502
5,678
16,398
—
48,758
TOTAL CURRENT ASSETS
193,326
152,900
TOTAL ASSETS
912,758
922,089
Profit from financing activities
Profit from winding up operations .............................................
Interest income from group companies ....................................
Interest income ...........................................................................
Interest expenses and similar income statement items............
58
—
3,632
-21,397
94,009
2,793
4,316
-22,407
Profit after financial items
92,018
177,152
Transfers and appropriations
—
-45,777
10,000
-109,830
Profit before tax
46,241
77,322
—
91
46,241
77,413
Net profit for the year
6•7
F I N A N C I A L
TOTAL FIXED ASSETS
Group contribution received.......................................................
Accelerated depreciation..................................................(Note 4)
Tax on the profit for the year ............................................(Note 3)
S T A T E M E N T S
Financial assets
CURRENT ASSETS
12° 40'
56°
00'
Parent Company
– Statement of Changes in Financial Position
Parent Company’s Balance Sheet
1997
1996
31 Dec 1997 31 Dec 1996
FUNDS SUPPLIED FROM OPERATIONS
EQUITY AND LIABILITIES
Equity:
(Note 7)
Restricted equity:
Share capital ...........................................................................
Statutory reserve......................................................................
37 290
—
30,000
6,000
Non-restricted equity:
Profit brought forward.............................................................
Profit for the year ....................................................................
Dividend (anticipated) ............................................................
47,066
46,241
—
70,943
77,413
-100,000
TOTAL EQUITY
130,597
84,356
Net revenues................................................................................
Operating costs ...........................................................................
Financial income and expenses..................................................
Taxes.............................................................................................
Capital gain on sale of fixed assets.............................................
630,081
-479,185
-17,707
—
7,537
607,179
-460,730
-15,613
91
-525
TOTAL FUNDS GENERATED INTERNALLY
140,726
130,402
22,729
-19,276
-31,528
-409
44,462
864
131,518
156,452
210
30,050
-24,000
-1,720
-27,082
239,397
884
—
-209
-46,837
108,976
349,687
GROUP CONTRIBUTIONS
—
10,000
DIVIDEND
—
-100,000
-50,064
4,446
25,797
-189,599
-43,752
—
89,155
26,336
Change in current receivables.....................................................
Change in current liabilities
excluding short-term portion of ship loans................................
Change in long-term receivables ................................................
Untaxed reserves:
Accumulated excess depreciation ...................................(Note 4)
436,977
391,200
Long-term liabilities:
Ship loans .........................................................................(Note 8)
Other liabilities to credit institutions ..............................(Note 8)
186,593
26,520
50
213,118
723
114
TOTAL LONG-TERM LIABILITIES
213,163
213,955
Current liabilities:
Short-term portion of ship loans .....................................(Note 8)
Accounts payable - trade .............................................................
Liabilities to associated companies............................................
Other liabilities ............................................................................
Accrued expenses and deferred income ........................(Note 10)
78,481
6,224
—
9,857
5 138
32,321
47,510
14,600
126,477
—
8,649
35,342
TOTAL CURRENT LIABILITIES
132,021
232,578
TOTAL EQUITY AND LIABILITIES
912,758
922,089
542,054
550
None
487,534
750
None
INVESTING ACTIVITIES
Result from liquidation of subsidiary .........................................
Sale of fixed assets ......................................................................
Purchase of shares ......................................................................
Purchase of vessels and equipment ...........................................
FINANCING
Change in intra-group financing .................................................
Change in ship loans...................................................................
Change in long-term liabilities ....................................................
Change in liquid assets
Pledged assets and contingent liabilities
Ship mortgages with regard to ship loans .................................
Property mortgages with regard to liability to credit institutions
Contingent liabilities....................................................................
8•9
F I N A N C I A L
S T A T E M E N T S
12° 40'
Notes to the financial statements
Accounting principles
The annual accounts have been prepared in accordance with the Annual
Accounts Act (1995:1554), and the figures for the previous year have been
adjusted to comply with the terms of this act.
Group accounts
Group consolidated accounts include the financial statements for all group
companies. All intra-group transactions and profits have been eliminated.
Accounts for associated companies have been included in the consolidated
accounts in accordance with the equity method.
The consolidated accounts have been prepared in accordance with the purchase method and are adapted to Recommendation 1:96 of the Swedish
Financial Accounting Standards Council pertaining to the treatment of untaxed reserves. Accordingly the group income statement and balance sheet are
stated without appropriations and untaxed reserves. Untaxed reserves in the
individual companies within the group have been divided so that the deferred
tax is reported under provisions and the equity capital portion is included
among restricted reserves. The deferred tax is after considering unutilised tax
loss carried forward calculated as 28% of untaxed reserves. Deferred tax attributable to allocations for the year as a whole in the individual companies has
been charged against consolidated income reported for the year.
The accounts of foreign subsidiaries have been translated in accordance with
the current method, which means that balance sheets have been translated at
year-end rates and income statements have been translated at the average
rates for the year. In cases where intra-group transactions represent permanent investments, the exchange differences reported in the companies are
transferred to equity, considering the tax effects.
Consolidated unrestricted equity includes unrestricted equity in subsidiaries
translated at the year-end exchange rate. As a consequence, the translation
difference is divided between restricted and unrestricted equity
Accounting for foreign currencies
Receivables and liabilities in foreign currency have been shown at the yearend exchange rate, with unrealised exchange gains reported in accordance
with Recommendation R7 of the Swedish Financial Accounting Standards
Board. In line with this recommendation, the book value of liabilities in
foreign currencies that have been hedged by assets in the same currency has
not been affected by changes in the exchange rate. In compliance with
Recommendation R7, premiums and deductions relating to futures/forward
contracts are accrued over the duration of the contract.
Inventories
Inventories have been valued at the lower of acquisition cost and market
value. Inventories consist of bunkers, the value of which has been calculated
based on the FIFO method. Appropriate deductions have been made for
obsolescence.
Other comments
From 1997 the accounting principles for drydocking have been changed: the
costs are now activated and written off in the period leading up to the next
scheduled drydocking, usually a period of 3 years. For 1997 the changed principle has resulted in an improvement of profit after tax of SEK 5.4 m compared with if the previous principle had been applied. Last year’s accounts and
equity brought forward have not been amended in accordance with reccommendation 5 of the Swedish Financial Accounting Standards Council as the
effects would be immaterial. Shipping revenues are recognised when incurred. Accounts receivable are valued at their recognisable value.
Depreciation according to plan
Vessels: Annual depreciation is based on individual estimates of each ship’s
remaining economic life and an estimated scrap value at the end of the
depreciation period. The average remaining economic life of the group’s vessels is just under 11 years. The economic life used as a basis for straight-line
depreciation is 29-32 years.
Machinery and equipment: Annual depreciation is made at a rate of 20% of
the acquisition value.
Buildings: Annual depreciation is calculated at a rate of 2% of the acquisition
value.
10•11
F I N A N C I A L
S T A T E M E N T S
56°
00'
NOTES
Note 1 Sailing and administrative costs
Note 4
For vessels registered in Sweden employing labour for whom an employer’s
contribution to national social security fees in Sweden are paid, the Swedish
state issued a subsidy in 1997 of SEK 39.424 m (43.5). The subsidy was paid
to Sea Partner AB which is responsible for technical management and crewing. Sailing and administrative costs include bareboat charters for 4 vessels, chartered for periods of between 4 and 13 years. The group has cargo
agreements for these vessels running for the corresponding periods.
Note 2
Personnel – average number of employees, wages and other
remunerations and social security costs etc.
GROUP
Average no. of employees Sweden
Men
Women
Total Sweden
1997
11
8
19
1996
13
8
21
Average no. of employees Canada
Men
Women
Total Canada
GRAND TOTAL EMPLOYEES
1
1
20
1
1
22
1997
1996
(in thousands of SEK)
Sweden
Wages and remunerations
7,855
7,965
Payroll overheads
2,735
3,940
(of which SEK 1.497 m for pension costs (2.62)
(of which SEK 0.452 m (0.301) are pension costs for the Presidents)
The costs for insurances for employees in accordance with the terms of
collective agreements are reimbursed by the Gorthon Lines Pensions Fund.
Total personnel costs
of which
Board, President and Exec. Vice President
Wages and emoluments
Including bonus payments 536 ( - )
448
448
11,038
12,353
2,369
1,581
The President and Executive Vice President each receive bonus payments of
0.25% of the profit for the year after financial income and expenses and
0.75% of the increase in profits over the year. The period of notice to be served by the President and Executive Vice President is 12 months. If their
employment is terminated by Gorthon Lines, they may be entitled to severance payment equivalent to one year’s salary. Pension contributions on
behalf of the President and Executive Vice President are covered by the
Pension Foundation. Above and beyond this there are no guarantees for
their future pensions.
Emoluments to the board amounted to SEK 300,000. No fees are paid to the
Chairman of the Board or to the President. Gorthon Lines pays B&N, Bylock
& Nordsjöfrakt AB, SEK 600,000 per year to cover part of the costs for offices etc. assigned to the Chairman of the Board.
Other senior executives’ pension contributions are made in accordance with
the ITP plan. No terms for severance payments exist.
PARENT COMPANY
All staff in Sweden are employed by the parent company.
Note 3
Vessels and investments in
long-term leased tonnage
1997
1996
Group
Acquisition value
Acquisition value brought forward
Purchases
Sales
Accumulated acquisition value carried forward
Tax on the profit for the year
The winding up of a foreign subsidiary has reduced the tax cost for the group
by SEK 36 m. By reducing the deferred tax liability and actual tax, this has
already been included in the group’s financial statements as of 31 December
1997. However, as a result of excess depreciation a tax loss carry forward of
SEK 98 m still exist in the parent company.
Machinery
and other technical equipment
1997
1996
Equipment, tools,
fixtures and fittings
1997
1996
1,320,124
27,081
-10,520
1,336,685
1,273,621
46,503
—
1,320,124
19,898
134
—
20,032
19,898
—
—
19,898
3,993
76
-5
4,064
3,825
168
—
3,993
Accumulated depreciation according to plan
Depreciation brought forward
-638,810
Depreciation for the year according to plan
- 41,360
Sales
509
Accumulated depreciation acc. to plan carried fwd. -679,661
-599,148
-39,662
—
-638,810
-14,924
-2,501
—
-17,425
-12,436
-2,488
—
-14,924
-2,712
-480
—
-3,192
-2,301
-412
—
-2,713
681,314
2,607
4,974
872
1,280
Value according to plan carried forward
Personnel costs
Canada
Wages and remunerations
Fixed assets
657,024
Vessels and investments in
long-term leased tonnage
1997
1996
PARENT COMPANY
Acquisition value
Purchases
Sales
Machinery
and other technical equipment
1997
1996
Equipment, tools,
fixtures and fittings
1997
1996
857,777
27,082
-31,961
852,898
811,274
46,503
—
857,777
19,898
134
—
20,032
19,898
—
—
19,898
3,877
76
-5
3,948
3,766
111
—
3,877
-105,208
Sales
1,705
-45,668
Accumulated depreciation acc. to plan carried fwd. -149,171
-60,454
—
-44,754
-105,208
-14,924
—
-2,501
-17,425
-12,436
—
-2,488
-14,924
-2,662
—
-479
-3,141
-2,270
—
-392
-2,662
703,727
752,569
2,607
4,974
807
1,215
Accumulated excess depreciation
-436,977
386,197
—
-4,700
—
-303
Residual written-down value carried forward
266,750
366,372
2,607
274
807
912
Accelerated depreciation has been eliminated in the group. Please refer to Accounting Principles.
The previous year(s) vessel values have been written up/down by SEK 110 million.
Vessels owned by the group are insured for a total of SEK 1,297 million.
Buildings
Land
1997
1996
1997
Acquisition value
Investments
1996
2,973
2,973
993
993
2,973
2,973
993
993
Accumulated depreciation acc. to plan carried fwd.
-357
-59
-416
-298
-59
-357
—
—
—
—
—
—
2,557
2,616
993
993
889
889
539
539
Value for taxation purposes
Auditors’ report
Note 5
Shares in subsidiaries
Note 8
Number % of share
Company
Reg. office
Par
Book
capital
value
value
500
100
100
50
100
100
1
1
of shares
Rederi AB Gylfe,
Helsingborg,
556161-7928
Sweden
Gorthon Shipping Inc. Montreal,
Canada
Gorthon Lines AS,
Sarpsborg,
977027330
Norway
200
100
NOK
200
209
Total kSEK
Note 6
As of 31 Dec 1997 Gorthon Lines’ long-term loans (including the current
portion) amounted to SEK 318 m at the balance sheet rate. All ship loans are
denominated in US dollars.
Amortisations in accordance with
current amortisation plans have
been translated at the closing day rate.
SEK millions
260
Shares in associated companies
Note 9
Number % of share
Par
Book
Company
Reg. office
of shares
capital
value
value
Sea Partner AB,
556275-8846
Skärhamn,
Sweden
60,000
30
1 500
1800
1998
1999
2000
After
2000
Total
87
59
31
141
318
Equity
Group
kSEK
Share-
Restr’d
Non-res.
Non-res.
capital
reserves
reserves
equity
Balance brought forward
30,000 287,723
4,001 321,724
Appropriations
7,290 -6,000 -1,290
0
Equity part of unrestricted reserves
45,777 -45,777
0
Transfers from restricted to non-restricted reserves 14,528 -14,528
0
Profit for the year
100,909 100,909
Group
1997
1996
Accrual of sailing revenues
Pre-paid time charters
Pre-paid dry dock charges
Other items
5 755
1 884
7 581
3 371
4 319
4 320
—
7 759
18 591
16 398
5 755
1 884
7 581
2 286
4 319
4 320
—
7 759
17 506
16 398
Balance carried forward
Parent company
kSEK
37,290 342,028
43,315 422,633
Share-
Restr’d
Non-res.
Non-res.
capital
reserves
reserves
equity
Balance brought forward
Bonus issue
Profit for the year
30,000 6,000
7,290 -6,000,
--
48,356
-1,290
46,241
84,356
0
46,241
Balance carried forward
37,290
93,307 130,597
Parent company
Accrual of sailing revenues
Pre-paid time charters
Pre-paid dry dock charges
Other items
Note 10
Accrued expenses and prepaid income
Group
Accrued liabilities to employees
Accrued bareboat charters
Interest expenses
Other items
1997
1996
2 388
9 189
4 775
16 009
1 110
11 286
3 247
19 699
32 361
35 342
2 388
9 189
4 775
15 969
1 110
11 286
3 247
19 699
32 321
35 342
Parent company
0
The 1997 Annual General Meeting increased share capital from SEK 30 million to SEK 37.29 million by reducing restricted equity with SEK 6 million and
non-restricted equity with SEK 1.29 million. At the same time a 50:1 split was
made, whereby the total number of shares increased to 18,644,858, each with
a nominal value of SEK 2.
Accrued liabilities to employees
Accrued bareboat charters
Interest expenses
Other items
Note 11
To the general meeting of the shareholders of Gorthon Lines AB (publ) Reg no 556112-6953.
We have audited the annual report, the consolidated financial statements, the accounting
records and the administration by the board of directors and the managing director of
Gorthon Lines AB for the year 1997. These accounts and the administration of the
Company are the responsibility of the board of directors and the managing director. Our
responsibility is to express an opinion on the annual report, the consolidated financial statements and the administration based on our audit.
Prepaid expenses and accrued income
Results from participation in associated companies was SEK 0 in 1997.
Note 7
(Translation from the Swedish original)
Ship loans and liabilities to credit institutions
We conducted our audit in accordance with generally accepted auditing standards in
Sweden. Those standards require that we plan and reform the audit to obtain reasonable
assurance that the annual report and the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts an disclosures in the financial statements. An audit also includes assessing
the accounting principles used and their application by the board of directors and the
managing director, as well as evaluating the overall presentation of information in the
annual report and the consolidated financial statements. We examined significant decisions, actions taken and circumstances of the Company in order to be able to determine
the liability, if any, to the Company of any board member or the managing director or
whether they have in any way acted in contravention of the Companies Act, the Annual
Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.
In our opinion the annual report and the consolidated financial statements have been prepared in accordance with the Annual Accounts Act, consequently, we recommend
that
the income statements and the balance sheets of the parent company and the
Group be adopted and
that
the unappropriated earnings of the parent company be dealt
with in accordance with the proposal in the administration report.
Purchasing and sales between group companies
There have been no intra-group sales in 1997.
Helsingborg, Sweden, 2 march 1998
Gorthon Lines AB (publ)
In our opinion, the members of the board of directors and the managing director have
not committed any act or been guilty of any omission, which could give rise to any liability to the Company.
We recommend
that
Lennart Bylock
the members of the board of directors and the managing director be discharged
from liability for the financial year.
Chairman of the Board
Sten K Johnson
Lennart Nilsson
Christer Zetterberg
Folke Patriksson
Mats Nilsson
President
12
F I N A N C I A L
S T A T E M E N T S
Malmö , March 4, 1998
Carl-Eric Bohlin
Authorised Public Accountant
Magnus Willfors
Authorised Public Accountant
Gorthon Lines Annual Report 1997
Financial Statements
97
Gorthon Lines
Table of Contents
Overview
Summary 1997
Key figures
Report of the Board of Directors
Income Statement
Balance Sheet
Cash Flow Analysis
Notes
Shareholders Policy
@Hugin 1998. All rights reserved.
Main menu

Gorthon Lines Annual Report 1997.

Transcription

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