Norway Seafoods Annual Report 1997

N O R WAY S E A F O O D S A N N U A L R E P O R T 1 9 9 7
FROM SEA TO CONSUMER
1
There is nothing better for a man,
than that he should eat and drink
and find enjoyment in his toil.
THE BIBLE. Ecclesiastes 2:24.
36
Management´s comments
8
The year in review
14
Report of the Board of Directors
22
Profit and loss account
23
Balance sheet
24
Statement of cash flow
26
Comments on the accounts
28
Notes to the accounts
37
Auditors´ report
40
The importance of fish
44
From sea to consumer
48
Risk management
50
Equity and ownership
52
Environmental report
53
Socio-Economic accounts
54
Organisation and management
BUSINESS CONCEPT
DESSERT
12
6
FRIONOR DEEP-FRIED
SCAMPI WITH
CORIANDER SAUCE
MAIN COURSE
4
GRILLED FRIONOR ARCTIC
C O D W I T H PA S TA A N D
CHILLI SAUCE
S TA R T E R
BABY PINEAPPLE AND
S T R AW B E R R I E S W I T H
COCONUT SAUCE
NOR WAY SEAFOODS SHALL BE ONE OF THE WORLD´S LEADING SEADOOD COMPANIES
3
Norway Seafoods shall be one of the
world´s leading seafoods companies.
Nor way Seafoods´ operations are
based on a stable supply of raw
materials through proprietary harvesting
operations and sourcing. The company´s
harvesting and processing operations shall
be resource-effective, thus ensuring a solid
foundation for increased sales through a
leading sales and marketing organisation.
S TA R T E R
6
Management´s comments
8
The year in review
FRIONOR DEEP-FRIED SCAMPI WITH CORIANDER SAUCE
1 carton crème fraîche
1-2 tbsp coriander, finely chopped
Juice of 1 lime
A few drops of Tabasco
For the sauce, combine the ingredients and
place in the fridge for a few hours.
Salt & pepper
Frionor scampi
Fry the scampi as instructed on the packet. For a
slightly different presentation, use a small
skewer to make brochettes. 3 - 4 pieces of
scampi per person is enough for a starter. Serve
hot with a little salad, preferably Ruccola, and
the coriander sauce.
Serve straight away.
BON APPETIT
6
MANAGEMENT'S COMMENTS
Considerable room for improvement and
going public were unfortunately not met in
higher added value in all parts of the
1997. Low operating margins, a weak
prices which had an impact on profit margins.
value added chain
development in profits, provisions, and the
This situation also characterises the first
of the business, with high raw material
ongoing restructuring have resulted in the
quarter of 1998.
1997 was characterised by the merger with
stock market confidence in the company
The main goal through to the year 2000
Frionor, the stock exchange listing in May,
declining and resulting in a negative
will, naturally enough, be to realise the
and the work carried out in strengthening
development in the company's share price.
company's potential for added value and to
and clarifying the company's position and
There are so many reasons for this that it is
increase its competitiveness in our defined
strategy. In connection with this work, we
difficult to provide any in-depth explanation in
markets and market segments. This can only
concluded that there was a significant
just a few sentences. However, as a backdrop
be done by increasingly focusing on our
financial risk inherent in our activities in
for evaluations it is necessary to bring to
strategy, on profitability, and by concentrating
South America and Russia. At the same
mind the company's long expressed goal
on our core activities.
time, work on the strategy unveiled a need
of establishing and developing a vertically
The foundation for an offensive development
to concentrate our focus on the company's
integrated food company with control over
of Norway Seafoods can only be laid
core activities, with a basis in white fish.
the entire value chain, from ocean to table.
through our own efforts, and through a
While doing this work, it was natural to
Through offensive and so-called anti-cyclic
positive development in results which can
consider the possibility of restructuring parts
acquisitions of processing plants and the
improve the possibility of strategic acquisitions
of the operation with a view to reduce
proprietary company Frionor, Norway
in segments that we do not adequately cover,
some of the risks linked to the various business
Seafoods has expanded over a few years
and by establishing strategic alliances.
areas, and to section out activities that are
from being a company engaged only in
We must focus the Group's resources on
not directly related to the core business.
catching
integrated
fewer markets, based on a simplified catch
The restructuring and adjustments in many
company. When the acquisition strategy in
and production operation, so that the vertical
of the Group's activities have produced a
this respect has been to buy anti-cyclic,
integration can be strengthened even more
corporate structure where all businesses
making the acquired companies profitable
by maximising the exploitation of raw
have a considerably better footing on
is time consuming, calls for substantial
materials through our value added chain.
which to make a positive contribution to the
resources, adjustments and restructuring.
We will not necessarily increase our
Group's results in the years to come.
In this there is, of course, an inherent financial
capacity with regard to catches, but
into
a
vertically
The expectations both shareholders and
risk.
through alliances and sourcing secure raw
the investor market had of Norway
Last year was also characterised by a difficult
material suppliers to our own value added
Seafoods in connection with the company
raw material situation in the European part
chain in Europe, employ idle production
7
capacity with new products, increase our
all parts of our value chain. We must
factors for our future development.
share of processing (and of second brand
prepare to do battle, by building up a
During the last few years we have seen a
and private labels). Furthermore, we must
dynamic organisational structure, cost-
clear increase in vertical and horizontal
focus our sales and marketing resources
effective production, innovative products
competition in many areas, including
toward our defined markets, so that we
that today's customers are demanding and
the fisheries. New structures are being
can play a leading role in these markets.
are willing to pay a little more for. We
established with more concentration, larger
This will be achieved by building relationships
need to see volumes grow, we need to be
units and new ownership constellations,
with customers and key players in the
cost-effective if we are to have a basis
which in total implies fiercer competition
industry.
for better financial results, and we need
and new challenges in the years to come.
In the United States, where raw material
satisfactory liquidity as a platform for
Norway's fishing industry is therefore
supplies to our own value chain are more
dividends and growth.
dependent on players who are willing to
certain, cultivating the market will be given
The basic requirements for achieving this
accept responsibility for the entire value
continued priority.
are absolutely present: The demand for fish
chain, just as Norway Seafoods has done.
One precondition for improvement is an
and seafood products is continually growing,
A long-term approach and predictability
ability to interact with customers, suppliers
among other things because consumers
will provide us with an opportunity of
and partners, as well as internally in the
have come to realise that fish is healthier
increasing value, securing year-around
company. The market is constantly making
than meat and poultry. This implies significantly
jobs,
greater demands with regard to effectiveness,
better market opportunities.
marketing in order to compete with the
flexibility, quality, and innovation. There
The fishing industry is Norway's second
large
is therefore a need for continual and
largest export industry. Only the oil and
seafood business.
uncompromising pressure on building up
gas industry is bigger. Market access is
To be big is not a goal in itself, but we want
the Frionor brand name, inter alia through
therefore an important part of our business,
to be bigger in profitable market segments,
innovative product development that results
but equally important are the framework
so that we do not have to compete purely
and
investment
international
in
companies
increased
in
the
in Frionor being conceived as different and
conditions on the procurement side. Long-term
on price. A major part of our strategy,
creative. Our success depends on what we
contracts with suppliers of raw materials,
therefore, is to be among the leaders in all
manage to create of positive experiences
the possibility of owning our own fishing
areas of our value chain.
around our products.
vessels, equal competitive terms for all
At the beginning of 1998, it is easy to
types of production, and a harmonising of
ascertain that there is room for improvement
quota and resource utilisation between
and the creation of higher added value in
Norway and other countries are decisive
8
THE YEAR IN REVIEW
with Aker RGI ASA to charter the two surimi
January - February 1997
May 1997
Work on establishing Norway Seafoods
Johnny
ASA's vertical integration model is started.
Executive Officer on May 1.
the filet trawler Claymore Sea for fishing off
The goal of the Board and management is
The Annual Shareholders´ Meeting on May
the cost of Russia. This increases Norway
that the restructuring, into a stream-lined
13 adopts Norway Seafoods' profit and
Seafoods' production capacity by 375
seafood company, shall be completed by
loss account and balance sheet for the
tonnes per day.
the end of 1998.
1996 financial year. Norway Seafoods is
As part of the restructuring of Skaarfish,
listed on the Main List at the Oslo Stock
Norway Seafoods sells the plant at Måløy
Company, takes over the operation of 5
Exchange on May 16. The introduction
for NOK 30 million. The pelagic plants at
new vessels shortly before the beginning of
price was NOK 55.00 per share.
Liavåg and Florø are upgraded at a total
the winter season (A-season) off Alaska.
Norway Seafoods' Chilean subsidiary,
cost of NOK 42 million.
The A-season is better than in 1996, but
Pesquera Yelcho S.A has one of its licences
because of starting problems, earnings per
in Chile revoked. This prevents the company
August 1997
vessel are lower than in the preceding year.
from using American Monarch in Chile.
On August 12, Norway Seafoods presents
Work on Norway Seafoods' strategy is
its accounts for the first six months of 1997.
started.
The company makes a provision of NOK 400
The
subsidiary,
American
Seafoods
March - April 1997
Austad
takes
over
as
Chief
trawlers Saga Sea and Heather Sea, and
million in the accounts for the first half-year.
Melbu Fiskeindustri 's operations increase
in scope. In March, a second shift is started
July 1997
This provision is related to the probable
in the land-based production.
Because of the sharply rising raw material
loss on claims the company has against the
The merger of Norway Seafoods and
prices and rather unsatisfactory development
Government of the Argentine, the probable
Frionor is finally approved on April 4.
in the results of Thorfisk AS, Norway
costs of liquidating the line boat activity in
In connection with the merger, Norway
Seafoods
Argentina,
Seafoods issues 7 487 010 shares with a
company's activity. As a consequence of
activity in Chile, uncertainty surrounding
nominal value of NOK 5.00.
the
353
the joint venture project in Russia, and
decides
restructuring,
to
219
restructure
of
the
the
uncertainty
surrounding
the
The Extraordinary Shareholders´ Meeting
employees
become
adaptations that have to be made to the
on April 17 resolves to apply to have
redundant. Poul
Petersen takes over as
factory- and organisational structure in
Norway Seafoods listed on the Main List at
Managing Director of Norway Seafoods
connection with the reorganisation. As part
the Oslo Stock Exchange.
Denmark, and
of the restructuring of Norway Seafoods,
at
Thorfisk
AS
Thorfisk AS.
Norway Seafoods signs an agreement
the Board resolves to reduce the number of
9
employees at the Lysaker headquarters.
fish, the autumn season in Alaska (B-season)
60 and NOK 70 million.
The Russian fishing company VBTRF, which
is poorer than expected. The share of
Norway Seafoods enters into an agreement
owns the company ASC/Russia together
processed products is lower in 1997 than it
with A/L Gartnerhallen on the acquisition of
with American Seafoods Company, withdraws,
was in the preceding year.
the latter's shares in Frionor-Produkter. As a
7 of 10 trawlers from the co-operation with
Negotiations between Norway Seafoods
result, Frionor-Produkter becomes a wholly
American Seafoods Company. Norway
and Gilde Norge ANS on the take-over of
owned subsidiary of Norway Seafoods.
Seafoods claims compensation from VBTRF.
the latter's interest in Frionor-Produkter are
A/L Gartnerhallen renews its sales and
Norway Seafoods, AL Gartnerhallen, and
concluded with a positive result.
distribution contract with Frionor-Produkter.
Gilde Norge ANS start negotiations on the
The Argentine authorities decide to disburse
Because of the delay in processing the
acqusisiton of the remaining 65 per cent of
the export subsidies that Norway Seafood
licence application for Norway Seafoods´
the shares in the jointly owned Frionor-
were entitled to. These subsidies total USD
acquisition of the final 30 per cent of the
Produkter AS.
7.1 million. Norway Seafoods therefore
shares in Melbu Fiskeindustri, it is not possible
Norway Seafoods starts to negotiate with
reverses a further NOK 50 million of the
for Norway Seafoods to exercise its option
Aker RGI ASA and its bankers on a new
provision made in August 1997.
to acquire the shares in the company by the
financial and operational structure for the
agreed date. An agreement is therefore
November 1997
reached with the owners of the shares, AS
Negotiations between Norway Seafoods,
Melbu Ansatte, and the existing option is
September 1997
Aker RGI ASA and Norway Seafoods´ bankers
prolonged for further two years.
At the end of August, the Boards of Global
are completed. As a result of the negotia-
The Board of Norlax resolves to withdraw
Fish AS ,Global Fish Group AS, and Norway
tions, Norway Seafoods sells 90 per cent of
the company from the discount segment in
Seafoods' subsidiary AS Skaarfish Pelagisk
the shares in Seafood Holding Ltd. to Aker
Germany, as a result of significant losses
propose that the three companies merge.
RGI ASA. The remaining 10 per cent is sold
during the last few years. Production capacity
The merger was resolved in September.
to Kjell Inge Røkke. The sale of Seafood
is cut back, and management at Norlax
Following negotiations with the Russian
Holding Ltd. reduces Norway Seafoods´ total
negotiates with the employees on a possible
fishing company VBTRF, American Seafoods
asset by about NOK 1 billion, and interest-
closure of the factory in Hirtshals.
Company is awarded compensation of
bearing debt by NOK 588 million. The
The subsidiary, Melbu Fiskeindustri AS, sells
USD 7 million. This positive end to negotiations
refinancing is underwritten by a syndicate
operating and fixed assets in Hovden
means that Norway Seafoods reverses
led by Den norske Bank and Christiania
Fiskeindustri AS to a Norwegian-Icelandic
provision totalling NOK 50 million. American
Bank og Kreditkasse.
group for NOK 11.4 million.
Seafood Company's shares in ASC/Russia
The 3rd quarter accounts show an operating
are sold to VBTRF, and the company's
profit before provisions of NOK 110 million,
December 1997
direct involvement in Russia ends.
or NOK 72 million more than at the same
GO Fish Group AS and Norway Seafoods'
time in 1996. Norway Seafoods´ management
subsidiary Skaarfish Group decide to
October 1997
signals that the result for 1997, before
merge the major part of Skaarfish Group's
As a result of the large proportion of small
tax and provisions, will be between NOK
salmon activity with GO Fish Group AS.
company.
10
In the settlement, Norway Seafoods
selected to be one of the two suppliers of a
cod to Hardee's Restaurants, a nation-wide
receives 22.22 per cent of the shares in
total of one million kilos finished white fish
fast-food chain in the United States.
the merged company, Norway Seafarms.
products to the 1,800 hospitals that are
The Managing Director of Frionor-Produkter,
linked to Premier Healthcare. The products
March 1998
Leif Stråtveit, resigns. He is succeeded by
will be distributed by Alliant Foodservice,
On March 3, Norway Seafoods presents its
Geir Frantzen, formerly Managing Director
the third largest seafood distributor in the US.
preliminary results for 1997. The company's
of Vesterålen Hermetikkfabrikk. At the same
Alliant Food service will also offer distribution
operating profit before provision is NOK
time, Frionor-Produkter AS changes its
of Frionor products to other customers.
182 million, or NOK 177 million better
name to Frionor Norge AS, and the
than in the preceding year. After tax and
operation is moved from Rud to Norway
February 1998
provisions, the company's result was a loss
Seafoods' premises at Lysaker.
Norway Seafoods presents a proposal for
of NOK 105 million. Of the provisions
Norway Seafoods' subsidiary, American
a new ownership structure for AS Havfisk.
made, aggregating NOK 400, NOK 170
Seafoods Company, signs an agreement
The majority shareholder in AS Havfisk will
million was reversed in the course of the
with one of the largest restaurant chains in
be Nord-Norsk Sjømat, with 90 per cent
second half of 1997.
USA, Long John Silver, for the delivery of
of the shares, while Sortland Municipality
seafoods products from Norway Seafood's
and AS Vesterålen Hermetikkfabrikk will
Frionor plant in New Bedford. The contract
own 5 per cent each. Nord-Norsk Sjømat
has an annual value of more than USD 20
is owned by Melbu Fiskeindustri (40 per
million. As a result of this contract, capacity
cent), Kjell Inge Røkke (35 per cent), and
utilisation at the New Bedford factory rises
AS Melbu Ansatte (25 per cent).
from 40 per cent to 66 per cent based on
On February 5, Johnny Austad resigns from
two shifts.
his positions as Chief Executive Officer.
Tore Tønne, formerly Managing Director of
January 1998
the Norwegian Industrial and Regional
American Seafoods Company signs a
Development Fund (SND) will succeed him.
long-term contract with Premier Healthcare,
American Seafoods Company signs a new
a leading US supplier of food to hospitals.
contact for supplying one million kilos
As a result of this contract, Frionor US was
finished products based on pollock and
Tore Tønne assumes the position as Chief Executive Officer on March 17 1998.
There is no love more sincere
than the love of food.
G E O R G E B E R N H A R D S H AW
English writer (1856 -1950)
MAIN COURSE
15
Report of the Board of Directors
22
Profit and loss account
23
Balance Sheet
24
Statement of cash flow
26
Comments on the accounts
28
Notes to the accounts
37
Auditors´report
G R I L L E D F R I O N O R A R C T I C C O D W I T H PA S TA A N D C H I L L I S A U C E
1 red chilli, finely chopped
1 clove of garlic, finely chopped
1-2 tsp fresh ginger, finely
To make the sauce, crush the ingredients in a
chopped
mortar and fry gently in a little oil. Add the
100 ml tomato purée
tomato purée and sugar, stir a couple of times,
1 tsp sugar
and add the water. Allow to simmer until the
1/2 tbsp soy sauce
sugar has dissolved and the sauce has thickened
100 ml water
slightly.
Pasta
Frionor arctic cod
Season the fish with freshly milled pepper and
salt to taste, and fry in a little oil or butter until
golden brown. If you fancy vegetables with the
fish, you can also add squash, carrots, sugar
peas, etc. to the pan.
Lightly mix the freshly boiled pasta with the chilli
sauce, and lay the fish on top together with the
vegetables.
Serve straight away.
BON APPETIT
One cannot conduct good politics
with a poor kitchen.
CHARLES-MAURICE
D E TA L L E Y R A N D - P È R I G O R D
French statesman (1754 -1838)
REPORT OF THE BOARD OF DIRECTORS
After the new management was in place, a
holding company for the fishing activities in
Norway Seafoods ASA was established in
strategy process started, marking that the
Russia and South America) to Aker RGI
December 1994 with a view to restructuring
company was being transformed from a fishing
ASA (90 per cent) and to Kjell Inge Røkke
RGI's fishing activities at that time, and is
and production-orientated company into a
(10 per cent). For accounting purposes, the
currently owned 60.8 per cent by Aker
company with market orientation. The strategy
sale took place effective October 1 1997,
The establishment of Norway Seafoods
RGI ASA. As a step in the direction of
process concluded with concentration on the
and covered the operating companies for
establishing a vertically integrated seafood
core activities, focus on stable access to white
the trawler "Centurion del Atlantico", and
company, with control over the entire value
fish raw materials, cost-effective land-
the line boats "Antarctic I, II, and III" in
chain, the first two years of the company's
based production, product development,
Argentina. In addition to the company owning
existence
concentration on proprietary goods, and
"American Monarch" and the Chilean
substantial growth in the fishing fleet, and
on few geographic markets.
licences, the sale also comprises the
the acquisition of production plants in
The Group's new strategy, and signals
co-operation agreement with the company
Norway and Denmark.
received in August regarding financial
HC Dalmoreprodukt in Russia. The sale
The company continued to expand a great
uncertainty for the activities in South America
was effected at booked consolidated capital
deal in 1997, inter alia through the merger
and Russia, called for the company to be
(real value) on June 30 1997, after the
were
characterised
by
a
with the proprietary company Frionor, the
reorganised and restructured. Because of the
accounts had been charged with provision
merger was finally approved on April 4.
new strategy, and as part of the restructuring,
totalling NOK 140 million. The net selling
Through this merger, Norway Seafoods has
the Board decided at it meeting on August 11
price for the shares in Seafood Holding
developed into a vertically integrated
to make a NOK 400 million provision in
was USD 14.6 million, and the buyers
producer of fish-based foodstuffs, with
the semi-annual accounts. This provision was
assumed all liabilities of the company. Aker
activities in all parts of the value chain.
made because of the probable loss on
RGI ASA chose to gather all its fishing
In 1997, subsequent to the merger, the
claims that the company had against the
activities in RGI Seafoods Corporation Inc.
company has been through a process of
Argentine Government, the estimated cost
Furthermore, agreements were signed between
putting the vertical structure in place and
of liquidating the line fishing activities in
Norway Seafoods and Aker RGI ASA covering
consolidating the company into a fully
Argentina, uncertainty regarding the situation
marketing and sales of the products, and
integrated seafood company.
in Chile for the operation of "American
technical services related to the operation of
Monarch" and the licences obtained,
Seafood Holding. This implies that Norway
Important events in 1997
uncertainty surrounding the joint venture in
Seafood has an exclusive right to sell the
Norway Seafoods can look back on an
Russia, and needed adjustments in the
products from these fishing vessels.
eventful year, and the Group has been
structure of plants, offices, and organisation
The sale of Seafood Holding contributed to
through a major restructuring and reorgani-
as a result of the company's new strategy. At
the financing of the company's operations
sation process.
the end of the year, NOK 170 million of
(NOK 650 million) being fully subscribed,
During the first quarter, a public sale of
the original provision of NOK 400 million
by a bank consortium with Den norske Bank
shares was carried out in connection with
had been reversed.
and Christiania Bank as lead managers.
the process of having the company listed
The restructuring and reorganisation of the
Following the sale of Seafood Holding and
on the Oslo Stock Exchange. The company
company started in the second half of
the refinancing, the company's total assets
was listed on the Exchange on May 16
1997, inter alia with the sale of the shares
were reduced by NOK 1 billion and interest-
1997.
in Seafood Holding Ltd. (the operating and
bearing debt reduced by NOK 588 million.
15
16
BJARNE KRISTENSEN
KJELL INGE RØKKE
FINN KRISTENSEN
The equity ratio rose to 33.96 per cent. At
The transfer took place on 31 December 1997.
December 31 1997 the equity ratio
Norway Seafoods has acquired all the shares
amounted to almost 44 per cent.
in the company Frionor-Produkter AS from the
As a result of the restructuring and reorganisation
previous co-owners Gilde and Garterhallen.
of the company, Norway Seafoods has a
By taking over this company, Norway Seafoods
stronger financial foundation than before,
will increase market focus in Norway and the
through its slimming of the balance sheet, less
Nordic region. A wholly owned company will
need for external financing, and a higher
be able to serve customers and consumers in
equity ratio.
a better manner, with more emphasis on
In addition to the work on the new strategy
innovative products and marketing efforts.
and the restructuring of the company, emphasis
After a lengthy process in Denmark, it was
has been placed on the organisation of the
decided in the first half of the year to close
activities, with focus on integration of new
down parts of the production at Thorfisk AS.
activities in the value chain, streamlining the
This resulted in the number of staff being
sales and marketing efforts, and cutting costs.
reduced by 119 people.
The Skaarfish Group was also restructured,
It was also decided to close the Norlax plant
when the salmon business was merged with
at Hirtshals in Denmark with effect from the first
GO Fish into a new company, Norway
quarter of 1998. This closure came as a result
Seafarms. Norway Seafoods owns 22 per
of a decision to withdraw from the discount
cent of the shares in the new company, which
segment in Germany, where the company
is expected to generate an annual revenue of
had incurred significant losses over the last
NOK 500 million. Further, Skaarfish Pelagisk,
few years. In the short term, this means lower
Global Fish AS, and Global Fish Group AS
sales in 1998, but the operating result is
merged. Norway Seafoods owns 18 per
expected to show a positive trend compared
cent of the merged company. Its annual
to the loss of NOK 10 million in 1997. The
revenue is expected to be NOK 1.5 billion.
plant, which will be shut down in the first quarter
In connection with the presentation of the
of 1998, has 104 hourly workers and a
semi-annual report, Norway Seafood stated
salaried staff of 11.
that the company would exercise its option to
Norway Seafoods’ subsidiary American Sea-
acquire the remaining 30 per cent of the
foods Company (ASC) enjoyed a good
shares in Melbu Fiskeindustri from Melbu
winter season in Alaska (the A season),
Ansatte A/S. Due to the uncertainty surrounding
where it operated 16 vessels, or twice as
the processing of the licence for a possible
many as in 1996. The new trawlers that
take-over of the last 30 per cent of the shares,
were put into operation for the A season
Norway Seafoods and Melbu Ansatte A/S
were "Katie Ann", "Christina Ann", "Rebecca
have agreed to prolong this option for a period
Ann", "Elisabeth Ann", "Victoria Ann",
of two years.
"Northern Hawk", "Northern Eagle", and
Melbu Fiskeindustri AS has sold operating
"Northern Jaeger".
and fixed assets in Hovden Fiskeindustri AS for
On the other hand, the B season was weaker
an aggregate NOK 11.4 million. This sale
than expected, with a relatively large portion
was carried out because of a desire to optimise
of small fish, resulting in a fall in the portion of
operations at Melbu Fiskeindustri by focusing
processed products. Salmon fishing at Bristol
attention on the company's two main plants at
Bay did not produce expected results either,
Melbu and Stamsund. These plants complement
because of a shortage of raw material.
each other production-wise and they provide
As part of Norway Seafoods' new strategy,
the company with the necessary flexibility.
ASC has focused on the vertical integration
United States has been improved by having
million. The Board of Directors of Norway
Frionor US Inc. and the Hadley Group fully
Seafood believes this activity has further
integrated into ASC at the beginning of
potential, through the integration with Frionor,
1998. This integration is already bearing
and a stronger focus on the operation in Alaska.
fruits, in that ASC/Frionor has landed major
In 1997, Norway Seafoods' revenue totalled
contracts with the lending restaurant chains
NOK 5.3 billion, which is on par with 1996
Long John Silver, Burger King, and Hardee's
(NOK 5.0 billion). The operating profit (before
Restaurants, as well as Premier Healthcare,
special operating items of NOK 230 million)
which supplies food products to a large number
was NOK 182 million (NOK 4 million). 1997
of hospitals in the USA.
includes non-operational income, NOK 28
To ensure future business opportunities, ASC
million higher than in the preceding year. The
used substantial resources on the political
profit before taxes and special operating
challenges related to fish resources in US
items was NOK 92 million (NOK 36
waters. This refers to both inshore and
million). The profit for the year, before special
offshore quotas that are to be fixed for the
operating items, was NOK 125 million
coming years, and Senator Ted Steven's bill
(NOK 10 million).
which proposes that all companies fishing in
At year-end, the Group's liquidity was good,
US waters shall be at least 75 per cent US
and the equity ratio was 43.8 per cent.
owned and that no vessel shall be longer
than 165 feet.
Provisions and investments
At year-end, NOK 170 million of the NOK
Revenue and results 1997
400 million provision had been reversed.
In 1997, the company has been characterised
This reversal includes NOK 50 million relating
by major reorganisations, and this has had
to the development of the joint venture in
an impact on the Group's financial results. It
Russia, and NOK 50 million relating to the
has been especially difficult to ensure stability
payment of subsidies by the Argentine
in raw material availability, and at the same
authorities. As a result of clarifying the subsidy
time it has been difficult to regulate the prices
issue and the assessment of the resource situation
of gods sold as quickly as we would like in
in Argentina, it was also decided that the
times when raw material is limited and prices
company should continue to operate two of the
higher than normal. This resulted in the Group's
three line vessels previously decided to be
land-based operations reporting weaker than
sold. Provisions totalling NOK 60 in this
expected 1997 earnings. Substantial losses
respect have also been reversed. Finally, a
in the Skaarfish Group, Thorfisk, and Norlax
reversal of NOK 10 million was made
also contributed to Norway Seafoods failing
relating to land-based activities in Europe. Of
to reach the goals set for profits in 1997.
the remaining provisions totalling NOK 230
However, through the restructuring and
million, NOK 140 was realised in connection
reorganisation of the Group, it is expected that
with the sale to Aker RGI ASA of the
these companies will make a positive
fishing activities in Chile and Argentine. The
contribution in 1998. It should also be pointed
last NOK 90 million is for the restructuring of
our that "American Monarch" caused a pre-
the company's production plants and the
tax loss of NOK 46 million, in addition to
closure of sales offices in several countries. The
NOK 25 million in depreciation.
1997 accounts have therefore been charged
American Seafoods Company (ASC) was a
with a total of NOK 230 million in expenses
bright spot in 1997, with the Alaska operation
for restructuring and reorganising.
BJØRN RUNE GJELSTEN
recording an operating profit of NOK 142
TERJE SKJÆRBUDAL
within the Group. The value chain in the
O D D V I G M O S TA D
17
18
Gross investments in 1997 amounted to
May 16 at a price of NOK 55.00 and at
NOK 401 million, mainly for the following:
the end of the first trading day, the price was
has been done streamlining the sales and
commissioning of the plant in Thailand, building
NOK 51.00. At the end of 1997, the share
marketing organisation, the product development,
start on a new fresh fish vessel for AS Havfisk,
was priced at NOK 22.00. The Oslo Stock
and in developing new concepts in the retail
upgrading of the factory trawlers engaged in
Exchange All Share Index rose by 13.4 per
and
the Alaska operations, and miscellaneous
cent from the time of the listing of Norway
sectors.
upgrading and new investments in machinery
Seafoods and until year-end, while the Norway
development has been carried out in close
etc. at the European production facilities.
Seafoods share fell by 56.9 per cent in the
association with the company's organisations in
same period. A total of 15.6 million Norway
Europe and the United States. This work is
Shareholder situation and
Seafood shares was traded from the time of
expected to generate positive results in 1998.
share performance
introduction and until year-end.
In conjunction with this, a great deal of work
large-scale
This
catering/household
product
and
concept
Health, the environment, and safety
Norway Seafoods' ownership structure has not
changed significantly since the company went
Market development
In as much as Norway Seafoods, over a
public in May 1997. At the end of the year,
The lack of raw materials for Norway
relatively short period of time, has acquired a
Aker RGI ASA was the company's largest
Seafoods most important products resulted in
number of production companies in different
shareholder, with 60.80 per cent of the
rising prices and a difficult sourcing situation,
locations, with different operating pattern and
outstanding shares.
causing lower margins for the company's
environments, it was decided, in association
At 20 February 1998, the company's largest
European operations. Surimi prices stabilised
with the employees' representatives, that the
shareholders were:
after having risen for a year and a half.
company should carry out a survey of the
Sales of Frionor's products in the proprietary
working environment in 1997.
markets that are given priority were stable
The intention with the survey is to create a better
Shareholder
No of shares
%
1. Aker RGI ASA
42 595 098
60.80%
thought the year. Hence the market position
understanding of the working environments in
2. Orkla ASA
11 831 299
16.89%
for the Frionor branded products was
each individual company, and to create a
3. Avanse Forvaltning
1 541 900
2.20%
maintained in the Nordic region in 1997, but
good tool with which management can make
4. SND
1 391 304
1.98%
the trend in results was nevertheless weak as
the necessary decisions in order to improve
5. DnB Investor
1 137 300
1.62%
a result of high raw material prices that were
well-being and efficiency.
930 000
1.33%
so characteristic of 1997.
Management
6. Storebrand Livsforsikring
and
the
project
groups
7. Gjensidige Fondsforvaltning 921 800
1.32%
Surimi production increased as a result of
appointed in the individual companies were
8. Fokus Bank ASA
870 699
1.24%
expanding American Seafoods Company's
recently advised of the results, and they have
9. Gjensidige Livsforsikring
859 880
1.23%
fishing fleet. American Seafoods Company
started work on the preparation of plans of
10. Merrill Lynch International
845 800
1.21%
can now offer the world market stable access
action aimed at systematically correcting the
to surimi all year round. In addition to growth
unwanted situations that the survey has
in Japan, the company has also extended its
brought to light.
350 313 065 at the end of 1997, was
sales and marketing organisation in Europe,
The company carries out its systematic work
divided into 70 062 613 shares with equal
Korea, USA and China.
on health, the environment, and safety in
voting rights.
In 1997, the company invested substantial
accordance with internal control legislation,
In 1997, the price of the Norway Seafoods
resources in the work of developing a new brand
and in association with the company's
share fell sharply. The share was listed on
name strategy and brand name positioning.
medical services.
Norway Seafoods' share capital of NOK
19
The companies in the Group have increased
shall be characterised by continual
Prospects
their efforts in the field of health and the
improvement.
The foundation for an offensive development
environment. Several actions have been
Environmental efforts will continue in 1998, and
of Norway Seafoods lies in the positive
implemented to prevent any working conditions
environmental measures will be implemented
development of the company's financial
that are hazardous to health and to monitor
in all parts of the Group.
results, which allow for both natural organic
acceptable storing and removal of harmful
growth and strategic acquisitions.
materials. The companies do not pollute the
Organisation and personnel
The Board is of the opinion that the prime
environment more than is normal from such
Because of the restructuring, the number of
goals through to the year 2000 are to
activities, and the Group is constantly working
employees decreased from 4,406 in
realise the Group's potential for increasing
on improvements in this field.
1996 to 3,725 at the end of 1997.
its values and for increasing the company's
One important task for the Group has been to
2,994 of these employees are engaged
competitiveness in defined markets and market
compile an environmental policy and overriding
outside Norway.
segments. These goals can only be achieved
environmental goals for the company's
Johnny Austad succeeded Kjell Inge Røkke as
by focusing on the company's strategy, focusing
operations. Norway Seafoods, as a long-
President and Chief Executive Officer with
on profitability, and concentration on its core
term player in the white fish area, has much
effect from May 1 1997.
activities.
to gain from an acceptable administration of
Salary to the President and Chief Executive
The Board ascertains that at the beginning of
marine resources.
Officer,
1998 there is ample room for a significant
The company's earnings are entirely dependent
together
with
other
reportable
benefits, totalled NOK 959,913 for 1997.
increase in all parts of the company's value
on sustainable resources. In this connection,
The President and Chief Executive Officer
chain. This must be tackled in an offensive
the company operates only in fisheries,
has no other agreements relating to financial
manner
regulated by national and international
benefits, and no pension rights other than
organisational structure, a cost-effective
authorities.
those earned as a member of the company's
production organisation, and innovative
The company bases its environmental profile
group pension scheme.
products that the customers are demanding.
on the following:
Auditor's
Seafoods
The Board believes that the company needs a
• Norway Seafoods contributes to a long-
aggregated NOK 1,944,834 in 1997,
growth in volumes and better cost-effectiveness
term and sustainable administration of the
of which NOK 746,300 referred to
as a basis for better financial results, and a
world's fish resources
ordinary auditing services, and NOK
stronger cash flow as a platform for future
1,198,534 to advisory services.
dividends and growth.
It is proposed that remuneration of NOK
Norway Seafoods' objective must be to
350,000 shall be paid to the Board for
continue channelling as large a portion of its
1997.
own catches as possible into production of its
Details of shares owned by the President and
own branded processed products. The
C.E.O. and members of the Board of
company's new operating structure, with two
Norway Seafoods are detailed in Note 25
vertically integrated value chains, Europe
• Norway Seafoods shall have modern
equipment and exploit up-to-date technology
in order to minimise incidental catches
• Norway Seafoods’ objective is to exploit
every single fish to the greatest extent
possible
• Norway Seafoods’ goal is to live up to
fees
for
Norway
by
building
a
dynamic
to the accounts.
and USA, will help it achieve this goal. To be
legislation applicable to and the demands
The company is cognisant of the challenges that
successful, it is necessary to focus the Group's
on our industry with a good margin
the year 2000 will create for its IT systems, and
resources on fewer markets, based on a
has set in motion the necessary measures.
simplified fishing and processing activity, and
• Norway Seafoods’ environmental efforts
Give a man a fish
a n d y o u f e e d h i m f o r a d a y.
Te a c h a m a n t o f i s h ,
and you feed him for life.
CHINESE PROVERB
21
building up the Frionor brand name. At the
which includes restructuring or dismantling
Alaska’s A season recently came to a close.
same time, through sourcing and alliances,
areas of activity that were generating losses.
This is the most important fishing season for
the company must ensure stable supplies of
Norway Seafoods. The company caught its
raw materials to the company's production
Covering of the loss for the year
share of the quota, but the roe percentage
plants, as a basis for competitive production
The Board proposes that the loss of NOK
proved to be lower than expected. At the
within the Group.
134,636,000 in Norway Seafoods ASA
moment, it is difficult to assess how the Asian
Work on the vertical integration must continue
be covered by way of a transfer from the
economies' will affect the company's surimi
to be focused, in order to reduce fluctuations in
Statutory Reserve Fund.
and roe products, which for the most part are
the results of the Group. Furthermore,
The Board will propose that the Annual
exported to these markets. However, we must
additional resources must be invested in
Shareholders´ Meeting adopts a resolution
wait until later in the year, when the final
product innovation, with focus on the launching
that no dividend be paid to the shareholders.
prices are settled, to see how the price of
of new product and concepts.
Events in 1998
surimi and roe develops. Signals from the
It will be decisive for Norway Seafoods to
Melbu Fiskeindustri has sold the company
markets
build up an organisation where all links in the
Pumpeteknikk Nord to ABS Pumper, Sandvika
tendency of lower prices, as a result of the
value chain are competitive. Priority will be
for an amount of NOK 4.4 million. This sale
above.
given
also
to
brand
uncompromising
name
building
with
and
inventories,
machinery,
the
moveables, and goodwill. The sale, effective
establishment of a leading sales and marketing
January 1 1998, arose because Pumpeteknikk
organisation focusing on selected segments
Nord's activities were outside what has been
Oslo, 2 March 1998
in
defined as Melbu Fiskeindustri's core business.
The Board of Directors
catering/household markets.
The Board has appointed Tore Tønne as new
Norway Seafoods ASA
The consumers' increased interest in environ-
President and Chief Executive Officer to
the
retail
pressure
comprises
indicate however, that there is a
and
large-scale
mental issues and the quality of food production
succeed Johnny Austad, who resigned in the
Bjørn Rune Gjelsten
implies that the company must continue to
beginning of February. Tønne will take up his
Chairman
give these issues priority at all levels.
new position on March 17.
Market access is important for the company's
Both Norway Seafoods' European activities
future development. The same is true of a
and the industry as a whole suffered from a
long-term approach and predictability with
difficult raw material situation throughout
regard to the framework conditions under
1997. This situation appears to continue in
which the company operates, so that it can
1998. The company will therefore give
secure long-term agreements for the supply
priority to building up a sourcing organisa-
of raw materials, being able to own its own
tion which can help minimise the risk inherent
fishing vessels, and have equal competitive
in variations in the resource basis. In addition,
terms between all types of production,
the company has, in association with other
whether at sea or on land.
players in the fishing industry, addressed this
1997 can be described as a year of restruc-
situation both in its contacts with the
Johnny Austad
turing and consolidation for NorwaySeafoods,
fishermen's organisations and the authorities.
President and Chief Executive Officer
Odd Vigmostad
Kjell Inge Røkke
Finn Kristensen
Bjarne Kristensen
Terje Skjærbudal
22
PROFIT AND LOSS ACCOUNT
N O R WAY S E A F O O D S G R O U P
1996
Pro Forma
PROFIT & LOSS
1997
Note
1,9
Amounts in NOK 1000
N O R WAY S E A F O O D S A S A
Note
1997
1996
Pro Forma
Operating revenues
842 305
831 319
-715 952
-696 320
-23 433
-25 988
-71 145
-68 480
- 118
-4 680
-1 135
- 622
-164 039
0
Total operating expenses
-975 822
-796 090
Operating profit
-133 517
35 229
0
31 429
5 009 022
5 339 425
-3 171 511
-3 469 606
Cost of goods sold
-738 897
-1 016 832
Wages, salaries and personnel expenses
-982 614
-495 266
-16 127
-12 564
-95 022
-162 706
0
-230 259
-5 004 171
-5 387 233
4 851
-47 808
49 972
19 493
-
-
51 285
51 863
4
Financial income
4
47 985
70 121
-69 868
-162 060
5
Financial expenses
5
-42 783
-32 438
-18 583
-110 197
5 202
37 683
36 240
-138 512
9
Profit before minority interests
and taxes
-128 315
104 341
-19 808
27 921
7
Taxes
-6 321
-10 661
-6 118
5 303
-
-
10 314
-105 288
-134 636
93 680
0.15
-1.50
2
Other operating expenses
2
Losses on bad debts
Ordinary depreciation
3
9
Exceptional operating items
3
6Share of earnings in associated companies
Share of earnings in NOKUS companies
Net financial items
7
Minority interests
Profit (loss) for the year
Earnings per share (NOK)/ Earnings per
8
share fully diluted (NOK)
Allocation of profit:
Transferred from Statutory Reserve Fund
134 636
B A L A N C E S H E E T AT 3 1 . 1 2 .
N O R WAY S E A F O O D S G R O U P
01.01.97
Pro Forma
23
B A L A N C E S H E E T AT 3 1 . 1 2 .
31.12.97
Note
Amounts in NOK 1000
N O R WAY S E A F O O D S A S A
Note
31.12.97
01.01.97
Pro Forma
3 988
181 977
3 242
0
ASSETS
301 304
76 843
93 115
3 249
10
Cash and bank deposits
10
Interest-bearing short-term receivables
-
-
305 198
146 110
961 391
651 409
11
Short-term receivables on Group companies
Other short-term receivables
11
54 387
43 263
612 718
554 631
12
Inventories
12
41 348
44 954
1 968 528
1 286 132
408 163
416 304
181 645
6 134
-
-
Long-term receivables on Group companies
564 469
634 660
-
-
Shares in subsidiaries
14
354 553
540 665
61 755
149 661
13 Shares in other companies and partnerships 14
83 056
74 423
16 126
107 075
15
Other long-term receivables
15
11 484
4 687
1 251 016
916 789
16
Fixed assets
16
3 045
3 187
317 306
259 100
16
Goodwill and intangible assets
16
0
0
1 827 848
1 438 759
Fixed assets
1 016 607
1 257 622
3 796 376
2 724 891
Total assets
1 424 770
1 673 926
0
13 183
Current assets
Interest-bearing long-term receivables
LIABILITIES AND
SHAREHOLDERS’ EQUITY
780 377
58 321
17
Interest-bearing short-term liabilities 17
-
-
632 853
548 839
Short-term liabilities to Group companies
1 413 230
607 160
1 160 987
810 308
19
Interest-bearing long-term liabilities
66 882
114 915
21
Other long-term liabilities
1 227 869
925 223
48 573
40 116
350 313
350 313
-
-
18
Other short-term liabilities
18
Current liabilities
21
Long-term liabilities
28 181
149 977
64 224
116 116
92 405
279 276
376 897
299 630
3 619
5 907
380 516
305 537
350 313
350 313
601 536
738 800
Minority interests
23
Share capital
23
Statutory Reserve Fund
756 391
802 079
1 106 704
1 152 392
Other equity
3 796 376
2 724 891
920 311
456 722
20
Guarantees
1 552 345
1 025 833
20
Mortgages
2 472 656
1 482 555
24
Shareholders’ equity
0
0
951 849
1 089 113
1 424 770
1 673 926
20
449 942
896 897
20
70 237
-
520 179
896 897
24
Total liabilities and
shareholders’ equity
Total
24
S TAT E M E N T O F C A S H F L O W
N O R WAY S E A F O O D S G R O U P
1996
Pro Forma
S TAT E M E N T O F C A S H F L O W
1997
Amounts in NOK 1000
N O R WAY S E A F O O D S A S A
1997
1996
Pro Forma
36 240
-138 512
Profit after financial items
-5 654
137 629
Loss (gains) and write-downs
95 022
162 706
Ordinary depreciation
0
-89 167
Share of profit in associated companies
-6 236
-22 231
-17 100
-1 185
-1 338
433
Change in other assets
-196 448
-366 327
-166 654
252 780
Change in receivables
10 549
662 102
-14 259
-66 404
Change in inventories
3 606
-11 776
Tax paid
-56 815
-77 791
-119 694
159 443
Net cash flow from operating activities
Repayment of debt
-698 265
-400 787
-128 315
104 341
87 605
0
1 135
622
-
-
-46 272
27 488
-285 240
415 265
Investments in operational fixed assets
-1 503
-2 841
Investments in shares and partnerships
-13 623
-246 384
0
-250 093
-4 118
-16 031
-349 036
0
23 535
78 623
Sales of operational fixed assets
120
343
69 710
88 986
Sales of shares and partnerships
80 791
36 994
7 888
25 846
Sales of other financial investments
0
8 821
0
25 504
Sales of other investments
0
0
-950 286
-197 859
65 785
-453 160
Investments in other assets
Net cash flow from investment activities
455 963
302 414
New long-term debt
289 021
45 151
-36 423
-312 136
Repayment of long-term debt
-254 596
-32 383
646 486
131 120
New short-term debt
11 927
3 104
-8 646
-175 050
Repayment of short-term debt
0
-8 335
-89 688
-132 393
967 692
-186 045
Net cash flow from financial activities
Share issues and currency effects
-102 288
-224 461
Total change in liquid assets
403 592
301 304
Liquid assets as at 01.01.
301 304
76 843
Liquid assets as at 31.12.
-4 886
-89 688
41 466
-82 151
-177 989
-120 046
181 977
302 023
3 988
181 977
The world may say what it wishes.
If God could create delicious
large pike and lovely Rhine wine,
then I can also eat and drink it.
MARTIN LUTHER
German Theologian (1483 -1546)
26
COMMENTS ON THE ACCOUNTS 1997
General principles
Norway Seafoods and Frionor AS merged
1997, Norway Seafoods ASA being the
acquiring company. The merger was
approved in January 1997 and finally
consummated on 4 April 1997.
The merger between Norway Seafoods and
Frionor has been dealt with in the accounts
according to the continuity method, and the
registered assets and liabilities have been
brought forward at book values. A pro forma
balance sheet as at 1 January 1997 has been
prepared, as have pro forma figures for the
profit and loss account in 1996 for purposes
of comparison.
The annual accounts have been prepared in
accordance with the historical costs principle.
Income is recognised at the time goods sold
are delivered.
Expenses are grouped with and expensed at
the same time as the income to which the
expenses refer. Costs that cannot be allocated
direct to income are expensed as incurred.
In the event of restructuring or closing down
an operation, all costs related to this are
expensed at the time the decision is made.
Refer also to comments on the year's special
operating items in Note 3 and the Report of
the Board of Directors.
Assets related to the business cycle are
classified as current assets. The same rule
applies to short-term liabilities. Receivables and
liabilities that do not refer to the manufacture
of products are classified as current assets/
short-term liabilities if they fall due within one
year of the closing of the accounts. Shares that
are not intended for permanent ownership
are recorded as current assets.
Other assets are classified as fixed assets,
and other debt is classified long-term.
Group accounting principles
The Group accounts consist of Norway
Seafoods and subsidiaries in which Norway
Seafoods directly or indirectly has control
through ownership interests or by agreement.
The Group accounts are prepared as
though the Group were one unit. Hence,
all material transactions and inter-company
items are eliminated. The result after financial
items shows the result before taxes and
minority interests. The minority interests'
share of the result is deducted on a separate
line so that the Group's result for the year
shows the majority owners share of the
result after taxes.
Investments in subsidiaries
When a subsidiary is acquired, the cost
price of the shares in the parent company's
accounts is eliminated against equity in
the subsidiary at the time of acquisition.
Any excess value paid is allocated to the
assets the excess value refers to, and is
expensed later together with these. Excess
values are recorded gross with provisions for
deferred tax. Any non-assignable excess value
is capitalised as goodwill and amortised on
the basis of an individual assessment of each
acquisition. Goodwill that has a significant
value for more than 5 years is amortised
over the expected economic life. In the
Group this varies between 10 and 20 years.
In the event of acquisitions or sales of subsidiaries and associated companies, these
are recorded in the Group profit and loss
account for that part of the year they have
been a part of the Group or associated to
the Group, as the case might be.
Investments in associated companies
Associated companies where Norway
Seafoods does not have controlling interest,
but nevertheless has a significant ownership
stake and influence, are included in the
consolidated Group accounts according to
the equity method. Norway Seafoods’ share
of the result after tax and minority interests
in associated companies, less amortisation
on excess values which are paid for, is
recorded on a separate line as an ordinary
item in the profit and loss account. In the
consolidated (Group) balance sheet,
shares in associated companies are recorded
at cost price plus accumulated share of
results, as described above, less dividends
received.
Translation of foreign companies
On consolidation, the accounts of foreign
subsidiaries and associated companies are,
to the extent possible, harmonised with the
Group's accounting principles. When
translating these companies' accounts from
foreign currencies to Norwegian kroner,
balance sheet items are translated at the
exchange rate on the balance sheet date,
and profit and loss items are translated at the
average exchange rate for the accounting
year. The difference that arises as a result
of the company's opening equity being
translated at a different rate than the rate
on that day, and the result being translated
at the average rate, is recorded as a
correction to the Group's equity.
Valuation and classification principles
Stocks: Stocks of raw materials and operating
materials are booked at the lower of cost
price and market value. Finished products
and semi-manufactures are valued at full cost.
This full cost includes, in addition to purchase
cost, direct and indirect production costs,
including a certain portion of fixed costs.
Goods for resale are booked at cost.
Finished goods, semi-manufactures and
goods for resale are written down to
expected sales price less sales costs, in the
event that this is lower than full cost or
original purchase cost.
Fixed assets: Fixed assets are recorded at
historical cost.
Maintenance: As a general rule, all
maintenance is expensed when the expenses
are incurred. An upgrading or replacement of
operating assets is considered an investment
and capitalised. In the case of major
maintenance on vessels based on Det
Norske Veritas classification, provisions are
made. In addition, provisions are made for
dry-docking and paint work, based on
estimated shipyard costs.
Environmental investments: Expenses relating
to measures aimed at improving the internal
and external environment are expensed as
incurred, except in those cases were the
measures will have a lasting positive
impact on productivity. In that case they
are capitalised and depreciated over the
expected lifetime.
27
Depreciation: The Group's ordinary
depreciation is based on as assessment of
the asset's economic and technical lifetime.
Depreciation is on a straight-line basis
based on the expected economic life and
without anticipating that the asset will have
any residual value.
Assets and liabilities in foreign currencies:
Cash and equivalents, receivables classified
as current assets, and short-term liabilities
are translated at the exchange rate on the
balance sheet date.
The Group's long-term receivables and
debt in foreign currencies are managed on
a portfolio basis with a view to reducing
the overall foreign exchange risk. Long-term
receivables and debt are evaluated by
each currency at the lower/higher of
exchange rate at the time the receivable
arose/debt was incurred and the rate on
the balance sheet date for the portfolio as
a whole. Any foreign exchange loss is
recorded as a financial expense, while net
unrealised foreign exchange gains are
only recorded as income within the limits of
previously expensed unrealised losses.
Long-term debt in foreign currencies, used to
finance foreign subsidiaries or associated
companies, and which hedges the foreign
exchange risk inherent in these investments,
is recorded in the parent company's
accounts at the exchange rate at the time
the debt was incurred. A valuation of such
foreign exchange debt at draw-down rate,
when this is lower than the balance sheet
date rate is only made when there are
undoubted unrealised gains in the secured
assets
above
and
beyond
any
unrealised foreign exchange loss on this
foreign exchange debt. In the Group
accounts, such foreign exchange debt is
recorded at the rate applicable on the
balance sheet date. The difference that arises
in the consolidated accounts, when this debt is
translated at another rate than that applicable
on the date the debt was incurred, is posted
against equity. Receivables and liabilities
hedged by way of forward contracts to buy or
sell the same currency are translated at the
contract rate.
Pension costs: Pension schemes that are
benefit plans are assessed at the present
value of future pension benefits that are
earned on the balance sheet date and
calculated on the basis of assumptions as to
the discount rate, expected future wage
growth and pension adjustments. Pension
funds are assessed at market value.
Net pension obligations on under-funded
contracts are recorded in the balance sheet
as long-term interest-free debt, while net
pension funds on over-funded contracts are
presented as a long-term interest-free
receivable. The net pension cost, which is
the gross pension cost less the estimated
yield on pension funds, adjusted for the
divided effect of changes in estimates and
pension plans, is included in the item
wages and other personnel costs. For pension
schemes that are defined as contributory
schemes, the contribution is recorded as
the pension cost for the period.
Taxes: Deferred tax in the balance sheet is
allocated on the basis of difference between
values for accounting purposes and values
for tax purposes. The allocation includes all
types of differences and is calculated without
any discounting. When calculating the
deferred tax liability, a deduction is made
for the value of carry forward losses that
can probably be utilised. Deferred tax and
deferred tax benefits are offset to the extent
that the temporary difference are reversed
in the same time interval and within the
same tax regime. Deferred tax benefits on
net pension obligations are not offset, but
capitalised as a separate item in the
balance sheet. In addition the tax benefit is
capitalised to the extent that it is highly
probable that the company will, in the future,
have income that will allow the benefit to be
exploited, and the balance sheet includes
deferred tax that is of at the least the same
amount. In the profit and loss account, the
tax charge appears as the sum of taxes
payable and the deferred tax charge. The
deferred tax charge is the change in net
deferred tax liability from one accounting
period to another, corrected for foreign
exchange fluctuations and changes in
deferred tax benefits/liabilities related to
corporate acquisitions.
Special operating items: Significant items
that do not occur regularly are classified as
special operating items. Substantial losses
on sales, write-downs, restructuring costs,
and similar items are thus classified as
special items in the profit and loss account.
Reference is made to the comments in the
Report of the Board of Directors and Note
3 to the accounts.
Amendments to accounting principles
No amendments have been made to the
Group's accounting principles in 1997.
Acquisitions and sales of activities
The investment in Frionor Produkter was 35
per cent at the end of 1996. Norway
Seafoods acquired the remaining 65 per
cent of the company. For accounting
purposes this acquisition was effective
November 1 1997. In the consolidated
accounts, the acquisition is treated in
accordance with the purchase method of
accounting.
The shares in the subsidiary Seafood
Holding Ltd. were sold. For accounting
purposes this sale was effective October 1
1997. Norway Seafoods was assessed
for taxes as a participant (NOKUS) on this
investment, and in previous periods it was
included in Norway Seafoods ASA's
accounts according to the equity method.
Reference is made to the comments in the
Report of the Board of Directors. Our
subsidiary Skaarfish Group AS demerged
part of the operations in 1997, and this
part was then merged with Global Fish AS
and Norway Seafarms AS. The merger
with Global Fish AS is dealt with in the
accounts as a sale and recorded at fair
values on the date of the transaction.
Furthermore, our subsidiary Melbu Fiskeindustrier AS sold its interest in Hovden
Fiskeindustri AS in 1997.
28
NOTES TO THE ACCOUNTS
Note 1: Operating revenues 1)
The group’s operating revenues divided between Norway and abroad were as follows. Operating revenues divided by business segments are set out in note 9.
Amounts in NOK 1000
Operating revenues Norway
Operating revenues abroad
Sales gains
Operating revenues
1)
1997
224 761
5 038 477
76 187
5 339 425
1996
173 340
4 787 269
48 413
5 009 022
1997
176 074
24 209
200 283
1996
218 845
78 463
297 308
Rent period
1996-2000
1996-2001
1995-2000
Yearly rent
536
445
3 830
4 811
Based on the customer’s location
Note 2: Other operating expenses
Other operating expenses include rent and leasing costs. The yearly rent and leasing payments are calculated as follows:
Amounts in NOK 1000
Bareboat charter rates
Other expenses
Total yearly rent and leasing liabilities
The parent company has made the following rent and leasing contracts (Amounts in NOK 1000):
Asset
Cars
EDP equipment and office equipment
Office space
Total yearly rent and leasing liabilities
Note 3: Exceptional operating items
At the end of the first half of 1997, the Group Board of Directors resolved to make provisions to meet reorganisation and restructuring expenses. For a further discussion
of this matter, please consult the Board of Directors report. The breakdown of restructuring expenses is as follows:
Amounts in NOK million
Guarantee responsibilities for lineboats in Argentina
Licences in Chile
American Monarch
Write downs on accounts receivable
Write downs on fixed assets
Reorganisation and layoff costs Main office/Europe
Total
1997
40
75
25
12
47
31
230
The parent company’s restructuring expenses are broken down as follows:
Amounts in NOK million
Write downs on shares in subsidiaries
Net loss on shares sold
Previously accounted earnings in NOKUS co-operations
Guarantee responsibilities Argentina
Reorganisation and layoff costs
Total
1997
18
23
67
40
16
164
Note 4: Financial income
Financial income includes the following items:
Group
Amounts in NOK 1000
Interest income
Intercompany interest income
Other financial income
Group dividends
Total
1997
17 925
1996
28 536
33 938
22 749
51 863
51 285
Parent company
1997
1996
1 566
17 941
44 690
51 089
1 729
0
0
1 091
47 985
70 121
1996
- 69 868
0
0
- 69 868
Parent company
1997
1996
-1 038
- 292
- 36 194
- 27 463
- 3 294
- 1 558
- 2 257
- 3 125
- 42 783
- 32 438
Note 5: Financial expenses
Financial expenses includes the following items:
Group
Amounts in NOK 1000
Interest expenses
Intercompany interest expenses
Other financial expenses
Foreign currency loss
Total
1997
-132 060
- 4 910
- 25 090
-162 060
29
Note 6: Share of earnings in associated companies
The share of earnings in associated companies includes results from the following companies
Amounts in NOK 1000
Norway Seafarms
Hadley Group
ASC Russia
Lofoten Trålrederi
Vesterålen Hermetikkfabrikk
Frionor Produkter 1)
Myregruppen
Frøya Holding
Global Fish
Pelagic Partners
Total
1)
1997
0
510
17 913
-1 042
-104
-3 223
0
0
5 439
0
19 493
1996
0
0
51 493
0
375
213
-657
-2 435
0
983
49 972
Frionor Produkter is balanced as an associated company for the period 01.01.97 - 31.10.97 and consolidated as a subsidiary from 01.11.97.
The table below shows the (estimated, unaudited) profit and loss accounts for the consolidated investments in associated companies in 1997.
Amounts in NOK 1000
Operating income
Operating profit
Result after financial items
Profit for the year
Share of result from the associated companies
Corrections 1)
Depreciation of goodwill
Share of result from associated companies
1) Changes in previous estimates
1997
1 411 441
196 084
157 361
159 351
24 231
-3 847
-891
19 493
Note 7: Taxes
The group’s taxes are made up as follows:
Amounts in NOK 1000
Taxes payable:
Norway
Abroad
Total taxes payable
1997
- 4 025
-10 118
-14 143
Change in deferred taxes:
Norway
Abroad
Total change in deferred taxes
Total tax expenses (income)
40
1
42
27
731
333
064
921
The parent company’s taxes are made up as follows:
Amounts in NOK 1000
Accounting profit before taxes
Permanent differences
Contribution to group companies
Change in temporary differences
Basis for taxes payable (taxable income)
Taxes payable/(foreign subsidiary withholding tax)
Taxes payable previous years
Withholding taxes in foreign branches
Total taxes payable for the year
Taxes payable:
Total taxes payable for the year
Change in deferred taxes
Total tax expenses (income)
1997
-128 315
25 727
0
-29 724
-132 312
- 6 321
0
0
- 6 321
1996
104 341
- 8 223
- 60 348
7 485
43 255
-12 266
-138
906
-11 498
- 6 321
0
- 6 321
-12 266
1 605
-10 661
Note 8: Earnings per share/Earnings per share fully diluted
The calculation of earnings per share for the year 1996 is based on pro forma figures. As the company recorded a loss for the year, the potential dilution effect of the
option agreements mentioned in Note 27 is not taken into consideration.
Amounts in NOK 1000
Ordinary result after taxes
Number of shares outstanding
Earnings per share/Earnings per share fully diluted
1997
-105 288
70 063
-1.50
1996
10 314
70 063
0.15
30
Note 9: Operating revenues, operating profit and profit after financial items by business segments
The following table shows operating revenues, operating profit and profit after financial items for the different business segments:
Operating profit and profit after financial items for 1997 are shown before exceptiobal operating items of NOK 230 259 000,-.
Amounts in NOK 1000
NWS Hovedkontor
Frionor Norden
Frionor Europa
Fangst & Produksjon USA
Produksjon & Trading
Total
Operating revenues
1997
1996
394 369
418 749
401 078
346 192
447 510
247 021
2 097 880
1 882 938
1 998 588
2 114 122
5 339 425
5 009 022
Operating
1997
27 000
3 447
-3 052
136 602
18 454
182 451
profit
1996
11 270
10 024
3 517
-12 082
-7 878
4 851
Profit after financial items
1997
1996
32 202
40 499
2 397
12 630
-9 620
3 976
82 627
-34 459
-15 859
13 603
91 747
36 249
The following table shows operating revenues, operating profit and profit after financial items based on the group company´s location:
Amounts in NOK 1000
Norway
Sweden
Denmark
Great Britain
Rest of Europe
USA
Asia/Australia
South America/other areas
Total
1
1
1
5
Operating revenues
1997
1996
278 626
1 210 700
329 869
310 864
005 110
821 413
130 841
33 171
285 702
319 766
713 792
1 240 787
399 788
202 698
195 697
869 623
339 425
5 009 022
Operating profit
1997
1996
-64 306
-15 296
2 053
14 083
-12 356
3 803
-58
-68
-8 559
-493
157 663
1 122
-14 758
9 972
-107 487
-8 272
-47 808
4 851
Profit after financial items
1997
1996
-83 181
6 819
1 569
13 226
-20 973
-4 882
-998
-423
-12 526
-2 072
125 321
-11 156
-28 740
6 713
-118 984
28 015
-138 512
36 240
Note 10: Cash and bank deposits
The group’s cash and bank deposits are as follows:
Amounts in NOK 1000
Cash and bank deposits
31.12.97
76 843
01.01.97
301 304
31.12.97
477 461
-32 072
206 020
651 409
01.01.97
725 204
-14 523
250 710
961 391
The Norwegian group companies have issued guarantees covering employee taxes for a total amount of NOK 8 million.
Note 11: Short-term receivables
Short-term receivables consist of the following items:
Amounts in NOK 1000
Accounts receivable
Provisions for bad debts
Other short-term receivables
Total
Parent company
The parent company’s receivables which amounted to NOK 32 715 000,- at the end of 1997, are written down with the amount of NOK 1 500 000,. The write-downs
constitute approximately 4 per cent of the parent company’s receivables (excluding VAT). The provisions for bad debts have not been changed during the year. The parent
company has accounted a total of NOK 118.000,- in losses on accounts receivable during 1997.
Note 12: Inventories
Group
Amounts in NOK 1000
Raw materials
Work in progress
Finished goods
Total
31.12.97
177 676
239 870
137 085
554 631
01.01.97
116 910
32 289
463 519
612 718
Parent company
31.12.97
01.01.97
0
0
0
0
41 348
44 954
41 348
44 954
Note 13: Shares in associated companies and partnerships
Shares in associated companies are accounted for in accordance with the equity method.
As of 31.12.1997
Global Fish AS 1)
Hadley Group Inc.
Norway Seafarms AS
Lofoten Trålrederi AS
Vesterålen Hermetikkfabrikk AS
Total shares in associated companies
Shares in other companies:
Miscellaneous
Total shares and partnerships
Ownership
%
18
50
22
27
29
Currency
NOK
USD
NOK
NOK
NOK
Share capital
(NOK 1 000)
594
600
815
8 178
3 525
Number of Total nominal value
shares
(NOK 1 000)
594
1 000
400
1 500
815 000
1
16 356
500
7 050
500
Book value
(NOK 1 000)
88 113
2 749
43 480
5 362
2 701
142 405
7 256
149 661
31
The share of ownership in Global Fish AS is 18 per cent and is accounted for in accordance with the equity method due to the influence Norway Seafoods has in
Global Fish AS’ governing bodies and through the regulations made in the shareholder agreement. The issue of shares in Global Fish AS to Norway Seafoods ASA was
formally completed in 1998.
1)
Excess of purchase price over net assets acquired in associated companies
The total excess of purchase price over net asset values in associated companies, after deductions for amortisation, amount to NOK 93 874 000,-. In 1997, the indirectly
fully-owned company Skaarfish Pelagisk AS was merged with Global Fish AS. This transaction is dealt with as a sale and recorded at fair value at the time of the transaction.
This generated a gain of NOK 31 651 094,-, which is included in above figure for excess of purchase price over net assets acquired. Such excess values are depreciated
over 10 – 20 years on the basis of strategic positions, synergy effects, and expectations of future earnings.
Note 14: Shares held by Norway Seafood ASA
Shares in subsidiaries
As of 31.12.1997
American Seafoods Company Inc
Custom Blenders Inc
Skaarfish Group AS
Norway Seafoods Denmark A/S
SH 37
Melbu Fiskeindustri AS
Frionor Produkter A/S
Nye Frionor A/S
Frionor Fabrikker A/S
Frionor Sverige AS
Frionor (England) Ltd.
Frionor Tiefkuhl-Produkte GmbH
Frionor AG
Frionor Australia Pty. Ltd
Frionor (Thailand) Ltd.
Frionar C.R. a.s.
Frionor France SARL
Frionor Asia Pacific Pte. Ltd.
Frionor USA Inc.
Total shares in subsidiaries
Ownership
%
100
100
100
100
100
70
100
100
100
100
100
100
70
100
100
100
100
100
100
Currency
USD
USD
NOK
DKK
DEM
NOK
NOK
NOK
NOK
SEK
GBP
DEM
CHF
AUD
THB
CZK
FRF
SGD
USD
Share capital
(NOK 1 000)
10
2
5 000
80 000
50 000
6 429
14 600
50
1 500
6 000
100
1 600
1 000
1 500
132 000
1 000
6 550
1 000
1 500
18
NOK
594
Shares in associated companies
Global Fish AS
Number of Total nominal value
shares
(NOK 1 000)
10 000
1
1 812
1
50 000
100
30 250
2 645
50
1 000
6 429
1 000
14 600
1 000
50
1 000
150
10 000
60 000
100
100 000
1
1 600
1 000
1 000
1 000
1 500 000
1
132 000
1 000
1 000
1 000
6 550
1 000
1 000 000
1
1 500 000
1
594
Book value
(NOK 1 000)
100 183
10 602
0
70 239
213
70 242
18 733
50
2 347
5 644
22
0
1 242
8 991
28 240
242
0
4 138
33 425
354 553
1 000
82 674
Other shares
Miscellaneous
Total other shares owned by the company
382
83 056
Note 15: Interest-free long-term receivables
Interest-free long-term receivables comprise the following items:
Group
Amounts in NOK 1000
Pension plan assets (See note 21)
Deferred tax advantage (See note 21)
Other long-term receivables
Total
31.12.97
18 050
75 069
13 956
107 075
01.01.97
7 468
6 313
2 345
16 126
Parent company
31.12.97
01.01.97
4 924
3 885
792
802
5 768
0
11 484
4 687
Note 16: Depreciable assets
Movements in the accounts for depreciable assets in 1997 are shown in the overview below.
Group
Amounts in NOK 1000
Cost price at 01.01.97 including currency effects
Additions
Transfer from plant under construction
Disposals at cost price
Accumulated depreciation and write downs
Book value 31.12. 97
This years´ ordinary deprecations
Depreciation rate (%)
1) Goodwill
Investments/rented Machinery,
vessels
equipment etc.
1 041 133
530 774
189 688
121 019
0
8 767
- 530 226
-108 444
- 124 692
- 345 237
575 903
206 879
- 71 242
2-50
- 49 485
15-20
Buildings
and plants
259 123
7 240
28 344
-61 174
-135 654
97 879
-10 841
3-10
Real
estate
11 635
727
0
-5 889
-2 628
3 845
0
Plant under
construction
31 849
50 148
-44 754
-858
-4 102
32 283
0
Goodwill
53 753
10 045
0
-13 883
-21 710
28 205
Intangible
assets
320 044
21 920
7 643
-43 957
- 74 755
230 895
-1 814
5-10
-29 324
5-10
1)
SUM
2 248 311
400 787
0
- 764 431
- 708 778
1 175 889
-162 706
and intangible assets have been incurred in connection with acquisitions. The depreciation rate is 5-10 per cent. When evaluating goodwill and intangible assets,
Norway Seafoods strategic positioning in the fishing industry and future synergies has been taken into consideration. Based on this, the respective excess values are
assessed individually and amortised on a straight-line basis over the expected economic life.
32
Purchases and disposals
Amounts in NOK 1000
Investments on rented equipment/vessels
Machinery, equipment etc.
Buildings and plants
Real estate
Plant under construction
Goodwill and intangibles
Total
1997
Purchase
Disposal
189 688 530 226
121 019 108 444
7 240
61 174
727
5 889
50 148
858
31 965
57 840
400 787 764 431
1996
Purchase
Disposal
787 626
421 550
10 130
157 167
13 405
674
27 506
380 900
1 775 423
23 535
Purchase
77 059
23 775
6 297
33 602
140 733
1995
Disposal
843
843
Parent company
Amounts in NOK 1000
Cost price 01.01.97 including currency effects5 310
Additions
Transfer from project assets
Disposals at cost price
Accumulated depreciation and write downs
Book value 31.12. 97
1994
Purchase
Disposal
8 751
1 017
119
8 870
1 017
1993
Purchase Disposal
10 436
2 500
2 153
1 800
12 589
4 300
Machinery, equipment etc.
8 865
1 462
- 249
-3 478
-1 135
3 045
Goodwill
14 175
41
- 906
-8 000
0
0
1 503
-1 155
-11 478
-1 135
3 045
-1 135
20-33
0
-1 135
This years´ ordinary deprecations
Depreciation rate (%)
SUM
Purchases and disposals
Amounts in NOK 1000
Machinery, equipment etc.
Activated costs
Total
1997
Purchase
Disposal
1 462
120
41
0
1 503
120
1996
Purchase
Disposal
1 976
343
865
0
2 841
343
Purchase
744
0
744
1995
Disposal
100
0
100
1994
Purchase
Disposal
0
249
0
0
0
249
1993
Purchase Disposal
0
120
0
0
0
120
Note 17: Interest-bearing short-term liabilities
Interest-bearing short-term liabilities comprises the following items:
Group
Amounts in NOK 1000
Bank overdraft
Other short term debt
Total
31.12.97
0
58 321
58 321
01.01.97
780 377
0
780 377
Parent company
31.12.97
01.01.97
0
13 183
0
0
0
13 183
Note 18: Other short-term liabilities
Interest-free short-term liabilities comprises the following items:
Group
Parent company
Amounts in NOK 1000
31.12.97
01.01.97
31.12.97
01.01.97
Taxes payable
13 378
21 466
479
11 285
Duties, taxes, holiday pay
65 586
80 503
5 290
0
Advances from customers
4 780
2 829
0
0
Due to suppliers
264 240
348 926
43 622
89 894
Accrued interest
5 711
4 893
2 196
0
Other accrued expenses
57 900
32 033
12 637
4 210
Guarantee provisions
393
0
0
0
Other short-term debt
136 851
142 203
0
10 727
Total
548 839
632 853
64 224
116 116
The parent company has made reclamation provisions to a total amount of NOK 400 000,-. The item has not been changed during 1997.
Note 19: Interest-bearing long-term debt
Interest-bearing long-term debt is divided between borrowings in Norwegian kroner (NOK) and various foreign currencies as follows:
Currency
NOK
USD
DKK
Other
Interest-bearing long-term debt
Interest-bearing long-term debt matures as follows:
Amounts in NOK million
1998
1999
2000
2001
2002
After 2002
Total
(1000)
1997
301 610
53 547
136 750
(NOK 1000)
1997
301 610
391 690
115 300
1 708
810 308
(NOK 1000)
1996
350 500
743 972
66 515
0
1 160 987
Loans
47
29
25
20
484
205
810
33
Note 20: Guarantees and mortgages
The following guarantees and mortgages have been established:
Guarantees (Amounts in NOK 1000)
Financing of subsidiaries ans associated companies
Rent of buildings
Chartering of vessels
Other
Declaration of surety as for own debt
Total
Group
120 603
123 000
170 524
38 780
3 815
456 722
Parent company
119 603
123 000
170 524
33 000
3 815
449 942
The group’s long-term interest-bearing loans are secured through mortgages in the following assets (at book value):
Asset (Amounts in NOK 1,000)
Shares
Receivables and inventories
Fixed assets
Vessels
Total
Book value
70 239
470 576
172 886
312 132
1 025 833
The parent company’s long-term interest-bearing debt is secured in shares with a book value of NOK 70.237.000,-.
Note 21: Other long-term liabilities
Interest-free long-term liabilities comprises the following items:
Group
Amounts in NOK 1000
Net pension liabilities
Deferred taxes
Interest-free long-term debt
Total
31.12.97
9 553
75 069
30 293
114 915
01.01.97
11 086
48 377
7 419
66 882
Parent company
31.12.97
01.01.97
2 827
4 999
792
802
0
106
3 619
5 907
Group pension expenses and liabilities
The group’s Norwegian companies mainly cover their pensions through group pension schemes in life insurance companies. Under the Norwegian Accounting Standard
for pension expenses, the schemes have been treated for accounting purposes as defined benefit plans.
The group's companies outside Norway have pensions schemes based on local practice and regulation. Certain companies have pension schemes where the employer
provides an agreed contribution which is managed in a separate pension saving scheme (defined contribution plans) or makes contributions which are included in a joint
scheme together with other employers (multi-employer plans). The contributions are recorded as the pension expenses for the period. The group also has uninsured pension
liabilities for which a provision has been made.
Actuarial calculation have been made in order to determine pension liabilities and pension expenses in connection with the group’s defined benefit plans. The following
assumptions have been made when calculating liabilities and expenses in Norway:
Expected return on plan assets
Discount rate
Salary adjustment
Social security increase/inflation
Pension increase
7
6
3
2
0
-
8%
7%
3,3 %
3%
2%
Amounts in NOK 1000
Present value of the year´s pension earnings
Interest cost on accrued pension liabilities
Expected return on pension funds
Allocated effect of change in estimates and pension plans
Net pension expenses
Additional benefits ended as of 31.12.97 1)
Net periodic pension expenses
Under-funded
plans 1)
1 140
393
-179
28
1 382
-2 122
-740
Over-funded
plans 1)
1 995
1 488
-2 211
0
1 272
0
1 272
TOTAL
3 135
1 881
-2 390
28
2 654
-2 122
532
1) The parent company’s additional benefit plan has, in agreement with the employees, been discontinued. The net pension liability (including accrual employer tax) of
NOK 2.122.000,- related to this plan is presented as income in the profit and loss account.
Pension funds/liabilities as of 31.12.97
Amounts in NOK 1000
Present value of accrued pension liabilities
Accrual employer tax
Value of future wage growth
Calculated pension liabilities
Plan assets, at fair value
Plan assets/(pension liabilities) in the balance sheet 3)
Amortisation 2)
Not recognised plan assets 4)
Plan assets/(pension liabilities) in the balance sheet 3)
Under-funded
plans 1)
9 028
555
151
9 734
0
-9 734
181
0
-9 553
Over-funded
plans 1)
40 655
0
5 876
46 531
74 953
28 422
318
-10 690
18 050
TOTAL
49 683
555
6 027
56 265
74 953
18 688
499
-10 690
8 497
34
1) Under-funded plans: The value of the pension liability exceeds the value of the pension funds. Over-funded plans: The value of the pension funds exceeds the value of
the pension liability.
2) Amortisation: The effect of change in estimates and pension plans not booked to the profit and loss account.
3) A provision is made for employment tax on contracts with net pension liabilities.
4) Not recognised plan assets: the share of net plan assets which is not believed to be available to cover future payments for the pension plans.
The group’s net pension liabilities of NOK 9 553 000,- are presented in the balance sheet as an interest-free long-term liability. Net pension funds of NOK 18 050 000,are presented in the balance sheet as an interest-free long-term receivable. The pension liability booked is calculated on the basis of estimated pension liabilities and accrued
in accordance with relevant accounting principles. The pension liability recorded in the accounts is not the same as the pension rights legally earned at 31.12.97
Pension expenses and liabilities in the parent company
The parent mainly cover its pensions through group pension schemes in life insurance companies. Under the Norwegian Accounting Standard for pension expenses, the
schemes have been treated for accounting purposes as defined benefit plans.
The benefit plans cover 40 employees and 25 pensioners. In addition, to the benefit obligations through insurance arrangements, the parent company has uninsured benefit
obligations in the form of pension agreements which are financed through provisions in the profit and loss accounts. As of 31.12.97, the parent company has, in agreement
with the employees, ended an additional benefit plan. The net pension liability (including accrual employer tax) of NOK 2 122 000,- related to this plan is presented as
income in the profit and loss account.
Calculation of future benefit obligations is based on the following assumptions:
Expected return on plan assets
Discount rate
Salary adjustment
Social security increase/inflation
Pension increase
7.0
6.0
3.0
2.0
2.0
%
%
%
%
%
Pension expenses in 1997:
Amounts in NOK 1.000
Collective
benefits
1 697
1 429
-2 157
0
969
0
969
Present value of this year´s pension earnings
Interest cost on accrued pension liablities
Expected return on pension funds
Allocated effect pf change in estimates and pension plans
Net pension expenses
Additional benefits ended as of 31.12.97 1)
Net periodic pension expenses (income)
Additional
benefits
819
180
- 125
28
902
-2 122
-1 220
Uninsured
benefits
22
154
0
0
176
0
176
Total
2 538
1 763
-2 282
28
2 047
-2 122
- 75
1) Net periodic pension expenses (income) are included in the profit and loss accounts under wages, salaries and personnel expenses.
Pension funds/liabilities as of 31.12.97:
Amounts in NOK 1.000
Benefits earned during the year
Estimated effect of future salary growth
Projected Benefit Obligations (PBO)
Plan assets at fair value
Plan assets in excess of/less than (-) PBO
Differences in estimates not taken to income/expensed
Accrual employer tax
Plan assets/pension obligations (-) in the balance sheet
Collective benefits
1997
1996
22 558
27 109
3 748
4 834
26 306
31 943
30 912
31 781
4 606
- 162
318
4 047
0
0
4 924
3 885
Additional benefits
1997
1996
0
2 673
0
1 686
0
4 359
0
1 701
0
-2 658
0
786
0
- 264
0
-2 136
Uninsured benefits
1997
1996
2 504
2 534
132
134
2 636
2 668
0
0
-2 636
-2 668
158
117
- 349
- 312
-2 827
-2 863
In 1997, a payment of NOK 916 000,- was made to the additional benefit plan and NOK 2 007 000,- was transferred to the fund. Payment of pensions over the operating
account aggregated NOK 212 000,-. Net pension obligations of NOK 2 827 000,- are recorded in the balance sheet under interest-free long-term liabilities. Book
pension liabilities are calculated on the basis of estimated future pension liabilities and accrued in accordance with generally accepted accounting principles. The book
obligation does not correspond to the pension rights legally earned at 31 December 1997.
Deferred taxes in the group
Set out below is a specification of short-term and long-term differences between book and tax values and losses carried forward, and a calculation of deferred tax
liabilities/receivables based on nominal tax rates at the end of the last two accounting years.
Amounts in NOK 1000
Total short-term differences
Total long-term differences
Total differences
Tax losses carried forward
Total
Deferred tax liabilities
Deferred tax receivables
Net deferred tax liabilities
Change in deferred tax liabilities
1997
- 62 562
249 427
186 865
- 355 234
- 168 369
75 069
75 069
- 42 064
1996
- 59 133
183 437
124 304
- 228 081
- 103 777
48 377
6 313
42 064
41 840
35
Deferred taxes in the parent company
The specification below shows the difference between book and tax values at the end of the last two accounting years, changes in these differences, deferred taxes at
the end of the last two accounting years and change in deferred taxes.
Amounts in NOK 1000
Short-term differences
Fixed assets reserve
Share differences
Foreign exchange differences
Net pension liability
Net pension fund
Gain and loss account
Long-term differences
Total differences
Loss carried forward (including unused renumeration)
Total change in deferred taxes1)
1) Net deferred taxes are not balanced
1997
- 2 020
1996
- 7 737
- 466
19 391
- 2 827
4 924
8 529
29 551
27 531
- 138 313
- 110 782
- 1 073
- 4 808
- 259
- 2 863
3 885
10 662
5 544
- 2 193
0
- 2 193
792
792
0
802
802
0
Deferred taxes on pension liabilities
Deferred taxes
Net deferred taxes
The tax rate used is 28 per cent. Positive and negative differences are offset in accorance with the requirements of the Joint-Stock Companies Act and generally
accepted accounting principles.
Note 22: Total assets, net interest-bearing debt and gross investments
Set below is a specification of total assets, net interest-bearing debt and gross investments for the different business segments in the group.
Amounts in NOK 1000
Frionor Norden
Fangst/produksjon USA
Frionor Europa
Norway Seafoods Main office
Produksjon & Trading
Total
Total Assets
31.12.97
01.01.97
150 236
72 902
1 327 422
2 144 185
154 147
170 307
203 505
340 687
889 581
1 068 286
2 724 891
3 796 367
Net interest-bearing debt / receivables (-)
Gross investments
31.12.97
01.01.97
31.12.97
01.01.97
-19 344
-14 714
10 434
4 850
120 984
773 853
225 823
1 180 380
-11 840
209
1 270
2 670
372 909
79 916
1 503
2 841
319 694
526 036
161 757
584 494
782 403
1 365 300
400 787
1 775 235
Note 23: Share capital
The share capital Norway Seafoods ASA as of 31.12.97 comprise 70 062 613 shares with a nominal value of NOK 5,-. The market price of the Norway Seafoods
share as of 31.12.97 was NOK 22,- which gives the group a market value of NOK 1 541 377 000,-. During the year, the following changes was made:
Share capital
Share capital as of. 31.12.1996
Increase in share capital due to acquisition of Frionor A/S, effective as of 1 November 1997
Share capital as pr. 31.12.1997
Share capital (NOK) Number of shares
312 878 015
62 575 603
37 435 050
7 487 010
350 313 065
70 062 613
The agreed RISK-regulation for 1996 is NOK 0,01 per share.
The estimated RISK-regulation for 1997 is NOK 0,00 per share.
Note 24: Shareholders’ equity
Changes in shareholders’ equity are as follows:
Amounts in NOK 1000
Shareholders’ equity at 01.01.97
Group profit for the year
Public offering and merger costs
Translation difference
Shareholders’ equity at 31.12.97
Group
1997
1 106 704
-105 288
-2 629
153 605
1 152 392
Parent company
1997
1 089 113
-134 636
-2 629
0
951 848
Note 25: Transactions and agreements with related parties
Norway Seafoods has recurring transactions and agreements with related parties. These transactions and agreements are mainly connected to the fishing operations in
Alaska, where Norway Seafoods have entered charter agreements with Aker RGI ASA’s subsidiaries. The charter agreements have a total value of approximately NOK
176 million per year. The average remaining lease period for the 14 chartered factory vessels is 8.*5 years, where after Norway Seafoods, through its subsidiary
American Seafoods Company, has an option to acquire the shares in the holding company for the vessel owning companies.
With accounting effect as of 1. October 1997, Norway Seafoods sold its shares in Seafood Holding, the operating and holding company for the group’s fisheries
activities in Russia and South America, to Aker RGI ASA (90%) and Kjell Inge Røkke (19%).
Norway Seafoods holds a five-year option to purchase the shares of the Aker RGI ASA owned vessel owning company RGI Seafoods Corporation. If exercised, Norway
Seafoods would pay the amount of the equity capital along with an annual return on equity of 12.75 percent. The option is forfeited if it is not exercised upon a possible sale
to a third party. The option has been granted to Norway Seafoods in order to protect the interests of the company's minority shareholders. The agreement is thoroughly
discussed in the report of the Board of Directors.
36
Note 26: Shares held by members of the Board of Directors
Norway Seafoods ASA is owned by 60.8 per cent by Aker RGI ASA. Through shareholdings in Aker RGI ASA, Chairman Bjørn Rune Gjelsten and member of the board
Kjell Inge Røkke hold 1.97 per cent and 19.91 per cent of the shares Norway Seafoods ASA respectively.
Note 27: Options
Orkla ASA has an option to buy 2 000 000 new shares at NOK 54,- per share. The option is valid until August 31 1998 and can be exercised at any time.
The board of directors in Norway Seafoods ASA has been authorised to issue up to 6.5 million new shares with a nominal value of NOK 5,- per share. Of these 6.5 million
shares, 1 million shares are to be issued as payment for the acquisition of the remaining 30 per cent of the shares in Melbu Fiskeindustrier AS. In November 1997,
Norway Seafoods ASA’s option to acquire the remaining 30 per cent of the shares in Melbu Fiskeindustrier was prolonged by two years, and is valid until August 7
1999. The authority for the remaining 5.5 million shares will expire at the ordinary general meeting of 1998.
There are no option agreements between Norway Seafoods ASA and the senior management or officers.
Note 28: Currency
A large part of group income is in foreign currency. The group have as a principle to secure large fluctuations in the exchange rates by using foreign exchange contracts,
or by establishment of debt in the same currency as the revenues.
Material open contracts as of 31.12.97 are as follows:
Year of
maturity
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
1998
Total
Currency
secured
JPY
USD
AUD
ESP
USD
USD
USD
DKK
FRF
BEF
FIM
DEM
GBP
CHF
IEP
NLG
AUD
THB
CHF
DEM
FRF
GBP
SEK
Secured by
currency
USD
CHF
THB
NOK
NOK
DKK
NOK
NOK
DKK
DKK
DKK
DKK
DKK
DKK
DKK
DKK
DKK
NOK
NOK
NOK
NOK
NOK
NOK
Group
Amounts in
NOK 1000
597 491
12 971
888
4 795
216 342
1 825
4 065
1 920
12 100
8 927
122
6 146
2 588
959
1 783
1 817
1 201
17 227
16 655
6 638
4 400
3 037
25 482
949 378
Parent company
Amounts in
NOK 1000
0
0
0
0
216 342
0
0
0
0
0
0
0
0
0
0
0
0
17 227
16 655
6 638
4 400
3 037
25 482
289 781
AUDITORS’ REPORT
37
(Translation from Norwegian)
To the Annual Shareholders’ Meeting of Norway Seafoods ASA
Audit Report for 1997
We have audited the annual report and accounts of Norway Seafoods ASA for 1997, showing a consolidated loss for
the year of NOK 134 636 000 for the parent company and a consolidated loss for the year of
NOK 105 288 000. The annual report and accounts, which comprise the annual report proper, profit and
loss account, balance sheet, cashflow statement, notes to the accounts and consolidated accounts are presented
by the company’s Board of Directors and its managing director.
Our responsibility is to examine the company’s annual report and accounts, its accounting records and other
related matters.
We have conducted our audit in accordance with relevant laws, regulations and generally accepted auditing
standards. We have performed those audit procedures which we considered necessary to confirm that
the annual report and accounts are free of material misstatements. We have examined selected parts of the
evidence supporting the accounts and assessed the accounting principles applied, the estimated made by
management, and the content and presentation of the annual report and accounts. To the extent required by generally accepted
auditing standards we have reviewed the company’s internal control and the management of its financial affairs.
The Board of Directors’ proposal for the settlement of the loss for the year is in accordance with the requirements
of the Joint-Stock Companies Act.
In our opinion, the annual report and accounts have been prepared in accordance with the requirements of
the Joint-Stock Companies Act and present fairly the financial position of the company and the group as of 31.12.97
and the result of its operations for the financial year, in accordance with generally accepted accounting principles.
Oslo, 2 March, 1998
KPMG as
Asbjørn Næss
Henning Aas
State Authorised Public
State Authorised Public
Accountant (Norway)
Accountant (Norway)
38
DESSERT
40
The importance of fish
44
From sea to consumer
48
Risk management
50
Equity and ownership
52
Environmental report
53
Socio-economic accounts
54
Organisation and management
B A B Y P I N E A P P L E A N D S T R AW B E R R I E S W I T H C O C O N U T S A U C E
1 carton coconut milk
2 tbsp sugar
Juice of 1/2 lime
1-2 tbsp rum
Baby pineapple
Strawberries
Gently heat the sugar and coconut milk until it
begins to form a thick sauce. Remove from the
heat and add the lime juice. If the sauce is too
thin when it has cooled, simmer it a little more.
Allow the sauce to cool until it is viscous and
then add the rum. Should the sauce separate,
you can warm it up carefully.
Cut the top off of the pineapple and use it as a
decoration on the dish. Skin the rest of the
pineapple, cut the flesh into pieces and arrange
around the dish together with the strawberries.
Carefully pour over a little of the sauce and serve.
BON APPETIT
T H E I M P O R TA N C E O F F I S H
More than 100 million tonnes of fish and
than 30 per cent in the next 12 years. The
shellfish are harvested every year on a
demand growth will be strongest in Asia,
global basis. About 70 per cent of the
Production and comsumption in
catch becomes human food, whilst the rest
industrialised countries
partly because of long-term income and
wealth growth and partly because of the
is used for animal food or other purposes.
N
H
prestigiousness of seafood in this region.
Increasing demand
The main fishing nations
In tons
The demand for food is basically growing in
With a yearly catch in excess of 25 million
Production
Consumption
Consumption per capita
line with the world wide population growth,
tonnes, China is the world’s largest fishing
nation. The Chinese fisheries take place in
demand for food rich on proteins, such as fish
the central Pacific. In addition to this, the
grows faster than the world wide population.
On a global level, the consumption of fish
protein grew by 47 per cent from 1961 to
8 869 796
but as the global wealth increases, the
Chinese aquaculture industry is the world’s
largest. The yearly production is in excess
of 10 million tonnes. Other major fishing
1993, whilst the population growth was
nations are Peru, Chile, Russia and the
43 per cent in the same period. In addition to
United States of America. Norway is the
demand growth due to increased population
world’s eleventh largest fishing nation.
an alternative to meat because of health
concerns. In the industrialised part of the
world, fish has become an increasingly more
6 757 570
and wealth, fish has in many cases become
The most important fisheries
In the later years, the fishery for anchoveta
has been the world’s largest. The fishery
takes places in the Southeast Pacific, west off
5 614 534
5 779 789
important part of the protein consumption.
In four of the G7 nations; France, Italy, Japan
and the United States of America, the con-
Chile and Peru. Catches in the Southeast
Pacific has experienced large changes and
fluctuations over the past years, partly due to
more than 30 per cent in the last 30 years.
non-sustainable catch rates, but also due toe
4 373 827
sumption of fish per capita has increased by
Differences
In Japan, the fish consumption per capita is
climatic changes that follow of the El Niño
phenomenon. Norway Seafoods does not
take part in this fishery.
The consumption per capita in the newly
Northern Pacific fishery for Alaskan pollock.
industrialised countries in Far East Asia is on
The fisheries take place in the Bering Sea
a corresponding level, whilst the consumption
and the waters around the Aleutians. This is
2 539 936
The world’s second largest fishery is the
in the EU-countries and in the United States
of America lies on a considerably lower
2 550 894
on the high side of 70 kilograms per year.
the most important fishery for Norway
Seafoods.
level, about 22 kilograms per capita per year.
1 245 029
1 052 267
Germany
France
Russia
USA
wide population growth, increase by more
Spain
demand for fish products will, due to world
Norway
192 422
and Agriculture Organisation (FAO), the
Holland
According to the United Nations’ Food
521 377
222 739
298 017
1 537 176
793 413
less than 10 kilograms.
609 768
consumption of fish per capita per year is
jack-mackerel in the Southeast Pacific west
Italy
1 320 000
1 445 662
Measured in catches, the fisheries for
In the less developed countries, the average
Japan
40
off Chile and Peru is the world’s third largest.
Norway Seafoods does not participate in
these fisheries.
The fisheries for Atlantic cod, the most
important of the Norwegian fisheries, is the
world’s ninth largest.
41
Fishing companies
regulation regime administered by Norwegian
The world’s largest fishing companies are
and Russian authorities.
Chinese, Japanese, Korean and Russian.
Following the strong deterioration of the
The largest public fishery companies:
Northeast Arctic cod stock in the years
Most of these are either government
owned or divisions in listed conglomerates.
1988 and 1989 the Norwegian and the
NOK million
There are comparatively few independent, fully
Soviet joint commission agreed a reduction
Norway Seafoods ASA
Irvin & Johnson Ltd
Pescanova SA
Fishery Products International Ltc
Oceana Ltd
Sanford Ltd
integrated and listed fishing companies.
Among the largest fishing companies listed
on different stock exchanges are Norway
in quotas of more than 50 per cent for the
years 1990 and 1991. The reduction in
quotas gave excellent results, and during
Seafoods, the South African company Irvin
the 1990s the cod stock has been growing.
& Johnson Ltd, the Spanish Company
The stocks which Norway Seafoods base
its Norwegian operations on are in good
Products International, Sanford Ltd in New
biological condition, but in general, the
Zealand and the South African company
European fisheries are in a difficult situation.
5340
Pescanova S.A., the Canadian Fishery
Oceana Fishing Group. In addition to
in the European Economic Zones are fully
5010
these, there are several medium sized fishing
companies listed on stock exchanges in South-
Several of the traditional fishery resources
or overexploited, with several stocks in a
depleted condition.
America and in the Southern African countries.
4200
4250
These companies serve domestic markets.
Norway Seafoods’ fisheries
Until the end of the third quarter 1997,
3600
3453
3570
3400
the Northern Pacific and the Bering Sea.
3575
in the Norwegian Sea, the Barents Sea,
3636
3840
3920
Norway Seafoods participate in fisheries
North-America
Norway Seafoods participate in the fisheries
for Alaskan pollock (a small whitefish), Pacific
cod and Pacific whiting (hake) in the waters
off the coasts of the American states Alaska,
Washington and Oregon. The fisheries are
Norway Seafoods also took part in fisheries
based in Seattle in Washington and Dutch
in the waters off Argentina and Chile and
Harbour in Alaska. Pollock and Pacific cod
in Russian waters. These operations were
are caught in the Bering Sea to the west of
sold effective as of 1 October 1997.
Alaska, whilst the fisheries for Pacific whiting
(hake) take place off the coast of Oregon
and Washington. In addition, salmon is
The operations in Northern Europe comprise
bought and processed in Bristol Bay.
the harvesting of cod, saithe and haddock
Measured in catches, the pollock stock in
as well as harvesting of shrimp in the
the Bering Sea is the world’s second largest
in
the
1310
Norwegian Sea and the Barents Sea off
fish resource. Both stock and catches are -
1450
Zones
1620
Economic
1600
Norwegian
1664
Northern Europe
and have been - stable. The stock is currently
considered to be in good condition.
situation has been considered to be good
The Pacific cod stock in the Gulf of Alaska
950
the coast of North-Norway. The raw material
Canada is considered to be fully utilised.
situation deteriorated to some extent.
The eastern Bering Sea stock, on which
The main reason for the good raw material
Norway Seafoods bases its operations, is
situation in the later years has been a strict
believed to be under-utilised.
1997
in the beginning of 1998, the raw material
1996
and off the coast of British Colombia in
1995
in the later years, but at the end of 1997 and
42
South America and Russia
in international waters. Several countries
In September 1997, Norway Seafoods
had to reduce the quotas within their own
decided to end its operations in Argentina
Economic Zones. The harvesting capacity
and Chile in South America and its
however, was not reduced. Due to subsidies,
operations in Russia. At the end of 1997,
European vessels maintained operations into
Norway Seafoods does not have any
the early nineties, even if the vessels were,
operations in these areas. Through business
run-down, obsolete and inefficient.
agreements, Norway Seafoods has a
In the later years, several European nations
right, but not an obligation, to buy raw
have implemented measures to reduce the
materials from these operations in the next
excess capacity. Measured in dead-weight
two years.
tonnes, the combined harvesting capacity
of the member states of European Union,
International resource management
has been reduced by 10 to 15 per cent.
The
Seafoods
The effectiveness of the remaining fleet has
participate in are well managed. The stocks
not increased. Portugal and Spain alone
that the company bases its operations on
have reduced the fleet capacity by 31 and
are, and have been, stable. The taxation is
17 per cent respectively.
moderate and under strict management.
During
Strict resource management however, is of a
management of marine resources, administered
fairly recent date in parts of the world.
by over-national bodies such as the United
In the years following World War II,
Nations’ Food and Agriculture Organisation
international management of the world’s
(FAO), has been satisfactory. In addition,
marine resources was insufficient. Several
several nations have introduced stricter
Southern European nations built large fleets
management regimes based on American
of seagoing trawlers, which operated in
or Norwegian standards. In the long run,
fisheries
that
Norway
the
nineties,
the
international
international waters outside the control of the
stricter regulations will lead to a more
Nation States. In the mid seventies, several
sustainable exploitation of the world's marine
of the world’s most important stocks were in a
resources.
depleted condition, due to over-exploitation
43
The fate of nations hangs upon
the food with which they nourish
themselves.
A N T H E L M E B R I L L I A N T- S AVA R I N
French jurist and gourmet (1483 -1546)
44
FROM SEA TO CONSUMER
Norway
Seafoods
was
formed
in
and the Hadley Group, have been fully
December 1994 to expand RGI’s seafood
integrated into American Seafoods Company.
business. Through several acquisitions and
Sales by business segment:
Streamlining
mergers in 1995 and 1996, the company
evolved from being a fishing-fleet company
4,7% Private label
Through the restructuring in 1997, Norway
into becoming a major food company
71,8% Industry
Seafoods
based on seafood products. The company’s
23,5% Branded products
integrated seafood company with two
have
become
a
vertically
strategy is to maximise the use of raw
geographically separated value chains.
material harvested by its own fleet in its
American Seafoods Company manages
onshore production facilities, thus minimising
harvesting, value-added processing, sourcing
transaction costs and price fluctuations.
and also marketing and sales in the North
American market and the sale of semi-
Complicated structure
processed goods such as surimi and roe in
In the beginning of the second half of
the Asian market. Frionor Group manages
1997, it became clear that Norway
harvesting, value-added processing, sourcing
Seafoods operating structure was too
and brand and marketing sales in the
complicated. The group had operations in
European and Australian markets.
more than 30 countries, and the operations
Sales by market area:
of several of the subsidiaries were not
co-ordinated well enough. Furthermore,
vast distances and a lack of flexibility within
the organisation, made the need for further
integration and streamlining evident.
Sales by market area:
g
g
45,8% Europe and Oceania
39,3% USA and Japan
Nordic countries
795 447
USA and Japan
2 097 880
Europe and Oceania
2 446 098
Total
5 339 425
14,8% Nordic countries
Integration
The value chain
Norway Seafoods operations were integrated
Norway Seafoods’ business concept is simple:
in two geographically separated value
By integrating the different links in the fishing
chains. Activities outside or not directly related
industry’s value chain; harvesting, value-
to the strategic core were sectioned out,
added processing and also marketing and
whilst the operations in South America and
sales in one company, the company can
Russia were dismantled and replaced by
achieve more stable sourcing conditions,
sourcing agreements.
more
As part of the new strategy, Norway
increased control with sales channels
cost
effective
processing
and
Seafoods has focused on the vertical integration
compared to traditional companies.
within the Group. Frionor’s operations in the
As a consequence of the integration, the
United States of America, Frionor US Inc.
company’s resource risk and transaction
45
costs are reduced. In the medium to long-term
factory trawlers. Part of the catch, mostly surimi
range, this will lead to improved profitability.
and roe, is processed onboard and sold
Harvesting by region:
Sales by business segment:
Private Label
249 923
Branded products
1 253 009
Industry
3 836 439
Total
5 339 425
5,4% South America and Russia
78,2% USA
16,4% Norway
directly in a semi-processed form, whilst other
products are refined at the processing plant
in New Bedford.
Surimi is a fish based paste predominantly
sold in the Asian markets, with the Japanese
market as the most important. The Japanese
market showed growth in 1997. In addition
Norway Seafoods operates a fleet of
to growth in Japan, the company has also
trawlers to be able to control the resources.
extended its sales and marketing organisation
Factory trawlers and land based processing
in Europe, Korea, USA, and China. The
facilities refine the raw materials which are
company expects further growth in the Asian
marketed and sold in three different markets;
markets.
industry,
In 1997, the on board production of surimi
private
labels
and
branded
consumer products. In addition, Norway
and roe increased, partly due to fleet growth
Seafoods has established a trading unit to
within American Seafoods Company, but
ensure stable sourcing for the land based
also because of the increased efficiency on
processing facilities.
board. American Seafoods Company can
Industrial sales by market area:
Harvesting
Norway Seafoods´ harvesting operations
take place in the Northern Pacific and the
Bering Sea outside Alaska and in the
44,1% Europe and Oceania
5
7
45,4% USA and Japan
10,5% Nordic countries
now offer the world market stable supply of
surimi all year round.
Norway
The Norwegian harvesting operations is
Norwegian Sea and the Barents Sea off
based on long-term sourcing agreements
the coast of North-Norway.
with
the
Norwegian
fleet
and
the
Melbutrawlers. Fish harvested in Norwegian
Industrial sales by market area:
waters is either processed in the company’s
418 850
plants at Melbu, in Stamsund and in
USA and Japan
1 734 646
Trondheim and also at the Thorfisk-plant in
Europe and Oceania
1 682 996
Denmark or sold as frozen round fish in the
Total
3 836 493
international markets.
Nordic countries
In 1997, the harvesting operations’ sales of
USA
semi-processed goods constituted most of
In the United States of America, Norway
Norway Seafoods’ sales. Recorded sales to
Seafoods operates a fleet that comprise 15
the industrial segment was NOK 3,8 billion.
46
Processing
capacity from 40 to 70 per cent during the
The land based processing takes place in
year. The plant is run on a two shift basis.
Norway Seafoods’ plants in Denmark,
Norway, Thailand and the United States of
America. The land based value-adding
processing can be compared with the
refining process in the oil industry - an
Production volume by region:
48% USA and Japan
A two shift arrangement was implemented
at the Melbu plant, and processing capacity
increased correspondingly.
20% Europe and Oceania
32% Nordic countries
Sourcing
homogenous resource is refined and
In addition to the group’s own harvesting
processed into several different products
operations, Norway Seafoods is a large
intended for different end users.
buyer of raw materials for its own production.
Furthermore, the fishing industry - like the oil
The group is in the process of establishing
industry - depends on cost efficient value-
its own trading unit to simplify the group’s
added processing to maintain the competitive
resource situation. The trading unit shall
strength. To achieve cost efficiency, the
secure a more stable supply of raw materials
utilisation of the processing facilities must
independently of the fluctuations in its own
be maximised on a yearly basis.
harvesting operations.
Norway Seafoods processed products are
predominantly sold under the Frionor brand
Production volume:
Tonnen
1997
Breaded products
61 983
19,7
Round fish
58 888
18,7
Surimi
43 257
in the European, North American and
%
13,8
Production by end-user segment:
Australian markets. Part of the production
however, is sold to international retail
68% Industry
32% Branded products
chains which market the products under
their own brands, so called private or
Fillets
31 224
9,9
Block
27 640
8,8
generic labels. The sale of private label
Fiskemeal
10 622
3,4
products constitute a small share of
Prepared meals
6 095
1,9
Norway Seafoods external sales, only 4.7
Mince
5 791
1,8
per cent of the group’s turnover. In 1997,
total private label turnover was just below
Roe
5 467
1,7
Other
64 036
20,3
Total
315 044
100,0
NOK 250 million.
Marketing and sales
During the year, Norway Seafoods have
Historically, the predominant part of Norway
increased the processing capacity at its
Seafoods production was sold as semi-
plants in Norway and the United States.
processed goods such as frozen blocks,
The processing facility in New Bedford has
surimi and roe. Following the merger with
increased the utilisation of processing
Frionor
A/S,
Norway
Seafoods
has
47
acquired a large sales network and a strong
operations in the United States are now fully
brand name within the retail and catering
integrated with American Seafoods Company’s
markets. The market for branded consumer
Branded products by market area:
products accounted for 23.5 per cent of
Norway
Seafoods
sales
in
1997.
In line with the strategy of channelling an
increasing volume trough the group’s marketing
operations,
whilst
American
Seafoods
Company’s marketing operations in other
41,2% Europe and Oceania
markets have been integrated in Frionor’s
27,5% USA and Japan
operations. So far, the integration has had
31,3% Nordic countries
positive effects in sales and marketing.
network under the Frionor brand, valueadded products sold under the Frionor brand
Branded products by segment:
name will increase in the future.
Retail
505 451
Catering
747 558
Branded products by market area:
Nordic countries
392 346
USA and Japan
344 548
Europe and Oceania
516 115
Total
Total
1 253 009
Frionor’s branded products are sold in more
than 30 countries in the Nordic region,
Europe, Australia and the United States.
Branded products by segment:
In 1997, more than 90 per cent of the sales
were outside Norway.
59,7% Catering
In 1997, the company invested substantial
40,3% Retail
resources in the work of developing a new
consumer brand strategy. An important part
of this work is a targeted development of
products that covers the customer’s need as
well as creating loyalty. This product and
concept development has been carried out
in close association with the company's
organisations in Europe and the United
States. This work is expected to generate
positive results in 1998.
Furthermore, Norway Seafoods have streamlined the sales and marketing organisation in
Europe and the United States. Frionor’s
1 253 009
48
RISK MANAGEMENT
There is a wide range of risks inherent in
harvesting
Norway Seafoods´ operations. Norway
taxation of the fish resources.
represents
a
sustainable
Seafoods divides the risks of operation into
the rough weather conditions at sea in the
areas where Norway Seafoods runs its
harvesting operations. Furthermore, the
four main groups: Resource risk, operating
Fluctuations in product prices
operations are dependent on experienced
risk, political risk and financial risk.
The world market prices for some of
and highly educated personnel on board
Naturally, resource risk and operating risk
Norway Seafoods products have fluctuated
and a high level of maintenance to be able
are most focused upon by the fishing industry,
significantly over the past years. In particular,
to maintain an efficient operation.
and these risks will also influence on the
the market prices for surimi and roe have
The fleet that Norway Seafoods operates
political and financial risks.
shown considerable fluctuations, whilst the
is among the youngest fleets in the worlds’
prices for processed products like fillets of
fisheries. The regulations for maintenance
Resource risk
cod and pollock have been more stable.
and onboard security are well above the
Resource risk arises due to fluctuations in the
Through global operations and a diversified
demands set by classification companies
fish resources that Norway Seafoods
product portfolio, the group has become
such as Det Norske Veritas. The personnel
bases
its
business upon. The group’s
less sensitive to such fluctuations in the past
onboard are certified in accordance with
operations depend upon a steady and long-
years.
the international regulations set by the
term supply of pollock from the Bering Sea off
The end user markets are to a lesser extent
United Nations’ shipping organisation.
the coast of the United States and cod,
exposed to these fluctuations, and the level
Norway Seafoods is adequately insured
saithe, haddock and shrimps from the waters
of prices have therefore been more stable.
against damages and losses which can be
outside Northern Norway.
Therefore, Norway Seafoods is trying to fix
incurred in this activity.
Norway Seafoods only participates in
an increasing share of the group’s processing
regulated fisheries with a resource regime
capacity to the end-user market through
Political risk
based on a sustainable harvesting of
long-term contracts. These contracts cover
Political risk can be defined as the risk
resources. The fish resources are monitored
deliveries for one to two years.
for changes in domestic and international
by national authorities in each country where
As part of the group’s strategy for reducing
fisheries regulations that Norway Seafoods
Norway Seafoods has its operations. Both
the price fluctuations risk, Norway Seafoods
operates within. Generally, political risk is
Norway and the United States of America have
has established a trading unit, in addition to
related to matters of taxation, but fishery
fishery inspection authorities that estimates the
the group´s havesting activities. The trading
companies are also exposed to risks
size of the biomass independently, and give
unit supplies the on-shore processing units
regarding the determination of quotas and
recommendations on the level of quotas. As a
with raw materials they need through active
the allotment of licences. Furthermore,
supplement
trading in the global commodity markets, or if
changes in international export and import
authorities in the different countries, the
necessary, provides a sales channel for
regulations and environmental regulation
United Nations’ Food and Agriculture
surplus catch.
may influence the company’s operations.
fisheries on a permanent basis. Reports
Operating risk
Quotas and licences: In the global fishing
from FAO and the different countries fishery
As all sea-going operations, Norway
industry, the fishing companies are dependent
inspection
Norway
Seafoods’ harvesting operations entail
upon the allotment of necessary licences
Seafoods to believe that the company’s
operating risks. The risks are mainly due to
and quotas to harvest in each country in
to
the
fishery
inspection
Organisation (FAO), monitor the worlds
authorities
cause
49
which it operates. It is the domestic fishery
future, both in Norway and in United
Seafoods has to follow both the federal
authority that decides the quotas and the
States of America. To ensure a swift
legislation and the legislation that applies
allotment of them. In general, the size of
adaptation to changes in the existing
in the state or region where the company
the quotas are based on the size of the
regulations, Norway Seafoods is in contact
has its operations. After the Exxon Valdez
biomass. The principles of allotment varies,
with the relevant authorities on a permanent
disaster in Alaska, the limits on emissions
but are mainly based on limitations
basis.
and other types of pollution have become
regarding the number and type of vessels
much stricter, both in the United States of
that can participate, which type of
Export and import regulations: Harvesting
America and in Norway.
equipment that can be utilised and the
and processing operations in the United
To ensure a safe operation and reduce the
minimum size of the catch available to
States of America are subject to American
inherent
each vessel. In some countries trading of
regulations, but as part of the production is
Seafoods has implemented an environmental
quotas are allowed.
exported to Japan and other Asian countries,
policy for all subsidiaries of the group.
Norway Seafoods is dependent on allotment
operations in this area can be affected by
Norway Seafood's overriding environmental
of quotas to be able to run its operations.
changes in the trade agreements between
goal is to contribute to a long-term
The risk for reduced quotas due to lower
the United States and the Pacific Rim
sustainable environmental administration of
biomass levels depends on which waters the
countries. The Norwegian operations are
the world's marine resources. Norway
company operates in. The quotas for the
regulated through the EEA agreements with
Seafoods has invested heavily in education of
Bering Sea pollock fishery have been
the European Union. The European Union
personnel and modern equipment in order to
relatively stable for many years, whilst the
has introduced a diversified duty on
minimise incidental catches and exploit every
quotas in Norwegian waters have varied
seafood products exported from Norway.
single fish caught to the greatest extent
somewhat in the past years. Norway
There are however a number of duty-free
possible.
Seafoods has reduced the risk connected
quotas in place allowing certain fish
to the allotment of quotas mainly through
products based on white fish to be imported
Financial risk
geographic diversification of its own
without any duty. Over a period of time,
The financial risks are related to interest
harvesting operations. In addition to this,
duty tariffs, export and import regulations
rates and currency. Norway Seafoods
the company has sourcing agreements with
are
undertakes hedging activities to reduce the
other companies.
Seafoods
the
risk of interest rate and currency fluctuations.
Fisheries are subordinate to government
development of trade agreements closely
Even if the company undertakes such
licensing in the countries where Norway
in the markets where the company operates.
activities to reduce losses that may amount
exposed
to
changes.
management
Norway
follows
Seafoods has its operations. Norway
environmental
risks,
Norway
due to fluctuations, these activities are of a
Seafoods has all necessary licences for its
Environment: In addition to following the
short-term nature. The company is therefore
operations in Norway and the United
domestic regulations in each area where
exposed to long-term interest rate and
States of America. Risk will arise in
Norway Seafoods has its operations, the
currency fluctuations. Some of the currency
connection with the allotment of new
company follows United Nations’ Code of
risks are limited through operations in
licences. Furthermore, the regulations on
Conduct for Responsible Fisheries. In the
different parts of the world.
which the allotment or continuation of
United States of America, where state and
licences are based, can be changed in the
federal
legislation
differ,
Norway
EQUITY AND OWNERSHIP
Norway Seafoods strive to provide its
The shareholders return will be reflected in
investors and the market in general with
the value created within Norway Seafoods,
relevant, correct and current information.
and it is expected that this will be
Shareholder structure:
Norway Seafoods information channels
expressed through the appreciation of the
to the investor market are annual reports
value of the shares in Norway Seafoods
and interim reports, presentation of the
on the Oslo Stock Exchange rather than
accounts to analysts and investors and
through dividend payments.
daily contact with investors, brokers,
analysts, the Oslo Stock Exchange and
Shareholder matters
the financial press.
As of February 20th 1998, Norway
Seafoods had 1,118 shareholders. With a
60.8 per cent of the outstanding shares,
Date
Event
AKER RGI ASA is the largest shareholder in
30.04.98
Interim report First Quarter 1998
Norway Seafoods. The ten largest share-
04.05.98
Annual Shareholder’s meeting
11.08.98
Interim report Second Quarter 1998
30.10.98
Interim report Third Quarter 1998
Ownership structure
60,80% Aker RGI ASA
Financial Calendar
holders account for 89.8 per cent of the
outstanding shares. Norway Seafoods has
1,108 shareholders that each hold less than
1 per cent of the shares. Of the 10 shareholders
with more than 1 per cent of the outstanding
Norway Seafoods’ Board of Directors and
shares are several fund management companies
management seek an ownership structure
that represent foreign private and institutional
where a large part of the share capital is
investors. The foreign shareholders accounted
owned by industrial investors with a long-
for 2,29 per cent of the shares.
term view for their investments. Norway
Seafoods sees a substantial value in
Share capital
investors that have a high knowledge of the
Norway Seafoods' share capital of NOK
company and that can contribute to the
350 313 065 is divided into 70 062 613
development of the company’s operations.
shares with a nominal value of NOK 5,-.
In addition Norway Seafoods seeks to
At an Extraordinary Shareholders’ Meeting
increase the spread in its ownership
on April 17 1997, the Board of Directors
structure.
was authorised to issue up to 6.5 million new
shares in Norway Seafoods. Of these,
Ownership structure
1 137 300
Storebrand Livsforsikring
930 000
Gjensidige Fondsforvaltning
921 800
Fokus Bank ASA
870 699
Gjensidige Livsforsikring
859 880
Merrill Lynch International
Others
Total
845 800
7 137 533
70 062 613
Change in share capital
10,19% Andre
1 391 304
DnB Investor AS
1,21% Merrill Lynch International
SND
Melbu Fiskeindustrier AS.
1,23% Gjensidige Livsforsikring
1 541 900
1,24% Fokus Bank ASA
11 831 299
Avanse Forvaltning
the remaining 30 per cent of the shares in
1,33% Storebrand Livsforsikring AS
Orkla ASA
be able to exercise a put option to acquire
1,32% Gjensidige Fondsforvaltning
42 595 098
2,20% Avanse Forvaltning AS
Number of shares
Aker RGI
1,99% SND
1,62% DnB Investor AS
Owner
1 million shares are to be issued in order to
16,89% Orkla ASA
50
Date
January 1995
July 1995
Share capital
Number of shares
50,000
10,000
20,000,000
40,000,000
August 1995
20,000,005
40,000,001
August 1995
293,913,050
58,782,610
October 1995
293,913,055
58,782,611
July 1996
312,878,015
62,575,613
April 1997
350,313,065
70,062,613
51
The authorisation for the remaining 5,5 million
shares can be used in the event of acquisitions
At the end of 1997, the company’s shares
were traded at a price of NOK 22. This
Share price and turnover:
by Norway Seafoods. The authority will expire
equals to a share price reduction of 56.9
at the Annual Shareholders’ Meeting on May
per cent. During the same period, the Main
4 1998. The authorisation does not include
Index at the Oslo Stock Exchange rose by
the shares to be issued in the event that Orkla
13.4 per cent. A total of 15.6 million
ASA exercises its call option on 2 million
Norway Seafood shares were traded from
Monthly turnover
Share price
shares at a strike of NOK 54 per share. This
option expires on August 31 1998.
the time of introduction in May and until yearend. The main part of the turnover took
place in the period May to August, and the
average daily turnover was low in the
To avoid double taxation of both the company
following period.
and its shareholders, the Norwegian
In connection with the announcement of the
Government in 1992 established a system
interim results for the first half year, the
for regulation of the acquisition cost of shares
4529
Risk adjustment
Board of Directors decided to make a
NOK 400 million provision. The provision
value is called RISK. The RISK adjustment
was made because of the potential loss on
for 1996 was NOK 0.01 per share, whilst
claims the company had in South America
the estimated RISK adjustment for 1997 is
and Russia and adjustments that needed to
3777
for Norwegian shareholders. This adjusted
NOK 0,00 per share.
be made due to the restructuring of the
land-based operations in Europe, the
Share price development
United States of America and Asia. Due to
The Norway Seafoods share was traded in
the
the non quoted OTC market in Oslo from the
Seafoods share fell sharply. From the time
autumn of 1995. In 1996, the number of
of the announcement before the Oslo Stock
shares traded in the OTC market was 20.6
Exchange opened August 12 and until the
million. During the first quarter of 1997
trading ended on the following day, the
5.9 million shares were traded at prices
company’s
between NOK 50 and NOK 60 per share.
reduced by NOK 800 million.
Share price development – 1997
Profit for the year
Share price
May
provisions, the quote of the Norway
market
capitalisation
was
High
Low
Volume
Norway Seafoods’ loss after taxes and
50.00
47.50
4,529,557
special operating items were NOK 105.3
49.50
46.00
993,641
million. The loss has been covered by the
52.00
47.00
1,396,151
equity, which at year-end was NOK
800,282
October
35.00
26.00
1,542,940
November
30.00
26.00
1,343,734
December
26.00
21.00
1,011,141
1,152.4 million. With reference to the
company’s dividend policy and this years
1011
3,777,686
1343
35.50
29.50
the Main List at Oslo Stock Exchange on
May 16 1998. The listing price was NOK
55, whilst the latest quotation on the first
31.12.97
30.11.97
31.10.97
30.09.97
31.08.97
31.07.97
30.06.97
day of listing was NOK 51.
16.05.97
that the Annual Shareholders’ Meeting
paid to the shareholders.
542
The Norway Seafoods share was listed on
loss, the Board of Directors will propose
adopts a resolution that no dividend will be
800
50.00
37.00
993
August
September
1396
June
July
52
ENVIRONMENTAL POLICY & SOCIO-ECONOMIC ACCOUNTS
The
environment
and
a
sustainable
order to map out where the environmental
and other partners to work for the same
development have become central social
challenges are found, thus creating a basis
environmental goals that as we have in
values and thus success criteria for those
for further development of the environmental
our own operations.
who set the framework conditions, and a
efforts through concrete plans of action.
potential
Norway Seafoods' environmental strategy
shall take into consideration the fact that
enterprises that have some point of contact
shall contribute to
we manage and process living raw
with nature and the environment. Norway
• the company achieving its financial and
material – and that we therefore ensure
"threat"
to
all
value-adding
Seafoods, as a long-term player in the field
of white fish, has much to gain from an
acceptable
administration
of
• Our fishing and production methods
management results
that this raw material is handled in a
• strengthening the company's position as
proper and dignified manner.
marine
a vertically integrated seafood company
• Resource-effective fishing, production,
resources. The company's earnings are
• giving the company a competitive edge
distribution and handling throughout the
entirely dependent on fish returning year
• building up Frionor as a proprietary name.
entire value chain shall increase our
after year. One important task for the Group
future competitiveness.
is the establishment of an environmental
Norway Seafoods' environmental policy:
• Norway Seafoods shall contribute to a
strategy, a policy and overriding goals for
• Environmental considerations shall always
long-term and sustainable administration
the management of the company, so that
be fundamental to our operations and
these become management parameters for
shall guide our day-to-day activities.
• Norway Seafood's vessels shall have
the operational side of the business.
Our environmental efforts shall be
modern equipment and exploit up-to-
Norway Seafoods is a young company,
characterised by constant improvements.
date technology in order to minimise
but has, nevertheless, on several occasions
• In line with increased understanding/
been pointed to as an example of a fishery
knowledge,
company with a responsible programme for
alternatives that reduce our impact on
sustainable fishing practices. The company
nature and our consumption of energy.
bases its fishing on the UN's "Code of
• Our actions shall be supported by
Responsible Fishing Practices", and it is
scientific fact and be based on the results
therefore operating with the full understanding
of the regulatory authorities.
we
shall
select
those
of the world's marine resources.
incidental catches.
• Norway Seafoods shall exploit every
single fish to the greatest extent possible
• Norway Seafoods shall live up to legislation
that applies to and the demands placed
on our industry with a good margin.
of international research.
• We shall continually strive to increase our
Norway Seafood's overriding
Over the first few years, in spite of a good
employees' environmental consciousness
environmental goals:
reputation in the field of environmental
and their understanding of the environment.
Norway Seafoods shall contribute to
efforts, this work has been carried out in a
Our staff shall actively participate in our
a
fragmented manner in the various companies
environmental efforts.
development by working on:
within the Group. This has unveiled a need
for
co-ordination
of
the
overriding
• We shall satisfy the wishes of our
customers and the consumers for clean,
long-term
sustainable
environmental
• maintaining the oceans' fish stocks and
their wealth of species.
environmental strategy and policy. As a
environment
tasty,
• reducing the burden on the local ecosystem
result, the company carried out a range of
nutritious products. Frionor wants the
• minimising energy consumption and going
environmental
eco
customers to conceive the company as the
over to renewable energy in fishing,
balance sheets, in 1997 of all links of the
leading alternative from an environmental
production, and office activities.
analyses,
so-called
company's value chain (catches, production,
transportation, storage, office, and sales) in
accommodating,
point of view.
• Norway Seafoods is to sway its suppliers
• ceasing, over time, to use cryogens that
break down ozone.
53
• minimising transport, opting for renewable
profits that are reinvested in the enterprise.
fuels, and reducing emissions from
Of the total value added by the group of
Value added
transportation and business trips.
Employment
NOK 1,096.7 million, NOK 952.6 million
• minimising the use of chemicals, including
benefits the employees in terms of wages
detergents and lubricants, and opting for
and social costs, whilst the Norwegian
biologically decomposable alternatives.
authorities receive a total of NOK 106.4
• minimising packaging and office paper,
million in employer taxes and value added
and selecting environmentally friendly
taxes. The lenders receive NOK 162.1
alternatives.
million in financial expenses.
• minimising the amount of waste and
Employment
increasing the degree of waste recovery.
At the end of 1997, the Norway Seafood
• handling hazardous waste in an environ-
Group had 3,725 employees. The average
mentally-friendly manner.
• co-operating with our customers and
number of employees during the year was
suppliers on issues relating to the
4,150. The number of employees working
environment.
abroad was 2,994. In Norway, the group
has the bulk of its operations at Melbu in
communication with customers, the general
public, and environmental organisations.
• establishing local environmental goals
and environmental plans for each and
1748 USA
89% Employees
• being in serious, active, and open
Vesterålen in Nordland County. Of the total
of 731 employees in Norway, 478 have
their employment in Nordland County.
In addition to the employees at Melbu,
every plant/facility and company in the
Norway Seafoods indirect employment in
Group.
the region’s fishery sector, transport sector
and services industry is substantial.
With a total of 1,748 employed, the United
The value added in Norway Seafoods is a
States of America constitute the main body of
product of the group’s revenues, less the
the groups jobs. The operations in Europe
value of purchased goods and services,
employs 885 people, whilst the operations
and less depreciation. The resulting figure
in Asia and Oceania have created 361
is distributed between the group’s employees
jobs.
(wages and social costs), lenders (interest
rate payments), the State (social security
731 Norway
contributions and annual taxes) and the
owners (profit after taxes).
Operating revenues
5 339
Depreciations
Financial income and exceptional items
Total value added
-4 210
13% Lenders
Acquisition of goods and services
-163
130
1 097
The owners’ share of the created value is
Lånegivere
Myndigheter
Eiere og bedrift
satte
divided between dividends and withheld
361 Asia and Oceania
1997
-12% Shareholders
NOK million
10% State and municipalities
Value added:
885 Europe
SOCIO-ECONOMIC ACCOUNTS
Employment:
Region
Employees
Nordland County
478
Sør-Trøndelag County
148
Oslo and Akershus
105
Total Norway
731
Europe
885
Asia and Oceania
361
USA
1748
Total
3725
54
O R G A N I S AT I O N A N D M A N A G E M E N T
Johnny Austad
President and C.E.O. *
Svein G. Nybø
Senior Vice President
Sturle Lyberg
Senior Vice President and Information Officer
Henrik Schüssler
Senior Vice President and C.F.O.
Bernt O. Bodal
Frank O. Reite
Pär Thunstrøm
Lars Erik Gundersen
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Harvest & Processing USA
Processing & Trading
Frionor Nordic
Frionor Europe/ Australia
Thorfisk
Frionor Sweden
Frionor Switzerland
Frionor Norway
Frionor Czech Rep.
President and C.E.O. ASC
ASC
Frionor US
Melbu/JM Johansen
Hadley Group
Thorfisk Trading
Frionor Denmark
ASC of Japan
Havfisk
Frionor Finland
Frionor UK (Trading)
Frionor Thailand
Frionor Germany
Frionor Slovakia
Frionor UK
Frionor Australia
Frionor Fabrikker
Norlax
* Tore Tønne assumed position as President and C.E.O. March 17 1998
A f t e r a g o o d d i n n e r,
o n e c a n f o r g i v e a n y b o d y,
even one´s own relatives
OSCAR WILDE
Irish English writer (1854-1900)
Frionor Europe/Australia
Norway Seafoods ASA
Lysaker Torg 8
P.O.Box 195
N-1324 LYSAKER
NORWAY
Tel. :
+47 67 52 46 00
Fax. :
+47 67 52 46 46
Frionor AG
Peter Merian Strasse 45, Postfach
CH-4002 BASEL
SWITZERLAND
Tel. :
+41 61 205 3333
Fax. :
+41 61 272 1836
Frionor Nordic
Frionor Sverige AB
Vretenvägen 12
P.O.Box 47309
S-171 54 SOLNA
SWEDEN
Tel. :
+46 8 564 80 500
Fax. :
+46 8 627 92 00
Frionor Norge AS
Lysaker Torg 8
P.O.Box 195
N-1324 LYSAKER
NORWAY
Tel. :
+47 67 52 46 00
Fax. :
+47 67 52 46 46
Frionor Danmark A/S
Ravnsbjergvej 69
Dollerup
DK-8800 VIBORG
DENMARK
Tel. :
+ 45 86 63 70 00
Fax. :
+45 86 63 86 92
Harvesting & Processing USA
American Seafoods Company
Market Place Tower
2025 First Avenue, Suite 900, SEATTLE,
WA 98121-2154
USA
Tel. :
+1 206 448 0300
Fax. :
+1 206 448 0303
Frionor USA, Inc.
40 Herman Melville Boulevard
P.O.Box A-2087
New Bedford
MA 02741-2087
USA
Tel. :
+1 508 997 0031
Fax. .
+1 508 997 5820
Hadley Group, Ltd.
40 Herman Melville Boulevard
P.O.Box 51377
New Bedford
MA 02745-0042
USA
Tel. :
+1 508 990 2525
Fax. :
+1 508 999 9055
American Seafoods Company Japan Ltd.
Tsukiji M.T. Building,
Tsukiji 2-11-9, Chuo-ku
TOKYO 104-0045
JAPAN
Tel. :
+ 81 3 3545 7676
Fax. :
+ 81 3 3545 7680
Frionor Australia Pty, Ltd.
541 King Street
West Melbourne 3003
Victoria
AUSTRALIA
Tel. :
+61 3 9329 3293
Fax. :
+61 3 9329 3294
Frionor CR a.s.
Osamocenà 426
CZ- 160 00 PRAUGE 6
THE CZECH REPLUBIC
Tel. :
+ 420 2 316 68 68
Fax.
+ 420 2 36 00 97
Frionor Slovensko s.r.o.
Malinovskeho 595
SK- 916 21 CACHTICE
SLOVAKIA
Tel. :
+42 1 834 787 757
Fax. :
+42 1 834 787 758
Frionor Tiefkuhl-Producte GmbH
Birkenstrasse 15
D-28195 BREMEN
GERMANY
Tel. :
+49 421 16 922 82
Fax..:
+49 421 16 922 85
Production and Trading
Melbu Fiskeindustri A/S
Villaveien 1
P.O.Box 104
N-8491 MELBU
NORWAY
Tel. :
+47 76 15 70 22
Fax. :
+47 76 15 81 21
J.M. Johansen AS
Buøyveien 7
P.O.Box 81
N-8431 STAMSUND
NORWAY
Tel. :
+47 76 08 91 00
Fax. :
+47 76 08 92 28
Thorfisk A/S
Nordre Kajgade 7
P.O.Box 180
DK-8500 GRENNA
DENMARK
Tel. :
+45 86 32 01 66
Fax. :
+45 86 30 01 75
Thorfisk Trading A/S
Nordre Kajgade 7
P.O.Box 180
DK-8500 GRENNA
DENMARK
Tel. :
+45 86 32 01 66
Fax. :
+45 86 30 01 75
Norway Seafoods Denmark A/S (Holdingselskap)
Nordre Kajgade 7
P.O.Box 180
DK-8500 GRENAA
DENMARK
Tel. :
+45 86 32 01 66
Fax. :
+45 86 30 01 75
Processing & Trading
Frionor England Ltd.
Alexandra Road, GRIMSBY
North East Lincolnshire DN311RD
ENGLAND
Tel. :
+44 1 472 355 324
Fax. :
+44 1 472 241 031
Frionor Fabrikker AS
Brattøra
P.O.Box 2117
N-7001 TRONDHEIM
NORWAY
Tel. :
+47 73 53 42 05
Fax. :
+47 73 52 28 15
Frionor Thailand , Ltd.
741 Moo 4 Export Processing Zone
Bangpoo Industrial Estate
Praeksa sud.district, Muang
SAMUTPRAKARN 10280
THAILAND
Tel. :
+66 2 70 944 22
Fax. :
+66 2 70 944 26
Norlax A/S
Gartnervægnet 31
P.O.Box 19
DK-6855, OUTRUP
DENMARK
Tel. :
+45 76 52 23 00
Fax. :
+45 76 52 23 91
Norway Seafoods Swiss, AG
Peter Merian Strasse 45, Postfach
CH-4002 BASEL
SWITZERLAND
Tel. :
+41 61 205 33 88
Fax. :
+41 61 205 33 70
Gotlandsfisk AB
Lundbygatan 3
S- 621 41 VISBY
SWEDEN
Tel. :
+46 498 21 01 10
Fax. :
+46 498 21 10 79
Geelmuyden.Kiese. Photo Lisa Westgaard and MariusTharaldsen
Parent company
97
Norway Seafoods
FROM SEA TO CONSUMER
N O R WAY S E A F O O D S A N N U A L R E P O RT 1 9 9 7
Table of Contents
Overview
Summary 1997
Key figures
Report of the Board of Directors
Income Statement
Balance Sheet
Cash Flow Analysis
Notes
Shareholders Policy
1
@Hugin 1998. All rights reserved.
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