PDF - Farstad Shipping

Transcription

Annual Report
Farstad Shipping ASA
20
09
FINANCIAL CALENDAR
(subject to changes)
Result for 1st quarter
19 May
Annual General Meeting
19 May
Payment to shareholders
1 June
Result for 1st half-year
24 Aug.
Result for 3 quarter
11 Nov.
rd
2
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farstad shipping asa
CONTENT
6
POSITIVE – NEGATIVE 2009
8
SIGNIFICANT EVENTS 2009
10
THIS IS FARSTAD SHIPPING
15
KEY FIGURES
17
MAIN FINANCIAL FIGURES
18
A WORD FROM THE CEO
20
OUR CORE VALUES
22
OUR FOCUS
24
THE GROUPS CORPORATE MANAGEMENT
26
THE BOARD OF FARSTAD SHIPPING
28
OUR BUSINESS AND CORPORATE GOVERNANCE
30
OUR BUSINESS
34
COMPANY STRUCTURE
36
CORPORATE GOVERNANCE
42
ANNUAL REPORT AND ACCOUNTS FOR 2009
85
PROFIT AND LOSS ACCOUNT
86
BALANCE SHEET
78
STATEMENT OFCASH FLOW
89
STATEMENT OF COMPREHENSIVE INCOME
90
STATEMENT OFCHANGES IN EQUITY
91
NOTES TO THE ACCOUNTS
113
AUDITOR’S REPORT FOR 2009
114
THE FARSTAD FLEET, VESSELS AND CONTRACT OVERVIEW
116
INVESTMENTS 1995 - 2010
118
THE FARSTAD FLEET
120
AHTS FLEET - EMPLOYMENT
122
PSV / SUBSEA FLEET - EMPLOYMENT
124
GLOSSARY
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4
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Another year
same procedure;
Better by Far
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5
N E W TA X M O V E F R O M T H E N O R W E G I A N G O V E R N M E N T
?
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Mrs. Justitia, the symbol of Law, Reason and Justice
In previous annual reports these two
of a burden for those shipping companies
NOK 5.7 billion. The special environmental
pages have been used to sum up the pos-
that chose to stay in it. The Supreme Court
investments associated with these vessels
itive and negative trends in the reporting
stipulated that the shipping companies
amounted to approximate 10%. All of the
year. This time we have chosen to focus
should pay tax when they voluntarily choose
vessels are owned in Norway. The new
on recent events to do with shipping taxa-
to withdraw resources out of the old
transitional rules also mean that the profit
tion. The background for this is the gov-
scheme.
from these vessels will be locked in. This
ernment’s press release of 26 March
also distorts competition and is very unfor-
2010. We read with disbelief the contents
The proposed new regulations mean an
tunate as we enter the most demanding
of this press release.
additional NOK 227 million for Farstad
market situation in a long time.
Shipping to pay in order to enter the new
After Farstad Shipping chose to go to court
taxation scheme that was introduced in
The current proposal places a huge ques-
against the government and won in both
2007.
tion mark over the stability and predicta-
District Court and the Norwegian Supreme
bility of the general conditions in Norway.
Court, the government’s response to its
We note that the government has also
A similarly large question mark must be
defeat is to introduce a scheme that clear-
dropped the environmental profile of the
placed above the credibility of the sitting
ly impacts those shipping companies that
transitional regulations. This astonishes
government. Our confidence in this gov-
have stayed in Norway. Farstad Shipping
us.
ernment has disappeared with respect to
is now being shut out of the new scheme
a steady course being navigated for the
unless we settle the bill from the old
Since the introduction of the new scheme
maritime industry in Norway. This is some-
scheme at a price fixed by the government.
in 2007 Farstad Shipping has taken deliv-
thing Farstad Shipping will have to take
In addition to this the government is tight-
ery of 12 new vessels built in Norwegian
into consideration in the future develop-
ening the old scheme so it becomes more
yards, corresponding to an investment of
ment of the company.
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7
SIGNIFICANT EVENTS 2009
Delivery of “Far Samson”
Delivery of “Far Serenade”
Delivery of “Far Scorpion”
The subsea vessel “Far Samson” was
PSV “Far Serenade” was delivered by
AHTS “Far Scorpion” was delivered by
delivered by STX Norway Offshore,
STX Norway Offshore, Brevik to Farstad
STX Norway Offshore, Langsten to
Langsten to Farstad Shipping on 24
Shipping on 31 March. A NOK 280 mil-
Farstad Shipping on 22 June. A NOK
March. A NOK 680 million long-term loan
lion long-term loan was taken out with
415 million long-term loan was taken out
was taken out with Eksportfinans in con-
Eksportfinans in connection with this.
with Eksportfinans in connection with
nection with this. The loan is guaranteed
The loan is guaranteed by Fokus Bank.
this. The vessel is working on the spot
by DnB NOR, GIEK and Handelsbanken.
The vessel is on a long-term contract
market in the North Sea.
The vessel is on a five year contract with
with Statoil.
Saipem U.K. Ltd.
Delivery of “Far Sagaris”
Purchase of “Far Swan”
Tax case against the state
AHTS “Far Sagaris” was delivered by STX
PSV “Far Swan” was purchased 24
Oslo City Court agreed with Farstad
Norway Offshore, Langsten to Farstad
September. The vessel was built at STX
Shipping and BW Gas that the transi-
Shipping on 27 October. A NOK 436.5
Norway Offshore AS, Langsten in 2006.
tional rules between the old and new
million long-term loan was taken out with
A long-term facility of NOK 98 was drawn
shipping taxation schemes, passed by
Eksportfinans in connection with this.
with Nordea Bank Norge AS to finance
the Norwegian parliament, the Storting,
The loan is guaranteed by Fokus Bank
the vessel. The vessel is working on a
in December 2007, were unconstitu-
and GEIK. The vessel is working on the
long-term contract for Woodside in
tional. The case has been appealed to the
spot market in the North Sea.
Australia.
Supreme Court. For information about
the judgement in the Supreme Court, see
page 47.
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Farstad wins the Heyerdahl Award
“Far Samson” - “Ship of the Year
“Far Samson” - “Ship of the Year
The award was presented for the compa-
2009”
2009”
ny’s commitment to improving environmen-
The prestigious Ship of the Year award
The most powerful offshore vessel ever
tal standards in the shipping industry. This
was instituted by the Norwegian shipping
built, CSV “Far Samson”, designed by
can be seen through the innovative and
publication Skipsrevyen. Candidates are
Rolls-Royce and built by STX Europe for
more environmentally friendly systems
nominated by the readers, though the
Farstad Shipping was named Ship of
installed onboard the company’s two new
final decision is made by a jury. The award
the Year by Offshore Support Journal.
supply vessels, CSV “Far Samson” and PSV
was presented by HRH King Harald and
Farstad Shipping, Rolls-Royce Marine
“Far Serenade,” wrote the jury. The award
State Secretary Rikke Lind at Nor
and STX Europe were presented with
was presented by HRH King Harald.
Shipping.
the award at Nor Shipping.
Safety award - Esso Australia
Stockman Award
Far Samson sets world record
Farstad Shipping received the safety
Farstad Shipping won the Stockman
CSV “Far Samson” set an unofficial world
award from Esso Australia based on its
Award in the class for smaller and me-
record with a continuous bollard pull of
safety results and commitment to the
dium-sized companies for the best re-
423 tons. This makes “Far Samson” the
quality of the services the company deliv-
porting to the financial market. The com-
most powerful offshore vessel ever. By
ers. In particular it was mentioned that
pany scored highly due to its open, cred-
way of comparison, construction vessels
the award was won because of the com-
ible and consistent information, because
carrying out similar operations today
pany’s ongoing service and safety re-
the company adapts to new accounting
have a bollard pull of around 280 tons.
sults, as well as its support of improve-
laws, and because the information value
ments in Esso’s activities.
disclosed in its presentations is high.
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9
T H I S I S FA R S TA D S H I P P I N G
M ACA É / R I O
10
1,860
6
3,258
E M P LOY E E S
COUNTRIES
FREIGHT INCOME
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A A lesund
aBERDEEN
singapore
luanda
P E RT H
melbourne
1,424
57
1,723
P RO F I T before ta x
V E S S E LS
L I Q U I D AS S E TS
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11
The Company’s history
The fleet has undergone considerable
largest companies within its segment and
Farstad Shipping was founded in 1956.
renewal and development since 1990
has a market share of approximately 6%.
In 1973, the company decided to enter
through the construction of new ton-
The company’s fleet consists of 57 ves-
the offshore market as one of the first
nage.
sels: 24 PSV, 30 AHTS, and 3 SUBSEA.
supply vessel operators in the North Sea.
The company had one vessel under con-
The company contracted its first supply
Strategy and focus areas
struction scheduled for delivery in March
vessel, an AHTS of UT 704 design.
Farstad Shipping’s strategy is to be a
2010.
long-term, major supplier of large and
The company grew through various part-
medium sized, modern, offshore service
Employees
nership solutions, both as owner and
vessels to the international oil and gas
The company had 1,860 employees at
operator, until the mid 1980s. The ac-
industry.
year-end 2009, an increase from 1,600
quisition of two fleets in 1986 (the Wil-
at year-end 2008. 160 of these work on-
helmsen fleet) and 1989 (the Seaforth
Farstad Shipping has a long term char-
shore, while 1,700 are sailors. The com-
fleet) respectively, was of fundamental
tering strategy and strives charter its
pany’s head office is situated in Ålesund
importance to the development of the
vessels on long term contracts. The pe-
and has 65 employees. Other operations
current fleet. At the same time the com-
riod of the contracts vary depending
are conducted from the company’s offices
pany also built up independent opera-
upon the market and vessel contract-
in Aberdeen (16 employees), Melbourne/
tional and market functions, and gath-
ed.
Perth (42 employees), Macaé/Rio (30 em-
ered its vessel ownership interests in one
company.
12
annual report
ployees) and Singapore (7 employees). 47
Farstad Shipping is currently one of the
-
nationalities are represented among the
sailors. The largest groups are represent-
Care must be exercised in order to pro-
pects, how many of its own shares it
ed by 411 Australians, 204 Norwegians,
tect oneself, one’s colleagues, the vessel,
acquires, and other general conditions.
264 Brazilians and 246 British sailors.
cargo, offshore installations, third parties
A dividend of NOK 3.00 per share is pro-
and the environment.
posed for 2009.
Every year Farstad Shipping invests sig-
Shareholder information
The company had 1,500 shareholders
nificant resources in ensuring the safety
The company has been listed on the Oslo
as per 15 March. Foreign shareholders
of its employees and creating and main-
Stock Exchange with the ticker code FAR
own 12% of the shares. The company’s
taining a good working environment. This
since 1988.
share price in 2009 moved between NOK
Health, Safety and Environment
is done to achieve as safe and environmen-
70.00 and NOK 140.00. In the middle
tally friendly operations as possible which
Farstad Shipping’s goal is to ensure that
of March 2010 the share price was NOK
comply with national and international
shareholders receive a competitive re-
151.50. This results in a market value
laws, regulations and relevant standards/
turn over time. This return partly comes
on the Oslo Stock Exchange of approxi-
guidelines in the offshore industry.
from the value created in the company
mately NOK 5.9 billion for the compa-
being reflected in the price of the com-
ny.
All employees on the company’s vessels
pany’s shares and partly from the pay-
and onshore are obliged to comply with
ment of dividends. The magnitude of the
the safety and environmental regulations
dividend will be assessed on a continuous
and procedures issued by the company
basis with respect to the company’s earn-
at any given time.
ings, investment plans, market pros-
annual report
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13
FINANCIAL DEVELOPMENT
3500
%
(mill. NOK)
100
2800
80
2100
60
1400
40
700
20
0
0
2000
2001
Freight income
2002
EBITDA
2003
2004
EBIT
2005
2006
EBITDA-margin
2007
2008
2009
EBIT-margin
D E V E L O P M E N T I N VA L U E S A N D D I V I D E N D
250
(Dividend NOK)
(Value NOK)
5
200
4
150
3
100
2
50
1
0
0
2000
2001
Dividend
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2002
2003
Board’s proposal dividend
2004
2005
VAE
2006
2007
Shareprice
2008
2009
Book value
KEY FIGURES
Farstad Shipping ASA – Group
2009
2008
2007
2006
2005
Share capital (NOK mill.)
39.0
39.0
39.0
39.0
39.0
Market price at 31.12
128.50
67.50
148.00
135.50
97.00
(1) 5 011.5
2 632.5
5 772.0
5 284.5
3 783.0
Share price high
140.00
148.00
170.00
139.00
97.50
Share price low
70.00
66.50
123.00
92.00
73.00
Booked equity per share
160.31
113.85
87.95
90.61
79.13
Estimated value adjustet equity per share (2) 249.45
248.06
218.06
170.87
115.28
Market capitalisation (NOK mill.)
Result per share incl. sale of fixed assets
(3) 49.53
31.42
-2.29
13.91
12.86
Result per share excl. sale of fixed assets
49.53
29.86
-7.32
13.91
8.71
Cash flow per share including sales profit (4) 37.68
39.64
13.09
20.65
25.16
Cash flow per share excluding sales profit
37.68
38.08
8.06
20.65
21.01
Dividend per share
3.00
5.00
4.00
3.00
3.00
(5) -
-
-
-2.95
-4.89
RISK-amount Liquidity ratio (6) 2.07
2.05
1.72
1.65
1.89
EBITDA- margin excl. sale of fixed assets
53.3 %
56.4 %
50.9 %
50.9 %
47.9 %
EBIT- margin excl. sale of fixed assets
39.3 %
44.0 %
36.4 %
36.1 %
30.9 %
Return on Equity (ROE) (7) 36.1 %
31.1 %
-2.6 %
16.4 %
17.1 %
Return on capital employed (ROCE) (8) 13.4 %
17.3 %
14.9 %
11.3 %
11.7 %
39 000 000
39 000 000
39 000 000
39 000 000
39 000 000
Average number of outstanding shares
Number of vessels per 31 December
56
51
48
48
44
Number of employees per 31 December
1 860
1 600
1 525
1 391
1 295
(9) 1.81
0.81
1.04
0.92
1.09
LTI- number DEFINITIONS:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total share outstanding x share price at 31.12.
Net value adjusted equity per share, for calculation methode see page 45.
Result of the year, divided by average number of shares.
Pre-Tax profit - taxes paid + depreciation + change in revaluation of liabilities,
divided by average shares outstanding.
01.01. of the year shown in the actual column.
Liquid assets divided by short- term debt.
Profit devided by average booked equity.
EBIT divided by sum total average booked equity and net interest bearing debt.
Lost Time Injuries, number of injuries per million work hours.
annual report
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15
416.7
540.6
195.6
366.8
285.6
473.6
456.4
804.7
895.0
4th QUARTER
265.0
299.1
220.5
640.88
05 06 07 08 09
3 QUARTER
451.7
549.5
871.9
417.1
536.8
429.3
662.7
560.6
rd
346.1
280.3
206.9
394.2
325.0
268.6
193.5
05 06 07 08 09
nd
EBITDA
( excl . profit
169.9
2 QUARTER
st
on sales )
571.9
05 06 07 08 09
1 QUARTER
775.7
834.9
437.6
425.4
746.1
625.2
545.0
05 06 07 08 09
208.9
417.0
382.1
O P E R AT I N G I N C O M E
( excl . profit on sales )
05 06 07 08 09
05 06 07 08 09
05 06 07 08 09
2nd QUARTER
05 06 07 08 09
3rd QUARTER
4th QUARTER
05 06 07 08 09
1st QUARTER
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05 06 07 08 09
2nd QUARTER
05 06 07 08 09
3rd QUARTER
294.7
125.8
279.2
208.3
352.6
366.3
178.2
226.6
147.2
196.1
255.9
341.3
141.0
136.9
292.6
236.1
190.5
124.9
EBIT
( excl . profit
101.4
on sales )
444.3
1st QUARTER
05 06 07 08 09
4th QUARTER
MAIN FINANCIAL FIGURES
Farstad Shipping ASA – Group
2009
2008
2007
2006
2005
(NOK mill)
Operating income ex. sale of fixed assets
3 257.6 2 958.6 2 318.2 1 940.9 Profit on sale of fixed assets
-
61.1 196.1 - Operating expenses
(1 521.4)
(1 290.5)
(1 137.4)
Operating profit before depreciation (EBITDA) 1 736.2 1 729.1 1 376.8 987.1 954.7
(454.9)
(365.4)
(336.8)
(286.4)
(281.4)
Depreciation
(953.8)
1 653.8
161.9
(861.0)
Operating profit (EBIT)
1 281.3 1 363.7 1 040.1 700.7 673.3
Net financial items
142.4 (454.4)
(114.9)
(125.9)
(184.2)
Pre-tax profit
1 423.7 909.3 925.2 574.9 489.1
BALANCE SHEET
Fixed assets
10 489.3 8 471.7 7 338.6 6 620.3 5 712.6
Current assets
2 528.4 2 440.6 2 008.9 1 454.4 1 569.6
Total assets
13 017.7 10 912.3 9 347.5 8 074.7 7 282.2
Equity capital
6 251.9 4 440.0 3 430.1 3 533.7 3 086.0
Non-current liabilities
5 541.5 5 284.3 4 751.2 3 661.9 3 364.9
Current liabilities
1 224.3 1 188.0 1 166.2 879.1 831.3
(1)
4 540.3 3 422.3 2 997.3 3 176.4 2 657.3
Net interest bearing debt
LIQUIDITY
1 713.7 1 743.4 1 461.4 972.3 1 180.2
Working capital (2)
1 304.1 1 252.7 842.8 575.2 738.4
Cash flow (3)
1 469.5 1 546.1 510.4 805.3 981.4
Liquid assets
C A P I TA L
Total assets
13 017.7 10 912.3 9 347.5 8 074.7 7 282.2
Equity capital
6 251.9 4 440.0 3 430.1 3 533.7 3 086.0
Equity ratio (4)
48.0 %
40.7 %
36.7 %
43.8 %
42.4 %
Value adjusted equity ratio
(5)
59.0 %
59.9 %
59.0 %
59.5 %
51.7 %
FLEET
Book value of vessels, interest in vessels
10 194.5 7 853.5 6 730.2 5 923.3 5 137.6
Mortgage debt
5 962.1 4 935.1 4 196.1 3 515.0 3 273.6
Leasing liabilities
-
-
-
306.9 259.3
DEFINITIONS:
(1)
(2)
(3)
(4)
(5)
Interest bearing debt- interest bearing liquid assets.
Current assets - short-term liabilities.
Pre-Tax profit - taxes paid + depreciation + change in revaluation of liabilities.
Equity capital as % of total assets.
Net value adjusted equity as % of total assets , for calculation methode see page 45.
annual report
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17
A WORD FROM THE CEO
Shipping was expected to be a challenging activity in 2009. The financial crisis
hit hard in the last half of 2008 and created direct ripple effects in all areas of
our operations as well. The excess tonnage caused by the large amount of new
build activity dramatically changed the
market. From witnessing spot market
rates in autumn 2008 of around NOK 2
million per day for large AHTS, 2009
brought with it far more difficult times.
We have had to get used to spot closings
of well under one hundred thousand per
day, and a utilisation rate of less than
60% for, for example, North Sea spot
tonnage.
Given this backdrop, Farstad Shipping’s
result for 2009 is pleasing and very satisfying. This is true with respect to both
the financial result in the form of turnover
and profit and the organisational result
in the form of good quality operations and
a strong focus on quality and safety
throughout the organisation.
2009 was also the year we took delivery
of four fine new builds and also invested
in one existing vessel, which had recently been delivered to another shipping
company from one of our partner yards.
Our new builds have a clear environmental profile. This has also been duly noted
in the market. The company won a number
of awards during the year. In essence this
was due to our strong focus on the environment, and a recognition of our good
quality, safe operations. I would especially like to highlight the Heyerdahl
Award for the company’s commitment to
the environment and the awarding of Esso’s safety award for 2009 based on our
operations in the Bass Strait in Australia.
A more informative presentation of the
various awards is provided on page 9 of
this report.
A new shipping taxation scheme was
introduced in Norway in 2007. The new
scheme provided competitive general
18
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-
conditions for shipping in Norway on a
par with those in the EU. This was a
positive and necessary foundation for
ensuring the sustainable development of
the quality shipping being operated from
bases in Norway.
The transitional rules from the old scheme
resulted in retroactive taxation stretching
back 11 years. This had a dramatic and
strongly negative effect on those companies that had joined the old scheme and
out of loyalty to this built up substantial
value in Norway. Farstad Shipping was of
the opinion, as was the rest of the industry, that this retroactive effect breached
paragraph 97 of the Norwegian constitution and, together with Bergesen Worldwide Gas, initiated legal proceedings
against the Norwegian government via the
Ministry of Finance on this basis.
The case was first heard in June in Oslo
City Court. The same case had also been
heard in Agder District Court by the shipping company Bergshav a few weeks
before, which resulted in a finding for the
government. The case was, as expected,
appealed, and went directly to the Supreme Court with all three suing shipping
companies represented as one.
The Supreme Court considered the case
in January 2010, and the judgement of
the Supreme Court found in favour of the
shipping companies. This was extremely
welcome, and was viewed by Farstad
Shipping as an important and necessary
clarification in relation to all business
activities in Norway, as well as confirmation of the fundamental principle that
laws should not have retroactive effect.
This is necessary if we are to develop and
invest in a capital intensive industry in
dynamic markets and at the same time
be able to manage financial risk.
On the whole, the levels of activity in our
various geographic segments declined in
2009. This was an indirect consequence
of the financial crisis and a direct consequence of the cost cutting of key customers, delayed delivery of rigs, and postponement or cancellation of planned
projects. However, the supply vessels
market primarily weakened due to a substantial surplus of tonnage due to the
large number of new builds delivered in
the market during the same period. The
market was already weakened at the start
of the year, but the financial balance was
still acceptable. Thereafter we experienced a fleet increase of 20% over a 12
month period with the consequent dramatic weakening of the market in general.
The effect was most apparent in the spot
market in the North Sea where spot rates
fell to record low levels. However, the effect was also clear in the market in general, including in the form of reduced rates
for longer charter parties.
Farstad Shipping took delivery of and put
into operation five vessels during 2009.
Four of these vessels are very advanced.
They are designed and equipped for environmentally friendly operations. We
have achieved pleasing emissions reductions of both CO2 and NOx of between
20 to 40% CO2 and 95% NOx respectively. The CO2 reductions were a direct
consequence of reduced bunkers consumption. This resulted in environmental
benefits on both the consumption and
emissions sides.
Shipping is international in nature. This
is also the case in the supply vessels
market in which we are active. On the
other hand, special national schemes and
the requirements of individual continental shelf states help to segment various
regions in a manner that makes the international sharing of competence and
equal competitive terms difficult. There
is a danger that both the financial crisis
and the surplus tonnage have strengthened the political basis for such regulations. The sharing of experience data in
connection with operational safety and
common standards for offshore operations would have had the opposite effect.
We look forward to better cooperation
and communication between the various
regions’ authorities and interested parties helping to guide this development in
a positive direction.
The group achieved a relatively good
safety result in 2009, but poorer than its
goal of zero harm to people and the environment. We thus have both potential for
improvement and face a general challenge
to be continually aware of the risks inherent in our operations. This is an exciting
and absorbing area of our activities. It
requires the continuous development of
our guidelines and the channelling of competent experience towards the continuous
improvement of our routines.
Of our almost 1,900 employees, more
than 90% are employed onboard our vessels, while our onshore organisation employs around 160 people. This organisation is based in the geographic regions
that are central to our activities and in
this way provides a solid basis for the
quality operations that are the goal of
our activities.
An intense focus on competence and
commitment in all parts of the organisation has contributed to the results we are
in a position to present after 2009. This
provides a basis for the focus and competitiveness we carry with us into a demanding market in 2010.
Shipping is by its nature cyclical. This
also makes us conscious of the fact that
the general conditions that currently
prevail in the market will develop in a
positive direction in the longer term. Farstad Shipping is well positioned to take
advantage of the opportunities this will
present.
annual report
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19
O U R C O R E VA L U E S
Farstad Shipping’s operations are based on five core values. These values are anchored
in our history. The company is run and developed in accordance with our values. These
values provide the starting point for our day-to-day prioritisations and decisions. Working
according to these five core values is what makes us good. How results are produced is
just as important as the results themselves.
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SAFETY MINDED
Our attitudes, vigilance and focus on safe
operations ensure the injury and damage
free execution of our assignments. Knowledge, skills, good attitudes and well thought
through routines ensure jobs are executed
properly for our customers and the environment. Farstad Shipping is and wants to remain a long-term, dependable employer.
VA L U E C R E AT I V E
We create value for our owners, our partners, our local communities and society as
a whole. We are ambitious and seekers of
and a driving force behind constructive
change. Focusing on the individual’s job
satisfaction, personal development and
safety through orderly conditions increases
the value for employees in the company.
RELIABLE
We are reliable, truthful, and vigorously and
loyally support decisions that have been
taken. Our attitudes are characterised by
integrity, we take responsibility, and do what
we say we are going to do.
INCLUSIVE
We are initiative takers and a driving force
with respect to the development of the industry, which we achieve by working together with customers, suppliers and educational institutions. We create a sense of
belonging and strength by benefiting from
and developing the individual employee,
sharing knowledge and experience, and taking individual needs into account.
V I S I B L E A N D T R A N S PA R E N T
We are consistent in all areas towards costumers, suppliers, employees and management. Systematically embedding our core
values results in a uniform management
style and a learning and developing organisation. We stand behind our decisions and
strive to be clear, consistent and recognisable. We care about and want to be a positive supporter of our local communities. We
communicate and live by our core values in
our day-to-day work.
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OUR FOCUS
We shall focus on health, safety, the environment and quality. This applies to all employees
and is vital to maintain the safety of our employees and improve our competitiveness. Our environment makes strict demands regarding safety
and precision both onshore and offshore.
We invest a large amount of resources every
year in stimulating and developing the employee’s attitudes and focus on these areas.
We have a clear goal of zero harm to people and
the environment.
We shall be a leading supplier of quality offshore
tonnage to the international oil and gas industry
with a focus on the larger, most advanced tonnage within the segments of anchor handling,
supply and subsea.
We shall maintain a long-term chartering profile.
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T H E G R O U P ’ S C O R P O R AT E M A N A G E M E N T
The Group’s corporate management consists of the CEO and CFO at the headoffice in
Aalesund, and the Excecutive Vice President, Eastern Hemisphere, who is situated in
Melbourne, Australia.
Karl-Johan Bakken (b. 1958) entered the position as CEO
January 1st 2006. He was earlier Director for Market and
Operations, a position he entered in July 1999. Mr. Bakken
joined Farstad with 15 years international experience from
the ship design and ship building industry. Latest as Vice
President of Ulstein Ship Technology and Director of Ulstein
Trading Ltd. AS. Bakken holds a M.Sc. in Naval Architecture
from the Norwegian University of Technology in Trondheim
(1984).
Karl-Johan Bakken
Chief Executive Officer
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annual report
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Torstein L. Stavseng (B. 1953) has held the position and
been part of the Management team since 1991. He came
to Farstad in 1988. Mr. Stavseng has a Masters degree
from Norwegian School of Economics and Business Administration (NHH) in Bergen. Before he joined Farstad he
had 6 years experience within the banking industry.
Joseph M. Homsey (b. 1949) is also Managing Director of
the Group’s entities in Australia and Singapore. He joined
Farstad Shipping in June 2003 upon the Group’s purchase
of P&O’s 50% share in IOS and P&O ship management
organisation in Melbourne.
Mr. Homsey worked for P&O Maritime Services for 22 years
and was the Director responsible for that company’s offshore and marine science fleet activities. Prior to that he
had 10 years with Industry Associations in Australia relating to Shipping and Mining respectively. He holds a B. ECO.
from Monash University, Melbourne.
Torstein L. Stavseng
Joseph M. Homsey
Chief Financial Officer
Executive Vice President, Eastern Hemisphere
annual report
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25
T H E B O A R D O F FA R S TA D S H I P P I N G
Sverre A. Farstad
(b. 1952)
Chairman
Board member / Deputy Chairman /
Chairman since 1988
Business degree - Heriot Watt University, Edinburgh, Scotland. Chairman of
the Board of Tyrholm & Farstad AS.
Various board appointments and other
positions in banking, insurance and the
Norwegian Shipowners Association.
Per Norvald Sperre
(b. 1946)
Deputy Chairman
Board member/Deputy Chairman since
1990. Admitted to the Supreme Court.
Law degree from Oslo, 1972. Experience
from banking, etc. Established own law
firm in 1977. Partner in the law firm
Schjødt DA since Nov. 2000. Holds a
number of board appointments in
industry and shipping.
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Gro Bakstad
(b. 1966)
Board member - since 2005
Business degree, NHH, Bergen and state
authorized accountant. Varied background from accounting, consulting, finance and offshore industry. Chief Financial Officer at Posten Norge AS.
Bjørn Havnes
(b. 1947)
Engineering degree, University of Newcastle
upon Tyne, President of Skips AS Tudor, Oslo.
Varied shipping experience since 1973,
primarily within offshore. Previously responsible for marketing in Wilhelmsen Offshore
Services and Wilh. Wilhelmsen rig division.
Holds various board appointments in industry and offshore companies.
Janne-Grethe Strand
Bjarne Sælensminde
Aasnæs
(b. 1963)
MBA – University of San Francisco, and
authorised financial analyst. Varied background as a financial analyst and portfolio manager in the investment management business. Managing director of
Strand Havfiske AS since 2000.
(b. 1947)
Business degree, NHH, Bergen. Vice
President Gard AS. Varied finance and
shipping background. Previously Director
of A/S Investa’s shipping and offshore
section.
Astrid Koppernæs
(b. 1957)
Engineering degree from NTH, MSc from
Stanford University. Varied background
as a petroleum engineer and manager
within the oil industry in Norway and the
UK since 1984. Managing Director in
Mythri Limited, Aberdeen.
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Our Business
and Corporate
Governance
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OUR BUSINESS
Our business activities
SUBSEA
Farstad Shipping ASA owns and oper-
44.2%
7.1%
vessel segment. The vessels can be di-
60.0%
34.3%
5.7%
2007
60.7%
32.8%
6.5%
2008
70.1%
28.3%
4.6%
Specially designed vessels for anchor
2009
64.4%
28.9%
6.7%
barges and production modules/vessels.
FREIGHT INCOME IN %
AHTS
PSV
2005
48.7%
2006
ates 57 vessels in the offshore service
vided into three categories:
AHTS
Anchor Handling, Tug, Supply vessels
handling and towing offshore platforms,
May have additional equipment for fire
fighting, oil recovery and rescue duties.
They also perform ordinary supply services.
PSV
Platform Supply Vessels:
Specially designed vessels for transporting supplies and equipment to and from
offshore installations. The vessels trans-
AHTS
port general cargo, primarily in containers as deck cargo, and a large variety of
other products (wet and dry) in separate
tanks. They also transport pipes in connection with laying pipelines.
SUBSEA
Construction and maintenance vessels:
PSV
Vessels specially designed for operations at great depths and installation and
maintenance on the seabed.
Strategy and focus areas
Within these three segments Farstad
Shippings shall work on a long term basis
and be a significant supplier. The company has a long-term chartering strategy. We have concentrated our activities
SUBSEA
within the AHTS > 10,000 BHP and PSV
> 2,000 DWT segment. There are 976
vessels within these segment, equivalent
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6 AHTS
12 PSV
1 PSV
9 AHTS
4 PSV
1 PSV
2 AHTS
15 AHTS
7 PSV
to about 40% of the total number of
Norwegian design, Norwegian equipment
The Fleet
supply vessels in the world. This is the
and Norwegian shipyards.
As per 15 March 2010, the company’s
segment in which the greatest growth
fleet consists of 57 vessels plus one new
has taken place in the last few years,
Today, the company is one of the largest
build scheduled for delivery at the end of
largely due to the substantial growth in
in this segment with a market share of
March 2010. The 57 vessels include: 24
oil and gas activities in deeper waters
approximately 6%.
PSV, 30 AHTS and 3 SUBSEA. The new
and in harsh weather regions.
build is an AHTS vessel.
The company has, in line with market
Farstad Shipping’s focus on the deep wa-
developments in the last few years, fo-
18 vessels are currently in the North
ter and subsea segment has intensified
cused on the international markets em-
Sea, 25 vessels are in the Indian Pacific,
in recent years and the new build pro-
ploying the technology and products
13 vessels are in Brazil, and 1 vessel is
gramme must be seen in this context.
Farstad has experience of in the compa-
in West Africa. The Farstad fleet’s con-
The company has been through a com-
ny’s traditional domestic market in the
tract coverage is approximately 78% for
prehensive new build programme with the
North Sea. This is why 39 of the compa-
the first half of 2010 and approximate-
delivery of 13 new builds corresponding
ny’s 57 vessels are currently working in
ly 67% for the second half of the year.
to an investment of NOK 6.6 billion.
markets outside the North Sea.
Contract coverage for 2011 is approxi-
The company has always contributed to
The sale of older vessels is and has been
charterers’ options to extend individual
the development of the maritime cluster
important with respect to maintaining a
contracts.
in the region and has focused heavily on
modern and competitive fleet.
mately 53%. These figures do include
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31
OUR BUSINESS
Our markets
The group’s activities are geographically
distributed over the following markets:
North Sea, Brazil, Indian Pacific and
West Africa. Farstad Shipping has a
long-term chartering strategy. The company’s customers are oil companies or oil
services companies that in turn have
contracts with oil companies. The
lengths of contracts and category of
charterer vary with respect to both the
type of market and geographical location. The North Sea is the only reguar
spot market for supply vessels.
The company has mostly signed longterm contracts for PSV vessels in the
North Sea, while the AHTS vessels are
on the sport market. Petrobras, the
state-owned oil company, is the largest
market player in Brazil. Farstad has the
most AHTS vessels on long-term contracts with Petrobras. Farstad also has
the most AHTS vessels on contract in
the Indian Pacific. This is due to the oil
types of activity being carried out by the
companies’ (mostly exploration activities)
in the region and the infrastructure in the
area.
Farstad Shipping’s income had the following geographic distribution in 2009:
North Sea 24.9%, Brazil 24.1%, Australia 47.5% and other sectors 3.4%.
F R E I G H T I N C O M E (sorted by sector)
Northwest Europe = 24.9%
Brazil = 24.1%
Indian Pacific = 47.5%
Other
= 3.4%
AHTS
64.4%
PSV
28.9%
F R E I G H T I N C O M E (sorted by segment)
SUBSEA
32
annual report
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6.4%
Value driven company
Farstad Shipping is a value driven company. All of our activities are based on
an awareness of the importance of
safety. The company has implemented
laws, regulations and internal guidelines
in order to protect people, the environment and equipment. The company is
ISO 9000/2000 and ISO 14001/2004
certified. Operations are ISM certified
and a Document of Compliance can be
found in every office. All the vessels in
the fleet are ISM and ISPS certified.
Farstad Shipping has always been and
will remain a company with a high level
of credibility by ensuring that we fulfil
our promises and agreements.
The company has played an important
role in the establishment and development of the maritime cluster in north
western Norway ever since the first half
of the 1970s when Farstad Shipping
started its activities in offshore service
vessels. This is the most complete maritime cluster in the world. Farstad Shipping has been a significant contributor
to the development of the industry by
deliberately focusing on partnership,
sharing ideas and openness. This is particularly true with respect to the implementation of equipment intended to
enhance the safety of those who work
onboard the vessels and measures for
reducing the pollution of the external
environment.
An inclusive attitude and involving the
company’s employees in projects and
the development of services have
helped to create huge value for both the
company and the industry.
The company has deliberately maintained an open dialogue with it’s customers. The development of new types
of vessel in close cooperation with the
company’s customers has helped to
strengthen the company’s market position. This has also helped the company’s
owners achieve their goal of a competitive return on their invested capital.
The company strives to be an attractive
place to work and cares about and
wants to be a positive contributor to its
local communities.
The company believes it is very important that owners and other players in
the financial market are treated equally
and wishes to set an example for others
to follow. The company has won the
Stockman* Award twice.
* The award is presented by the Norwegian Society of Financial Analysts for the best financial reporting in the small and medium-sized listed companies category.
annual report
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33
C O M PA N Y S T R U CT U R E
The Farstad Shipping Group owns vessel
owning companies in Norway, Scotland,
Singapore and Brazil (joint venture). With
the exception of Norway these companies also perform operational functions.
The operation of vessels in Norway is
organised through the parent company
Farstad Shipping ASA. Operations in the
Indian Pacific are coordinated through
our operating company in Melbourne.
The group’s head office is located in
Ålesund. At year end, the company employed 67 people associated with the
operation of 18 vessels. In addition, they
perform group related functions. 423
sailors were employed by the office in
Ålesund. The office administers 9 vessels in the North Sea and 9 vessels in
Brazil. The office is also supervising the
construction of 2 AHTS being built at a
Norwegian shipyard. The vessels operating in Brazil are operated jointly with
BOS.
Farstad Shipping Ltd.
This company’s office is in Aberdeen. The
office was established in 1989 and has
16 employees. They have technical,
crewing and commercial responsibility
for the operation of 10 vessels, of which
1 in Angola and 1 in Brazil. A total of
261 sailors, mainly British and Portuguese, work on these vessels. The company, which is subject to the British tonnage tax scheme, owns 8 vessels.
Farstad Shipping (Indian Pacific) Pty.
Ltd.
The company is headquartered in
Melbourne, with field offices in Perth and
Barry Beach Marine Terminal, and coordinates the management of 25 vessels
in the regions around Australia. The office employs a staff of 42. They have
technical, crewing and commercial responsibility for the operation of Farstad
vessels operating in the region. 608 sailors are employed on these vessels.
34
annual report
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Farstad Shipping Pte. Ltd.
Farstad Shipping Pte. Ltd. is headquartered in Singapore. The company was
established as a vessel owning company
in 2005 and today owns 7 vessels. The
operation of the vessels is coordinated
with the other offices, depending on
where the vessels are working. Currently,
3 vessels are stationed in Australia, 2
vessels in India, and 1 vessel in the
Philippines. The company has 7 office
staff and 141 sailors.
Farstad Construction AS
This company was established as a shipowning company for a SUBSEA vessel
under construction. The contract for the
newbuilding ”Far Samson tbn” was transferred from Farstad Shipping in 2008.
The vessel, that was delivered in March
2009 is chartered to Farstad Offshore
AS on a long-term bareboat agreement.
The company has no employees.
Farstad Offshore AS
This company was established for the
Farstad Shipping Crewing Pte. Ltd.
This company was established in
Singapore in 2009 for the purpose to
employ and manage sailors of the
Farstad Group and to perform ship husbandry services to Farstad Group vessels in the region. The company employs
and manages a total of 299 sailors,
mainly British and Asian.
Farstad Supply AS
This company is the Farstad Group’s
largest vessel owning company. The
company was established in 1997 as
part of the group’s adaptation to the
rules of the Norwegian taxation scheme
for shipping companies from 1996. At
the start of 2010, Farstad Supply owned
27 vessels. The company have no employees. The company and the company’s
vessels are operated pursuant to management agreements with other companies in the Farstad Group.
P/R International Offshore
Services ANS (IOS)
This company was established in 1997
as a joint venture with P&O Australia.
Farstad Supply bought P&O out in 2003
and today the company is a subsidiary of
Farstad Supply AS. The company is subject to the rules of the Norwegian shipping taxation scheme and owns eight
vessels. The company has no employees.
The operation of the company and the
company’s vessels is performed by other
companies in the Farstad Group via management agreements.
49%
Quimbriz Farstad
Shipping Lda.
(Luanda)
51%
Quimbriz, Angola
50%
BOS
Navegação SA
(Macaé - Rio)
50%
Petroserv, Brazil
purpose to charter and operate the
SUBSEA vessel “Far Samson tbn” from
Farstad Construction AS. Far Samson is
working on a long term contract with
Saipem. The company has no employees.
The company and the vessel are operated pursuant to management agreements with Farstad Shipping ASA.
BOS Navegação SA
BOS (Brazil Offshore Services) was established in June 1999 to crew, operate
and market the Farstad Group’s supply
vessels in Brazil. BOS is a joint venture
(50/50) with Petroserv S/A. Petroserv is
a Brazilian offshore company with long
traditions in the Brazilian oil industry.
BOS also holds a Brazilian Shipping
Licence and is therefore authorised to
contract foreign flagged vessels for operations in Brazilian waters. The company owns 3 AHTS and is also responsible for 10 Farstad Shipping vessels
chartered by Petrobras and British Gas.
The company has offices both in Rio and
Macaé and employs 30 people onshore.
266 sailors are employed on Farstad/
BOS vessels.
Quimbriz Farstad Shipping Lda.
The company markets and operates offshore service vessels and associated
services in Angola. Farstad Shipping has
one vessel on contract with BP Angola in
Angola. Farstad Shipping own 49% of
the company
(Aalesund)
100%
Farstad Shipping
(Indian Pacific)
Pty. Ltd.
(Melbourne)
100%
Farstad
Shipping Pte. Ltd.
(Singapore)
100%
Farstad
Shipping Ltd.
(Aberdeen)
100%
Farstad
Offshore AS
(Aalesund)
100%
100%
Farstad
Construction AS
(Aalesund)
Farstad
Supply AS
(Aalesund)
100%
Farstad
Shipping Crewing
Services Pte. Ltd.
(Singapore)
100%
P/R International
Offshore
Services Ans
(Aalesund)
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35
C O R P O R AT E G O V E R N A N C E
Farstad Shipping’s corporate governance
are commented on. References are made
equally. We shall project a positive profile
principles are intended to lay the ground-
to other places in the Annual Report with
in both the local community and in other
work for long-term value creation for the
respect to some topics. Further, more
relevant contexts. In 2006, we started an
benefit of shareholders, employees and
detailed information directly related to
attitudes campaign in order to promote
society as a whole.
corporate governance in Farstad Shipping
the company’s values among our employ-
can be found on the company’s website:
ees. These values will ensure that the
www.farstad.com.
confidence in the group’s activities is re-
1. Corporate governance report
Compliance:
inforced and grows. The job of describing
The Board of Farstad Shipping will at all
Core values:
the company’s ethical guidelines in ac-
times ensure that the company practices
The company’s objective is to create value
cordance with our values has been start-
good corporate governance and that
for its owners through profitable opera-
ed.
Farstad Shipping complies with the inten-
tions and business development. Exercis-
tions of the Norwegian Code of Practice
ing good corporate governance is
2. Activities
for Corporate Governance dated 4 De-
strongly emphasised in this work. This can
The objects clause of the company’s ar-
cember 2007, last revised on 21 October
only be achieved by generating the right
ticles of association states that:
2009. Corporate governance is reviewed
attitudes and a sense of responsibility
“The company’s objectives are the pur-
and discussed by the Board every year.
among the employees with respect to
chase, sale and operation of vessels,
The review of Farstad Shipping’s corpo-
maintaining heath, safety, the environ-
other shipping activities and investments
rate governance principles below follows
ment and quality in their day-to-day work.
activities, including participation in other
the template of the recommendations
The company wants good, open and uni-
companies with similar objectives and
from 2009. The report covers every point
form communications, which will also
providing guarantees for such, and any-
and deviations from the recommendations
ensure that all shareholders are treated
thing else connected with this.” Within
36
annual report
-
this framework the business concept is to
time. The basis for the shareholder’s re-
Capital increases:
be a long-term, major supplier of large,
turn is the growth in value created in the
The same general meeting also authorised
modern offshore service vessels to the
company. This partly depends on the
the Board to undertake increases in capi-
international oil industry.
company’s earnings and partly on the
tal of up to 3.9 million shares. In addition
development in value of the company’s
to increasing capital in the form of cash
3. Share capital and dividend
fleet. The goal is for this growth in value
the authority also covers mergers, takeo-
Equity:
to be reflected in the price of the compa-
vers of other companies, and investments
The company’s equity is appropriate for
ny’s shares.
in tangible fixed assets. This authority has
its goals, strategy and risk profile. Equity
not been exercised. The Board will ask
as per 31 December 2008 was NOK
Acquisition of own shares:
the general meeting to renew this author-
4.44 billion, which corresponds to 40.7%
In the ordinary general meeting on 14 May
ity as well for another 12-month period.
of its total assets.
2008 the Board’s authority to acquire up
Please also see note 24.
to 3.9 million of the company’s own shares
Dividend policy:
(10%) at a price between NOK 75 and
It is the Board’s intention to continue pay-
NOK 200 was renewed. This authority
4. Equal treatment of shareholders and
ing dividends. The amount of the dividend
has not been exercised. The Board will ask
transactions with closely associated
will be assessed on a continuous basis
the general meeting to renew the author-
parties.
with respect to the company’s earnings,
ity for another 12-month period, with a
Equal treatment:
investment plans, market prospects and
price range between NOK 50.00 and NOK
The company has only one class of share.
how many of its own shares it acquires.
200.00.
All shareholders have the same rights. The
The Board’s goal is to ensure that share-
authority to increase capital, discussed
holders receive a competitive return over
above, means that the existing sharehold-
annual report
-
37
ers have waived their preferential subscrip-
According to Norwegian law the general
about the shareholders’ right to propose
tion rights in connection with increases in
meeting must also appoint the auditor and
resolutions concerning matters that are
capital initiated pursuant to the authority.
approve the auditor’s fee. The general
going to be dealt with by the general
meeting shall also deal with the declara-
meeting. Information shall also be pro-
Any acquisition by the company of its own
tion about the guidelines for fixing the
vided about proposed resolutions for each
shares will take place via the stock ex-
remuneration of senior executives in the
agenda item, as well as alternative com-
change. Board members and senior em-
company.
ments about the agenda items where no
ployees shall report to the Board any direct
resolution has been proposed. A proxy
or indirect significant interests they have
Attendance:
in agreements signed with the company.
The annual general meeting is normally
form shall accompany the invitation.
held in the first half of May. Shareholders
Shareholders who wish to attend the
Transactions with close associates:
who have registered their addresses with
general meeting must register no later
In note 6 to the accounts Tyrholm & Far-
the company will receive an invitation by
than two days before it is held. Share-
stad AS is defined as a close associate.
mail no later than 21 days before it is held.
holders who are unable to attend them-
The Chairman of the Board of Farstad
The invitation and relevant documents will
selves can vote by proxy. The Chairman of
Shipping, Sverre A. Farstad, is also the
also be published on the company’s web-
the Board shall participate in the general
Chairman of the Board of Tyrholm & Far-
site at least 21 days before the general
meeting, as shall the company’s auditor.
stad AS. Transactions between Tyrholm
meeting is held.
The general meeting shall choose who will
& Farstad and the company take place on
market terms.
chair the meeting itself.
The relevant documents that accompany
the invitation shall be comprehensive
The minutes of the general meeting are
5. Free tradeability
enough for shareholders to reach a deci-
published on the company’s website.
All of Farstad Shipping’s shares have
sion concerning all of the agenda items
equal rights and are freely tradeable.
that are going to be dealt with.
6. General meeting
The invitation shall contain information
ers it has not been deemed appropriate
The general meeting in Farstad Shipping:
about the procedures the shareholders
for the company to have an election com-
The general meeting is the company’s
must follow in order to be able to partici-
mittee.
highest authority and elects the compa-
pate and vote in the general meeting. This
ny’s Board, approves the annual accounts,
also applies to the use of proxies. The in-
and the dividend proposed by the Board.
vitation shall also contain information
7. Election committee
Given the current structure of sharehold-
38
annual report
-
8. Corporate assembly and the Board,
Time is set aside during each board
ensure that those who are elected fulfil
composition and independence
meeting for the Board to evaluate its
the requirements. The audit committee
The composition of the Board:
work and its competence. The internal
shall consist of 3 board members.
The company’s Board currently has seven
allocation of responsibilities and tasks
members, three women and four men.
is regularly discussed and monitored
10. Risk management and internal con-
Board members are elected for a period
in the light of current legislation and
trol
of two years at a time. A brief résumé of
employment contracts.
Board responsibilities and purpose:
each board member, including how long
The Board deals with matters of strategic
they have served on the Board of Farstad
Financial reporting:
and/ or major financial importance to the
Shipping ASA, is provided on page 18.
The Board is regularly briefed on the
company. One board meeting every year
company’s financial situation, the vessel
is set aside for strategy work only. During
Board’s independence:
charter/market situation, and any chang-
this the Board reviews the company’s
The section “Board Remuneration” states
es in the competition situation. The Board
market expectations and financial fore-
which of the board members are consid-
complies with the Oslo Stock Exchange’s
casts from a five year perspective.
ered independent. The Board’s tasks are
interim reporting deadlines.
regulated by Norwegian law and include
The company’s internal control systems:
the overall administration and manage-
Board committees:
All of Farstad Shipping’s managers are
ment of the company. Members of the
The Board has not deemed it appropriate
responsible for risk management and in-
group management team are not mem-
to establish board committees. In practice
ternal control within their area of respon-
bers of the Board, although the group
the Chairman of the Board and the Depu-
sibility. The Board ensures that the com-
management team does attend Board
ty Chair together have acted as the pre-
pany has good internal controls and
meetings.
paratory corporate body for the facilita-
appropriate systems for risk management
tion of matters to which the company’s
within all areas of the company’s activi-
Board members’ share holdings in Fars-
senior management team are parties
ties. At each board meeting the Board
tad Shipping:
(employment contracts, pension agree-
receives a briefing about developments
The Board’s members own the shares in
ments, etc). These two have thus in prac-
within health, safety and the environment
the company stated in note 24.
tice functioned as a board committee.
(HSE) in which the company’s core values
Corporate assembly:
Audit committee:
Pursuant to the Regulations of 18 Decem-
Pursuant to the new provisions of the
Internal auditors regularly carry out as-
ber 1998, shipping companies are exempt
Norwegian Public Limited Liability Com-
sessments of the vessels’ and the indi-
from the obligation to have a corporate
panies Act, all issuers of tradeable securi-
vidual units’ management and control
assembly.
ties on the Oslo Stock Exchange must
systems and whether the control systems
establish an audit committee. The duty to
are appropriate. In addition, Det norske
9. The Board’s work
elect the audit committee and the rules
Veritas performs ISO audits of the com-
The Board’s duties:
concerning the audit committee’s duties
pany’s systems and of the internal audits
The Board’s statutory duties include the
and composition apply from the next or-
of these systems. The company is ISO
overall administration and management
dinary general meeting in May 2010.
14001 and ISO 9001 certified.
of the company. The Board adopts a con-
According to the provisions the committee
crete meeting schedule for the following
is intended to be a preparatory and advi-
Financial risk:
year in December each year. The Board
sory working committee for the board. The
Each year the Board deals with the com-
normally holds five meetings a year. The
committee’s members must be elected by
pany’s budgets in a special board meeting
Board holds an annual strategy meeting
and from among the board’s members and
in December in which a detailed presenta-
that lasts for 3-5 days every year focusing
shall together have the competence that
tion is also given of the subsidiaries’ finan-
on strategic options. The Board has ap-
is necessary, based on the company’s
cial position and exposure. The company’s
pointed a deputy chair who can function
organisation and activities, to address its
management reports on the company’s
as the chairman when the chairman can-
tasks. At least one of the members must
market situation at every board meeting.
not or should not chair the Board’s work.
be independent of the activities and have
The group’s financial position is presented
qualifications within accounting or audit-
every quarter. The key figures associated
ing. It is the general meeting’s duty to
with the company’s profitability and finan-
and ethics are also focused on.
annual report
-
39
cial soundness form the core of such
Paragraph 6-16a of the Public Limited
having an incentive scheme for those who
presentations. The Board is responsible
Companies Act instructs the Board to
form the company’s senior management
for the accounts and presents proposals
annually present a declaration concerning
team. Therefore, a bonus scheme has
regarding the allocation of the result to
guidelines for the remuneration of senior
been in place since 1993 that is partly
the general meeting. The company em-
employees to the general meeting. The
linked to the company’s earnings in the
phasises the production of accounts and
aforementioned legal provision came into
individual year and partly linked to an
financial reporting in which owners, inves-
force on 1 January 2007. In line with this
overall judgement of the senior manage-
tors and banks in particular can have
the Board has drawn up such a declara-
ment team’s performance during the rel-
confidence. An account of the company’s
tion, which was presented to the general
evant year.”
accounting principles is provided on
meeting on 10 May 2007. Part of the
pages 91 to 94 of this annual report.
declaration states:
Board’s annual review:
“As a major international player in its sec-
management team’s pension schemes,
In addition to the continuous reporting,
tor the Board is obliged to compete in a
post-employment pay arrangements and
the Board reviews the internal control
market which is international at the senior
other remuneration please see note 19 on
system every year and assesses the most
management level when setting the remu-
page 102.
important risk factors the company faces.
neration of managers in the company. The
.
The Board assesses the appropriateness
company’s management pay level is in-
13. Investor relations
of the internal control systems and en-
tended to correspond to what is esti-
Messages and reports:
sures compliance with these. The Board
mated to be a market level where the
Farstad Shipping places great emphasis
also assesses measures associated with
relevant function is exercised. The com-
on ensuring that shareholders and the rest
the risk factors.
pany’s managerial pay policy also means
of the share market receive rapid, relevant
that pay – in the sense of compensation
and as objective as possible information
11. Board remuneration
for work performance – is primarily fixed
about the company. Simultaneous notifi-
The Board’s remuneration is set by the
in money and not in the form of natural
cation is an important principle in our in-
general meeting and is not linked to the
benefits, share options and the like. Cus-
formation work. Our goal is for sharehold-
result. The remuneration reflects the
tomary additional benefits such as a
ers to have a good understanding of the
Board’s responsibilities, competence, time
company car/compensation for the use of
company’s activities so that they are in
spent and the complexity of the company.
one’s own car and the like are accepted.
the best possible position to evaluate the
The Board’s remuneration is stated in note
The Board recognises the importance of
share price and the company’s underlying
The Board sets the group management
team’s terms. For information about the
19 on page 102.
No options have been awarded to the
Board’s members.
The Deputy Chair of the Board and the
law firm of which he is a partner – Advokatfirmaet Schjødt DA – has performed
tasks for the company in connection with
the drawing up of agreements between
the company and the management. These
jobs were paid for according to the normal
hourly rates for this type of work. Other
board members do not perform tasks for
the group other than their board duties.
12. Remuneration of senior employees
The Group’s corporate management is
presented on page 24-25.
40
annual report
-
value. The information is primarily dis-
meeting. However, this issue is regularly
Auditor’s role in relation to the company’s
seminated through the company’s interim
discussed by the Board. The Board has
Board:
reports and annual report. Farstad Ship-
delegated the detailed work associated
The auditor is always present when the
ping normally publishes preliminary an-
with this to the company’s general senior
Board deals with the annual report and
nual financial statements in the second
management team.
accounts in order to provide an account
half of February. Complete financial state-
of the company’s internal controls and
ments and an annual report are sent to
14. Company takeover
accounts/reporting systems and other
shareholders during the month of April.
Given the current shareholder structure
relevant factors. The Board can meet
The financial calendar is published for a
the likelihood of a takeover bid being made
auditors without the group management
year at a time and is provided on page 2.
for the company is regarded as small. The
team being present if this is desirable. The
It is also available on the company’s web-
Board has therefore not drawn up any
Board has not deemed it necessary to
site. All stock exchange messages are
primary principles for how one would act
draw up written guidelines for the group
also distributed by Hugin. All reports,
in the event of a takeover bid being
management team’s access to use the
press releases and presentations are
made.
auditor for services other than auditing.
Equal treatment and openness:
In connection with the 2009 annual report
The company’s articles of association
and accounts the Board has received writ-
Other market information:
contain no restrictions with respect to
ten confirmation from the auditor that he
Being accessible to analysts is one of the
share purchases. Tyrholm & Farstad and
satisfies the stipulated independence
company’s priorities. Farstad Shipping
the Farstad family owned approximately
criteria. The auditor has also provided a
arranges public presentations for inves-
45% of the shares as per 31 December
written summary of the services other
tors in connection with the presentation
2009, but have no special rights as share-
than auditing that have been delivered to
of the interim reports for the 2nd and 4th
holders. The Board aims to treat all share-
the company during the year.
quarters. The results are presented, and
holders equally.
available on the company’s website: www.
farstad.com.
market performance and the company’s
Auditor’s fees:
outlook commented on. These presenta-
15. Auditor
The auditor’s fees are stated in note 19
tions are not currently webcast. Written
Audit firm Ernst & Young are responsible
on page 102.
guidelines for the company’s contact with
for the financial auditing of the parent
shareholders have not been drawn up
company, all the subsidiaries and the
other than with respect to the general
consolidated accounts.
annual report
-
41
42
annual report
-
Annual Report
and accounts for 2009
annual report
-
43
M A I N F I G U R E S O N A Q U A R T E R LY B A S I S F O R 2 0 0 8 A N D 2 0 0 9
All figures are exclusive profit on sales
NOK mill.
1st quarter 2008
Freight income
625.2
EBITDA
325.0
EBIT
236.1
Cash Flow before tax
274.0
Freight income
662.7
EBITDA
346.1
EBIT
255.9
320.0
Freight income
775.7
EBITDA
456.4
EBIT
366.3
402.3
Freight income
895.0
EBITDA
540.6
EBIT
444.3
533.2
Freight income
746.1
EBITDA
394.2
EBIT
292.6
322.5
Freight income
834.9
EBITDA
451.7
EBIT
341.3
421.2
Freight income
871.9
EBITDA
473.6
EBIT
352.6
422.0
Freight income
804.7
EBITDA
416.7
EBIT
294.7
363.4
2nd quarter 2008
3rd quarter 2008
4th quarter 2008
1st quarter 2009
2nd quarter 2009
3rd quarter 2009
4th quarter 2009
44
annual report
-
R E S U LT, F I N A N C I N G A N D R I S K
Going concern
Operating costs amounted to NOK
2.5% is in AUD. Interest-bearing current
The annual financial statements have
1,5421.4 million (NOK 1,290.5 million),
assets amounted as per 31 December
been prepared on the basis of a going
and ordinary depreciation amounted to
2009 to NOK 1,698.0 million (NOK
concern assumption since, in the opinion
NOK 454.9 million (NOK 365.4 million).
1,808.1 million). The group’s equity as
of the Board, no circumstances exist that
The operating profit (EBIT) amounted to
per 31 December 2009 amounted to
suggest otherwise should be the case.
NOK 1,281.3 million (NOK 1,363.7 mil-
NOK 6,251.9 million (NOK 4,440.0 mil-
lion including gains from sales). Net fi-
lion) corresponding to NOK 160.31 (NOK
IFRS accounting standards
nancial items were positive in the amount
113.85) per share. The book equity ratio
The consolidated financial statements
of NOK 142.4 million (negative NOK
was 48.0% (40.7%).
and the financial statements of the par-
454.4 million) after an unrealised cur-
ent company Farstad Shipping ASA have
rency gain of NOK 349.5 million was
Value adjusted equity (VAE)
been prepared in accordance with
recognised as income (loss NOK 315.8
Farstad Shipping obtains value estimates
International Financial Reporting
million). Currency gains of NOK 18.8
for the fleet twice a year: at the end of
Standards (IFRS).
million were realised (NOK 83.1 million).
the year and at the end of the first six
The result after tax amounted to a
months of the year. Calculations of the
Result and dividend
profit of NOK 1,931.5 million (NOK
vessels’ market values were made on the
The Board is very satisfied with a pre-tax
1,225.6 million) after the recognition of
basis of value estimates obtained from
profit of NOK 1,423.7 million based on
NOK 507.8 million in tax as income, NOK
three independent Norwegian shipbro-
operating revenues in excess of NOK 3.2
635.6 million of which came from a re-
kers at year-end 2009. The estimated
billion. Despite the poorer market condi-
versal of tax linked to the transition to
values of individual vessels (averages)
tions, signed charter parties and good
the new tax regime in 2007. The group’s
are stated in the overview of the fleet on
vessel operations helped ensure the
cash flow* for the period was NOK
pages 121 and 123. The brokers’ esti-
company was able to post a good result
1,529.1 million (NOK 1,590.5 million).
mates assume the vessels are without
for 2009 as well. Operating costs in-
charter contracts and available for im-
creased by 18% in 2009. This was due
Parent company’s result
mediate sale on the market. The brokers
to a combination of the fleet growing by
The parent company’s profit and loss
state their value estimates in NOK. The
five vessels and actual price increases.
account shows a profit of NOK 1,255.0
average value estimates at year-end
A high level of demand for maritime la-
million, which the Board proposes be
2009 indicated the value of the Farstad
bour in 2009 as well contributed to large
transferred to other equity. Pursuant to
fleet was NOK 13.64 billion. The value
increases in costs in all markets. The
the rules of the Limited Liability
of the fleet fell by 15.4% in 2009 (fall
level of activity and orders on hand at
Companies Act, NOK 1,950.2 million of
of 2.5% in 2008). Since the end of the
yards and equipment suppliers also re-
the company’s equity were distributable
first half of 2009 the value of Farstad’s
sulted in noticeable price increases for
reserves as per 31 December 2009. The
fleet has fallen by 7.1%. The market
equipment, servicing and spare parts.
Board will propose to the general meet-
outlook indicates that values may fall
Fluctuations in exchange rates through-
ing on 19 May 2009 that a dividend of
further, especially with respect to the
out the year resulted in a large correction
NOK 117.0 million be paid for the 2009
older part of the fleet.
to the exchange rates as per year-end
financial year. This corresponds to a
2008. This resulted in large unrealised
dividend of NOK 3.00 per share.
currency gains in the financial state-
Based on the value estimates as per 31
December 2009, VAE per share was
ments for 2009 linked to the portfolio of
Financing and capital structure
calculated at NOK 249.45 (NOK
loans in foreign currency and hedging
As per 31 December 2009, interest-
248.06). This results in a VAE ratio of
transactions.
bearing liabilities on the balance sheet
59.0% (59.9%). During 2009, VAE in-
totalled NOK 6,238.3 million (NOK
creased by approximately 0.6%) ap-
The result as per 31 December 2009
5,230.4 million as per 31 December
proximately 14% in 2008). At the end
Operating revenues as per 31 December
2008). The company’s interest-bearing
of 2009, VAE was calculated at NOK
2009 amounted to NOK 3,257.6 million
liabilities are distributed as follows:
9.72 billion (NOK 9.67 billion at the end
(NOK 3,019.7 million in 2008), including
63.4% is in NOK, 21.4% is in USD,
of 2008). The brokers have given their
gains from sales of NOK 61.1 million.
8.5% is in GBP, 4.2% is in EUR and
estimates in the form of high/low evalu-
* Pre-tax result + depreciation -/+ unrealised currency gains/losses vis-à-vis the company’s long-term foreign currency obligations.
annual report
-
45
R E S U LT, F I N A N C I N G A N D R I S K
Currency risk
31.12.09
31.12.08
31.12.07
VAE Total
Per
Total
Per Totalt
Per
share
share share
(mill. NOK) (NOK)
(mill. NOK)
(NOK) (mill. NOK) (NOK)
The company is significantly exposed to
currency risk since more than 90% of its
income is earned in foreign currency. As
well as having debt in the same currency
Market value vessels
13 642.5 349.81 13 056.3 334.78 11 803.2 302.64
Bok value vessels
10 165.9 260.67 7 822.1 200.57 6 728.8 172.53
as its income, Farstad routinely signs
forward exchange contracts and options
Excess value vessels
3 476.6 89.14 5 234.2 134.21 5 074.4 130.11
Book value equityl 6 251.9 160.31 4 440.0 113.85 3 430.1 87.95
VAE
9 728.5 249.45 9 674.2 248.06 8 504.5 218.06
Book equity ratio
48.0 %
40.7 %
36.7 %
Value adjusted equity ratio
59.0 %
59.9 %
59.0 %
to reduce currency risk and hedge cash
flows in foreign currency.
Credit risk
ations. If one takes the average of the
between the vessels’ market value and
brokers’ ‘high’ values, one arrives at a
gross mortgage debt was NOK 7.68
market value for the fleet of NOK 14.06
billion. The latter figure represents sig-
billion (equivalent to a VAE of NOK
nificant potential for further borrowing.
The company is exposed to potential
losses related to accounts receivable.
Our customers are primarily oil companies and credit risk is there regarded as
low. Provisions for losses on accounts
260.20 per share), while the average of
receivable as per 31 December 2009
the ‘low’ values results in a fleet market
Interest risk
value of NOK 13.22 billion (equivalent to
In the short-term the company is not
a VAE of NOK 238.70 per share). A fall
exposed to changes in variable interest
of 10% in values results in a fall in VAE
rates since only 16% of the long-term
of NOK 35.00 per share (equivalent to
interest bearing debt was subject to
approximately 14%).
variable interest rates as per 31
were very limited and large part of the
previous year’s provisions were recognised as income in 2009 since they were
paid.
Liquidity risk
December 2009. The remaining part of
It is important to stress that these cal-
the debt is subject to fixed interest rates
culations do not take into account extra
through fixed rate loans and interest
value in the company other than that
swap agreements.
The group’s strategy is to have sufficient
cash and cash equivalents to secure
ongoing operations, future growth and
dividend payments. The new build pro-
which derives from the difference be-
gramme is coming to an end and the
tween the vessels’ market values and the
vessels’ posted values in the accounts.
The estimates are provided on the assumption that the vessels can be sold
individually and that sales have no tax
related consequences. No adjustments
are made for any variations in value relating to signed charter contracts. Nor have
adjustments for any extra value associated with vessels under construction
been made. Thus no account has been
taken of variation in value associated
RESULT PER SHARE (after Tax) *
50
NOK
CASH FLOW PER SHARE (before Tax )
50
40
NOK
40
30
30
with the sale of the entire fleet, or sale
of the company as a going concern.
20
Financial risk
10
20
The figure at the top of the page provides
an overview of the vessels’ market value,
book value and gross mortgage debt. As
per 31 December 2009, the difference
between market value and book value
was NOK 3.48 billion, and the difference
10
0
-10
2005
2006
2007
2008
2009
excl. profit on sales
0
2005
2006
2007
2008
2009
incl. profit on sales
* Inclusive tax liability regarding new Norwegian taxation scheme for shipping companies in 2007
46
annual report
-
company had two vessels under con-
Norwegian constitution’s prohibition
the judgement causes us to believe that
struction as per 31 December 2009.
against laws with retroactive effect.
we can now expect predictable general
Both vessels were scheduled for delivery
Oslo City Court considered our case in
conditions for shipping in Norway.
in the 1st quarter 2010, and long-term
the beginning of June 2009. The City
financing of approximately 70% and
Court agreed with Farstad Shipping (and
The financial consequence of the judge-
approximately 75% has been agreed
BW Gas) that the transitional rules be-
ment is that the company’s equity is
with Fortis Bank and DnB NOR/GIEK
tween the old and new and new taxation
strengthened by NOK 635.6 million,
respectively. In addition to this the drop-
scheme for shipping companies were
which was the amount of the tax claimed.
ping of a NOK 635.6 million claim for tax
unconstitutional.
This corresponds to NOK 16.30 per
due to the Supreme Court’s judgement
share. From an accounting perspective
(see below) will strengthen the company’s
This judgement was appealed. It was
this takes place by recognising the
current and future liquidity situation.
decided that the case would proceed
amount as income in the financial state-
directly to the Supreme Court. The case
ments for 2009. Farstad Shipping had
Market risk
was heard by the Supreme Court in
already paid NOK 127.2 million. This will
A description of the markets Farstad
plenum in the second week of 2010. The
be the positive liquidity effect of the
Shipping works in is provided on pages
Supreme Court handed down its judge-
decision. The judgement stipulated that
61 to 81. The market risks differ in the
ment on Friday 12 February and found
the company’s tax assessment must be
various markets. The company’s strat-
in favour of the shipping companies by 6
cancelled. As of today’s date no new
egy is to have a long-term chartering
votes to 5. This means that the Supreme
guidelines have been issued as a conse-
profile. This reduces market risk.
Court has concluded that the transi-
quence of the judgement.
tional rules adopted by the Norwegian
Taxation scheme for shipping compa-
parliament in December 2007 breached
nies
paragraph 97 of the Norwegian constitu-
As previously announced, Farstad
tion.
Shipping brought legal proceedings
against the Norwegian government
Farstad Shipping welcomes the judge-
claiming that the transitional rules for
ment. It confirms, in our view, that retro-
the new taxation scheme breached the
active taxation is illegal. Furthermore,
DEVELOPMENT IN VALUE OF VESSELS
VALUE OF VESSELS VS. MORTGAGE DEPT
(NOK bill.)
(NOK million)
15
600
500
12
400
9
300
6
200
3
100
0
959697989900010203040506070809
Far Scandia
Far Senior
Far Service
Far Sword
Far Star
Far Sovereign
0
31.12.05
31.12.06
Mortgage dept
31.12.07
Book value
31.12.08
31.12.09
Market value
annual report
-
47
O P E R AT I O N S , C H A N G E S T O T H E F L E E T A N D N E W C O N T R A C T S
Activities
Farstad Shipping ASA owns and operates 57 vessels in the offshore service
vessel segment. The company works in
the platform service vessels (PSV), anchor handling vessels (AHTS) and subsea
vessels segments. A more detailed description of the company’s operations
can be found on pages 30-35 of this
report.
The company hires out vessels to oil
companies and other operators of offshore installations. The most important
changes to the fleet that took place and
new contracts that were signed are described below.
DnB
NOR
Bank
ASA,
GIEK
and
Handelsbanken.
vessel. The vessel was chartered to
Woodside in Australia on an 18 month
contract (plus on option for a further 18
”Far Serenade” (PSV, UT751CD) was
months) which started in December.
delivered by STX Norway Offshore AS,
Brevik on 31 March. The vessel was
4th quarter:
chartered to Statoil on a 5 year contract.
”Far Sagaris” (AHTS, UT731CD) was
A long-term loan of NOK 280 million was
taken out with Eksportfinans ASA in con-
Langsten on 27 October. The vessel is
nection with the delivery of the vessel.
working on the spot market in the North
The loan is guaranteed by Fokus Bank.
Sea. A long-term loan of NOK 437 million was taken out with Eksportfinans
2nd quarter:
ASA in connection with the delivery of
”Far Scorpion” (AHTS, UT731CD) was
the vessel. The loan is guaranteed by
Fokus Bank and GIEK
Langsten on 22 June. The vessel is working on the spot market in the North Sea.
Changes to the fleet
taken out with Nordea Bank Norge ASA
Farstad Shipping took delivery of the fol-
in connection with the delivery of the
lowing new builds and vessels in 2009:
vessel.
1st quarter:
3rd quarter:
”Far Samson” (CSV, UT761CD) was de-
”Far Swan” (PSV, VS470 MKII) was pur-
livered by STX Norway Offshore AS,
chased on 24 September 2009. The
Langsten on 24 March. The vessel was
vessel was built by STX Norway Offshore
chartered to Saipem UK Ltd on a 5 year
AS, Langsten in 2006.
New contracts
Farstad Shipping signed the following
new charter parties in 2009:
1st quarter:
AHTS ”Far Sea” won a contract with
Petrobras in Brazil for a period of up to 4
years. The contract started at the end of
January. Petrobras has a right to cancel
the contract every year, which can only
be exercised under certain conditions.
contract. A long-term loan of NOK 680
million was taken out with Eksportfinans
ASA in connection with the delivery of
taken out with Nordea Bank Norge ASA
the vessel. The loan is guaranteed by
in connection with the delivery of the
Two 5 year contracts were signed for
two PSV with Esso Australia. These will
service Esso’s drilling programme in the
CONTRACT COVERAGE FOR THE TOTAL FLEET IN %
Q 1 - 2010
Q 2 - 2010
Q 3 - 2010
Q 4 - 2010
Q 1 - 2011
Q 2 - 2011
Q 3 - 2011
Q 4 - 2011
Q 1 - 2012
Q 2 - 2012
Q 2 - 2012
Q 3 - 2012
48
annual report
-
CONTRACT
COVERAGE
78.7%
62.9%
48.4%
40.6%
36.1%
31.1%
26.6%
19.1%
17.6%
15.1%
15.0%
15.0%
OPTION
0.8%
6.5%
17.1%
14.5%
16.6%
18.3%
19.7%
17.6%
15.6%
14.7%
14.2%
12.5%
Bass Strait. The contract started in May.
”Far Scandia”s contract has been renewed, while ”Far Supplier” will replace
”Lady Kari-Ann”.
BP Angola has exercised it option to charter PSV ”Far Spirit” for a further year.
Associates (ADA). ADA is the agent for
a consortium of operators and the vessels will support the semi-submersible
rig Kan Tan IV in a drilling programme off
Australia and New Zealand. The vessels
mobilised from the North Sea in early
June.
AHTS ”Lady Cynthia” won a contract with
Japan Vietnam Petroleum Company
(JVPC) for a period of 9 months. The vessel will service JVPC’s drilling programme in Vietnam.
PSV ”Lady Christine” won a contract with
Shell Australia for a period of approximately 4 months to service Shell’s drilling programme off the west coast of
Australia.
PSV ”Lady Grace”s contract with
Woodside in Australia was renewed for
a period of 12 months from 30 April.
PSV ”Far Sleipner”s contract with
Petrobras in Brazil was renewed for a
further 2 years.
The contracts of AHTS ”Far Strait” and
AHTS ”Far Stream” with Woodside were
also renewed for a period of 12 months
from 20 April.
Petrobras has also exercised its options
for AHTS ”Far Sailor” and AHTS ”Far
Senior” for a period of 146 days.
Statoil exercised its first year option to
extend the contract of PSV ”Far
Searcher”.
2nd quarter:
AHTS ”Far Scimitar” and AHTS ”Far
Fosna” won contracts for a period of 12
- 15 months with Australia Drilling
4th quarter:
PSV ”Far Supporter” won a contract with
Petrobras in Brazil for a period of up to
3 years which will start in the 1st quarter
of 2010. PSV ”Far Splendour”s contract
with Peterson SBS was extended for a
further 1 year. PSV ”Far Scotia” won a
contract for a period of 6 months (plus a
3 month option) with Shell to work on the
Irish continental shelf. The contract was
started in November. AHTS ”Far Sabre”
won a 240 day contract with Petrobras
in Brazil. The contract was started in
October.
Statoil exercised its option for PSV ”Far
Star” for a period of 2 years.
The Farstad fleet’s contract coverage is
approximately 78% for the first half of
2010 and approximately 67% for the
3rd quarter:
AHTS ”Far Scout” won a contract with
Petrobras in Brazil for a period of up to
2 years. The vessel mobilised from the
North Sea and started its contract in the
beginning of November.
FREIGHT INCOME IN % SORTED BY SECTOR
100
The contracts of AHTS ”Far Sailor”, AHTS
”Far Senior” and PSV ”Far Swift” with
Petrobras in Brazil were all extended by
2 years. Petrobras has an option to extend the contract of ”Far Swift” by a
further 4 months.
second half of the year. Contract coverage for 2011 is approximately 53%.
These figures do include charterers’ options to extend individual contracts.
FREIGHT INCOME IN NOK SORTED BY SECTOR
%
3500
mill. NOK
3000
80
2500
60
2000
1500
40
1000
20
0
500
0
01
02
03
04
05
06
07
08
Northwest Europe
09
01
Brazil
Indian Pacific
02
03
04
05
06
07
08
09
Other
annual report
-
49
S H A R E H O L D E R M AT T E R S - D E V E L O P M E N T O F T H E S H A R E P R I C E
FINANCIAL CALENDAR
(subject to changes)
The company’s shares are listed on the
comparison the share price fell by 54%
“OB Match” list on the Oslo Stock
in 2008, while it rose by 9% in 2007
Exchange with the ticker code FAR. The
and 40% in 2006 respectively.
company’s share capital amounts to NOK
Result for 1st quarter
19 May
Annual General Meeting
19 May
Payment to shareholders
1 June
Result for 1st half-year
24 Aug.
Result for 3rd quarter
11 Nov.
39.0 million, made up of one class of 39
The highest share price in 2009 was
million shares with a nominal value of
NOK 140.00, while the lowest was NOK
NOK 1.00. A total of 3.22 million Farstad
70.00. Market capitalisation (listed
Shipping shares were traded in 2009,
share price multiplied by the total number
compared with 3.4 million shares in
of shares) amounted at year-end 2009
2008. These shares were traded on 240
to NOK 5,011.50 million (NOK 2,593.5
out of 251 trading days.
million at year-end 2008).
The company’s share price at the start
The company had 1,501 shareholders
of 2009 was NOK 70.00. At year-end
as per 31 December 2009 compared to
2009 the share price was NOK 128.50.
1,503 shareholders at year-end 2008.
This corresponds to a rise of 83.6%. By
The company had 100 (114) foreign
T R A D E O F FA R S TA D S H A R E S I N 2 0 0 9
VA E v s M A R K E T C A P I TA L I S AT I O N
Source: OSE
NOK bill.
10
9
350
56
300
48
250
40
200
32
150
24
100
16
8
7
6
5
4
3
2
50
8
0
0
1
0
2005
2006
2007
Value Adjusted Equity (VAE)
50
annual report
-
2008
2009
Market Capitalisation
Number of traded shares in 1000
Number of trades
shareholders, which represents 11.9%
authorisation to expand share capital by
The Board will propose a dividend of NOK
(22.3%). Foreign shareholders can own
issuing up to 3.9 million shares without
3.00 per share for 2009 at the annual
up to 33.3% of the shares.
preferential rights for current sharehold-
general meeting on 19 May 2010. It will
ers. The Board was also granted author-
also propose that the above mentioned
The ordinary general meeting was held
isation to purchase up to 3.9 million of
authorisations be renewed.
on 14 May 2009. The dividend approved
the company’s own shares. The authori-
was NOK 5.00 per share with payment
sations are valid until the annual general
to
meeting in 2010.
the
shareholders
on
27
May.
Shareholders registered as shareholders
in the share register on 14 May 2009
The company’s goal is to ensure that
were entitled to receive the dividend. The
shareholders receive a competitive re-
share was traded on the first day exclud-
turn over time. This return must partly
ing the dividend on 15 May 2009.
come from growth in the value created
in the company being reflected in the
On 14 May 2009, the general meeting
price of the company’s shares and partly
gave the company’s board an extended
from the payment of dividends.
SHAREPRICE DEVELOPMENT
NOK per share
SHAREPRICE DEVELOPMENT
INDEX
Source: OSE
200
800
175
700
150
600
125
500
100
400
75
300
50
200
25
100
0
Source: OSE
0
00
01
02
03
04
05
06
07
08
09
00
01
02
03
04
05
06
07
08
09
PHLX Oil Services Bench (US)
OSEBX Bench (NO)
annual report
-
51
H E A LT H , T H E W O R K I N G E N V I R O N M E N T, S A F E T Y A N D Q U A L I T Y
Values and values meetings
safe work operations. Preventive and cor-
term and long-term, that are intended to
Farstad Shipping’s values: safety minded,
rective maintenance are important areas
improve our statistics within both injuries
value creative, reliable, inclusive and visible
which the company pays a great deal of at-
to people and HSE in general.
and transparent, also guide the work done
tention to in order to safeguard technical
within the area of health, safety and the
integrity.
environment (HSE).
No contacts with installations were recorded in 2009, which is in line with our goal.
The company measures the frequency of
However, this goal will not be able to be
Values meetings focusing on teams and
absences due to injury as the number of
achieved in 2010 since PSV “Far Grim-
teamwork were held in 2009. The values
injuries to people with absence per one mil-
shader” collided with the drilling rig Songa
program will be introduced in all the operat-
lion working hours. There were 12 absenc-
Dee in January. This was a very serious in-
ing companies in the group.
es due to injury in 2009, compared to 5 in
cident that has been investigated both in-
2008. This corresponds to a frequency of
house and in cooperation with the operator
Targets
absences due to injury of 1.81 compared
and rig company. Improvement measures
Farstad Shipping’s goals within HSE is to
to 0.81 in 2008. The company takes this
have been identified and will be implement-
operate without injuries to people and harm
increase very seriously. A number of meas-
ed to avoid such incidents in the future.
to the environment, and in line with the prin-
ures have been implemented, both short-
ciples of sustainable development.
Farstad Shipping’s management system for
HSE and quality form an integral part of the
group’s total management system and are
certified pursuant to the ISO 9001 and ISO
LT I - Frequency (Lost Time Injuries)
15
Number of injuries per million of hour worked
14001 standards.
A key part of the HSE management is the
12
registration, reporting and assessment of
HSE data. HSE measurement indicators
have been established to help with this
9
work. The purpose is to document quantitative development over time and strengthen
the basis for making decisions regarding
6
systematic and targeted improvements.
The company focuses on learning from in-
3
cidents, both those involving injuries and
damage and those not involving injuries and
damage, and targets resources at those
areas that entail the greatest risk. It is also
working on ensuring that individuals take
the necessary time to plan and implement
52 annual report -
0
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
From 2003 the Indian Pacific is also included in the LTI-Frequency
09
The reporting of unwanted incidents by the
porting is good.
vessels increased from 2,001 reports in
participate in the further development of the
management system with a special focus
2008 to 2,148 reports in 2009. These
HSE data is collected in the result units and
on risk management. The NWEAG (North
included 494 registered NCRs (non-con-
reported to the group’s management team
West European Area Guidelines) are widely
formance reports). NCRs are reports of non-
which then assesses developments and
used in connection with this and the com-
conformance resulting from interruptions
trends, and also decides whether improve-
pany undertakes to comply with these in
to operations and non-conformance result-
ment measures are necessary. The HSE
geographical regions where they apply.
ing from internal audits and inspections
results and assessments are presented to
pursuant to the company’s ISM, ISO and
the Board by the CEO.
ISPS certifications. Most of the reports
The company’s participation in BIP (Bridge
Integrated Project) and the establishment
stem from inspections carried out by DnV,
The company has taken the initiative with
of a separate simulator training centre in
port authorities, customers and our own
respect to a further focus on operational
Australia are also contributions to this ef-
personnel (internal audits). The fact that the
safety. This is being done as a further meas-
fort.
number of reports has increased in relation
ure to improve the working environment and
to 2008 is interpreted as positive in the
to reduce the risk of injuries, including major
Sick leave
sense that it shows that the attitude to re-
accidents. Sailors from all regions actively
Absence due to sickness showed a positive
annual report
-
53
H E A LT H , T H E W O R K I N G E N V I R O N M E N T, S A F E T Y A N D Q U A L I T Y
development for sailors onboard our vessels
A number of courses within the fields of
Innovation, research and development
last year. In 2009 the sick leave ended at
safety (STCW & OLF), operator courses,
The company’s involvement in the form of
3.28% (3.77% in 2008). The sick leave
technical courses and other types of cours-
direct contributions to research amount to
es were conducted in 2009.
around NOK 10 million per annum, while our
among shore personnel augmented a little,
from 2.80% in 2008 to 2.98% in 2009.
Focus on health
Substantial resources are invested in creating safer work places though the mechanisation of risk exposed operations and remote control of equipment on deck. This is
primarily being done to lighten the work and
eliminate risk in certain operations.
Focusing on chemicals and systematically
phasing out products that can be replaced
by less harmful alternatives is an ongoing
job.
As an extension of our in-house “Health in
Focus” programme we participate in a
project together with the Offshore Simulator Centre, Marintek, Rolls-Royce, Bourbon
Offshore, NTNU and SINTEF. The project
is looking at “marine operations under extreme conditions” and will last for 4 years,
ending in 2011. The project aims to look
more closely at human/machine communications/ interaction and measurements visà-vis noise, EM radiation and the thermal
environment onboard vessels. The project
is intended to deliver a complete training
arena for offshore operations.
Competence
There was a large amount of activity within
the area of competence in 2009, both on
the vessels and onshore. The company
places great importance on ensuring crews
not only always comply with the competence requirements set by authorities and
customers, but that it is proactive in relation
to the development of competence enhancing measures that ensure that the company
leads the industry.
investments associated with innovation and
In the case of the Ålesund fleet, the initiative
the development of new and improved tech-
was taken in 2009 to increase the skills of
nology for use onboard our new builds
the sailors by offering them a chance to gain
amount on average to around 10% of the
their able seaman craft certificate. Arrange-
vessels’ contract price. This represents an
ments were made to facilitate study and
innovation contribution of more than NOK
exams onboard, and exams onshore for
100 million for 2009.
those who had time off. All of the 56 who
took the theoretical part of the exam
Farstad Best Practice
passed. In 2009, the company sent cap-
Common, global work processes
tains and chief officers from the PSV ves-
A roadmap containing a number of proposed
sels in the North Sea on courses to increase
improvement projects based on Farstad
their competence in relation to oil, gas and
Shipping’s core values has been established.
chemicals in and on tanks. This course re-
The introduction of a common global net-
sulted in the “tanker man lowest grade”
work that ties all of Farstad’s offices to-
certificate. The project has received very
gether and the development of common
positive feedback from those involved.
work processes across the group are examples of the above-mentioned projects.
A number of HSE seminars were held for
entire crews and managerial development
By introducing common global work proc-
courses for officers at our operating com-
esses supported by shared IT systems the
pany in Melbourne.
company hopes to improve information and
data quality through increased integration
In addition to this, a number of projects were
and interaction between the company’s lo-
started up together with course providers
cations, in-house at each location, as well
and producers that we expect to have pos-
as ship to shore, and not least improve data
itive results in 2010.
security.
The company has carried out a project with
Global work groups have described the
its own training PCs in connection with
company’s future global work flow in the
training and courses onboard on the ves-
areas of finance, human resources and
sels. This has had a positive effect with a
chartering.
number of implemented modules and courses involving the use of CBT (computer based
The results of the work in the global groups
training).
provides the basis for choosing the global
IT systems that will provide IT support for
The company has its own safety coaches
Farstad Best Practice. Implementation of
who for periods stay onboard the company’s
the new IT systems will start during spring
vessels to ensure that procedures and rou-
2010.
tines are complied with and observed. The
coaches also carry out different types of
skills enhancing measures onboard.
54
annual report
-
FA R S TA D S H I P S I M U L AT O R C E N T E R
Farstad Shipping’s ship simulator in
Perth, Australia
the equipment for the simulator centre.
other or function together. Training sta-
In 2009, Farstad Shipping decided to
The simulator centre will be a modern
and crane simulators for both vessels
establish an offshore simulator centre in
maritime training centre in 1,500 m2
and rigs will be integrated into the simu-
Perth to provide better simulator provi-
premises.
lator.
The simulator will be established as two
The simulator is planned to open in the
fully equipped and complete vessel
middle of August 2010.
tions for DP, training stations for sailors,
sion for the increasing number of employees on offshore vessels in the region.
The construction phase started in au-
bridges. There will be a 360 degree ho-
tumn 2009. Offshore Simulator Center
rizon from both bridges with the aid of
AS in Ålesund was awarded the contract
18 projectors. The bridges will be able
for both the development and delivery of
to be operated independently of each
annual report
-
55
O P E R AT I O N A L I M P A C T O N T H E E X T E R N A L E N V I R O N M E N T
Discharges into the sea
Control panel modification
used. We are constantly introducing im-
Farstad Shipping’s has a target of zero
The electrical control panels and systems
provements in this area. These include the
discharges into the sea. The company
for power supply onboard have been
introduction of the mandatory reporting
recorded 15 discharges into the sea in
modified. This makes it possible to reduce
of cooling agent consumption, which is
2009 (16 in 2008) totalling 578 litres
the number of engines that are running
included in the company’s environmental
(1,768 litres in 2008). Even though this
depending on the operational mode and
accounts.
is an improvement on the volume in rela-
thus saves fuel and reduces maintenance
tion to 2008, systematic work is still re-
costs.
Rubbish and waste
quired to achieve our target.
All rubbish and waste onboard the vessels
Catalytic converters
is sorted pursuant to international guide-
Ordinary shipping operations will always
Besides the last eight delivered vessels
lines. The management, destruction and
impact the environment in a number of
being equipped with catalytic converters,
disposal of rubbish and waste is included
areas. Besides our target of zero dis-
catalytic converters have been installed
in our monthly reporting.
charges into the sea, Farstad Shipping
on all four engines onboard Far Symphony.
focuses on the following areas:
The use of catalytic converters reduces
Septic sludge and grey water
NOx emissions by around 95%.
The regulations for handling and disposing
Emissions to air
off septic sludge and grey water vary in
In recent years the company has focused
Cooling agents
the different regions of the world. The
on reducing the volume and improving the
There has been a greater focus on leaks
company has drawn up guidelines pursu-
quality of its emissions of exhaust gas to
and improvements to the cooling systems
ant to international and local regula-
air. The volume of emissions depends on
onboard the vessels. This has had a pos-
tions.
the vessels’ assignments, including work-
itive effect in relation to unwanted leaks.
ing time and loads. The volume of emis-
When systems are renewed, more envi-
Chemicals and cleaning agents
sions can be reduced by optimising the
ronmentally friendly cooling agents are
In recent years the company has reviewed
use of engine power and good quality
maintenance. Purifying exhaust gas
makes a big difference in relation to reducing pollution when consuming fossil
GROWTH IN FLEET vs FUEL CONSUMPTION
fuels.
Farstad Shipping uses only light diesel oil
5
Number of units in million
Kg per DWT
10
in all of its vessels. The company’s newest
vessels have hybrid propulsion solutions,
which optimise efficiency and thus reduce
fuel consumption. Catalytic converters
4
8
3
6
2
4
1
2
have also been introduced on all newer
vessels. The company has started installing catalytic converters on its other vessels to reduce exhaust gas emissions.
Focus on optimum consumption
The company focuses on the consumption
of fuel in transit and in port in general.
Vessels with hybrid solutions enable the
optimisation of engines depending on operational requirements. Hybrid solutions
result in significantly better propulsion
efficiency and thus reduced fuel consumption at low speeds. Exploiting this advantage requires competence and the awareness of the crew onboard.
56
annual report
-
0
2006
2007
Total number of BHP in the fleet
Total number of DWT in the fleet
2008
2009
Total effect in kilowatt (KW) in the fleet
Fuel consumption in kg per DWT
0
and replaced the entire range of chemi-
and propellers by focusing on the prod-
to construct and operate vessels that
cals it uses onboard the vessels. Similarly,
ucts we choose, continuous improvements
present the least possible risk of dis-
a huge amount of work has been done to
and maintaining equipment.
charges of environmentally harmful sub-
increase our knowledge and improve
stances into air and water. The environ-
safety in relation to the use of chemicals.
Ballast water
mentally friendly measures onboard the
The range used onboard is continuously
Farstad works globally and often moves
last eight vessels delivered to the com-
assessed with a view to using more envi-
vessels between different operational
pany represent investments of around
ronmentally friendly chemicals.
regions such as the North Sea, Brazil and
NOK 40 - 80 million per vessel. These are
the Indian Pacific, and also moves vessels
investments that exceed the authorities’
Antifouling paint
within those regions. The environmental
requirements in the form of measures that
Today we exclusively use self-polishing
consequences of moving vessels are a top
reduce fuel consumption, e.g. hybrid pro-
paint of good quality and environmentally
priority with respect to marine organisms
pulsion solutions. The environmentally
friendly products that are available on the
in ballast water that are carried from one
friendly “Clean Design” antifouling paint
market. Silicone paint is being tested and
region to another. Plans have been drawn
and other measures will also help to pro-
experience of other new types of antifoul-
up in the form of ballast water manuals.
tect the environment.
ing paint is being gained. The first use of
Reduced quantities of ballast water are
silicone paint was in 2003 and the expe-
introduced and regularly replaced when
The curve at the bottom left shows the
riences so far have been positive.
vessels are in transit.
effect the company’s focus has had in
Antifouling products have continuously
improved since then.
relation to reducing fuel consumption in
Reduced impact on the external envi-
relation to the growth of the fleet.
ronment
Oil leaks from rudder and propellers
The newest available technological solu-
We have over time achieved substantial
tions are utilised in close cooperation with
reductions in sea pollution from rudder
designers, yards and equipment suppliers
Emissions to air
Cooling agents
Rubbish and waste
Septic sludge and grey water
Chemicals
and cleaning agents
Discharges
into the sea
Antifouling paint
Oil leaks from rudder and propellers
Ballast water
annual report
-
57
58
annual report
-
W E L FA R E , E Q U A L O P P O R T U N I T I E S A N D D I S C R I M I N AT I O N
Welfare
Standards have been developed for gyms
Supply vessel companies have a clear
A special full-time, welfare liaison officer
onboard the vessels as part of the devel-
preponderance of male-dominated pro-
position has been established at the
opment of the welfare concept. A re-
fessions. Farstad Shipping faces a chal-
head office as part of the development
searcher is also developing wide-ranging,
lenge in inspiring women to choose a
of the welfare concept in Farstad Ship-
varied recreational provision onboard.
maritime career. 55 women are cur-
ping. Welfare work has been developed
Resources are set aside for environment-
rently employed in different positions
further in 2009. The aim is to translate
creating activities.
onboard the company’s vessels. We will
our experience from Norway to other
regions, but tailored to local conditions.
continue to recruit women for maritime
As a trial project, the company has intro-
related positions.
duced a scheme in which cabins and
One important focus is an increased fo-
holiday flats can be rented by sailors in
The 1,700 sailors who were employed
cus on communications and information
Norway. These offers are managed by
by the company at year-end 2009 rep-
flow. The company is striving to develop
the employees representatives and also
resented a total of 47 nationalities.
a regular flow of information to all em-
developed in consultation with them.
ployees and their families.
The Board of Directors and management
Equal opportunities and discrimina-
team continue to promote gender equal-
FarInfo is an important information chan-
tion
ity in all areas to create diversity in the
nel. This is the in-house newsletter that
Farstad Shipping focuses on ensuring
organisation.
is published four times a year. A web
that people are not treated differently
based information channel “Farstad
because of their gender when it comes
In addition to work on equal opportuni-
Community” has also been introduced.
to promotion and recruitment. The prin-
ties, the company is also working to in-
This is currently only available in Norwe-
ciple of equal pay for equal work applies
clude people from groups that are under
gian. Work on an English version is ongo-
when setting pay scales. Appointment,
represented in the job market, including
ing.
training, remuneration and promotion
people with disabilities and groups with
shall be based on relevant qualifications
various ethnic backgrounds.
Contact with the employees’ family is one
only such as education, experience, re-
important area. In addition to the above
sults and other professional criteria. Of
information channels, a variety of ac-
the group’s 160 office staff as per 31
tivities, meetings and extensive informa-
December 2009, 64 were women. None
tion have been initiated to strengthen the
of the company’s senior management
company’s ties with employees’ family.
team are women. Three of the company’s
The experience so far has been good.
seven board members are women.
annual report
-
59
60
annual report
-
The Market for
Offshore Service Vessels;
annual report
-
61
THE MARKET IN GENERAL
The financial crisis, fall in oil prices and a
new build activity in this segment. The order
317%, corresponding to 742 vessels,
large number of vessels under construction
book for large and medium-sized supply
since 1998. Of these 752 vessels 652
characterised market development in our
vessels consists of around 375 units,
(87%) have gone to markets outside the
industry in 2009.
equivalent to around 38% of the existing
North Sea. Thus at the beginning of 2010,
fleet. Around 70% of the vessels are sched-
only 25% (244 vessels) of the fleet were
The financial crisis resulted in a dramatic
uled for delivery in 2010. It is doubtful that
operating in the North Sea (see the figures
reduction in access to capital. In addition to
they will all be delivered as planned. Only a
on next page).
substantially higher lending costs, this re-
few of the new builds currently have long-
sulted in projects being postponed or can-
term contracts.
celled. Stagnated growth in the global
The figures also show the trends for AHTS
and PSV respectively. Large PSV espe-
economy also had a negative impact on
At year-end 2009, there were 1,350 ves-
cially have experienced a significant change
activities in our markets. In addition to this,
sels, including vessels on order, owned by
in distribution by market. While 90 of the
the fall in oil prices resulted in a significant
153 market players. The 40 largest market
109 units (82.5%) were in the North Sea
incentive for the oil companies to cut costs.
players, which all have 10 vessels or more,
in 1998, only 31% of the world’s PSV fleet
This affected the level of both activity and
control 75% of the fleet, including new
is now in the North Sea (179 out of 575
rates. The delivery of new builds also re-
builds. 95 market players have five or few-
units). The AHTS fleet has seen a similar
sulted in overcapacity in most markets. The
er vessels and control 15% of the fleet.
development. While the AHTS fleet in the
fleet of large and medium-sized supply ves-
Edison Chouest is the largest market play-
North Sea in 1998 accounted for 47% of
sels increased by almost 140 units in 2009,
er in this segment because of its extensive
the world’s fleet (54 out of 115 units), the
equivalent to approximately 16%. The im-
new build programme. Tidewater is the sec-
percentage has now fallen to approximate-
balance in the market was first noticed in
ond largest market player, while Farstad
ly 16% (65 out of 401 units). The figures
the North Sea. During the year this imbal-
Shipping is the sixth largest market player.
also indicate how the various markets have
ance also spread to the other markets re-
Both Solstad and DOF are among the 10
grown.
sulting in falls in rates.
largest market players.
The fleet of offshore service vessels con-
The North Sea market was for a long time
around USD 80 a barrel and clear indica-
sists of approximately 2,400 units on a
the most important market for large and
tions of increased offshore activity, there is
global basis. Approximately 40% of this
mediumsized supply vessels. In 1998, 64%
in general little reason for optimism in our
fleet consists of large and medium-sized
of the fleet was involved in activities in the
industry due to all of the vessels that are
service vessels defined as AHTS with en-
North Sea. Since that time most of the
still on order. This situation is expected to
gine outputs of greater than 10,000 BHP
growth has taken place in markets other
endure far into 2011.
and PSV with cargo capacities of greater
than the North Sea. The industry has be-
than 2,000 DWT. There is still substantial
come international. The fleet has grown by
Despite an oil price that has stabilised at
A H T S > 1 0 0 0 0 B H P A N D P S V > 2 0 0 0 D W T (incl. NEWBUILDS) S O R T E D B Y O W N E R S
(15 largest)
AHTS
Edison Chouest
Tidewater
Maersk
Bourbon Offshore
Gulf Offshore
Farstad Shipping
DOF
Solstad Offshore
Chinese owners
Swire
Hornbeck
Seacor
Siem Offshore
Deep Sea Supply
Toisa
Sanko
62
annual report
-
14
18
51
16
10
28
8
18
18
15
0
14
2
12
3
8
PSV NEWBUILDS
67
52
11
39
40
24
20
13
8
8
21
11
9
8
11
2
33
16
4
9
6
2
16
3
3
4
6
0
11
1
5
10
AHTS
AHTS AND PSV IN NORTHWEST EUROPE
> 2 000 DWT
150
153
168
143
156
180
209
222
227
244
171
195
237
330
372
408
464
508
612
732
Northwest
Europe
Other
markets
58
54
61
50
48
45
51
54
56
65
92
105
124
164
175
189
207
229
282
336
Northwest
Europe
Other
markets
92
99
107
93
108
135
158
168
171
179
69
80
113
166
197
219
257
279
330
396
January 2001
January 2002
January 2003
January 2004
January 2005
January 2006
January 2007
January 2008
January 2009
January 2010
A H T S I N N O R T H W E S T E U R O P E v s OT H E R M A R K E T S
January 2001
January 2002
January 2003
January 2004
January 2005
January 2006
January 2007
January 2008
January 2009
January 2010
P S V I N N O R T H W E S T E U R O P E v s OT H E R M A R K E T S
January 2001
January 2002
January 2003
January 2004
January 2005
January 2006
January 2007
January 2008
January 2009
January 2010
PSV >2 000 DWT PER SECTOR
AHTS >10 000 BHP PER SECTOR
150
PSV
> 10 000 BHP
No. of vessels
200
120
No. of vessels
150
90
100
60
50
30
0
0
Northewest
Europe
South
America
Indian
Pacific
January 1998
West
Africa
Gulf of
Mexico
Canada
January 2008
Northewest
Europe
January 2009
Gulf of South/Central
Mexico
America
Indian
Pacific
West
Africa
Mediterraniean
January 2010
annual report
-
63
NEW BUILD ACTIVITY
One consequence of the last few years’
optimism in the oil and offshore industry
was a significant increase in the number of
large and medium-sized supply vessels. The
fleet increased by 63 AHTS (18%) and 74
PSV (15%) in 2009. The equivalent figure
for 2008 was 55 AHTS (19%) and 54 PSV
(12%). At the beginning of 2010, 375 vessels were on order (439 at the same time
in 2009). Of these 154 (201) are AHTS
and 221 (238) PSV. Approximately 80%
of the AHTS new builds and approximately
60% of PSV new builds are scheduled for
delivery in 2010. Many of the new builds
are expected to be delayed.
Increased oil activity in deeper and more
demanding waters has together with in-
NEWBUILD SORTED BY SECTOR
creased subsea activity been the driving
force behind the demand for large and medium-sized supply vessels. This has resulted in tonnage developing towards increasingly larger and more complex vessels with
respect to engine capacities, crane and
winch capacities. manoeuvrability, and
mechanised handling equipment. ROV and
other subsea functions have become more
integrated in the vessels. Greater deck areas and flexible tank solutions have enabled
the transport of different types of cargo on
the same vessel. Increased subsea activity has also resulted in a large number of
advanced construction and subsea vessels
being contracted.
The focus on health, safety and the environ-
AHTS
> 10 000 BHP
China
India
USA
Norway
Brazil
Singapore
Malaysia
Japan
Spain
Korea
NEWBUILD SORTED BY DELIVERY TIME
31
18
2
21
2
11
6
14
5
6
AHTS
> 10 000 BHK
1 Q - 2010
2 Q - 2010
3 Q - 2010
4 Q - 2010
1 Q - 2011
2 Q - 2011
3 Q - 2011
4 Q - 2011
1 Q - 2012
2 Q - 2012
3 Q - 2012
4 Q - 2012
64
annual report
-
53
28
22
20
6
6
6
8
0
3
1
1
PSV
SUBSEA
34
44
53
21
25
8
16
4
2
0
10
7
0
11
3
7
2
1
7
7
PSV
SUBSEA
41
38
31
26
20
7
9
11
12
8
9
6
21
20
11
5
8
2
0
1
2
1
1
0
> 2 000 DWT
> 2 000 DWT
ment has contributed to the development
of more environmentally friendly vessels
and stimulated a focus on the working environment onboard, including noise reduction measures.
The maritime industry in Norway still plays
a key role in the development of offshore
vessels and Norwegian yards are still leaders in their construction. At the start of
2010, 42 supply vessels were under construction at Norwegian yards (81 a year
ago). Of these 21 (40) are AHTS and 21
(41) PSV.
In the last few years a large number of
vessels have been ordered from yards in
other regions, especially the Far East.
This is due both to a lack of available
capacity at Norwegian yards and the
increase in prices that occurred at these
same yards. A number of Western operators have therefore ordered from
yards in the Far East. Another cause of
the increased contracting activity in this
region was the increase in the number of
local operators ordering vessels from local yards for operations primarily in their
domestic markets.
Yards in China have 65 (71) vessels under construction and this is now the
country with most vessels of this type
under order. Of these 31 are AHTS and
34 PSV. Yards in India have 62 (59) vessels under construction. Of these 18 are
AHTS and 44 PSV. Yards in other countries in the Far East have a total of 86
(104) vessels under construction. Of
these 52 are AHTS and 34 PSV.
tracts for Petrobras and work in Brazilian
fields. Of these 3 are AHTS and 25 PSV.
55 (40) vessels are currently on order at
US yards. These are largely expected to
remain in the Gulf of Mexico. 2 of the new
builds are AHTS and 53 PSV.
Norwegian yards are now responsible for
approximately 12% of the order book
(18% at the start of 2009 and 26% at
the start of 2008). Yards in the Far East
are responsible for 57% of the new
builds, up from 53% a year ago.
With a fleet that is increasing in number
and complexity, it is a challenge for the
industry to man vessels with crews with
the necessary competence and experience.
There are 28 (25) vessels of this type
under construction in Brazil. These are
primarily being built for long-term con-
annual report
-
65
66
annual report
-
THE NORTH SEA MARKET
In 2009, 24.9% of Farstad Shipping’s
portion of demand (term contracts) fell by
associated with subsea, cable laying and
freight income came from this region
3% in 2009.
salvage/coastguard activities in 2009.
(29.9% in 2008 and 33.4% in 2007).
The same level is expected in 2010.
This corresponds to freight income of
The majority of the term contract demand
NOK 812.7 million (NOK 884.8 million
in the region is connected to fields in
Statoil is the operator in the North Sea
in 2008 and NOK 735.0 million in
production. In 2009, 135 boat-years
with the most supply vessels on term
2007).
were related to this type of activity (136
contracts. It is followed by Shell and BP.
in 2008). The forecast for demand indi-
Gulf Offshore, DOF, and Farstad Shipping
In 2009, demand for supply vessels in the
cates slight reduction in 2010 as well.
are the shipping companies with the larg-
region ended on a par with 2008. From a
Demand for drilling activities fell from 25
est number of term contracts.
record low in 2004 of 164 boat-years,
boat-years in 2009 to 19 boat-years in
the level of activity and demand now ap-
2009. Demand for this type of activity is
The average utilisation rate describes the
pears to have stabilised at around 250
expected to fall further in 2010. The
relationship between the supply of and
boat-years. The average demand by
activity associated with the development
demand for supply vessels, and thus ex-
quarter in 2009 was as follows: 242
of fields and infrastructure such as pipe-
presses the balance in the market. The
boat-years in the 1st quarter (244 in the
lines, pump stations and loading buoys
average number of supply vessels in the
1st quarter 2008), 254 boat-years in the
were higher in 2009 than in 2008. This
North Sea in 2009 increased by 13 units
2nd quarter (255), 253 boat-years in the
type of activity involved an average of 22
(13 in 2008). The flat development of
3rd quarter (256) and 252 boat-years in
supply vessels in 2009. A slightly lower
demand created an imbalance in the
the 4th quarter (247). The level of activity
level of activity is expected in this region
market resulting in a fall in the level of
in the North Sea is expected to be on a
in 2010. In addition, an average of 23
rates.
par with 2009 in 2010. The long-term
supply vessels were engaged in activities
V E S S E L S I N T H E N O R T H S E A S O R T E D B Y O W N E R (15 largest)
AHTS
> 10 000 BHP
Gulf Offshore
Solstad Shipping
Farstad Shipping
Maersk
DOF
Havila Shipping
Island Offshore
Moekster
Siem Offshore
Bourbon Offshore
Eidesvik
Olympic
Trico Marine
Sartor
Sealion
annual report
PSV
> 2 000 DWT
1
9
4
10
2
4
2
3
2
2
2
4
2
2
0
-
22
10
12
6
12
8
9
7
7
6
6
4
4
4
5
67
THE NORTH SEA MARKET
DEVELOPMENT IN DEMAND FOR OFFSHORE SERVICE
VESSELS
300
In 2009, the average utilisation rate for
the total North Sea fleet was 90% com-
Boat-years in the North Sea
%
pared to 95% in 2008. The averages for
100
the quarters were: 89.5% in the 1st
quarter (92%), 93% in the 2nd quarter
250
95
200
90
and 88% in the 4th quarter (94%).
150
85
Rates come under pressure when the
100
80
50
75
0
2001
2002
2003
Term demand
2004
2005
2006
Spot demand
2007
2008
No. of vessels
2009
E-2010
Utilisation
70
(95%), 89.5% in the 3rd quarter (97%)
utilisation rate falls below 92-93%. The
utilisation rate was below this level for
large parts of 2009. The utilisation rate
is expected to fall in 2010 due to the
number of new builds scheduled for delivery in 2010. In such a market situation
a larger part of the demand will switch
from the term market to the spot market,
which further strengthens the imbalance
TERM DEMAND SORTED BY ACTIVITY
in the market. A further reduction in the
Boat-years in the North Sea
term market of around 4-5% is expected
300
in 2010. Earnings in the spot market are
currently below the level of the vessels’
250
operating costs. The AHTS fleet in particular has been hard hit by this market
200
situation. No significant improvement can
150
be expected in the short-term. The market balance in the region can therefore
100
only be restored by the fleet in the region
being reduced by 15-20 vessels.
50
0
2001
2002
2003
Production
2004
Construction
2005
2006
2007
Drilling
2008
2009
E-2010
Spot
Other
RIG DEMAND IN THE NORTH
SEA
D E V E L O P M E N T I N S P OT- R AT E S I N T H E N O R T H S E A
2,0
NOK million
40
No. of rigs
35
1,5
30
1,0
25
0,5
20
0
Jan.
Feb.
Mar.
2008
68
annual report
-
Apr.
May
2009
Jun.
Jul.
2010
Aug.
Sep.
Oct.
Nov.
Dec.
15
02 03
Semis
04 05
06
07
08
09 E-10
RESULT PER SECTOR
Freight income
NORTH SEA
2009
812 708
2008
946 250
Operation and administration cost
460 871
362 604
Operating result before depreciation (EBITDA)
351 837
583 646
Depreciation
160 829
119 939
Operating result (EBIT)
191 008
463 707
EBITDA %
43.3 %
61.7 %
EBIT %
23.5 %
49.0 %
AHTS
VESSELS IN THE NORTH SEA
> 10 000 BHP
PSV
> 2 000 DWT
January 2000
61
102
January 2001
58
92
January 2002
54
99
January 2003
61
107
January 2004
50
93
January 2005
48
108
January 2006
45
135
January 2007
51
158
January 2008
54
168
January 2009
56
171
January 2010
65
179
2008
2009
Statoil
46
44
Shell
19
17
BP
19
17
Peterson
13
14
ConocoPhillips
11
12
Maersk Oil
8
7
Team
7
6
Talisman
7
6
Saipem
3
5
Apache
5
4
TERM CONTRACTS SORTED BY OPERATOR IN THE NORTH SEA
annual report
-
69
70
annual report
-
T H E I N D I A N PA C I F I C M A R K E T
2009 was expected to be a challenging
New build offshore supply vessels (OSV)
Farstad Shipping’s fleet in this region
year with the global economic downturn
continued throughout the early period of
totalled 25 vessels at year’s end. The
impacting the offshore industry. This was
2009. However by midyear most owners
anticipated arrival of Far Supplier for a
proved well founded with the market ex-
had begun to realise that the market was
long term contract with Esso in Australia
periencing dramatic fluctuations in both
significantly changing and virtually halted
eventuated in May 2009. In addition to
supply and demand. For Farstad Shipping,
new build orders. The delivery of new ves-
this long term charter, Farstad Shipping
however, 2009 still proved to be a record
sels rose sharply in 2009 as the back log
was also able to secure long term char-
breaking year in the region.
of late deliveries from 2008 also came
ters for both the Far Scimitar and Far
in to the picture. This led to significant
Fosna in support of drilling operations in
Economic growth in the region was var-
oversupply of vessels in the region with
southern Australian waters as well as
ied. China, India, Australia and Indonesia
many vessels being idle for extended pe-
New Zealand. These vessels arrived in
are expected to have survived the eco-
riods.
July and are supporting the Kan Tan IV
nomic downturn with positive growth for
for
Origin
Energy
and
Australian
2009 whilst many countries including
This oversupply had a significant impact
Worldwide Exploration. On December 1st
Japan, Singapore and Malaysia have ex-
on OSV rates and increasing as the year
Farstad Shipping also took delivery in
perienced significant downturns and are
progressed. Combined with the down
Australia of Far Swan for a long term con-
expected to post heavy negative growth
turn in spending, delays or cancellation
tract with Woodside Energy Ltd. This
for 2009. However, many expects this to
of drilling programs rate levels were down
vessel was purchased and reflagged to
be turned around in 2010. Positive
almost 50% in some markets from the
Singapore and further solidifies Farstad
growth can again be registered.
heights realised in 2008.
Shipping’s
strong
relationship
with
Woodside in Australia.
V E S S E L S I N T H E I N D I A N P A C I F I C S O R T E D B Y O W N E R S (15 largest)
AHTS
> 10 000 BHK
Chinese
Farstad Shipping
Semco
Tidewater
Swire
Intra Oil
Ezra Holdings
Great Eastern
Bourbon Offshore
Gulf Offshore
Maersk
Solstad Shipping
FEMCO
Greatship
SBS Logistics
annual report
PSV
> 2 000 DWT
18
15
12
6
7
9
10
5
2
5
7
5
6
0
0
-
8
8
0
6
3
1
0
3
5
2
0
1
0
6
5
71
T H E I N D I A N PA C I F I C M A R K E T
RIG TYPE
2010 may well be the most challenging
Total in the region
in many years as the supply continues to
2005
2006
2007
2008
2009
grow beyond any projected recovery in
JACK UP
72
75
83
95
100
demand for OSV services. Farstad re-
SEMI-SUB
17
18
20
21
24
8
8
8
6
9
97
101
111
122
133
DRILL SHIP
TOTAL
tains a high portion of long term contracts for the fleet in this region which
are significant to the prognosis for the
year ahead. The biggest challenges will
revolve around some of our older vessels
in the region that will be exposed to very
RIG TYPE
JACK UP
Uttilisation (%)
competitive market conditions.
2005
2006
2007
2008
2009
94 92 91
89 85
DRILL SHIP
74
73
59 49
66
SEMI SUB
71 58 69 71 76
TOTAL
88 84
83
83
81
72
annual report
-
RESULT PER SECTOR
INDIAN PACIFIC
Freight income
2009
1 548 889
2008
1 344 926
687 410
595 819
861 479
749 107
Depreciation
171 328
153 042
Operating result (EBIT)
690 151
596 065
EBITDA %
55.6 %
55.7 %
EBIT %
44.6 %
44.3 %
AHTS
VESSELS IN THE INDIAN PACIFIC
> 10 000 BHP
G R O W T H I N G D P January 2000
26
6
January 2001
28
12
January 2002
29
12
January 2003
32
20
January 2004
43
30
January 2005
69
36
January 2006
64
41
January 2007
72
44
January 2008
88
49
January 2009
116
65
January 2010
147
70
2005
2006
2007
2008
20091)
Australia
3.2
2.7
4.8
2.3
1
China
10.4
11.6
13
9.0
8.7
India
9.2
9.8
9.4
7.3
6
Indonesia
5.7
5.5
6.3
6.1
4
Japan
1.9
2
2.2
-1.5
-5.6
Malaysia
5.3
5.8
6.2
4.6
-3.6
Singapore
7.3
8.4
7.8
1.1
-3.3
Thailand
4.6
5.2
4.9
2.6
-3.5
World average
5.1
5.2
) estimated
1
PSV
> 2 000 DWT
4.5
3-1.0
* Source: Westpac Market Outlook: Australia, G3 & Asia-Pacific February 2010 annual report
-
73
74
annual report
-
THE BRAZILIAN MARKET
Brazil is Latin America’s largest market,
PETROBRAS has recently released very
delivered to PETROBRAS. This means an
the world’s fifth most populous country
good information about the long-term
increase on the number units of approx.
and the tenth largest economy in terms
testing carried out at TUPI oil. A con-
85% in a period of four years!
of GDP. The government target is to be
servative estimate for the block’s reser-
among the five largest economies in the
voir is from 5 to 8 billion barrels. The
Besides this twenty nine drilling units
world until 2016.
field’s operating consortium consist of
already chartered to PETROBRAS, there
PETROBRAS, with 65%, BG with 25%
is tender going on for additional twenty
Brazilian economy was not so affected
and Petrogal, with 10%. It is expected
eight drilling rigs. These rigs will have to
by the international financial crisis as the
that four to six production platforms will
be built in Brazil and to be delivered until
European countries; however the impact
be needed to have the field fully produc-
2017. The proposals will have to be sub-
of the crisis will be seen on the 2009
tive with the capacity to produce in the
mitted to PETROBRAS in March 2010.
GDP. It is expected to have a GDP growth
area of 100,000 barrels/day.
around zero. The good news is that in last
Despite the new discoveries, Campos
quarter of 2009 the GDP growth is ex-
To comply with the drilling commitments
Basin is still PETROBRAS’ largest oil pro-
pected to be 2% higher than the 3rd
assumed with the ANP in the new “pre-
ducing area in Brazil. Approx. 80% of the
quarter of the same year, and comparing
salt” area, PETROBRAS will receive in
Brazilian production comes from Campos
with the last quarter of 2008 the in-
2010 six new drilling units, all under long
Basin’s ultra deep water oil fields.
crease is expected to be at the level of
term charters. In 2011 and 2012 an-
8%. Many economists predicts that the
other fourteen (14) drilling units will be
To support the increased activity in ultra
Brazilian GDP growth in 2010 will sub-
delivered to PETROBRAS. From the be-
deep waters, PETROBRAS fixed several
stantially increase, from a 0% in 2009
ginning of 2009 until 2012 twenty nine
new supplyvessels in 2009. Regarding
to about 6% in 2010.
(29) new drilling units were and will be
the PSV market thirty one new PSV were
VESSELS IN BRAZIL SORTED BY OWNERS (15 largest)
AHTS
> 10 000 BHP
Edison Chouest
Maersk
Tidewater
DOF
Farstad / BOS
Gulf Offshore
CBO
Finarge
Bourbon Offshore
Saveiros
Solstad Shipping
Ultrapetrol
Seacor
Augusta
Dalby Offshore
annual report
PSV
> 2 000 DWT
3
16
6
6
9
3
1
6
3
0
4
0
2
1
3
-
16
1
10
7
3
7
7
0
1
4
0
4
2
2
0
75
THE BRAZILIAN MARKET
hired; being thirteen newbuilds Brazilian
Santana (2000, UT 730, 19,200 BHP),
they will have a fleet of 50 supplyvessels
flag (6 large PSV 4500, 2 medium PSV
already located in Brazilian waters, will
working for them until the end of 2010,
3000, and 5 PSV with Oil Rec facilities),
service as a front runner until June 2010.
supporting 18 units, both rigs and pro-
and eighteen existing ships from the in-
Also in the last quarter of 2009 Petrobras
duction platforms. This new Brazilian
ternational market (5 large PSV 4500,
launched a tender for large AHTS for de-
market for supply vessels is already es-
13 medium sizes PSV 3000). These
livery in the 2nd half of 2010. It is ex-
tablished, and still growing.
eighteen PSV will commence contracts
pected that Petrobras will fix a substan-
latest in the 2nd quarter of 2010, while
tial number of vessels in this tender
Farstad Shipping ended 2009 with a
the thirteen 13 newbuilds have a delivery
(tender results are not announced yet).
fleet of twelve vessels trading in the
time of three years.
Brazilian market. All of them (3 PSVs and
2009 was also a good year for the
9 AHTSs) are under contract with
Petrobras has extended all AHTS con-
Brazilian market in general; the number
Petrobras, including the 3 Brazilian-built
tracts that were terminating in 2009, on
of supply vessels under contract with
AHTSs owned by BOS Navegação.
average for another 2 years period.
other oil companies has increased by
However, they know that for the forth-
37%. From 30 vessels trading in Brazil
coming ultra deep water challenges they
in 2008 to 41 vessels in the end of 2009,
must increase the AHTS fleet in terms of
being 17 AHTS, 23 PSV and 1 RSV. The
number of vessels and also in terms of
main international oil companies operat-
vessel’s sizes and winches capacities. As
ing in Brazil are: Statoil, Shell, Repsol,
a consequence Petrobras has awarded
Chevron, BG, ENI, Anadarko and Devon.
one of Farstad large new AHTS (UT 731
There are also two Brazilian private oil
CD, 24,000 BHP) a 2 year contract com-
companies in this market; OGX and
mencing 25th February 2010. AHTS Far
Starfish. Altogether, it is expected that
76
annual report
-
RESULT PER SECTOR
Freight income
BRAZIL
2009
786 181
2008
555 314
333 014
278 175
453 167
277 139
Depreciation
Operating result
(EBIT)
107 746
76 113
345 421
201 026
EBITDA %
57.6 %
49.9 %
EBIT %
43.9 %
36.2 %
AHTS
VESSELS IN BRAZIL / SOUTH AMERICA
> 10 000 BHP
PSV
> 2 000 DWT
7
25
13
24
15
27
17
25
20
25
26
36
31
39
37
41
42
51
53
59
77
77
2008
2009
Edison Chouest
11
22
CBO
12
18
Maersk
16
17
Tidewater
14
17
DOF / Norskan
9
14
Farstad / BOS
11
13
Wilson Sons
9
13
Solstad / REM
3
7
Finarge
5
7
UP Offshore
5
6
TERM CONTRACTS SORTED BY OWNERS IN BRAZIL
annual report
-
77
78
annual report
-
OT H E R M A R K E T S
Above we have provided a description of
Mexico, as can be seen from the figures
moving out into deeper waters. In the last
the markets in which Farstad Shipping
in this chapter. However, demand for
10 years, the number of large and me-
has concentrated its activities. Farstad
larger and more advanced tonnage has
dium-sized supply vessels in the Gulf of
Shipping has a market share of around
also grown in the Mediterranean, Black
Mexico has increased from 28 vessels
9% in these markets measured by the
Sea and Caspian Sea in recent years,
(17 PSV) to 150 vessels (123 PSV) at
number of vessels.
making these increasingly important
the start of 2010. The Gulf of Mexico is
markets. With the exception of the last
the second largest PSV market in the
Of the total world fleet of large and me-
six months, Canada has not seen any
world (21% of the fleet) after the North
dium-sized supply vessels, 70% of the
significant growth in recent years.
Sea (31%). Edison Chouest is by far the
AHTS fleet and 57% of the PSV fleet
largest player in this market with a mar-
were in these markets at year-end
The American sector of the Gulf of
ket share of 37%. The Jones’ Act pre-
2009.
Mexico in particular has experienced
vents tonnage not built in the USA work-
dramatic growth in the number of PSV
ing in the American sector of the Gulf of
Other major markets for this type of ton-
vessels. This is partly due to a need to
Mexico.
nage include West Africa and the Gulf of
renew the fleet and partly due to activity
V E S S E L S I N OT H E R M A R K E T S S O R T E D B Y O W N E R S (15 largest)
AHTS
> 10 000 BHP
Edison Chouest
Tidewater
Bourbon Offshore
Maersk
Hornbeck
Seacor
Swire
Gulf
Deep Sea Supply
Topaz Marine
Sanko
Augusta
Harvey
Bee Mar
Secunda
annual report
PSV
> 2 000 DWT
11
6
9
18
0
9
7
1
5
2
6
5
2
0
3
-
51
36
27
4
19
9
5
10
4
7
2
2
5
6
2
79
OT H E R M A R K E T S
VESSELS IN GULF OF MEXICO
VESSELS IN WEST AFRICA
As a region West Africa employed 45
(11%) of the world’s AHTS fleet and 82
150
No. of vessels
150
(14%) of the PSV fleet. This makes West
No. of vessels
Africa the fourth largest region for this
type of vessel. In the last 10 years the
120
fleet in this region has grown from 15 to
120
127 vessels. The dominant market players in the region are Bourbon Offshore
90
with its market share of 24% and
90
Tidewater with its market share of 22%.
An increase in offshore activity is not
60
only being seen in Nigeria and Angola,
60
but also in Ghana, Congo, Equatorial
Guinea and Sao Tome. Much of the activ30
ity is taking and will take place in deep
30
and ultra deep waters. Farstad Shipping
had one vessel working in this region
0
01 02 03 04 05 06 07 08 09 10
AHTS > 10 000 BHP
0
PSV > 2 000 DWT
01 02 03 04 05 06 07 08 09 10
AHTS > 10 000 BHP
PSV > 2 000 DWT
(Angola) at year-end 2009.
The Mediterranean region, including the
Black Sea and the Caspian Sea, has also
developed into an important region for
VESSELS IN MEDITERRANIAN/
CASPIAN SEA
80
No. of vessels
VESSELS IN CANADA
large and medium-sized vessels. Interest
in medium-sized vessels has also in-
20
creased in the Middle East in recent
No. of vessels
years. At year-end 2009, 35 AHTS and
39 PSV were working in this region. This
70
corresponds to an increase of approximately 9% and approximately 7% of the
15
60
world’s fleet. 10 years ago there were 4
AHTS and 3 PSV in this region. The larg-
50
est market players are Topaz Marine
(12% market share), Tidewater (11%),
10
40
Augusta Offshore (9.5%) and Deep Sea
Supply (9.5%).
30
5
20
10
0
01 02 03 04 05 06 07 08 09 10
AHTS > 10 000 BHP
80
annual report
-
PSV > 2 000 DWT
0
01 02 03 04 05 06 07 08 09 10
AHTS > 10 000 BHP
PSV > 2 000 DWT
AHTS
V E S S E L S I N T H E G U L F O F M E X I C O S O R T E D B Y O W N E R S (10 largest)
> 10 000 BHP
Edison Chouest
Hornbeck
Seacor
Gulf
Harvey
Tidewater
Bee Mar
Otto Candies
Nordcapital
Laborde Marine
11
0
7
0
2
1
0
0
0
0
AHTS
V E S S E L S I N W E S T A F R I C A S O R T E D B Y O W N E R S (10 largest)
> 10 000 BHP
Bourbon Offshore
Tidewater
Maersk
Swire
Sanko
Edison Chouest
Seacor
Varun
Sealion
Deep Sea Supply
V E S S E L S I N M E D I T E R R A N I A N / C A S P I A N S E A S O R T E D B Y O W N E R S (10 largest)
45
19
3
9
5
5
6
4
3
3
PSV
> 2 000 DWT
6
4
10
5
6
0
2
4
0
0
AHTS
> 10 000 BHP
Topaz Marine
Tidewater
Augusta
Deep Sea Supply
Swire
Iranian Nat Oil
Mærsk
Seacor
Olympic
Gulf
annual report
PSV
> 2 000 DWT
25
24
1
4
2
6
3
0
3
2
PSV
> 2 000 DWT
2
1
5
5
2
2
3
0
1
1
-
7
7
2
2
1
1
0
3
1
1
81
FUTURE OUTLOOK
The collapse of the financial markets in
mism resulted in the ordering of a large
Information Administration (EIA), has
autumn 2008 resulted in substantial
number of drilling rigs and offshore serv-
recently adjusted its forecast for oil de-
uncertainty in all markets. Huge value
ice vessels. The heavy fall in the oil price
mand in 2010 and 2011 upwards by
disappeared overnight, activities were
in autumn 2008 resulted in the oil com-
0.21 million and 0.20 million barrels per
paralysed in many markets, and projects
panies focusing on cutting costs in this
day respectively. EIA is now estimating
were cancelled or put on hold. The gov-
current period. This, combined with a dif-
demand at 85.51 million barrels per day
ernments of a number of countries intro-
ficult credit market, has produced a
in 2001 and 87.06 million barrels per
duced rescue packages to alleviate the
marked fall in activity. At the start of
day in 2011.
chaos caused by ensuring there was a
2010 the utilisation rate for semi-sub-
functioning banking industry, among
mersible rigs fell by 88%, while for jack-
The fact that the price of oil appears to
other things. This proved crucial and nec-
up rigs the fall amounted to 74%. In
have stabilised at around USD 80 per
essary to ensure viable projects/compa-
addition to this, 39 semi-submersible
barrel provides grounds for optimism.
nies obtained the financing they needed.
rigs and 61 jack-up rigs are under con-
There are indications from several quar-
At year-end 2009, many of the financial
struction.
ters that the activity in offshore is in the
markets have recovered significantly and
process of increasing again. The plans to
indications of growth are also being seen
The demand for oil is strongly linked to
increase activity in deep waters are es-
in the non-financial markets as well.
the performance of the global economy.
pecially important for Farstad Shipping.
There are now clear indications of a
This will also result in an increased need
The driving force behind the expansive
gradual improvement in the global econ-
for operations linked to the installation,
offshore activity in autumn 2008 was
omy. This is creating expectations of an
servicing and maintenance of subsea
the high oil price and the oil companies’
increased demand for oil. The US Depart-
wells and installations. Subsea activity
need to increase oil reserves. This opti-
ment of Energy’s statistical unit, Energy
is undergoing rapid development and
D E V E L O P M E N T I N O I L- P R I C E
150
USD
Source: Bloomberg
120
90
60
30
0
99
00
01
02
Per barrel
82
annual report
-
03
04
05
06
07
08
09
contributing to the further development
relatively rapidly towards the levels we
coming period. We will continue to renew
of the traditional supply vessels seg-
saw in spring/summer 2008.
the fleet in accordance with our custom-
ment.
ers’ needs, with an emphasis on health,
The market for offshore supply vessels
safety and the environment. With locally
A low level of exploration activity in the
in 2009 was characterised by reduced
anchored companies and qualified per-
preceding period resulted in the propor-
activity combined by a steadily increas-
sonnel both onshore and offshore we are
tion of new, potential oil fields falling in
ing supply of tonnage. This has produced
present in our most important markets.
both number and size. At the same time
an imbalance between the supply of and
In the years ahead we will continue to
production volumes from existing fields
demand for supply vessels. Rates have
develop the company’s competitive posi-
have been falling. This has a negative ef-
developed negatively in all markets. At
tions, expend substantial resources on
fect on the coming year’s production
the start of 2010 there were still 375
recruitment, and enhance our employees’
capacity. EIA’s current production esti-
large and medium-sized supply vessels
skills.
mates for 2010 and 2011 are 85.71
on order. This corresponds to an increase
and 86.69 million barrels respectively.
of 38%. A large increase in activities is
If one compares these figures with the
required before this overcapacity will be
demand forecasts above, the expecta-
absorbed. Everything indicates that we
tion now is that as early as in 2011 less
will be far into 2011 before the balance
oil will be being produced then there is
in the market will have a significant influ-
demand for. The consequence of the low
ence on the level of rates.
level of investment in searching for and
extracting oil in recent years may there-
Farstad Shipping is well equipped, both
fore be an oil price that once again rises
financially and operationally, to meet the
annual report
-
83
R E S P O N S I B I L I T Y S TAT E M E N T
We confirm, to the best of our knowledge,
sets, liabilities, financial position and
position of the entity and the group, to-
that the financial statements for the pe-
profit or loss of the entity and the group
gether with a description of the principal
riod 1 January to 31 December 2009
taken as a whole. We also confirm that
risks and uncertainties facing the entity
have been prepared in accordance with
the Board of Directors’ Report includes
and the group.
current applicable accounting standards,
a true and fair review of the development
and give a true and fair view of the as-
and performance of the business and the
Aalesund, 15 March 2010
Sverre A. Farstad
Chairman
Janne-Grethe Strand Aasnæs
Director
84
annual report
-
Per Norvald Sperre
Deputy Chairman
Bjarne Sælensminde
Director
Gro Bakstad
Director
Astrid Koppernæs
Director
Bjørn Havnes
Director
Karl-Johan Bakken
Parent Company
2008
Farstad Shipping ASA (NOK 1 000)
2009
Group
NOTE
2009
2008
Operating income:
-
89 249 -
99 046 Freight income
Other income
3 237 111 20 468 2 943 241
15 383
89 249 99 046 Total operating income
20
3 257 579 2 958 624
-
-
2
-
61 050
89 249 99 046 Total income
3 257 579 Operating expenses:
-
- Crewing expenses vessels
4 5 21
(926 878) -
- Other operating expenses vessels
(421 208) (88 521) (106 829) Administration
4 6 17 19 24
(173 333) 3 019 674
Profit on sale of fixed assets
Total operating expenses
(789 673)
(350 428)
(150 443)
(88 521) (106 829) 20
(1 521 419) (1 290 544)
728 (7 783) Operating profit before depreciation (EBITDA)
1 736 160 1 729 130
(1 298) (2 368) Depreciation
(454 909) (365 438)
(570) (10 151) Operating result (EBIT)
20
1 281 251 Financial items:
544 324 1 307 443 Financial income
78 243 (38 959) (20 025) Financial expenses
(304 153) (5 866) (4 975) Realised agio (disagio)
18 843 (4 343) (9 148) Unrealised agio (disagio)
349 506 1 363 692
495 156 1 273 295 86 200
(307 942)
83 122
(315 804)
26 27 29
142 439 (454 424)
494 586 1 263 144 Tax and results:
Pre-tax profit
1 423 690 909 268
(4 058) (8 184) Tax
14
507 813 316 287
490 528 1 254 960 Profit for the year
12 20
1 931 503 1 225 555
490 528 -
1 254 960 -
Majority share of the profit for the year
Minority share of the profit for the year
1 931 546 (43) 1 225 713
(158)
49.53 49.53 31.43
31.43
Net financial items
13
Earning per share (NOK)
Earning per share diluted (NOK)
3
3
annual report
-
85
BALANCE SHEET
Parent Company
31.12.08
31.12.09
- 8 487 - 12 843 9 807 490 763 514 711 - 12 494 - 4 658 22 660 1 435 361 673 814 Farstad Shipping ASA (NOK 1 000)
ASSETS:
NOTE
Group
31.12.09
31.12.08
Fixed assets:
Goodwill
16
30 247 Vessels etc.
13 20
10 237 712 Contracts newbuilds
11 13
191 242 Deferred tax benefit
14
-
Other long-term receivables
21
24 977 Receivables from Group companies
18
-
Shares
10
5 170 30 247
7 871 618
495 380
54 831
14 517
5 123
1 036 611 2 148 987 Total fixed assets
10 489 348 Current assets:
7 164 7 754 Account receivables, freight income
22
473 130 -
- Bunkers and other inventories
29 743 105 061 117 093 Other short-term receivables
8
296 126 -
- Forward currency and interest contracts
27
15 671 154 650 98 750 Other current financial assets
10
188 291 335 234 290 029 Cash and cash equivalents
10
1 525 413 8 471 716
533 327
19 665
144 245
198 998
1 544 379
602 109 513 626 Total current assets
2 528 374 2 440 614
1 638 720 2 662 613 Total assets
13 017 722 10 912 330
86
annual report
-
BALANCE SHEET
Parent Company
31.12.08
31.12.09
EQUITY AND LIABILITIES:
NOTE
Group
31.12.09
31.12.08
39 000 39 000 198 396 198 396 Paid-in capital:
Share capital
24
39 000 Share premium reserve
198 396 39 000
198 396
237 396 237 396 Total paid-in capital
237 396 Retained earnings:
897 633 1 957 331 Other equity 28
6 014 499 237 396
4 201 936
897 633 1 957 331 Total retained earnings
6 014 499 4 201 936
-
-
Minority interests
-
656
1 135 029 2 194 727 Total equity 6 251 895 Non-current liabilities:
56 146 60 118 Pension liabilities
21
60 118 -
- Deferred tax liabilities
14
14 902 -
- Tax liabilities and environmental fund
14 28
-
299 375 299 675 Interest-bearing mortgage debt 25 29
5 466 499 4 439 988
355 521 359 793 Total non-current liabilities
5 541 519 Current liabilities:
83 395 52 368 Accounts payables
177 019 -
- Taxes payable
14
22 325 -
- Forward currency and interest contracts
27
-
64 775 55 725 Other current liabilities 9
253 193 -
- Current portion of interest-bearing debt
25 29
771 771 5 284 379
148 170 1 187 963
1 224 308 56 181
508 476
4 719 722
204 593
99 514
153 134
220 041
510 681
108 093 Total current liabilities
503 691 467 886 Total liabilities
6 765 827 6 472 342
1 638 720 2 662 613 Total equity and liabilities
13 017 722 10 912 330
Aalesund, 15 March 2010
Sverre A. Farstad
Chairman
Janne-Grethe Strand Aasnæs
Director
Per Norvald Sperre
Deputy Chairman
Bjarne Sælensminde
Director
Gro Bakstad
Director
Astrid Koppernæs
Director
Bjørn Havnes
Director
Karl-Johan Bakken
annual report
-
87
S TAT E M E N T O F C A S H F L O W
Parent Company
2008
2009
Group
NOTE
2009
2008
494 586 1 263 144 (543 968)
(1 307 443)
22 147 13 880 - 1
- - 1 298 2 368 2 281 - 2 167 (590)
45 298 (31 027)
(734)
3 972 - 9 148 (50 164)
(21 044)
Cash flow from operating activity:
Pre-tax profit
1 423 690 Interest income/dividend received
(78 243)
Interest costs
26
278 484 Paid taxes
(8 119)
Profit on sales of fixed assets 2
- Ordinary depreciations
13 454 909 Writedown long-term shares
- Trade debtors (increase) / decrease
22 60 197 Trade creditors increase / (decrease)
(27 574)
Difference in pension cost and pension premium paid
3 937 Unrealised foreign exchange loss / (gain)
26
(349 506)
Changes in prepayment and accruals
(136 502)
(27 089)
(67 591) Net cash flow from operating activity
A
1 621 273 Cash flow from investment activity:
90 226 - Sale of fixed assets (sales price)
2
- (5 874)
(6 375) Investment in fixed assets and contracts newbuilds
13 (2 516 865)
(142 022)
(159 103) Purchase of shares
-
16 452 (953 746) Changes in long-term receivables
(10 460)
41 934 36 682 Interest income
78 165 502 034 1 270 761 Dividend received
78 (126 800)
43 048 Other investments
10 660 375 950 231 267 Net cash flow from investment activity
B
(2 438 422)
Cash flow from finance activity:
299 375 - New long-term debt 29 1 891 827 (300 000)
- Repayment of debt
29 (618 211)
(156 000)
(195 000) Dividend paid
23 24 (195 000)
(22 147)
(13 880) Interest costs
26
(278 484)
(6 207)
- Transactions posted direct to equity
- (184 979)
(208 880)
163 882 (45 204)
-
-
Net cash flow from finance activity
909 268
(86 200)
298 223
(141 230)
(61 050)
365 438
(192 127)
39 019
(540)
315 804
54 780
1 501 385
85 313
(1 462 727)
(4 590)
86 112
88
72 258
(1 223 546)
1 268 000
(764 513)
(156 000)
(298 223)
-
C
800 132 49 264
A + B + C
(17 017)
327 103
Net currency exchange differences subsidiaries
(1 949)
27 786
Net changes in liquidity over the year
171 352 335 234 Cash and cash equivalents at 01.01
1 544 379 1 189 490
335 234 290 030 Cash and cash equivalents at 31.12
1 525 413 1 544 379
10 88
annual report
-
S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E
Parent Company
2008
490 528
2009
Group
NOTE
2009
2008
Profit for the year
1 931 503
1 225 555
27 14 82 135 (3 538)
(101 813)
14 347
- - Translation effects foreign operation 7
- Change to environmental fund
(262) Other equity effects 78 597 (1 949)
(335)
(296)
(87 466)
27 786
6
(6 207) (262) Total other comprehensive income
76 017 484 321 1 254 698 Total comprehensive income for the year
2 007 520 Total comprehensive income attributable to:
484 321 1 254 698 Majority share
2 007 563 - - Minority share
(43)
Comprehensive income per share (NOK)
51.47 Comprehensive income per share diluted (NOK)
51.47 (59 674)
1 254 960
Other comprehensive income:
- - Change in foreign exchange contracts
- - Change in deferred tax
- - - (6 207) annual report
-
1 165 881
1 166 039
(158)
29.89
29.89
89
S TAT E M E N T O F C H A N G E S I N E Q U I T Y Farstad Shipping ASA (NOK 1 000)
Parent Company
Paid-in capital
Note
Share-
capital
Retained earnings
Share-
Currency and
Translation-
Other
premium interest hedging
effects
equity
fund
instruments
Total
majority
interest
Minority
interest
Total
equity
Equity at 31.12.07 39 000 198 396
0
0 569 312
806 708
0
Profit for the year 490 528 490 528 Other comprehensive income
(6 207)
(6 207)
Dividend payment 2007 (156 000) (156 000)
806 708
490 528
(6 207)
(156 000)
Equity at 31.12.08 39 000 198 396
0
0 897 633 1 135 029
0 1 135 029
Profit for the year 1 254 960 1 254 960 1 254 960
Other comprehensive income
(262)
(262)
(262)
Dividend payment 2008 23 24 (195 000)
(195 000) (195 000)
Equity at 31.12.09
39 000
198 396
0
0 1 957 331 2 194 727
Paid-in capital
Note
Share-
capital
0 2 194 727
Group
Retained earnings
Share-
Currency and
Translation-
Other
premium interest hedging
effects
equity
fund
instruments
Total
majority
interest
Minority
interest
Total
equity
Equity at 31.12.07 39 000 198 396 26 364 115 863 3 049 670 3 429 293 814 3 430 107
Profit for the year
0 0 1 225 713 1 225 713 (158) 1 225 555
Other comprehensive income
(87 466) 27 786 6 (59 674)
(59 674)
Dividend payment 2007 (156 000)
156 000) (156 000)
Equity at 31.12.08 39 000 198 396 (61 102) 143 649 4 119 389 Profit for the year
0 0 1 931 546 Other comprehensive income 27
78 597 (1 949)
(631)
Dividend payment 2008 23 24 (195 000)
Sale minority interest
1 931 546 (43) 1 931 503
76 017 76 017
(195 000) (195 000)
0
(613)
(613)
Equity at 31.12.09 39 000 198 396 6 251 895 90
annual report
-
17 495 141 700 5 855 304 4 439 332 656 4 439 988
0 6 251 895
n ot e s t o t h e a c c o u n t s ( NO K 1 0 0 0 )
note 1 – ACCOUNTING PRINCIPLES
Farstad Shipping ASA is a public limited com-
Certain new standards, changes and inter-
critical accounting estimates. It also requires
pany with its head office in Ålesund, Norway.
pretations of the standards that have been
management to exercise its judgment in the
The Group operates a shipping business that
published, but have not come into effect, have
process of applying the Company’s account-
primarily focuses on the operation of offshore
not been utilised in the annual accounts as
ing policies. The areas involving judgment or
vessels for the oil industry. The company’s
per 31.12.09. This applies change in IFRS
complexity, or areas where assumptions and
shares are listed on the Oslo Stock Exchange.
2 Share-based payment, change in IFRS 3
estimates are significant to the consolidated
The annual accounts were approved by the
Business combinations, a new IFRS 9 Financial
financial statements are value of vessels, use-
Board of Directors on 15th March 2010. The
instruments, revised IAS 24 Related party
ful lifetime for vessels, capitalization and de-
final annual accounts are approved by the
Disclosures, revised IAS 27 Consolidated
preciation of deferred maintenance, tax, pen-
Annual General Meeting.
and separate financial statements, change
sion liabilities and damage compensation.
The most important accounting principles
in IAS 32 and 39 Financial instruments, new
Revision to accounting estimates/ provisions
used in the preparation of the consolidated
IFRIC 16 Hedge of a net investment in a for-
are recorded in the period in which the esti-
accounts, which are prepared pursuant to the
eign operation, new IFRIC 18 Transfers of
mates are revised if the revision affect that
International Financial Reporting Standards
Assets from Customers and new IFRIC 19
period, or in the period of revision and future
(IFRS) and the interpretations stipulated by
Extinguishing Financial Liabilities with Equity
periods if the revision affects both current
the International Accounting Standards Board
Instruments. Some of these could affect the
and future periods. A provision is recognised
(IASB), are described below:
Group from 1st January 2010 or later. It is not
when the Group has an obligation (legal or self-
expected that these standards will have any
imposed) as a result of a previous event, it is
Primary principle
substantial impact on the group’s financial
probable (more likely than not) that a financial
The EU has decided that listed enterprises in
statements.
settlement will take place as a result of this
the EU must adopt the International Financial
The consolidated accounts and the accounts
obligation and the size of the amount can be
Reporting Standards (IFRS) for their consoli-
for parent company Farstad Shipping ASA
measured reliably. Please also refer to Note 15.
dated accounts from and including the pres-
have been prepared and presented in accord-
entation of their 2005 annual accounts. This
ance with International Financial Reporting
Principles of consolidation
also applies to Norwegian listed companies
Standard (IFRS). The consolidated accounts
The consolidated financial statements include
due to the EEA Agreement. The accounts are
have been prepared based on historic cost
the parent company Farstad Shipping ASA
presented on the basis of the IFRS stand-
principle. The exception is derivates (forward
and its subsidiaries in which Farstad Shipping
ards and the interpretations that apply for
exchange contracts and interest rate hedg-
ASA owns directly or indirectly more than
annual accounts that are presented as per
ing contracts), short-term shareholdings and
50% of the shares or has controlling power
31.12.09. The Group has implemented the
bonds, which are booked at their fair value.
over. The subsidiaries are specified in note 10.
Different accounting principles that apply in
following new amended standards and interpretations this year: IFRS 7 Financial instru-
Statement of comprehensive income
subsidiaries are adjusted prior to consolida-
ments - disclosures: Amendment effective
The revised standard prohibits the presenta-
tion, such that the consolidated accounts are
from 1 January 2009. The amendment re-
tion of items of other income and expenses
presented pursuant to uniform principles for
quires enhanced disclosures about fair value
(that is, ‘non-owner changes in equity’) in the
all group companies. All internal balances,
measurement and liquidity risk. Revised IAS
statement of changes in equity, requiring
transactions and results that arose between
1 Presentation of financial statements – re-
‘non-owner changes in equity’ to be presented
the companies have been eliminated in the
quires a new statement with presentation of
separately from owner changes in equity in
consolidated accounts. Shares and ownership
items of income and expenses (that is, ‘non-
a statement of comprehensive income. As a
interests in subsidiaries are booked at their
owner changes in equity’) separately from
result the group presents in the statement of
acquisition costs and are eliminated against
owner changes in equity in a statement of
changes in equity all owner changes in equity,
equity in the subsidiary at the time of acqui-
comprehensive income. Comparative infor-
whereas all non-owner changes in equity are
sition or establishment. Minority interests are
mation has been represented so that it also is
presented in the statement of comprehensive
included in the Group’s equity. The acquisition
in conformity with the revised standard. IAS
income. Comparative information has been
method was used when booking acquired units
23 Borrowing costs - change in accounting
represented so that it also is in conformity
and group eliminations. New acquired com
policy in respect of borrowing costs relat-
with the revised standard. As the change in
panies are consolidated from the moment de-
ing to qualifying assets. Change in IAS 27
accounting policy only impact s presentation
termining influence is attained.
Consolidated and separate financial state-
aspects, there is no impact on earnings per
ments - elimination of the cost method and
share.
Currency
Transactions in foreign currency are trans-
introduction of continuity of interest accounting. The implementation has no effect on the
Use of estimates - allocations
lated at the exchange rate at the time the
equity as at 1st January 2009 or compara-
The preparation of financial statements in con-
transaction took place. Cash items in foreign
tive figures.
formity with IFRS requires the use of certain
currency are translated to NOK using the ex-
annual report
-
91
change rate on the day of the balance sheet.
own segment. Overheads are distributed in
fair value through profit or loss, derivatives
Non-cash items that are measured at the
relation to the segment’s relative vessel share.
and loans. The group classifies its financial
historic exchange rate expressed in foreign
Financial information concerning segments
liabilities in the following categories: Financial
currency are translated to NOK using the ex-
and geographic distribution are presented in
liabilities at fair value through profit or loss,
change rate at the time of the transaction.
note 20. Segment information is presented
derivatives and financial liabilities at amor-
Foreign currency exchange rates are booked
according to IFRS 8 Operating Segments.
tized cost. Classification depends on the
purpose of the assets or liabilities.
on an ongoing basis during the period the accounts cover.
Costs- and revenue recognition
The Group presents its accounts in NOK. This
The group’s operational vessels are in essen-
Sale of vessels
is also the parent company’s functional curren-
tialness leased out on time charter parties.
Profit from the sale of vessels is presented at
cy. The profit and loss accounts of subsidiaries
The group has evaluated “IFRIC interpretation
a separate line for gain/loss on sale of fixed
with another working currency are translated
4 Determination whether an arrangement con-
assets and is included in total for income, due
to NOK at the monthly average exchange
tains a lease” and has concluded that the time
to the perception that these transactions are
rates as assets and liabilities are translated
charters (TC) represent lease of assets and are
part of the regular business operations.
into NOK using the rate of exchange as of
therefore subject to IAS 17. The TC contracts
the balance sheet date. The subsidiaries that
comprise payment for factors such as hire of
Government grants
operate in the UK (GBP), Brazil (BRL), Australia
crew. Lease income from the lease of vessels
Government grants from the authorities are
(AUD) and Singapore (USD) use a functional
is recognised on the profit and loss account us-
not recorded until it is reasonably certain
currency other than NOK.
ing the straight line method for the duration of
that the company will meet the conditions
The translation differences associated with
the lease period. The lease period starts on the
stipulated in connection with the receipt of
foreign currency related to the foreign subsi-
date the vessel is made available to the leaser,
the grants and that the grants will be received.
dies have been booked against comprehen-
and terminates on the agreed date for return
Government grants are recorded as deduc-
sive income. The accumulated conversion
of the vessel. Crew hire and payments to cover
tions from the cost that the grants are meant
differences associated with subsidiaries are
other operating expenses are reported as in-
to cover.
booked upon the sale of investments in foreign
come according to the straight line method for
subsidiaries.
the duration of the agreement. IFRIC-4 involves
Goodwill
no change in the revenue recognition principle.
Goodwill is the difference between acquisi-
Investments in joint ventures
Freight income is booked in the period in which
tion costs and the Group’s share of net fair
Jointly controlled ventures are ventures that
the service was performed. Income and costs
value of the identifiable assets at the time of
the Group controls jointly via a contractual
associated with charter parties are recognised
the acquisition. Goodwill is reviewed annually
agreement between the parties. A jointly con-
in the accounts on the basis of the number of
for impairment, and entered in the balance
trolled company entails the establishment of
days the contract lasts for and after the end of
sheet at acquisition cost less impairment
a separate entity in which each of the parties
the accounting period. Revenues from the sale
losses.
owns a share and where there is otherwise
of vessels are recorded in the income statement
When assessing the need to amortize good-
joint control.
once delivery to the new owner has taken place.
will, goodwill at the acquisition time is allo-
Farstad’s share of Brazil Offshore Service
Interest income is recorded as interest ac-
cated to the actual cash generating unit that
(BOS) (50 %) and Atlantic Marine Overseas
crues. The parent company incomes consists of
benefits from the acquisition.
Corporation (AMOC) (50 %) are entered
management fees from other companies in the
using the principal of proportional consoli-
Group and are entered as income continuous as
Depreciation of vessels and other fixed
dation (gross method). Accordingly, Farstad
per agreements between the companies.
assets
Shipping’s share of the company’s assets,
Vessels are included in the consolidated bal-
debts and margins are included in Farstad
Cash and cash equivalents
ance sheet at their cost price with deductions
Shipping’s financial statements respectively.
Cash includes cash in hand and at bank. Cash
of the year’s and previous years’ ordinary de-
Balance sheet items and result items directly
equivalents are short-term liquid investments
preciation. The vessels are depreciated line
between the company and Farstad Shipping
that can be immediately converted into a
arly to a corresponding value of 50 % of new
are eliminated in proportion to the ownership
known amount of cash and have a maximum
build price over defined period of use of 20
share Farstad Shipping has in the company.
term to maturity of three months.
years, taking into account an estimated mar-
ket value (residual value) of the vessels upon
Investments in associated companies
Accounts receivables
expiry of their period of use. These residual
Associated companies are entities in which
Accounts receivables are recognised at face
values are based on a conservative estimate
the
influence.
value less provision for bad debts. Provision
of what we believe the vessels can be sold for
Investments in associated companies are
for bad debts is made on the basis of signifi
when they are 20 years old. When a vessel is
booked according to the equity method.
cant uncertainty related to specified out-
older than 20 years old, the residual value is
standing items.
depreciated linearly by 10% per year, based
Segment
on an assumed useful life of 30 years, but
Segments are reported in the same manner
Valuation and presentation of current
always valued against the estimated residual
as internal reporting to the company’s highest
assets
value. The vessels are decomposed in vessel
decision-maker. The Corporate Management
Current assets in the form of shares and pri-
and deferred maintenance.
is defined as the company’s highest decision-
mary capital certificates are valued at their
maker and is responsible for allocation of re-
market value. The value of other short-term
Depreciation for other fixed assets is calcu-
sources to and consider profitability in the
receivables, bunkers and other inventories are
lated on a straight-line basis over estimated
different segments. The main business areas
face value reduced by expected future losses.
useful lifetime.
service (SUBSEAs) and platform supply serv-
Financial assets and liabilities
Write-down of fixed assets
ices (PSVs).
The group classifies its financial assets in
The booked values of vessels and other fixed
Other minor business is categorised into its
the following categories: Financial assets at
assets are reviewed for impairment when
Group
has
considerable
are anchor handling services (AHTSs), subsea
92
annual report
-
events or changes in circumstances indi-
loss account and costs associated with previ-
Equity and liabilities
cate the booked value may not be recover-
ous periods’ pension earnings, which are not
Financial instruments are classified as liabili-
able. If any such indications exist and where
recognized in the profit and loss account. The
ties or equity in accordance with the under
the booked value exceeds the estimated
defined benefit obligation is calculated annu-
lying economical realities. Interest,
recoverable amount, the assets are depreci-
ally by several independent actuaries, using
gains and losses relating to a financial instru-
ated to their recoverable amount as for fixed
the straight-line earnings method.
ment classified as a liability will be presented
assets is the greater of the net selling price
Estimate deviations that are due to new infor-
as an expense or income. Amounts distributed
and utility value. As an approach to net sell-
mation or changes to actuarial assumptions
to holders of financial instruments that are
ing price for the vessels the value estimates
in excess of the largest of 10% of the value of
classified as equity will be recorded directly
obtained from three independent Norwegian
pension assets or 10% of pension obligations
in equity. Translation differences arise in con-
shipbrokers is used. The broker’s estimates
are booked in the profit and loss account over a
nection with exchange-rate differences of
assume the vessels are without any charter
period that corresponds to the employees’ ex-
consolidated foreign entities. Exchange-rate
contracts and available for immediate sale on
pected average remaining period of employment.
differences in monetary amounts (liabilities
the market.
The estimated pension assets or obligations
or receivables) which are in reality a part of a
for the employees are gross recorded as a
company’s net investment in a foreign entity
Maintenance costs
long-term receivable and debt on the balance
are also included as translation differences.
Periodic maintenance is capitalized, and de-
sheet. The current year’s change in net pen-
preciated normally at 25% over 12 months
sion obligations then becomes a pension cost
Tax
and 75% over the period to next deferred
in the financial statement. Employers’ national
The Group is organized in compliance with the
maintenance/ docking, normally every 30.
insurance contributions are allocated for the
tax regime for shipping companies in Norway,
month. Upon delivery of new vessels, a portion
Norwegian pension obligations.
dividend,
Singapore and British Tonnage Tax. The parent
company, Farstad Shipping is not within this
of the cost of the vessel is valued as deferred
maintenance. If a vessel is sold, the capita
Defined contributions plans
regime. In December 2007, the Norwegian
lized deferred maintenance is deducted from
The Group’s defined contribution plan is a re-
parliament adopted a new shipping company
the profit.
tirement plan in which the Group pays fixed
tax scheme with accounting effect from and
contributions to a separate legal entity. For
including the 2007 financial year. This new
Contracts new builds
defined contribution plans, the Group con-
scheme entails no tax on profits or tax on divi-
Paid instalments for new builds are entered
tributes to a public or privately managed
dends from companies within the scheme. Net
as fixed assets as each payment take place.
insurance plan for retirement payment, on a
finance, allowed for some special regulations,
Investments regarding the new vessel that are
compulsory agreed-upon, or voluntary basis.
will continue to be taxed on an ongoing basis
not included in the contract, such as inspec-
The Group has no further payment obliga-
at a rate of 28%.
tion costs, and other related costs and rebates
tions once these contributions have been
The rules for the transition from the old to the
during construction are capitalized. Vessels
paid. Contributions are booked as costs on an
new regime are designed such that the ac-
under construction are not depreciated until
ongoing basis taking into account up-to-date
cumulated tax-free profit becomes taxable
the asset is taken into use.
accruals. Please also refer to note 21.
on the entry into force of the regime. The tax
cost’s nominal amount was recognised in its
All vessels for delivery next year have loan
approvals. Workshop payments, inspection
Financial instruments
entirely as a tax cost in 2007. Two thirds of
costs and a minor portion of the construction
Financial instruments within the scope of IAS
the tax is payable in 10 equal instalments over
contract are financed using our resources.
39 are classified into the categories financial
10 years.
Changes to IAS 23 Borrowing Costs means
assets at fair value against the result, lending
Meanwhile, a Supreme Court judgement of
that borrowing costs linked to qualified as-
and receivables, hedging and financial liabili-
12th February 2010 found in favour of the
sets can no longer be recognised as costs,
ties at amortized cost.
shipping industry and agreed that the transi-
but must be recognised on the balance sheet
The company utilises some extent of hedge
tional rules from 2007 were unconstitutional.
together with the asset. The company has not
accounting in the accounts. Hedge account-
The provision for tax was therefore reversed
incurred such borrowing costs.
ing is used when longer contracts in foreign
with effect for 2009. Tax that was paid for
currency are hedged for the entire period of
the 2007 and 2008 financial years is recog-
Pension costs and obligations
the contract. Hedge accounting is also used
nised as a current receivable on the balance
Group companies have various retirement
when interest rate swap agreements are used
sheet. Interest has not been calculated for this
plans. The group has both defined benefit and
to hedge interest rates and mortgages. Both
receivable.
defined contribution plans.
types of hedging represent cash flow hedging.
One third of the tax of the total tax was allo-
Hedging instruments that are considered ef-
cated to the fund for environmental measures
Defined benefit plans
fective means of hedging are entered into the
under non-current liabilities and the tax is
The Group’s defined benefit plans are retire-
balance sheet at their fair value, and changes
waived if the amount can be invested in envi-
ment plans that define a pension payment to
in fair value are entered to other comprehen-
ronmental improvement measures by 2021.
be received by an employee at retirement age;
sive income. Amounts that are entered to oth-
In 2008, the environmental fund was reversed
defined benefit plans are financed through
er comprehensive income are entered in the
as tax income and is recognized under equity
contributions to insurance companies or pen-
period in which the hedged transaction affects
as of 31st December. The basis for this was a
sion funds. Pension payments usually depend
the profit and loss account.
press release from the Ministry of Finance on
on one or more factors such as age, number
When the hedging transaction is signed, the
20nd January 2009 announcing a proposal to
of years of employment at the company, and
connection between the hedging instruments
discontinue the deadline of 15 years for imple-
salary level. The balance sheet liability associ-
and the hedged objects are documented, the
menting the environmental measures.
ated with defined benefit plans is the present
purpose of the risk management, and the
The company has tax increasing temporary
value of the defined benefits on the balance
strategy on which the various hedging trans-
differences posted in the balance sheet as a
sheet date less the fair value of pension plan
actions are based.
deferred tax liability. Deferred tax assets are
assets, adjusted for estimate deviations that
See also note 27 and 28.
recognized when it is probable that the com-
have not been recognized in the profit and
pany will have a sufficient profit for tax pur-
annual report
-
93
poses in subsequent periods to utilize the tax
Cash flow statement
Contingent obligations and assets
asset. Deferred tax and deferred tax assets
The Company uses the indirect model when
Contingent obligations are not booked in
are recognized at their nominal value and clas-
presenting its cash flow statement. Bank de-
the annual accounts. Significant contingent
sified as non-current asset investments (long-
posits and money market funds are included in
obligations are reported with the exception
term liabilities) in the balance sheet.
cash and cash equivalents.
of those contingent obligations in which the
Taxes in the profit and loss account represent
likelihood of the obligation arising is very
a reversal of tax allocated to the fund for en-
Operating leases
unlikely.
vironmental measures, the payable tax for the
Leases for which most of the risk and return
A contingent asset is not booked in the annual
period, partly a tax on gross freight income
associated with the ownership of the as-
accounts, but reported if there is a certain
abroad and changes in deferred tax. Tonnage
set have not been transferred to the Group
level of probability that the Group will attain a
tax within the regime is classified as an ope
are classified as operating leases. Lease
benefit.
rating cost and because of the size of Farstad
payments are classified as operating costs
Shipping’s vessels it is insignificant.
and recognized in the income statement in a
Research and development
Deferred tax is recognised in the accounts
straight line during the contract period.
Research and development costs are booked
directly against equity to the extent that it
as costs on an ongoing basis when the criteria
relates to items recognised in the accounts
Lease of vessels – leasing obligations
directly against equity.
Lease agreements concerning vessels in
Please also refer to note 14.
which the Group has largely assumed the risk
Events after the balance sheet date
are classified as financial leasing. Upon the
New information on the company’s positions at
Result per share
start of the lease period the asset is activated
the balance sheet date is taken into account in
The calculation of the result per share is based
in the balance sheet as a vessel and the lease
the annual financial statements. Events after
on the majority’s share of the result with the
obligation is correspondingly included as long-
the balance sheet date that do not affect the
use of the time weighted average number of
term and short-term liabilities. Depreciation is
company’s position at the balance sheet date,
outstanding shares throughout the year.
implemented in the same manner as it is for
but which will affect the company’s position in
owned vessels and quarterly paid leasing pay-
the future, are stated if significant.
for capitalization of the costs are not met.
Dividends
ments are booked as interest and repayments
Dividends are calculated when the sharehold-
(annuity repayments on leasing obligation). At
er’s right to receive the payment is established
present the company does not have any ves-
(general meeting resolution).
sels at such agreements.
note 2 – PROFIT ON SALES OF FIXED ASSETS
Sales of fixed assets 2009
Vessels
Net
Booked
Profit
sales price
value
2009
No sale of vessels
-
-
-
0
0
0
Net
Booked
Profit
sales price
value
2008
Total profit on sales - Group
Sales of fixed assets 2008
Vessels
Lady Dawn
85 313
24 263
61 050
Total profit on sales - Group
85 313
24 263
61 050
note 3 – EARNINGS PER SHARE
Share Capital:
The company’s share capital is NOK 39,0
mill., distributed across 39.000.000
shares with a nominal value of NOK 1.00
in one share class. At the Annual General
Meeting one share has one vote.
94
annual report
-
Group results
Of which the minority's share
Average number of shares
Results/diluted earnings per share (NOK)
2009
2008
1 931 503
1 225 555
(43)
(158)
39 000 000
39 000 000
49.53
31.43
note 4 – PAYROLL EXPENSES, NUMBER OF EMPLOYEES
Parent Company
2008
2009
36 324
45 160
6 602
7 771
8 194
14 036
1 953
2 647
53 073
69 612
Wages and salaries
Group
(Note 19)
Social security costs
Pension costs
(Note 21)
Other contributions
Payroll expenses
2009
2008
737 455
613 630
108 349
89 086
85 850
79 322
111 902
100 963
1 043 555
883 002
Payroll expenses for the group constitutes NOK 926 877 (NOK 789 673) across crews on vessels and NOK 116 677 (NOK 93 329) of
administration. The average number of man-year in the administration in Ålesund, Aberdeen, Macaé, Rio, Singapore og Melbourne was
154 (141) and the number of crew members onboard vessels in 2009 was 1 571 (1 415)
note 5 – GOVERNMENT GRANTS
Parent Company
2008
Group
2009
-
-
-
-
0
0
Net pay scheme at NOR-vessels
2009
2008
48 850
48 838
Refund scheme for temporary and work experience
positions for sailors in training
Government grants for the reduction of crew costs
338
370
49 188
49 208
note 6 – RELATED PARTIES
The company’s largest shareholder is
Tyrholm & Farstad AS in Ålesund with a
holding of 40,5%, and is defined as a related party. Farstad Shipping ASA has a
lease agreement for main office premises
in Ålesund with Tyrholm & Farstad AS. This
agreement is fixed to the end of 2012, with
option for further 5 year extension and con-
stitutes an annual cost of NOK 3 786 (NOK
3 707 in 2008). Previous IT-agreement
is substantially decreased as most ITservices now are purchased from external
consultants. At 31.12.09 the company
had a debt of NOK 207 ( NOK 509 i 2008)
payable to Tyrholm & Farstad AS.
Farstad Shipping ASA owns 50% of BOS
Navegacao SA and 50% of Atlantic Marine
Overseas Co. (AMOC) through Farstad
Brasil AS, see note 12, and are thus defined as related parties. Accounts receivable
from BOS Navegacao is NOK 4 246 (accounts payable NOK 1 294 in 2008) and
a long-term loan to AMOC of NOK 20 409
(zero in 2008).
NOTE 7 – CONVERSION TO PRESENTATION CURRENCY
Investments in foreign subsidiaries are
translated using the exchange rate as of
December 31st for the balance sheet, while
monthly average exchange rates are used
for the profit and loss statement. Exchange
rate differences that arise as a result of
this amounted to a disagio of NOK 1 949
(agio NOK 27 786 in 2008).
Exchange rates used in
the annual report:
Exchange rates
1.1.2009
USD - American dollar
Average
exchange 2009
Exchange rates
31.12.2009
5.7767
6.9989
6.2481
10.1210
9.7689
9.317
AUD - Australian dollar
4.8503
4.9435
5.1917
BRL - Brazilian real
2.9948
3.1600
3.32
EUR - European euro
9.8650
8.6913
8.315
GBP - British pound
Note 8 – OTHER SHORT-TERM RECEIVABLES
Parent Company
2008
2009
3 372
3 474
30 480
29 307
689
154
-
-
70 520
84 158
105 061
117 093
Loans to employees
Group
(Note 19)
Prepaid costs
Earned income
Claim of tax paid in 2007/2008
Other short-term receivables
(Note 28)
2009
2008
3 565
3 501
73 049
39 968
1 401
2 364
127 119
-
90 992
98 412
296 126
144 245
annual report
-
95
Note 9 – OTHER CURRENT LIABILITIES
Parent Company
Group
2008
2009
2009
2008
39 192
34 984
Tax deduction, holiday pay, days of grace, VAT, etc.
63 580
46 041
2 523
12 347
Accrued expenses
16 119
4 189
9 114
1 899
Accrued interest on mortgage debt and bonds
68 211
82 100
9 222
435
4 724
6 060
64 775
55 725
Liabilities to Group companies
Other current liabilites
-
-
105 283
87 711
253 193
220 041
note 10 – LIQUID ASSETS, SHARES IN SUBSIDIARIES AND OTHER SHARES
Parent comp.
Market value/
Cash and bank deposits
Money market funds
Share Capital
Number
Ownership
Equity Capital of shares shares in %
Shares outstanding and equity certificates (EC):
Sparebanken Møre, EC
653 430
DnB NOR ASA
16 287 990
Orkla ASA
1 286 163
Statoil ASA
7 971 625
Deep Sea Supply Plc
$ 2 599
Prodjack AS, Skeie Drilling & Production $ 123 745
Solstad Offshore ASA
75 580
Northland Resources Inc.
0
TGS Nopec Geophysical Com
26 015
Prosafe ASA
€ 57 484
Prosafe Production Public
25 520
Norsk Hydro ASA
1 361 640
Acergy
$ 389 910
Royal Caribbean Cruises
$ 85 000
Seadrill Limited
$ 798 270
Norske Skogindustrier ASA
1 899 460
Telenor ASA
9 947 330
Shares and primary capital certificates, total:
Bonds
Sparebanken Vest 10/12-2006/2012
Storebrand Eiendomsfond 21/5-2006/2012
Kredittforeningen for Sparebanker
Forstædernes Bank 9/2011
Vestfold Sparebank 6/2012
Sparebanken Midt-Norge 1/3-2005/2012
Storebrand Eiendomsfond 21/5-2006/2012
Sparebanken Møre 08/18 FRN Cal
Statkraft AS 06/16 FRN
Hafslund ASA 06/11 FRN
Sparebanken Pluss, 07/17 FRN
Orkla ASA, 09/14 FRN
Sparebank 1 SR-bank, 08/12 FRN
Storebrand Livforsikring 08/14 Ansv
Yara International ASA 09/16
DnB NOR 7,068% 2049
Sparebank 1 SR-bank, fondsobl.
Bonds, total:
Other current financial assets
Total liquid assets
94 091
11 826
58 000
53 000
20 000
36 000
13 000
50 000
12 000
5 665
5665
112 000
4 000
2 000
1 000
7 000
40 000
Market value/
Book value
Book value
227 739
1 383 025
62 290
142 388
290 029
1 525 413
Par Historical Market value/
Market value/
Total cash and cash equivalents
Company
Group
value
cost
Book value
Book value
1.44 % 9 409.10
0.00 %
118.26
0.01 %
72.50
0.00 %
132.50
0.02 %
$ 0.40
0.05 %
$ 57.60
0.03 %
26.00
0.05 %
0.00
0.01 %
3.00
0.00 %
€ 1.42
0.00 %
0.57
0.01 %
123.20
0.00 %
$ 8.00
0.00 %
$ 0.02
0.00 %
$ 2.00
0.00 %
70.00
0.00 %
240.00
13 335
479
2 692
6 912
233
659
1 663
1 295
1 392
362
0
4 132
275
262
116
163
3 091
37 059
21 641
742
455
434
156
18
1 404
466
1 258
209
71
585
367
295
148
67
0
28 314
21 641
742
3 297
7 674
156
18
1 404
466
1 258
209
71
5 456
367
295
148
67
3 242
46 510
15 134
20 279
35 023
70 436
15 134
20 279
35 023
11 518
8 645
10 027
14 460
2 913
2 920
1 995
1 925
2 159
2 994
2 850
3 434
2 450
3 054
141 781
98 750
188 291
388 779
1 713 704
Current assets in the form of shares and equity certificates are included in current assets and entered at market value (from Oslo Stock exchange and Oslo Axess
31.12.09). Changes in the actual value are entered in the profit and loss account.
96
annual report
-
note 10 – LIQUID ASSETS, SHARES IN SUBSIDIARIES AND OTHER SHARES, cont.
Company
Share
Capital
Equity investment shares:
Farstad Shipping Ltd., Aberdeen
Number Ownership
of shares shares in %
£14 039 14 039 339
Par
value
Historical
cost
Booked
value
100
152 267
153 909
153 909
1 471
1 471 245
100
1 471
1 471
1 471
Farstad Brasil AS, Ålesund
100
100
100
100
100
100
Farstad Australia AS, Ålesund
100
100
100
100
100
100
Farstad Africa AS, Ålesund
100
100
100
100
100
100
$ 51 970 51 970 002
100
343 195
343 195
343 195
Farstad Supply AS, Ålesund
Farstad Shipping Singapore Pte Ltd, Singapore
Farstad Contruction AS, Ålesund
2 500
1 000
100
2 500
140 000
140 000
Farstad Offshore AS, Ålesund
2 500
1 000
100
2 500
25 000
25 000
FarInvest AS, Ålesund
2 000
1 000
100
2 000
5000
5 000
Farstad do Brasil Navegacao Ltda., Macaé
BRL 1
1 000
10
3
3
3
504 236
668 878
668 878
Shares in subsidiaries, total:
Other equity investment shares
Shares and equity investment shares, total parent company
Group eliminations
Other long-term shareholdings
Total Group long-term shareholdings
4 701
5 617
4 936
508 937
674 495
673 814
(504 236)
(668 878)
(668 878)
210
287
234
4 911
5 904
5 170
Shares owned by Farstad Supply AS:
Farstad International AS
100
100
100
100
100
AUD 1 720
497 528
100
8 624
8 624
$25
500
49
69
69
BRL 9
9 000
90
32
32
$200
200 000
100
1 155
1 155
Shares owned by Farstad Australia AS:
Farstad Shipping (Indian Pacific) Pty.Ltd
Shares owned by Farstad Africa AS:
Quimbriz Farstad Shipping Lda.
Shares owned by Farstad Brasil AS:
Farstad do Brasil Navegacao Ltda., Macaé
Shares owned by Farstad Shipping Pte Ltd, Singapore:
Farstad Shipping Crewing Services Pte.
Ltd., Singapore
NOTE 11 – CONTRACTS NEW BUILDS
The group had 2 vessels in the order book
as of 31.12.09 ( 6 vessels as of 31.12.08)
for delivery between January and March
2010.
NOK 191 242 (NOK 495 380 in 2008)
was capitalised as fixed assets relating
to inspection, owners supplies, and paid
contract instalments to the shipyards.
Paid contract instalments are secured by a
parent company guarantee from the yard.
The Group’s investments are expected
to total around NOK 1 173 million (NOK
3 634 million) Long-term financing is planned for approx. 71% of the investments.
Instalments paid to yards for the Group’s
new buildings are financed by equity
capital.
annual report
-
97
note 12 – INVESTMENTS IN JOINT VENTURES
The Group has the following investments in jointly-controlled entities
Joint venture
Brasil Offshore Services (BOS)
Atlantic Marine Overseas Co.
Country
Activity
Holding
Brazil
Shipping and operation of ships
50 %
Virgin Islands
Operation of ships
50 %
The Group’s total holding of assets, liabilites, income and expenses related to investments in jointly-controlled entities incurred together
with the other part :
Group
2009
2008
Assets
Current assets
Fixed assets
43 955
52 895
542 537
498 972
Liabilites
Current liabilities
Non-current liabilities
Net assets
(32 371)
(65 805)
(286 759)
(336 682)
267 362
149 380
Income
Expenses
181 926
(114 949 )
86 643
(169 998)
Net result
66 977
(83 355)
note 13 – VESSELS AND OTHER FIXED ASSETS (GROUP)
Other fixed assets
2009
Acquisition cost
Directly
owned vessels
Total vessels etc.
Contracts
new builds
Total
fixed assets
January 1st
38 172
9 600 723
9 638 895
495 380
10 134 275
Additions
30 800
2 681 338
2 712 138
79 366
2 791 504
Disposals
(3 874 )
(37 486)
(41 360)
(383 504)
(424 864)
353
(25 624)
(25 271)
-
(25 271 )
December 31st
65 451
12 218 951
12 284 402
191 242
12 475 644
Accumulated depreciation
and impairment
Balance as of January 1st
20 055
1 897 600
1 917 655
-
1 917 655
4 330
298 890
303 220
-
303 220
Disposals
(2 105)
-
(2 105)
-
(2 105)
December 31st
22 280
2 196 490
2 218 770
0
2 218 770
Conversion differences
The year's depreciations
Recognized value deferred
maintenance
Recognized value
-
172 081
172 081
-
172 081
43 171
10 194 541
10 237 712
191 242
10 428 954
Other fixed assets
2008
Acquisition cost
Directly
owned vessels
Total vessels etc.
Contracts
new builds
Total
fixed assets
30 023
8 315 340
8 345 363
550 795
8 896 158
Additions
8 489
1 346 496
1 354 985
242 770
1 597 755
Disposals
(836)
(89 612)
(90 448)
(298 185)
(388 633)
496
28 499
28 995
-
28 995
December 31st
38 172
9 600 723
9 638 895
495 380
10 134 275
Accumulated depreciation and impairment
17 069
1 729 127
1 746 196
-
1 746 196
3 692
243 432
247 124
-
247 124
(706)
(74 959)
(75 665)
-
(75 665)
20 055
1 897 600
1 917 655
0
1 917 655
January 1st
Disposals
December 31st
Recognized value deferred
maintenance
Recognized value
98
annual report
-
-
150 378
150 378
-
150 378
18 117
7 853 501
7 871 618
495 380
8 366 998
note 13 – VESSELS AND OTHER FIXED ASSETS (GROUP), cont.
Change in recognized value deferred maintenance
2009
2008
150 378
144 010
Additions
176 507
133 433
-
(9 721)
Disposals on sale
Balance as of December 31st
Depreciation schedule:
Vessels are decomposed in vessel and deferred maintenance.
The vessels are depreciated linearly to a
corresponding value of 50 % of new build
price over defined period of use of 20 years,
taking into account residual value upon expiry of their period of use.
Residual values are based on a conservative
estimate of what we belive the vessels can
be sold for when they are 20 years old.
When a vessel is older than 20 years old,
the residual value is depreciated linearly by
10% per year, based on an assumed useful life of 30 years, but always evaluated
against the estimated residual value.
Deferred maintenance is capitalised, and
depreciated normally at 25% over 12
(3 118)
970
(151 686)
(118 314)
172 081
150 378
months and 75% over the period up to next
deferred maintenance/ docking, normally
over 30 months.
Fixtures and fittings, vehicles and office
machinery etc. are depreciated linearly over
3-5 years.
Buildings are depreciated over a period of
up to 50 years.
note 14 – TAX SITUATION
Parent Company
2008
Group
2009
2009
2008
12 482
Calculation of taxable profit:
494 586
1263 144
19 906
(6 712)
Operating income before taxes
-
(901 302)
Tax exemption method income
(500 000)
(349 891)
None taxable result from subsidiaries
-
27 031
2 420
8 901
-
-
(16 912)
(19 925)
Utilised accumulated carried forward deficit
-
(21 246)
Ceded Group contribution
-
-
None tax-deductible expenses / (none taxable income)
3% taxable income from Tax exemption method
Changes in temporary differences
Taxable carry-forward deficit
Taxable profit
Tax expense:
Specification of taxes in profit and loss account:
-
-
Tax payable in Norway
2 805
-
-
Tax adjustments regarding previous year
( 595)
338
-
-
Withholding tax
60 189
44 757
Other taxes abroad
(2 824)
(19 108)
Changes in deferred tax from current profit
68 207
(46 176)
Calculated tax payable - transition to new Norwegian tonnage tax system
(635 595)
(308 580)
Total tax expense
(507 813)
(316 287)
1423 690
909 268
-
-
4 058
8 184
-
-
4 058
8 184
494 586
1263 144
138 484
353 680
4 058
8 184
(134 426)
(345 496)
5 574
(2 236)
Reconciliation of nominal and effective tax rates:
Pre-tax profit
Tax expense at tax rate in Norway (28%)
398 633
254 595
Recognized tax expense
(507 813)
(316 287)
Difference between expected and recognized tax expense
(906 446)
(570 882)
(312 698)
(635 595)
(5 213)
(299 438)
(308 580)
5 568
47 655
31 230
( 595)
338
Explanation of differences:
Effect of shipping company tax schemes
Calculated tax payable - transition to new Norwegian tonnage tax system
None tax-deductible expenses / ( none taxable income)
-
-
-
( 851)
Differences between foreign/Norwegian tax rates, withholding tax, etc.
(140 000)
(342 409)
Income from investment in subsidiaries
(134 426)
(345 496)
Difference between expected and recognized tax expense
Differences between calculated/assessed previous years
-
-
(906 446)
(570 882)
annual report
-
99
note 14 – TAX SITUATION, CONT.
Parent Company
2008
Group
2009
2009
2008
Deferred tax / (deferred tax assets) at 31st December
100
( 25)
-
-
Property, plant and equipment
15 195
9 684
Long term loans
51 983
12 291
(7 365)
(10 405)
-
-
Financial derivates
(33 494)
(32 143)
(4 438)
(5 579)
-
Taxable deficit carried forward
(31 513)
(14 168)
-
5 949
Group contribution
(13 150)
-
-
( 177)
Other temporary differences
-
(12 842)
(4 658)
(16 900)
(12 842)
4 058
8 184
Pension
( 177)
-
14 902
(54 831)
Specification of change in deferred tax:
Deferred tax / (deferred tax assets) at 1st January
Changes in deferred tax from current profit
(54 831)
7 989
68 207
(46 176)
3 539
(14 347)
(3 711)
(2 297)
1 698
0
Changes in deferred tax against equity
-
-
Change in deferred tax on forward exchange contracts and
interest rate swaps
-
-
Change in deferred tax posted against equity related to foreign companies
-
Change in deferred tax posted against equity related to
Norwegian companies
-
-
Changes in deferred tax against equity, total
(12 842)
(4 658)
-
Tax related deficit to be carried forward
is non time-limited and entails a deferred
tax benefit that is activated in the balance
sheet. The basis for capitalizing is that one
expects a taxable surplus in the Group such
that it can be utilised. Proposed dividend
will not influence on neither payable nor
deferred tax.
In December 2007, a new tonnage tax
regime was approved by the Norwegian
Parliament. Transition to the new regime
implies the previously assumed non-tax
able profit from 1996 to end of 2006 rela
ted to the old tax regime taxable. Transition
tax for Farstad Shipping is calculated to
NOK 953.4 mill., which will be payable over
10 years. NOK 943.5 mill were accounted
for at nominal value as tax expense and
tax liability in the 2007 accounts. NOK
9.9 mill. were tax adjustments to previous year, as a consequence of changes in
administrative regulations after closing of
accounts 2007. The Board of Directors’
opinion was that the transition rules conflicts with the The Constitution of Norway,
§ 97, and commenced legal proceedings
against The Norwegian Ministry of Finance.
On the 12th February 2010 The Supreme
Court has with 6 against 5 votes, decided
in favour of the ship-owners claim. This implies that the Supreme Court has concluded that the transition rules adopted by the
Government in December 2007 regarding
the transition from the old tax regime to the
new tonnage tax system is in breach of the
Constitution, § 97. As a consequence of
1 526
(16 644)
14 902
(54 831)
the verdict, NOK 635.6 mill are posted as
reversal of tax in the 2009 accounts, and
improve the company’s equity correspondingly. Under the transition rules, up to 1/3
of the tax will be waived by the authorities,
if a corresponding amount is spent on environmental measures and in accordance
with detailed regulations.
As a consequence of proposed changes in
rules regarding the fund for environmental
measures, NOK 317.8 mill are posted as
reversal of tax in the 2008 accounts. With
the transition to new tonnage tax rules in
2007, the environmental fund had to be
posted as liability. In January 2009 the
Ministry of Finance proposed a change in
rules allowing the environmental fund to be
posted as equity.
Note 15 – CONTINGENT LIABILITIES AND ASSETS
BOS Navegacao SA (BOS), Brasil, (share 50
%) has built three vessels in Brazil for longterm contracts with Petrobras. During the
construction period situations arose that
BOS had no control over, but which significantly changed the profitability contained
in the contracts. Brazilian law provides
companies with access to bring this type
of matters before the courts with a view
to rectifying such a financial imbalance in
a contractual relationship. In light of this,
BOS has brought a case against Petrobras.
The case is still being considered in the
courts system after it was lost in a lower
court and the case was appealed. Petrobras
100
annual report
-
has also presented a claim for payment in
connection with the delayed delivery of the
vessels. Legal fees are recognized as costs
as they are incurred.
A proportion of our British sailors have
been paid by an external crewing company.
This crew company is winding up its operations. In December 2009, our sailors were
transferred to Farstad’s new, wholly owned
crewing company in Singapore. The sailors are members of a pension scheme in
the UK. Questions have been asked about
whether the winding up of the crewing
company could trigger extra payments
of around GBP 3-4 million to the pension
fund. This claim is being challenged since
we believe the pension schemes can con
tinue under the same terms as before.
The temporary import of our vessels into
Brazil resulted in a number of cases in
which the customs authorities presented
claims for the payment of customs duties
and fines for five of our vessels. NOK 9.2
million has been set aside for any customs
duties, fines and legal fees in connection
with this. Our legal counsel is of the opinion
that procedural errors have been made and
rejects the claims.
note 16 – Goodwill
Goodwill is linked to the acqusition of
100%, up from 50%, of P/R International
Offshore Service ANS in june 2003, with
17 vessels primarily working in the Far East/
Australian sector. The acquisition involved
the takeover of personnel and the operating
company in the region, and thus an estab-
lished, valuable organisation for the Group.
Goodwill is not depreciated. Meanwhile, it is
tested vis-à-vis writing down each year.
The goodwill is unchanged at a cost price of
NOK 35 937, less accumulated depreciation before 2005 of NOK 5 690 gives a net
book value of NOK 30 247.
The conclusion is that the current value
of the recoverable amount is considerably greater than the booked value and the
utility value indicates that no write-down is
necessary.
Note 17 – leases
The Group as a lessee – operating leases
The Group has entered into different operating leases for office premises, office machines, cars and communication satellite equipment for
the vessels. The lease periods vary and most of the leases contain an option for extention.
The lease costs are as follows:
Parent Company
2008
2009
5 528
5 589
5 528
5 589
Ordinary lease payments
Group
2009
2008
15 544
12 920
15 544
12 920
The future minimum rents related to non-cancellable leases fall due as follows:
Parent Company
Group
2008
2009
2009
2008
5 216
5 589
Within 1 year
13 889
12 340
14 455
9 801
1 to 5 years
22 828
21 291
-
-
19 671
15 390
After 5 years
4 185
-
40 902
33 631
note 18 – ACCOUNTS RECEIVABLE – GROUP COMPANIES
31.12.09 31.12.08
Accounts receiv
able from group
1 435 361
companies:
490 763
The parent company’s accounts receivable
from Farstad Shipping Ltd. totals NOK 121
213 (NOK 151 914 in 2008) of which NOK
158 198 is linked to a parent company
loan for purpose of the transfer of 3 vessels
from Farstad Supply AS in the autumn of
2002, conversion of Far Scotia, the transfer of the new build contract for Far Spirit
and at last the transfer of another 3 vessels
from Farstad Supply AS in February 2007.
The remaining NOK 36 985 is unrealised
disagio on the parent company loan. The
previous seller’s credit was converted to
equity in Farstad Shipping Ltd. during 1st
quarter 2008.
The loan to Farstad Brazil AS, NOK
189 128 (NOK 183 423), concerns financing for new builds in Brazil. Farstad
Shipping ASA’s accounts receivables from
Farstad Brasil/ AMOC at a total of NOK
20 409 of which NOK 23 174 is granted
for the purpose that BOS Navegacào shall
repay short term bank loans. NOK 2 765
is unrealized disagio on the loan from the
parent company. The loans to Farstad
Australia AS and Farstad Africa AS totalling NOK 11 496 (NOK 11 046) and NOK
2 134 (NOK 2 236) respectively, concern
expenses in connection with the establishment of the operating organisations in
Australia and Africa. The loan to Farstad
Construction AS, NOK 143 421 (NOK
140 943), concerns financing of the new
building Far Samson. The loan to FarInvest
AS, NOK 46 250 is granted for the purpose to perform investments in shares
and bonds. The parent company Farstad
Shipping ASA’s accounts receivable from
Farstad Supply at a total of NOK 900 000
concerns an additional share payment for
2009.
The interest on accounts receivable is
calculated at market interest rates:
The interest on the accounts receivable
from Farstad Shipping Ltd. is calculated on
a six months basis: 6 months GBP LIBOR
+ 0.6% margin. The interest on the ac-
counts receivable from Farstad Brasil AS,
Farstad Australia AS and Farstad Africa
AS is calculated on an annual basis: 12
months NIBOR + 0.7% margin. The interest
on the accounts receivable from Farstad
Brasil/ AMOC is calculated on a six months
basis: 6 months USD LIBOR + 1.0 % margin. The interest on the accounts receivable from Farstad Construction AS has in
2009 been calculated from 1st April 2008
and for the entire year of 2009 as the accounts receivable was not converted to
equity in 2009 as originally planned. The
interest on the accounts receivables from
Farstad Construction is calculated on a
three months basis: NIBOR 3 months + 1.3
% margin. The interest on the accounts receivables from FarInvest AS is calculated
on a three months basis: NIBOR 3 months
+ 1.0 % margin.
No interest has been calculated in 2009
on the accounts receivable from Farstad
Supply AS, as this will be converted to
equity in 2010.
annual report
-
101
NOTE 19 - REMUNERATION TO EXECUTIVES, BOARD OF DIRECTORS AND AUDITOR
2009
Wages
Pensionexpenses
2008
Other compensations
Wages
Pensionexpenses
Other compensations
Management
CEO
2 663
933
880
2 484
896
891
CFO
2 093
1 133
787
1 980
934
726
Executive Vice President - Eastern Hemisphere
2 221
397
783
1 960
306
803
6 977
2 463
2 450
6 424
2 136
2 420
Charged remuneration to the members of
the Board of Directors
Chairman of the Board
6 members of the Board at NOK 231
765
26
703
1 389
-
1 323
98
-
2 154
26
2 026
98
Auditor's fee parent company
959
545
Certification
13
12
Tax
22
31
Auditor's remuneration
Other services
120
43
1 114
631
Auditor's remuneration
1 798
1 418
Other services
1 342
512
3 140
1 930
4 254
2 561
Auditor's fee subsidiaries
Total auditor’s fee Group
In the event that the CEO or CFO, because
of a change to the controlling stake (buyout) resigns his position or employment is
terminated, is entitled to compensation
corresponding to 2 years’ salary.
It has been agreed that the CEO will receive an additional 6 months pay after the
ordinary period of notice expires upon termination of his employment.
CEO and CFO has an early retirement
agreement, which provides for the right to
mutually demand early retirement when he
or she turns 60 years and to he or she turns
67 years. The company chairman has a cor-
responding right to mutually demand early
retirment when he turns 60 years and to
he turns 72 years. Former CEO receives an
annual pension until May 2013.
The company has not issued share options
to the Board of Directors or employees.
The company’s management (3 persons)
is subject to an incentive-based bonus arrangement whose amount has a ceiling of
NOK 600 per person. These arrangements
are reviewed by the Board of Directors annually.
Loans to senior employees, shareholders
The company issues loans of NOK 2 434
(NOK 2 184 in 2008) to the CEO and NOK
657 (NOK 635 in 2008) to the CFO.
Additionally, loans of NOK 474 (NOK
682 in 2008) have been granted to other
employees.
In total, loans of NOK 3 565 (NOK 3 501 in
2008) were granted and security was provided for the entire amount.
The interest rate is set at the normal for
reasonable loans related to work relations. The repayment plans for the loans
are individually adapted, and no loans have
been issued to members of the Board of
Directors or shareholders.
Note 20 – SEGMENT INFORMATION
BUSINESS SEGMENT:
The Group’s activities are divided into business segments according to the type of
vessel services; platform supply vessel
services (PSV), anchorhandling tug supply
vessel services (AHTS) and subsea services (SUBSEA).
GEOGRAPHICAL REPORTING:
The Group’s acitivities are principally distri
buted geographically across the following
sectors: Northwest Europe, Brazil, Indian
Pacific and other sectors. Other
sectors
include, among others, West Africa and
Mexico.
102
annual report
-
A detailed accounting overview is provided
below for the various individual segments.
Accounting figures for the largest geographic areas are also described in the individual markets on pages 61 to 81. Income
and costs are allocated to the sector where
the vessel has been operating. The distribution of costs, revenues and balance sheet values across the various sectors involves a certain degree of judgement
and does not represent a good enough basis for comprehensively assessing the pro
fitability of each area. Other factors that
have to be taken into account are the markets’ varying needs and requirements vis-à-
vis tonnage, the vessels’ varying financial
lifetimes in the various markets, the age of
tonnage, time of investment, future contract coverage, operating risk, tax regulations, need for local partners and varying
administrative/market related follow-up of
the individual vessels.
Income is from external customer only.
There are no internal transactions posted
between areas of operations. All segments
are related to continuing operations.
During 2009 freight income from the company’s largest client, Petrobras in Brasil,
amounted to NOK 621 million. This is approx 19.1% of total freight income.
Note 20 – SEGMENT INFORMATION, cont.
Business
segments
PSV
AHTS
2009
2008
SUBSEA
2009
2008
2009
Other
Consolidated
2008
2009
2008
2009
2008
215 600 132 166
20 468
15 383
3 257 579
2 958 624
56 544
-
(736)
1 521 419
1 290 544
119 858
75 622
20 468
16 119
1 736 160
1 668 080
212 264
48 137
28 868
5 526
4 395
454 909
365 438
973 863 1 023 586
71 721
46 754
14 942
11 724
1 281 251
1 302 642
-
61 050
Net finance costs
142 439
(454 424)
Tax expense
507 813
316 287
1 931 503
1 225 555
49 483 10 237 712
7 871 618
Freight income
and other income
936 352
832 785 2 085 159 1 978 290
Operating costs
569 153
492 296
742 440
95 742
Operating result I
(EBITDA)
367 199
340 489 1 228 635 1 235 850
Depreciations
146 474
119 911
254 772
Operating result
II (EBIT)
220 725
220 578
856 524
Non-allocated
income (gains
related to sale of
vessels)
Net profit and
loss for the year
Book value ves2 907 197 2 449 402 5 819 621 4 810 769 1 439 092 561 965
sels as of 31.12
Non-allocated
assets
Total assets
2 780 010 3 040 712
2 780 010
3 040 712
2 907 197 2 449 402 5 819 621 4 810 769 1 439 092 561 965 2 851 812 3 090 195 13 017 722 10 912 330
Liabilites vessels
1 674 983 1 556 274 3 394 007 3 078 773
as of 31.12.
893 085 300 071
Non-allocated
liabilities
Total liabilities
71 802
1 674 983 1 556 274 3 394 007 3 078 773
893 085 300 071
0
0
5 962 074
4 935 118
803 753 1 537 224
803 753
1 537 224
803 753 1 537 224
6 765 827
6 472 342
Investments in
fixed assets
633 063
682 882 1 353 480
946 385
925 264
7 587
56 204
94 334
2 968 011
1 731 188
Depreciations
146 474
119 911
212 264
48 137
28 868
5 526
4 395
454 909
365 438
254 772
Northwest Europe
Geographical reporting:
Brazil
2009
2008
2009
2008
Freight income and other income
812 708
946 250
786 181
555 314
Operating costs
460 871
362 604
333 014
278 175
Operating result I (EBITDA)
351 837
583 646
453 167
277 139
Depreciation
160 829
119 939
107 746
76 113
Operating result II (EBIT)
191 008
463 707
345 421
201 026
Investments in fixed assets
2 595 983
1 296 837
62 720
344 062
Book value vessels as of 31.12.*)
4 626 743
3 375 097
2 164 365
1 643 032
Non-allocated income (gains related to sale of vessels)
Indian Pacific
Geographical reporting:
Freight income and other income
Other
Consolidated
2009
2008
2009
2008
2009
2008
1 548 889
1 344 926
109 801
112 134
3 257 579
2 958 624
Operating costs
687 410
595 819
40 124
53 946
1 521 419
1 290 544
Operating result I (EBITDA)
861 479
749 107
69 677
58 188
1 736 160
1 668 080
Depreciation
171 328
153 042
15 006
16 344
454 909
365 438
Operating result II (EBIT)
690 151
596 065
54 671
41 844
1 281 251
1 302 642
0
61 050
Non-allocated income
(gains related to sale of vessels)
Investments in fixed assets
Book value vessels as of 31.12.*)
250 990
50 074
58 319
3 261 108
2 582 889
185 496
2 968 011
1 731 188
270 601 10 237 712
40 215
7 871 618
*) The vessels’ booked value includes provisions for deferred maintenance in the balance sheet and is distributed across geographic
sectors in relation to where the ship was located at year end 2008/2009 and at year end 2009/2010.
annual report
-
103
NOTE 21 – PENSIONS
CONTRIBUTION PENSIONS
The company’s pension schemes are treated in accordance with the IFRS standard
for pension costs in the accounts. See page
93 for more details of the accounting principles. Sailing personnel in Norway, officers
in Australia and the UK, as well as office
personnel participate in different contri
bution pensions schemes in the respective
countries. The pension scheme in Norway is
in accordance with the requirements of the
law.
Changes in the pension schemes’ obligations
are entered as crew costs for operating ves-
sels and administration costs. The schemes
cover 572 people (510 in 2008). The obligations are calculated on the basis of linear
earnings. Unrealised gains and losses due
to changes in the actuarial assumptions
are distributed over the expected average
remaining earning period.
Group
2009
2008
Current service cost
20 240
15 311
Interest cost on pension liability
11 079
11 532
(11 739)
(12 938)
The year's pension costs:
Expected return on the plan assets
Administration cost
Actuarial gains and losses
Total pension costs
698
325
4 473
(101)
24 751
14 129
271 311
247 418
(4 691)
(5 804)
Pension liability and pension plan assets:
Reconciliation of the present value of the pension obligation:
Present value of pension obligation at beginning of the year
Exchange differences
Employers' national insurance contributions
3 690
3 006
Current service cost
20 240
18 610
Interest cost on pension liability
11 091
11 533
12 941
11 734
Benefits paid
(25 236)
(15 186)
Present value of the pension obligation at December 31st
289 346
271 311
176 976
204 939
Reconciliation of fair values of pension plan assets:
Present value of plan assets at beginning of the year
Exchange differences
(1 879)
(3 798)
Expected return on the plan assets
11 739
16 065
1 804
(38 214)
28 330
12 358
Employer contributions
Administration cost
(698)
(325)
Benefits paid
(23 689)
(14 049)
Fair values of pension plan assets at December 31st
192 583
176 976
Net pension liability
(96 763)
(94 335)
51 403
43 980
(45 360)
(50 355)
(50 355)
(50 398)
Unrecognised actuarial gains and losses
Net pension liability at December 31
st
Changes in net pension liability during the year:
Net pension liability January 1st
Pension liability againts comprehensive income/costs
Net pension cost for the year
Contributions
Net pension liability at December 31st
(262)
-
(24 751)
(14 129)
28 330
12 358
1 678
1 814
(45 360)
(50 355)
Presented in the balance sheet:
Capitalised plan assets included in other long-term receivables
Capitalised pension liability
14 758
5 826
(60 118)
(56 181)
Expected contributions for next year is NOK 29 600 (NOK 16 700 in 2008).
The pension obligations have been placed in various investments through external assurance companies or pension funds, and where each company
or fund is fully responsible for the administration of the invested amount of all corresponding transactions regarding the pension scheme.
The major categories of plan assets in percentage of the fair value of total assets as per 31.12.09:
Norway
Scotland
Australia
Equties
10 %
57 %
61 %
Bonds/securities
56 %
34 %
23 %
Money markets funds
16 %
3%
0%
Property/Other
18 %
6%
16 %
104
annual report
-
NOTE 21 PENSIONS, CONT.
Calculations of pension costs and net pension obligations are based on the following assumptions:
Norway
Discount rate
Scotland
Australia
2009
2008
2009
2008
2009
2008
4.40 %
4.30 %
5.80 %
6.50 %
4.80 %
3.40 %
Expected return on pension plan assets
5.60 %
6.30 %
6.30 %
6.80 %
6.50 %
6.50 %
Future salary adjustment
4.25 %
4.50 %
5.20 %
4.60 %
4.00 %
4.00 %
Adjustment of benefits
4.00 %
4.25 %
3.70 %
3.10 %
2.50 %
2.50 %
Volunteer retirement
2.50 %
2.50 %
-
-
-
-
Expected use of AFP
20 %
20 %
-
-
-
-
K2005
K2005
SAPS
PA92
-
-
Mortality table
Development the last 5 years of pension obligation and pension plan assets
2009
2008
2007
2006
2005
Present value of the pension obligation
289 346
271 311
247 418
226 056
246 508
Fair values of pension plan assets
192 583
176 976
204 939
197 195
191 588
CONTRIBUTION SCHEME
The company has a contribution scheme
for the office employees in Scotland and
Australia. The scheme covers 58 (52 in
2008) fulltime employees. Posted contributions amounted to NOK 5 030 for 2009
(NOK 2 834 in 2008).
Two people in the management team and
the chairman have individual agreements
with an early retirement option.
Two former managers receive pensions
from agreements with an early retirement
clause.
Calculations show that the obligations are
NOK 22 670 (NOK 21 926 in 2008), which
has been entered in the balance sheet as a
liability in the accounts. The expensed payments/pensions amounted to NOK 2 210
(NOK 2 205 in 2008).
Note 22 – ACCOUNTS RECEIVABLE
Parent Company
2008
2009
7 164
7 754
Accounts receivable
Group
2009
2008
473 130
533 327
Movement in provision for losses:
Parent Company
2008
2009
-
-
Provision for losses at January 1st
-
-
This year’s provisions
Group
2009
-
-
Written off during the year
-
-
Reversed provisions
0
0
Provision for losses at December 31st
2008
15 086
676
20
14 901
-
(49)
(14 814)
(442)
292
15 086
The credit risk and foreign currency risk associated with accounts receivable are discussed in more detail in note 27, financial risks.
Note 23 – PAID AND PROPOSED DIVIDEND
2009
2008
195 000
156 000
195 000
156 000
117 000
195 000
3,00
5,00
Decided and paid out through the year:
Ordinary dividend
Proposed dividend for approval in the Annual General Meeting (Not booked as a liability as per 31.12):
Ordinary dividend
Per share
annual report
-
105
Note 24 – SHAREHOLDER INFORMATION AND DIVIDENDS
SHARE CAPITAL
The company’s share capital is MNOK 39.0,
distributed across 39 000 000 shares
with a nominal value of NOK 1.00 in one
share class. No changes in the number of
shares or share capital have been done during last year. The average of outstanding
shares for the fiscal year was 39 000 000
shares. At the Annual General Meeting one
share had one vote.
AUTHORITY OF THE BOARD OF
DIRECTORS
At the Annual General Meeting held on
May 14, 2009 the Board of Directors was
granted renewed authority to increase the
share capital by issuing 3.9 million shares.
This authority includes capital increases
also against something else than money, so
that the Board of Directors may carry out
”RISK”-AMOUNT
merges, purchase of business, assets, etc.
This authority also means that the Board of
Directors may set the terms when issuing
the shares. This authority has not yet been
exercised and remains in force up to the
Annual General Meeting in May 2010.
The Board of Directors is authorised to purchase treasury shares of up to 10% of the
share capital write-down, corresponding to
the highest number of shares 3 900 000.
Shares may be traded at a price between
NOK 50.00 and NOK 200.00 per share.
This authority has not yet been exercised
and remains in force up to the Annual
General Meeting in May 2010.
No share options have been issued to
the Board of Directors or the company’s
management.
TREASURY SHARES
The company did not purchase treasury
shares during 2009. At the end of 2009,
the company has no holdings of treasury
shares. As noted, the company is aut
horized to purchase 3.9 million shares.
Purchase of treasury shares is evaluated
on an ongoing basis.
DIVIDENDS
The Board of Directors proposes a dividend
of NOK 3.00 per share, in total NOK 117
million. It is shareholders who hold shares
on the date of the Annual General Meeting
who are entitled to receive dividends. The
Annual General Meeting will be held on the
company’s premises on May 19, 2010.
Payment to shareholders will take place on
June 01, 2010.
SHARES OWNED BY THE BOARD OF DIRECTORS,
THE MANAGEMENT AND THE AUDITOR
Pr. 01.01.93NOK 0.00
Pr. 01.01.94NOK -0.50
Pr. 01.01.95NOK -0.23
Pr. 01.01.96NOK 0.00
Pr. 01.01.97NOK 0.00
Pr. 01.01.98NOK -1.00
Pr. 01.01.99NOK -1.00
Pr. 01.01.00NOK -1.00
Pr. 01.01.01NOK -0.96
Pr. 01.01.02NOK -0.88
Pr. 01.01.03NOK -1.84
Pr. 01.01.04NOK -1.86
Pr. 01.01.05NOK -4.89
Pr. 01.01.06NOK -2.95
at 31.12.09
Number of shares
THE BOARD OF DIRECTORS:
Sverre A. Farstad
17 094 199
Per Norvald Sperre
3 700
Gro Bakstad
0
Bjørn Havnes
0
Bjarne Sælensminde
70 000
Janne-Grethe Strand-Aasnæs
3 200
Astrid Koppernæs
0
THE MANAGEMENT:
Karl-Johan Bakken
700
Torstein L. Stavseng
33 000
Joseph M. Homsey
0
THE AUDITOR:
Ernst & Young AS
0
ALLOCATION OF SHARES AT 31.12.09:
NORWEGIAN
Share
holders
Total shares
FOREIGN
Shareholding
%
Share-
holders
TOTAL
Shareholding
%
Share-
holders
Shareholding
%
1- 999
787
192 331
0.5
38
12 673
0.0
825
205 004
0.5
1 000- 49 999
579
3 361 664
8.6
47
333 565
0.9
626
3 695 229
9.5
16
1 130 815
2.9
6
397 482
1.0
22
1 528 297
3.9
100 000- 499 999
8
1 399 877
3.6
8
1 413 510
3.6
16
2 813 387
7.2
More than 500 000
11
28 265 083
72.5
1
2 493 000
6.4
12
1 401
34 349 770
88.1
100
4 650 230
11.9
1 501
50 000- 99 999
TOTAL
106
annual report
-
30 758 083 78.9
39 000 000
100
Note 24 – SHAREHOLDER INFORMATION AND DIVIDENDS, CONT.
THE COMPANY’S 20 LARGEST SHAREHOLDERS
at 31.12.09
Tyrholm & Farstad A/S
THE COMPANY’S 10 LARGEST SHAREHOLDERS IN 2008 Number of Ownership
shares share in %
at 31.12.08
Number of Ownership shares share in %
15 796 199
40.5
Tyrholm & Farstad AS
15 796 199
40.5
Folketrygdfondet
3 941 600
10.1
Folketrygdfondet
3 941 600
10.1
Brown Brothers Harriman & CO
2 493 000
6.4
Brown Brothers Harrisman & CO
2 500 000
6.4
Pareto Aksjer Norge
1 646 410
4.2
Pareto Aksjer Norge
1 523 600
3.9
Verdipapirfond Odin Norge
1 228 334
3.1
Verdipapirfond Odin Norge
1 244 534
3.2
Jan H. Farstad
1 050 000
2.7
Jan H. Farstad
1 050 000
2.7
Sverre A. Farstad
1 000 000
2.6
Sverre A. Farstad
1 000 000
2.6
Pareto Aktiv
838 530
2.2
Pareto Aktiv
900 600
2.3
Skagen Vekst
730 000
1.9
Verdipapirfond Odin Norden
768 860
2.0
Awilco Invest AS
717 950
1.8
Skagen Vekst
730 000
1.9
Verdipapir Odin Offshore
700 000
1.8
Total 10 largest shareholders
29 455 393
75.4
30 302 749
77.7
8 697 251
22.3
39 000 000
100.0
Verdipapirfond Odin Norden
616 060
1.6
Total 1 389 Norwegian shareholders
MP Pensjon
420 000
1.1
Total 114 foreigner shareholders
Number of shares with 1 503
shareholders, total
Skandinaviska Enskilda Banken AB
238 100
0.6
Pareto Verdi
222 350
0.6
RBC Dexia Investor Services Trust
219 900
0.6
Citibank N.A.
207 526
0.5
State Street Bank and Trust Co.
192 646
0.5
The Northern Trust
Forsvarets Personellservice
188 150
151 700
0.5
0.4
32 598 455
83.6
29 442 023
75.5
Total 1 401 Norwegian shareholders 34 349 770
88.1
Total 100 foreigner shareholders
4 650 230
11.9
39 000 000
100.0
Numbers of shares with 1 501
shareholders, total
NOTE 25 – MORTGAGE AND GUARANTEE LIABILITIES
2009
Parent
Company
2008
Group
Parent
Company
Group
0
6 028 567
0
5 021 753
Bank deposits
-
134 987
-
98 433
Account receivables
-
20 090
-
0
Vessels, at book value
-
10 022 461
-
7 822 134
0
10 177 538
0
7 920 567
MORTGAGES:
Debt, lease obligations and interest secured by mortgage
Securities included:
total
In addition the Company has assigned any insurance payment as security for the debt. Witholding taxes relating to emplyees NOK 14 083
(NOK 12 984 in 2008) are committed resources deposited into separate accounts, but are included in the company's total bank deposits.
Vessels booked values differ substantially from market values of NOK 13 642 500 as per 31.12.09
Markets values are an average of value estimates obtained from three independent brokers at the end of 2009
No agreements put restrictions on pledge assets.
2009
Parent
Company
2008
Parent
Company
Group
Group
Guarantees:
Guarantee liabilities
1 191 286
270 222
672 830
337 027
Gguarantee liabilities relates to the debt in Brazil Offshore Services.
The parent company has provided guarantees for mortgage dept in Farstad Construction AS.
In addition guarantees have been provided for loans to Ålesund Stadion KS NOK 825 (NOK 825 in 2008)
In 2008, the company also provided a guarantee on behalf of Solnør Gaard Golfbane (NOK 400).
annual report
-
107
NOTE 26 – FINANCIAL ITEMS
Parent Company
2008
Group
2009
2009
2008
47 337
82 784
2 071
2 034
Financial income
17 287
12 146
502 034
1 251 851
24 459
30 607
3 474
4 166
Bank interest
Dividends received
Interest income from Group companies
Realised agio
-
11 305
544
1 533
547 798
1 311 609
-
-
547 798
1 311 609
-
-
(22 151)
(13 880)
(13 839)
(3 448)
(2 281)
-
(688)
(2 697)
Other financial costs
Realised disagio
-
-
164 331
207 711
Value increase of market-based current assets
14 959
-
Other financial income
13 876
1 381
242 574
293 911
Unrealised agio
349 506
-
Total financial income
592 080
293 911
(278 484)
(250 763)
(11 863)
(35 712)
(3 448)
(16 419)
Financial costs
(9 340)
(9 141)
(48 299)
(29 166)
(4 343 )
(9 148)
(52 642)
(38 314)
495 156
1 273 295
Mortgage interest costs
Other interest cost
Value reduction of market-based current assets
Write-down of other assets
-
(2 281)
(10 358)
(2 766 )
(145 488)
(124 589)
(449 641)
(432 531)
-
(315 804)
Total financial costs
(449 641)
(748 335)
Net financial items
142 439
(454 424)
Unrealised disagio
NOTE 27 – FINANCIAL RISK, FINANCIAL INSTRUMENTS
The company is exposed to financial market risk regarding currency, interest rates
and freight rates through its operations.
The financial market risk is monitored continuously, and the company uses financial
derivatives to reduce the risk when this is
considered to be beneficial.
The company monitors the capital structure based on value adjusted equity among
others. Excess value is added to both equi-
INTEREST RISK
The sensitivity regarding interest risk can be summarized as follows:
The company has long term interest bea-
(All other variables are unchanged)
ring liabilities as described in note 29. Part
of the debt is subject to variable interest
rates, which means that the company is
affected by changes in interest rates.
Year:
ty and total assets. The target is to keep
the ratio above 50%.
2009
2008
Value adjusted equity 59.0% 59.9%
Increase/decrease of basispoints:
Effect on pre-tax profit:
2009:
+/- 100
+/- 19 mill.
2008:
+/- 100
+/- 22 mill.
As per 31st December 2009, 48% of the
company’s total long-term liabilities were
fixed-rate loans. If interest rate derivatives
are included, 84% of the company’s liabilities are subject to fixed interest rates. As a
consequence, the company is less exposed
to interest risk in 2010 compared to pre
vious years.
A summary of interest rate derivatives at the start of 2010 (interest rate swaps from variable
to fixed interest rates):
The Group’s interest rate hedging agree
ments had as per 31st December 2009 a
real value of NOK -29.5 million (NOK -30.7
million in 2008).
Hedge accounting is used when the company has pertinent debt in the same currency as the interest rate derivate within
the same legal entity in the Group. The
change in fair value is in this case recog
nised against other comprehensive income.
In cases where there is no debt in the same
currency as the interest rate derivative within the same legal entity, hedge accounting
is not used and changes in fair value are
108
annual report
-
Currency:
Amount:
Interest:
Weighted average
remaining term:
NOK
974 mill.
2.77 % - 5.17 %
3.0 years
USD
128 mill.
2.32 % - 3.74 %
4.6 years
GBP
61 mill.
3.30 % - 4.76 %
6.8 years
recognised against the profit and loss account.
Interest rate hedging increased finance
costs by NOK 12.6 million in 2009 compared to variable interest rates. The corresponding figure for 2008 was a reduc
tion in finance costs of NOK 5.6 million.
NOTE 27 – FINANCIAL RISK, FINANCIAL INSTRUMENTS, cont.
LIQUIDITY RISK
The group’s strategy is to have sufficient
cash and cash equivalents to ensure ongoing operations, future growth, and the payment of dividend. The investment program
is soon coming to an end, and there are two
vessels under construction at year end. Both
vessels are scheduled for delivery in 1st
Per 31.12.09
Repayment schedule existing debt
quarter of 2010, and the long term financing
of approx. 70% and 75% is committed by
Fortis Bank and Eksportfinans DnB NOR respectively. Thus, the liquidity risk regarding
the financing of new builds is significantly
reduced compared to previous years.
The Supreme Court decided that the transition rules from the old tax regime to the new
Less than 3 months
3-12 months
1-5 years
Over 5 years
349 526
422 242
3 301 822
2 164 680
6 238 270
0
54 792
438 333
741 875
1 235 000
11 162
11 163
0
0
Repayment schedule new debt (note 29)
Taxes
Accounts payable
177 019
Total
22 325
177 019
Other debt
46 245
138 736
Debt interest payments, accrued
55 482
12 730
639 434
639 663
TOTAL
tax regime are in breach with the Norwegian
Constitution. This implies a refund of paid
taxes of NOK 127 million and a repeal of the
future tax liabilities regarding the transition
rules. This will strengthen the company’s
present and future liquid capital.
The following table shows the maturity for
the financial obligations:
184 981
68 212
3 740 155
2 906 555
Interest bearing mortgage debt is expected to increase by NOK 835 million regarding the financing of vessels under construc-
tion. Mortgage debt in P/R International
Offshore Services will be refinanced in 1Q
2010. Balloon repayments are included in
repayment schedule existing debt. Taxes
include short term debt relating to taxes.
FOREIGN CURRENCY RISK
The company is heavily exposed to foreign
currency since more than 90% of the income is earned in foreign currencies.
The foreign currency risk is calculated for
each relevant currency. This takes account
of the assets and liabilities, and highly
probable transactions in the relevant currency. The Group signs forward exchange
contracts and options agreements to reduce the currency risk associated with
cash flows in foreign currency.
In the case of longer charter parties in foreign currency the company has at times
signed forward exchange contracts for the
sale of income during the entire period of
the charter party. The effect of this hedg-
ing is recognised in the accounts together
with the income. Hedge accounting is used
for such forward exchange contracts. The
freight income was NOK -0.4 million (NOK
5.3 million in 2008) lower in 2009 due to
these hedging contracts. This is compared
to the income using variable exchange
rates.
Transfers to other comprehensive income:
The following changes have taken place in association with cash flow hedging over the
year (interest rate and currency hedging):
Fair value of cash flow hedging OB
2009
2008
(69 714)
30 278
(408)
(5 288)
Entered freight income
Interest rate costs
(12 591)
(5 611)
New cash flow hedging
63 966
(88 745)
Change in value of remaining cash flow hedging
33 470
(348)
Fair value of cash flow hedging CB
14 723
(69 714)
When forward exchange contracts and currency options are used to hedge expected profit in the various currencies based on expectations
about income and costs, hedge accounting is not used and the changes in fair value are recognised against the profit and loss.
The company had the following forward exchange contracts and options as per 31st December 2009 to hedge exchange rates for future
cash flows:
Currency:
Due dates:
Forward exchange rates:
Sale GBP 12.3 mill.
Jan 2010 – Feb 2011
11.005 – 11.310
Of which GBP 12.3 mill. is hedging contracts (hedge accounting is used)
Sale USD 34.4 mill.
Jan 2010 – Feb 2011
5.7994 – 7.1710
Of which USD 28.4 mill. is hedging contracts (hedge accounting is used)
Sale AUD 89.0 mill.
Jan 2010 – Aug 2011
4.6170 – 5.2650
Of which AUD 80.0 mill. is hedging contracts (hedge accounting is used)
Sale EUR 6.45 mill.
Jan 2010 – Jun 2010
8.2706 – 8.5600
Of which EUR 0.45 mill. is hedging contracts (hedge accounting is used)
Forward exchange contracts had a positiv
value as per 31st December 2009 amounting to NOK 45.2 million (negative added
value of NOK 103.5 million as per 31st
December 2008). For the contracts in
which hedge accounting is used the positive value as per 31st December 2009 was
NOK 42.9 million (NOK -21.8 million in
2008).
annual report
-
109
CREDIT RISK
The company is exposed to possible losses
linked to accounts receivable. The credit
risk within our segment is regarded as low.
The company’s debtors are mostly major
oil companies and offshore service com
panies, and it is considered unlikely that
they will fail to meet their obligations. The
maximum credit exposure is regarded as
equal to the size of the accounts receivable, i.e. NOK 473.1 million.
The company is also exposed to possible
losses if the agreement counterpart in a
derivative contract should fail to fulfil its
payment obligations on the settlement
date. However, the company does not expect any of the parties to fail to fulfil their
obligations since derivative contracts are
only signed with recognised financial institutions.
No particular hedging against credit risk
was undertaken in 2009. Ongoing provisions are made, and historically the loss
percentage has been very low. As per 31st
December 2009, NOK 0.3 million was allo
cated for uncertain outstanding accounts
receivable.
Outstanding receivable – by age:
Total:
Not overdue:
0 – 30 days
31 – 60 days
More than 60 days
473 130
301 374
158 052
10 092
3 612
100 %
63.7 %
33.4 %
2.1 %
0.8 %
Sales to the company’s largest customer, Petrobras in Brazil, amounted to NOK 620.9 million in 2009. This amounts to around 19.1% of
total operating income.
FAIR VALUE
The company’s financial assets are classified into the categories financial assets
at fair value against the result, hedging,
lending and receivables. Financial liabilities
are classified as financial liabilities at fair
value and financial liabilities at amortised
cost.
Financial assets at fair value are divided into the following levels for estimation of value at
31.12.09:
Group:
Parent
company:
1 571 923
318 344
186 965
70 435
0
0
Level:
1. Based on market prices
2. Based on market prices on comparable assets
3. Approximate values
Financial assets in the first level are divided
between the categories shares, equity certificates, money market funds, cash and
cash equivalents. These are valued based
on market rates or prices at 31.12.09
(from Oslo Stock Exchange and Oslo
Axess). Values regarding bonds, forward
exchange contracts and interest swap
agreements in level 2 are based on prices
from the sale of comparable assets. There
are no financial assets in level 3 were approximate values are used.
The company’s following financial instruments are not evaluated at fair value:
Accounts receivable, other short-term receivables, lending, accounts payable and
long-term liabilities. The value of accounts
receivable and accounts payable are al-
110
annual report
-
most the same as their fair values since
they are entered on ’normal’ conditions.
Lending is a short-term receivable and
lending is assumed to have a fair value that
is almost the same as the value entered
into the balance sheet.
The fair value of long-term liabilities subject to fixed interest rates is calculated by
comparing the company’s terms and the
market terms for liabilities with the same
time to maturity and credit risk.
Principal
Total NOK loans:
Amortized cost/
market value:
Fixed-rate loan
NOK 2 442 208
NOK 2 442 208
Market terms
NOK 2 442 208
NOK 2 436 048
Principal
Total USD loans:
Amortized cost/
market value:
Fixed-rate loan
USD 47 178
USD 47 178
Market terms
USD 47 178
USD 45 152
Group
2009
2008
Value in balance sheet
Fair value Value in balance sheet
Fair value
Financial assets:
Financial assets at fair value against the result:
Equity certificates
21 641
21 641
15 055
Short-term shareholdings
24 869
24 869
3 809
3 809
142 388
142 388
174 639
174 639
Money market funds
Bonds
FX contracts, interest swaps (not hedging)
Hedging
15 055
141 781
141 781
180 134
180 134
1 383 025
1 383 025
1 369 740
1 369 740
2 270
2 270
-
-
42 914
42 914
-
-
769 256
769 256
677 572
677 572
10 219
10 219
8 471
8 471
-
-
83 420
83 420
29 513
29 513
69 714
69 714
Lending
Accounts receivable and other short-term receivables
Other long term receivables
Financial liabilities:
Financial liabilities at fair value against the result:
FX contracts, interest swaps (not hedging)
Hedging
Financial liabilities at amortised cost:
Accounts payable and other short-term liabilities
Interest bearing long-term liabilities
Parent Company
430 212
430 212
524 148
524 148
6 238 270
6 220 408
5 239 652
5 206 352
2009
2008
Fair value
Fair value
21 641
21 641
15 055
15 055
6 673
6 673
3 809
3 809
62 291
62 291
68 269
68 269
Financial assets:
Financial assets at fair value against the result:
Equity certificates
Short-term shareholdings
Money market funds
Bonds
70 435
70 435
135 786
135 786
227 739
227 739
266 965
266 965
Lending
Accounts receivable and other short-term receivables
124 846
124 846
112 225
112 225
1 435 361
1 435 361
490 763
490 763
7 902
7 902
3 761
3 761
88
88
-
-
Accounts payable and other short-term liabilities
108 093
108 093
148 170
148 170
Interest bearing long-term liabilities
300 000
300 000
300 000
300 000
Receivables from Group companies
Other long term receivables
Financial liabilities:
Financial liabilities at fair value against the result:
Hedging
Financial liabilities at amortised cost:
Category:
Gain/(loss)
against the result in 2009:
Gain/(loss)
against the result in 2008:
11 511
(16 419)
Financial assets at fair value against the result
Hedging
0
0
Lending and receivables
14 794
(14 410)
Financial liabilities at fair value against the result
(5 317)
8 543
0
0
Financial liabilities at amortised cost
NOTE 28 – EVENTS AFTER THE BALANCE SHEET DATE
A Supreme Court judgement of 12th
February 2010 found in favour of Farstad
Shipping ASA and agreed that the transitional rules in the new shipping taxation
scheme in 2007 breached paragraph 97
of the Norwegian constitution, which for-
bids giving laws retroactive effect. The NOK
635,595 provision for tax was therefore reversed with effect for 2009 and recognised
in the tax line in the profit and loss account.
Tax that was paid for the 2007 and 2008
financial years is recognised as a receivable
on the balance sheet in the amount of NOK
127,119. So far no new regulations have
been issued by the Ministry of Finance as a
consequence of the judgement.
annual report
-
111
NOTE – 29 MORTGAGES AND OTHER LONG-TERM LIABILITIES
Interest bearing debt, except the parent
company Farstad Shipping ASA’s debt, is
in its entirety associated with the financing
of the vessels. Loan agreements are signed
between the respective ship owning companies and lenders.
The loan agreements contain financial covenants which require the companies to fulFRAKTINNTEKTER FORDELT PÅ VALUTA
fil requirements vis-à-vis certain financial
key figures. These key figures are related
to equity ratio and the size of the liquidity
holdings and working capital. No breaches
of financial covenants occurred in 2009.
The loan agreements assume how large a
proportion of the mortgage debt is going
to be repaid through the sale of the vessel:
‘allocated debt’. The mortgage debt linked
to the individual vessel and which shall be
repaid in the event of a sale of the vessel
is stated in the fleet overview on page 121
and 123.
Net repayments of debt and leasing liabilities amounted to NOK 618 million in 2009.
Net new long-term loans raised were NOK
1,892 million during the same period.
2009
2008
Interest bearing debt
6 238 270
5 230 403
EUR - 1%
Interest bearing current assets
1 697 997
1 808 071
Net interest bearing debt
4 540 273
3 422 332
Net interest bearing debt as per 31.12:
BRL - 5%
NOK - 7%
GBP - 23%
Financing of vessels under USD
construction
- 28%
A long-term facility of NOK 400 million will
AUD - 36%
be drawn with Fortis Bank Netherlands to
finance the new build Far Shogun tbn. In
addition a long-term facility of NOK 435
million will be drawn with Eksportfinans to
finance the new build Far Saracen tbn. The
loan will be guaranteed by GIEK and DnB
NOR. Both new builds will be delivered in
the first quarter of 2010. A refinancing of
P/R International Offshore Services ANS
will be completed in March 2010 and loans
of in total NOK 190 million will then be repaid, and a new long-term facility of NOK
400 mill will be drawn.
The average effective interest rates for financial liabilities were as follows:
2009
2008
Bond issues/unsecured debt
4.63%
7.38%
Long-term liabilities secured by security
4.86%
5.15%
2009
2008
23 984
9 249
Mortgage sorted by currency
FRAKTINNTEKTER FORDELT PÅ VALUTA
Arrangement fee:
AUD
2.5%
EUR
4.2%
Capitalized arrangement fee
EUR - 1%
BRL - 5%
Capitalized arrangementGBP
fee is8.5%
presented
net with the loans and is amortized
NOK - 7%
until maturity of the loans.
USD 21.4%
NOK 63.4%
GBP - 23%
USD - 28%
AUD - 36%
Long-term liabilities as per 31 December
2009 are distributed as follows: 63.4% in
NOK, 21.4% in USD, 8.5% in GBP, 4.2%
in EUR and 2.5% in AUD.
st
Mortgage sorted by currency
Gjeld fordelt på valuta
Mortgage sorted by lender incl. loan guaranties*)
NOK Mill.
1800
AUD
1600
EUR
1400
GBP
2.5%
1000
EUR
4.2%
800
GBP
8.5%
600
400
200
BNP Paribas
Handelsbanken
Brasilian
Sparebanken Møre
Nordea Bank
Danish Ship Finance
0
Fokus Bank
NOK 63.4%
Swedbank
USD 21.4%
GIEK
NOK
1200
AUD
DnB NOR
USD
When nterest rate hedging contracts have not been signed, see note 27, the loans are subject to variable interest rates. The interest is fixed on the basis of market interest rates
(NIBOR/LIBOR) with an additional credit margin. The credit margin varies from loan to loan.
LENDER
*) The Group has loans totalling NOK 2 983 million in Eksportfinans. These loans are guaranMortgage sorted by lender incl. loan guaranties*)
teed by other banks and the guaranteed amounts are included in the above graph.
Gjeld fordelt på valuta
NOK Mill.
AUD
112
annual report
-
EUR
GBP
USD
NOK
1800
1600
1400
1200
1000
800
Statsautoriserte revisorer
Ernst & Young AS
Grimmergt. 4
NO-6002 Ålesund
Foretaksregisteret: NO 976 389 387 MVA
Tlf.: +47 70 11 82 82
Fax: +47 70 12 00 51
www.ey.no
Medlemmer av Den norske Revisorforening
To the Annual Shareholders’ Meeting of
Auditor’s report for 2009
We have audited the annual financial statements of Farstad Shipping ASA as of 31 December 2009,
showing a profit of NOK 1 254 960 000 for the Parent Company and a profit of NOK 1 931 503 000 for
the Group. We have also audited the information in the Directors’ report concerning the financial
statements, the going concern assumption, and the proposal for the allocation of the profit. The
financial statements comprise the financial statements for the Parent Company and the Group. The
financial statements of the Parent Company comprise the balance sheet, the statements of income,
comprehensive income, cash flows and changes in equity as well as the accompanying notes. The
financial statements of the Group comprise the consolidated balance sheet, the statements of income,
comprehensive income, cash flows and changes in equity as well as the accompanying notes. IFRSs
as adopted by the EU have been applied in the preparation of the financial statements of the Parent
Company and the Group. These financial statements and the Directors’ report are the responsibility of
the Company’s Board of Directors and Chief Executive Officer. Our responsibility is to express an
opinion on these financial statements and on other information according to the requirements of the
Norwegian Act on Auditing and Auditors.
We conducted our audit in accordance with laws, regulations and auditing standards and practices
generally accepted in Norway, including the auditing standards adopted by the Norwegian Institute of
Public Accountants. These auditing standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. To
the extent required by law and auditing standards, an audit also comprises a review of the
management of the company’s financial affairs and its accounting and internal control systems. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion,
• the financial statements of the Parent Company and the Group are prepared in accordance with
laws and regulations and present fairly, in all material respects, the financial position of the
Company and the Group as of 31 December 2009, and the results of its operations, cash flows and
changes in equity for the year then ended, in accordance with IFRSs as adopted by the EU
• the Company’s management has fulfilled its duty to properly record and document the Company’s
accounting information as required by law and bookkeeping practice generally accepted in Norway
• the information in the Directors’ report concerning the financial statements, the going concern
assumption, and the proposal for the allocation of the profit is consistent with the financial
statements and complies with law and regulations.
Ålesund, 15th March 2010
ERNST & YOUNG AS
Odd Jarle Døving
State Authorised Public Accountant (Norway)
(sign.)
Note: The translation to English has been prepared for information purposes only.
A member firm of Ernst & Young Global Limited
The Farstad Fleet;
vessels and Contract
Overview
114
annual report
-
annual report
-
115
INVESTMENTS 1995 - 2010
Long-term fleet renewal
a yard in Scotland, one vessel was built at
built after 2000, while 9 vessels were built
As illustrated in the figure on the right the
a yard in Denmark, one vessel was built at a
before 1990. The sale of older tonnage
company has invested a total of NOK 13.1
South Korean yard, and the last three were
will continue to form an important part of
billion in vessels and shares in vessels since
built at a Brazilian yard. All the vessels built
fleet renewal.
1995. In the same period we have sold
at foreign yards have Norwegian designs
18 vessels for a total of NOK 1.6 billion.
and equipment packages. The other part
With the delivery of Far Saracen tbn at
The difference of NOK 11.5 billion must
of the investment programme, amounting
the end of March 2010, we will have com-
therefore be financed through the results
to NOK 1.6 billion, involved the purchase
pleted a newbuild programme involving 16
the operation of the vessels produces.
of vessels in the used vessels market and
vessels from Norwegian yards since 2005.
Long-term, stable earnings are therefore
the purchase of the remaining 50% of IOS
This new build programme has involved
the key to the company’s ability to renew
in 2003.
investments totalling NOK 6.6 billion. We
and develop the fleet.
want to continue to play a key role in the
The result of this investment programme
maritime cluster in Norway. Stable, com-
The company has on its own or in part-
and the sale of older vessels is today’s
petitive general conditions for the industry
nership with others invested in 42 new
modern fleet, which has an average age
are a prerequisite if we are to succeed in
vessels since 1995. This amounts to an
of 10.5 years. The average age of the
this. On the other hand, Farstad Shipping
accumulated gross investment of NOK
PSV fleet is approximately 12.5 years,
will as an international company also be
11.5 billion for Farstad Shipping. Of this
while the average age of the AHTS fleet
open to those opportunities that exist in
approximately NOK 10.3 billion involved
is approximately 9 years, and the average
other markets with respect to investing
35 vessels built at Norwegian yards. Of the
age of the SUBSEA fleet is approximately
in newbuilds.
remaining seven vessels, two were built at
6 years. 31 of the fleet’s 57 vessels were
116
annual report
-
VESSELS SOLD AND ACQUIRED 1995 - 2010 (accumulated)
Year
Sales
Acquired
1995
64.4
271.2
1996
64.4
395.8
1997
127.7
614.0
1998
311.9
931.4
1999
311.9
1 844.7
2000
432.6
2 142.9
2001
611.8
3 282.0
2002
611.8
3 658.6
2003
637.6
5 704.6
2004
705.8
5 704.6
2005
1 141.3
5 945.1
2006
1 141.3
6 896.2
2007
1 470.2
8 014.8
2008
1 555.5
9 314.6
2009
1 555.5
11 883.9
2010
1 555.5
13 056.9
annual report
-
117
T H E FA R S TA D F L E E T
The company’s fleet consists of 30 AHTS, 24 PSV and 3 SUBSEA vessels. As at 15
March Farstad Shipping has one AHTS under construction at a Norwegian shipyard.
The contract coverage for the fleet included options is approximately 78% and 67%
for the first half year and second half year of 2010 respectively. For 2011 the fleet
coverage is 53%.
Anchor Handling Tug Supply Vessel
Offshore
specially
production modules/vessels. Certain
designed to provide anchor handling
supply
vessels
AHTS in our fleet are equipped for fire
and towage services for semi submer-
fighting, rescue operations and oil
sibles, platform jackets, barges and
recovery.
AHTS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
15
16
16
17
18
19
20
21
22
23
23
24
25
25
26
27
28
28
29
30
31
118
annual report
-
Plattform Supply Vessel.
Subsea Vessel.
Vessel specially designed for transpor-
on deck, in addition to a variety of dif-
Construction Subsea Vessel - specially
tation of supplies and equipment to/
ferent products (dry and wet) in sepa-
designed vessel for deepwater opera-
from offshore installations. Transport-
rate tanks. Also transporting pipes for
tions, installation and subsea support.
ing individual items mainly in containers
pipe-laying activities.
PSV
SUBSEA
32
33
34
35
56
37
38
39
40
57
41
42
41
43
42
44
43
58
45
46
46
47
47
48
48
49
50
51
52
53
54
55
annual report
-
119
A H T S F L E E T - E M P L OY M E N T
C O N T R A C T O V E R V I E W AT 1 5 . 0 3 . 1 0
Photo
nr.
Vessel name
FAR SARACEN tbn
1 Delivery March 2010
FAR SHOGUN
2
Spot
FAR SAGARIS
3 Petrobras
Feb. 12
FAR SCORPION
4
Spot
FAR SCIMITAR
5 ADA
July 10 + opt.
FAR SABRE
6 Petrobras
June 10 + opt.
FAR SAPPHIRE
7
Spot
FAR SOUND
8 Hess
June 10 + opt.
FAR STRAIT
9 Woodside
Aug. 10 + opt.
FAR STREAM
10 Woodside
April 11 + opt.
FAR SWORD
11 Hess
June 10 + opt.
FAR SALTIRE
12 Chevron
June 10 + opt.
FAR SCOUT 13 Petrobras
Oct. 11 + opt.
FAR SANTANA
14 Petrobras
June 10
FAR SENIOR
15 Petrobras
Oct. 11
FAR SAILOR
16 Petrobras
Oct. 11
FAR FOSNA
17 ADA
July 10 + opt.
FAR GRIP
18 Apache
Sept. 10
FAR SKY
19 Apache
Sept. 10
FAR SEA
20 Petrobras
Jan. 13 + opt.
LADY ASTRID
21
Spot
LADY CAROLINE 22
Spot
LADY GURO
23 Shell Filippinene
Oct. 16 + opt.
LADY SANDRA 24 Conoco Phillips
March 10 + opt.
LADY CYNTHIA
25 JVPC *)
May 10 + opt.
LADY GERDA
26
Spot
LADY AUDREY
29
Spot
LADY VALISIA
28
Spot
BOS TURQUESA
29 Petrobras
Feb. 15
BOS TURMALINA
30 Petrobras
July 14
BOS TOPÀZIO 31 Petrobras
Dec. 13
*)
120
Employment vi)
at 15.03.10
Charterer
JVPC = Japan Vietnam Petroleum Company
annual report
-
2010
2011
2012
Contracts
Charter’s option
Under construction
2013
2014
Vessel name
Year
built
Design
Register i)
Owner
FAR SARACEN tbn
UT 731 CD
2010
Farstad Supply AS
FAR SHOGUN
UT 731 CD
2010
FAR SAGARIS
UT 731 CD
FAR SCORPION
FAR SCIMITAR
-
BHP
DWT
Deckarea m 2
Mortgage iv) Value v)
(NOK mill.) (NOK mill.)
-
-
-
-
Farstad Supply AS
NOR 24000
3900
755
-
-
2009
Farstad Supply AS
IOM 24000
3900
755
436.5
575.0
UT 731 CD
2009
Farstad Supply AS
NOR 24000
3900
755
396.0
578.3
UT 712 L
2008
Farstad Supply AS
IOM 15900
2750
540
238.3 360.8
FAR SABRE
UT 712 L
2008
Farstad Supply AS
IOM 15900
2750
540
103.9 360.8
FAR SAPPHIRE
UT 732 CD
2007
Farstad Supply AS
NOR 27200
4800
800
332.7 605.0
FAR SOUND
UT 712 L
2007
Farstad Supply AS
IOM 15900
2750
540
153.0 360.8
FAR STRAIT
UT 712 L
2006
Farstad Shipping Pte. Ltd.
SGP 15900
2750
540
90.3 358.3
FAR STREAM
UT 712 L
2006
Farstad Supply AS
IOM 15900
2750
540
88.7 355.0
FAR SWORD
UT 712 L
2006
Farstad Supply AS
NIS 15900
2750
540
153.0 355.0
FAR SALTIRE
UT 728 L
2002
IOM 16300
2195
490
105.8 335.0
FAR SCOUT UT 722 L
2001
Farstad Supply AS
NOR 18000
2805
570
137.1 369.2
FAR SANTANA
UT 730
2000
Farstad Supply AS
NIS 19200
2966
570
131.1 381.7
FAR SENIOR
UT 722 L
1998
Farstad Supply AS
NIS 18000
2873
585
136.5 320.8
FAR SAILOR
UT 722
1997
Farstad Supply AS
NIS 16820
2681
540
82.6 291.7
FAR FOSNA
UT 722
1993
Farstad Supply AS
NOR 14400
2400
570
77.1 223.3
FAR GRIP
UT 722
1993
Farstad Supply AS
NIS 14400
2418
570
62.8 223.3
FAR SKY
ME 303 II
1991
Farstad Supply AS
IOM 14400
1920
567
70.7 141.7
FAR SEA
ME 303 II
1991
Farstad Supply AS NIS 13200
1920
567
70.7 141.7
LADY ASTRID
UT 712-2
2003
IOS ii)
NIS 13200
2654
510
51.6 283.3
LADY CAROLINE UT 712-2
2003
IOS NIS 13200
2649
510
51.6 283.3
LADY GURO
UT 719-2
2001
Farstad Shipping Pte. Ltd. NIS
1903
400
48.0 121.7
LADY SANDRA KMAR 404
1998
Farstad Shipping Pte. Ltd. SGP 16100
2598
538
85.0 253.3
LADY CYNTHIA
Hart Fenton
1987
Farstad Shipping Pte. Ltd. SGP
9388
2060
402
21.3 55.8
LADY GERDA
Hart Fenton
1987
IOS NIS
8660
2060
390
11.5 53.3
LADY AUDREY
ME 303
1983
IOS NIS 12240
2280
467
15.3 66.7
LADY VALISIA
ME 303
1983
IOS NIS 12240
2350
481
15.6 66.7
BOS TURQUESA
UT 722 L
2007
BOS
50%
iii)
BRA 19040
2713
450
105.6 200.8
BOS TURMALINA
UT 722 L
2006
BOS
50%
BRA 14410
2747
450
98.7 182.5
BOS TOPÀZIO UT 728 L
2005
BOS
50%
BRA 12240
2500
555
64.9 182.5
i)
ii)
iii)
iv)
IOM = Isle of Man, SGP = Singapore, BRA = Brazil
P/R International Offshore Services ANS
BOS Navegaçäo SA (Brazil Offshore Services)
Mortgage at 31.12.09
v) The estimate of market value is based on an
average of three independent broker’s estimate of
the vessels value (free of charter) at the year end of
2009.
5450
vi) Certain freight contracts contains clauses which
give the charterer the right to cancel the contract.
annual report
-
121
P S V / S U B S E A F L E E T - E M P L OY M E N T
C O N T R A C T O V E R V I E W AT 1 5 . 0 3 . 1 0
Employment vi)
at 15.03.10
Vessel name
Photo
nr.
FAR SERENADE
32 Statoil
April 14 + opt.
FAR SEARCHER
33 Statoil
March 12 + opt.
FAR SEEKER
34 Statoil
April 11 + opt.
FAR SPIRIT
35 Woodside
May 11 + opt.
FAR SWAN
36 Woodside
May 11 + opt.
FAR SPLENDOUR
37 Peterson SBS
Dec. 10 + opt. FAR SYMPHONY
38 Statoil
April 11.
FAR SWIFT
39 Petrobras
Oct. 11 + opt.
FAR SCOTIA
40 Shell Ireland
May 10 + opt.
FAR STAR
41 Statoil
June 11 + opt.
Charterer
FAR SUPPLIER
42 Esso Australia
May 14
FAR STRIDER
43 Apache North Sea Nov. 11 + opt.
FAR SUPPORTER
44 Petrobras
April 13
FAR SERVICE
45 Marathon
Aug. 11 + opt.
FAR SCANDIA
46 Esso Bass Strait
May 14
FAR SUPERIOR
47 ADTI
May 10 + opt.
FAR SLEIPNER
48 Petrobras
May 11 + opt.
FAR GRIMSHADER 49
Spot
FAR VISCOUNT
50
Lay up
LADY MELINDA
51 ConocoPhillips
Dec. 10 + opt.
LADY GRETE 52 Reliance
Nov. 10 + opt.
LADY GRACE 53 Woodside
April 10 + opt.
LADY CHRISTINE
54
Spot
LADY KARI-ANN
55 Esso Bass Strait
Sept.10 + opt.
Vessel name
Photo
nr.
Employment vi)
at 15.03.10
FAR SAMSON
56 Saipem
FAR SAGA
57 Acergy / Norsk Hydro April 10 + opt.
FAR SOVEREIGN
58
Charterer
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
April 14 + opt.
Spot
Contracts
Charter’s option
122
annual report
-
Year
built
Deck- Mortgage iv) Value v)
area m 2 (NOK mill.) (NOK mill.)
Register i)
BHP
DWT
Farstad Supply AS
NOR
9465
5944
1003
268.3
Farstad Supply AS
NOR
9465
4500
1090
202.2 360.0
2008
Farstad Supply AS
NOR
9465
4500
1090
107.2 360.0
VS 470 Mk II 2007
IOM
6530
3550
700
58.2 154.2
Farstad Shipping Pte. Ltd
IOM
5220
3570
700
98.0 155.0
Vessel name
Design
FAR SERENADE
UT 751 CD
2009
FAR SEARCHER
UT 751 E
2008
FAR SEEKER
UT 751 E
FAR SPIRIT
FAR SWAN
VS 470 Mk II 2006
Owner
375.8
FAR SPLENDOUR
P 106
2003
Farstad Supply AS
IOM
7440
3503
690
67.6 163.3
FAR SYMPHONY
P 105
2003
Farstad Supply AS
NOR
9925
4929
978
114.8 281.7
FAR SWIFT
UT 755 L
2003
Farstad Supply AS
NIS
5450
3084
585
67.2 150.8
FAR SCOTIA
UT 755
2001
IOM
5450
3000
519
52.9 140.0
FAR STAR
UT 745
1999
Farstad Supply AS
NOR
9600
4303
900
85.2 198.3
FAR SUPPLIER
VS 483
1999
IOM
6680
4605
902
68.8 187.5
FAR STRIDER
VS 483
1999
IOM
6680
4605
602
68.8 187.5
FAR SUPPORTER
UT 750
1996Farstad Shipping Ltd.
IOM
7200
4680
955
63.5 182.5
FAR SERVICE
UT 745
1995Farstad Shipping Ltd.
IOM
7200
4680
965
68.8 183.3
FAR SCANDIA
UT 705
1991
Farstad Supply AS
NIS
6600
3100
868
31.6 93.3
FAR SUPERIOR
UT 705 L
1990
IOM
6600
3796
987
42.3 95.8
FAR SLEIPNER
ME 202
1984
Farstad Supply AS
NIS
5250
3067
615
22.3 40.8
FAR GRIMSHADER
UT 706 L
1983
Farstad Supply AS
IOM
6120
3325
780
23.6 58.3
FAR VISCOUNT
H/R
1982
Farstad Supply AS
IOM
3400
1540
395
6.9 16.7
LADY MELINDA
UT 755
2003Farstad Shipping Pte. Ltd
SGP
5450
3095
600
58.7 169.2
LADY GRETE UT 755 L
2002Farstad Shipping Pte. Ltd
SGP
5450
3271
680
52.3 147.5
LADY GRACE UT 755
2002
IOS
ii)
IOM
5450
3936
615
28.7 131.7
LADY CHRISTINE
ME 202
1985
IOS
NIS
6544
2368
475
9.6 41.7
LADY KARI-ANN
ME 202
1982
IOS
NIS
6960
2972
612
7.6 38.3
Vessel name
Design
Register i)
BHP
DWT
Year
built
Owner
Deck- Mortgage iv) Value v)
area m 2 (NOK mill.) (NOK mill.)
FAR SAMSON
UT 761 CD
2009
Farstad Construction AS
NIS 49000
6103
1450
FAR SAGA
UT 745 L
2001
Farstad Supply AS
NOR 10800
3475
588
125.6 312.5
FAR SOVEREIGN
UT 741
1999
Farstad Supply AS
NOR 27400
4400
680
115.8 468.3
i) IOM = Isle of Man, SGP = Singapore
ii) P/R International Offshore Services ANS
iii) Mortgage at 31.12.09
iv) The estimate of market value is based on an
average of three independent broker’s estimate of
the vessels value (free of charter) at the year end of
2009.
651.7
906.7
v) Certain freight contracts contains clauses which
give the charterer the right to cancel the contract.
annual report
-
123
GLOSSARY
ASA:
Public limited company in Norway.
Bareboat agreement:
Agreement regarding chartering of a vessel where the operating costs are the
charterers responsibility.
Charterer:
The company paying for the assignment.
BHP:
Brake Horse Power, measure of engine power.
Bollard Pull:
A tug’s pulling power in tonnes.
BRA:
Brazil.
Boat-year:Use of one vessel for one year.
Charter Party (CP):
Contract for hiring a ship.
CEO:
CFO:
Chief Financial Officer
CSV:
Construction Subsea Vessel
DNV:
Det Norske Veritas. Classification company. Controlling and approving the vessels technical condition, security and quality according to the company’s own rules
and the national laws.
DPS:
Dynamic positioning system: Used to hold a vessel and/or other floating
installation in an exact position.
DWT:
Dead Weight Tonnes. The vessels carrying capacity measured in tonnes
of cargo and supplies.
EBITDA:
Operating profit before depreciation.
EBIT:
Operating profit.
FAR:
The company code (ticker) at the Oslo Stock Exchange.
GDP:
Gross Domestic Product.
IFRS:
International Financial Reporting Standards
124
annual report
-
IMO:
International Maritime Organization - The UN’s advisory committee.
IOM:
Isle of Man.
ISPS:
International Ship and Port Facility Security code. International framework to
detect/assess security threats and take preventive measures against security
incidents affecting ships or port facilities used in international trade.
ISM:
International Safety Management code.
ISO:
International Standards Organization.
Jackup:
Jackup drilling/production platform.
LIBOR:London Interbank Offered Rate.
LTI:
Injuries that result in absence from work beyond the day or shift on which it occurs.
LTI-frequency:Lost time injuries. (Number of injuries per million of hours worked.)
NGAAP:
Norwegian General Accepted Accounting Policy
NIBOR:
Norwegian Inter Bank Offered Rate.
NIS:
Norwegian International Ship Register.
NOR:
Norwegian Ordinary Ship Register.
ROV:Remotely Operated Vehicles: submarine unit used for inspection and maintenance work.
Semi submersible:
Semi submersible drilling/production platform.
SGP:
Singapore.
Spot rate:Rates for single assignments based on the current market situation.
Stand-By:
Vessel specially equipped for emergency rescue operations close to an offshore installation.
TBN:
To Be Named
VAE
Value Adjusted Equity
annual report
-
125
N OT E S
126
annual report
-
FARSTAD SHIPPING ASA
PO. Box 1301, Sentrum, 6001 Ålesund, Notenesgt. 14, Norway
Tel: +47 70 11 75 00, Fax: +47 70 11 75 01
E-mail: [email protected], Internet: www.farstad.com
FARSTAD SHIPPING LTD.
Farstad House, Badentoy Avenue, Badentoy Park, Portlethen, Aberdeen AB12 4YB, Scotland
Tel: +44 1 224 784 000, Fax: +44 1 224 783 340
E-mail: [email protected]
FARSTAD SHIPPING (INDIAN PACIFIC) PTY. LTD.
GPO Box 5111, Melbourne Victoria, 3001 Australia
Level 4, 99 Queensbridge Street, Southbank, Victoria, 3006 Australia
Tel: +61 3 9254 1666 Fax: +61 3 9254 1655
FARSTAD SHIPPING PTE. LTD.
78 Shenton Way, #19-02 Lippo Centre, Singapore 079120
Tel: +65 6323 2077 Fax: +65 6323 2877
BOS NAVEGAÇÃO SA (BRAZIL OFFSHORE SERVICES)
Rua Abilio Moreira de Miranda, 606 Parque Valentina Miranda, CEP 27915-250 Macae - RJ, Brasil
Tel: +55 22 2105 1900, Fax: +55 22 2105 1901

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