GRIEG MATURITAS
Annual Report 2020
GRIEG MATURITAS | ANNUAL REP ORT 2020
Content This is Grieg Reflections from our Chair
4
Our history
6
Our organization
8
Sustainability
16
Covid-19
20
Our companies Grieg Maritime Group
24
Grieg Shipbrokers
30
Grieg Logistics
32
Grieg Seafood
38
Grieg Investor
46
Grieg Kapital
50
Grieg Group Resources
52
From the Boardroom Directors Report & Group Result 2020
60
Annual Accounts
72
Notes
80
Auditors Report
116
2—3
Reflections from Chair These are not ordinary times. Women and men across the world have been struggling for over a year to save lives and keep the wheels turning through this time of turmoil. And so have all of us. For that, we are forever and sincerely grateful because none of us are genuinely safe unless we all are.
When writing this, we mark more than one year since the pandemic entered our lives and threatened the livelihood of millions across borders and industries. Navigating unknown waters, not knowing what to come next, is not an easy task. Every company within the Grieg Group must handle the challenges following Covid-19. Most of us has been working from home, crew members couldn't travel home to their loved ones, and disrupting and challenging markets reflected both shipping and seafood throughout the entire year of 2020. I think we can all agree that Covid-19 has been and still is a fundamental human and business challenge.
GRIEG MATURITAS | ANNUAL REPORT 2020
Worldwide vaccination plans and stabilizing markets
activities to grow core business at home. Grieg Logistics
give us hope for the future. Besides, EU regulations
is investing in new business, providing cutting-edge
and demands for the business community towards a
technology to ports across all of Scandinavia.
greener and more sustainable future give us speed in the right direction.
By looking at our activities during the past year, I am convinced that all Grieg Group companies are in good
GRIEG GROUP IN 2020
shape for the days to come.
Challenging and disrupted markets affected our overall financial performance in 2020, and our results are not
SUSTAINABLE DEVELOPMENT.
at all what we predicted. Covid-19 influenced all parts
For 138 years, the Grieg Group has lived by and with
of our organization, primarily as a result of market
the ocean. We believe that all industries need to be part
changeover in seafood, and disruption in the maritime
of the solution, reducing the world's Co2 emissions,
industry.
preventing plastics pollution, and contribute to a sustainable life below water.
Despite a challenging year, Grieg Maritime Group has indeed been able to find new and creative ways
Sustainable development is part of our core values.
of working. Conducting remote operations, keeping
Our sustainability effort allows us to actively seek
the wheels turning, and fighting for decent working
opportunities that will continue to create value for our
conditions for our crew members who had to be on
owners, our customers, and other key stakeholders, as
board our ships for an unacceptable long time. I am
well as society at large.
proud we have committed ourselves to the "Neptune Declaration", stating that crew members and seafarers
OPPORTUNITIES IN TIMES OF COVID-19
are critical workers.
We know that a crisis also presents opportunities. Especially for the maritime industry, Covid-19 has been
Covid-19 has had a significant impact on almost all of
a much-needed drive to speed up both digitalization
our maritime activities, but Grieg Green impressed us all
and the extension of partnerships across industries
by conducting remote IHM-operations in partnerships
and sectors to develop zero-emission solutions. There
with crewmembers and shipyards worldwide. Luckily,
is no doubt that the UN Sustainable Development
Grieg Green could almost do business as usual despite
Goal number 17 – partnership for the goals is the most
the pandemic.
important one.
With the establishment of Grieg Edge, we are indeed
It is part of our Grieg Group culture to adapt and use
moving forward into the green shift. The company was
challenging times to create value-driven change.
granted funding from the Norwegian funding scheme
And luckily, we draw from a vast pool of experience
Pilot-E in December and aims to build the world's first
and mobilize in joint efforts that can move both our
ammonia-fueled tanker in cooperation with Wärtsilä.
business and the global community forward.
I am proud of our commitment to creating successful new businesses built on the pillars of sustainability
OUTLOOK
and advanced technology.
Stabilizing markets in both shipping and seafood have provided us with a more favorable entry to 2021 than the
As a salmon farming pioneer, Grieg Seafood has
end of 2020. Aligned with the continuous development
taken several essential and necessary steps the
in our innovative projects and societies to re-open, I
past year. Managing disrupted and challenging
believe we are well on our way into the new normal.
markets, they demonstrate a long-term perspective
I genuinely believe that this new year brings with it
within the industry, establishing a new in-house
better opportunities and financial results than the last.
sales organization, focusing on partnership and sustainability, improving fish welfare, and reducing their impact on the environment. Grieg Investor celebrates the end of 2020, delivering their best result ever. Grieg Shipbrokers has a new interim management team and has sold their Asia-
Elisabeth Grieg C H A I R O F T H E B OA R D
4—5
Our history Grieg Group The Grieg Group derives from a long and proud maritime tradition.
In 1884, Joachim Grieg established a shipbroking firm
ment Goals in our business strategy and revised our
in Bergen, where the company continued to develope
business strategy to meet the future as more resilient,
during the two world wars. In 1960 Per Grieg sr. joined
more innovative and more sustainable. The ocean con-
the company and organized it into a specialized busi-
nects our businesses, our people, our future, and our
ness. Today the Group is owned and led by 4th and 5th
past. For more than 137 years, we have lived by and
generation Grieg and consists of several companies
with the ocean.
worldwide. Our people are our most valuable resource, and we The Grieg Group operates within seafood, shipping,
believe they are essential to building our success. Our
shipbroking, maritime innovation, logistics, and in-
1 710 employees operate in 8 countries, from Norway
vestments. Across all businesses, we shall create last-
(headquarter) to the rest of Europe, USA, Canada and
ing value through competence, experience and com-
Asia.
mon efforts. The Grieg family owns the Grieg Group through their Our mission is to restore our oceans, and we are com-
holding company, Grieg Maturitas (75%), and the Grieg
mitted to the UN Sustainable Development Goals. In
Foundation’s nonprofit organization (25%). Operating
2019 we incorporated the UN’s Sustainable Develop-
revenue in 2020 was MNOK 6 765.
1884
Joachim Grieg establishes ship broker business in Bergen.
1961
AS Star Shipping established.
1969
Grieg Logistics established as a separate business unit.
1984
1992
100 years! Restructured as the Grieg Group.
GRIEG MATURITAS | ANNUAL REPORT 2020
1998
Grieg Seafood established.
2002
Grieg Investor established.
1994
Grieg International established.
Grieg Foundation established.
1999
4th generation Grieg take over.
2008
Star Shipping becomes Grieg Star Shipping and joins the Grieg Group.
2007 Grieg Seafood gets listed on the Oslo Stock exchange.
2010 Grieg Green established.
2014
The Grieg Group celebrates 130 years anniversary!
2017
G2Ocean established, joint venture between Grieg Star and Gearbulk.
2020
2018 Grieg Kapital established.
Grieg Star Group reorganized into Grieg Maritime Group.
2019
Grieg Connect established.
6—7
Our organization
VISION
Create lasting value through competence, experience and our common efforts
O U R VA L U E S
Solid
Proud
Open
Commited
We contribute to a stable economic foundation and thus ensure business continuity.
We contribute to the welfare of our society, nationally and internationally.
We are honest, exchange ideas and seek to understand and learn from our colleagues.
We care about the job we do, work environment and the people around us.
OUR CORE BUSINESSES
Shipping
Aqua
GRIEG MATURITAS | ANNUAL REPORT 2020
Investment
Management
Key figures Group
1 710 Employees
6 765
-878*
2020 · MNOK
2020 · MNOK
Operating Revenue
31 .1 2 . 2020
Profit before tax
* Profit before tax is mainly effected by impairment in Grieg Maritime Group of MNOK 773. Profit before tax, ex write downs is – 105 MNOK.
O P E R AT I N G R E V E N U E 20 20 BUSINESS AREAS
T U R N OV E R B A S E D O N OW N E R S H I P 2020 BUSINESS AREAS
Grieg Maritime Group
Grieg Seafood
Grieg Maritime Group
Grieg Seafood
Grieg Shipbrokers
Grieg Investor
Grieg Shipbrokers
Grieg Investor
Grieg Logistics
Grieg Kapital
Grieg Logistics
Grieg Kapital
8—9
Board of Directors
Elisabeth Grieg
Per Grieg jr.
CHAIR
B OA R D M E M B E R
Long-term leadership experience from the private
MBA from INSEAD and a master’s degree in marine
sector and other organizations. Holds a degree from BI
technology from NTNU. Several years of experience
Norwegian Business School and the University of San
from the maritime sector and founded Grieg Seafood
Franscisco. Chair of the board at Norled, and member
ASA in 2002. Holds the position as Chair of the board at
of the board at Talent Norge, Grieg Foundation, G2
Grieg Seafood and Proximar Seafood. Board member of
Ocean and Grieg Maritime Group. First female presi-
Bergen Chamber of Commerce and Industry.
dent at the Norwegian Shipowner’s Association.
Camilla Grieg
Elna-Kathrine Grieg
B OA R D M E M B E R
B OA R D M E M B E R
MBA with a major in finance from the University of San
Degree from BI Norwegian Business School and has
Francisco and is a Certified Financial Analyst (CFA).
several years of experience from the maritime industry.
She is Chair of the board at Grieg Maritime Group and
Holds different board positions within the Grieg Group
has several years of experience from shipping and the
such as Chair of the board at Grieg Foundation and
maritime industry. Chair of the board at GC Rieber and
Grieg Logistics. Board member at Family Business
leader of the election committee at DnB.
Norway and Grieg Kapital.
GRIEG MATURITAS | ANNUAL REPORT 2020
Nicolai Hafeld Grieg
Nina Willumsen Grieg
B OA R D M E M B E R
B OA R D M E M B E R
Degree in International Business from the University
Holds a degree in Industrial Economy and Technology
of Edinburgh and the University of Hong Kong. Has several years of experience within shipping and logistics. He is head of Grieg Edge, part of Grieg Maritime Group, and board member at Grieg Foundation, Grieg Investor and Rem Nor AS.
Management from NTNU. Several years of experience from the maritime sector, specializing in seafood and shipping. She works in Grieg Seafood ASA, and holds the position as board member at Ystholmen Felles.
Knut Nesse
Rolv-Erik Spilling
B OA R D M E M B E R
B OA R D M E M B E R
MBA from Norwegian School of Economics and is
Holds a degree in Mathematics from NTNU, and is a
CEO at Akva Group. Has several years of experience
senior executive, venture investor, and serial entre-
from the maritime sector specializing in aquaculture.
preneur. Co-founder of the SW company Gture and
Joined the board of Grieg Maturitas in 2019. Holds
co-founder and Chair of the board at the early phase
several other board positions, and is Chair of the board
investment company Gvalueinvest. Joined the board
at Desert Control AS and Helgeland Plast AS.
of Grieg Maturitas in 2019.
10 — 11
The owner company Grieg Maturitas Grieg Maturitas is ensuring the owners’ short- and long-term interest in the Grieg Group.
I have without doubt been witnessing an organization who has been more resilient than we could have ever imagined. Even under exceptional circumstances we have managed to conduct business as usual, handling the challenges we have been facing across our companies. I would like to mention that I am duly impressed with how Grieg Maritime Group has dealt with the ongoing crew crisis, and how Grieg Investor made 2020 their best year ever. I would also like to cheer for Grieg Seafood and their technology-driven focus, working to improve fish welfare and communities in which they operate. S I R I N E FO D STA D C H I E F EX E C U T I V E O F F I C E R
2020 has been a challenging and disrupted year indeed. Amongst the most important learning outcomes from the pandemic is the willingness and ability to adapt to change in a creative and more efficient way.
Our on-going work with the UN SDGs has been constantly developing throughout 2020, which is an important priority for the Group and its owners. Moving forward we will continue our focus on ownership strategy, driving value through investments, communication, sustainability, and targeted projects. We are now witnessing stabilizing markets in both shipping and seafood, which is great for our business. This, alongside our continuous effort to make business more sustainable and future proof, makes me look forward to the days ahead.
GRIEG MATURITAS | ANNUAL REPORT 2020
Administration
Sirine Fodstad
Wenche Kjølås
C H I E F EX E C U T I V E O F F I C E R
CHIEF FINANCIAL OFFICER
24 years of working experience to design and imple-
MSC in Business Administration and Economics
ment changes to improve bottom line results. Holds a
from Norwegian School of Economics. Experienced
BBA and a BA in Business Administration, French and
CEO and CFO with a demonstrated history of working
Economics. Operational background from Asset Man-
with logistics, shipping, seafood and supply chain
agement, Oil&Gas and Airline industry with focus on
industry. Chair of the board at Keolis Norge AS and
human capital. Board member at Grieg Maritime Group
MagseisFairfiled ASA, and board member at Slettvoll
and Grieg Seafood.
AS and Grieg Logistics AS.
Gry Larsen
Marte Leirvåg
L EA D E R S U STA I N A B I L I T Y A N D P U B L I C A F FA I RS
C O M M U N I C AT I O N S M A N AG E R
Former Secretary General at CARE Norway. Several years
BA in Political Science from the University of Bergen and
of experience from Norwegian Politics, serving as both
NTNU. Specialized in foreign policy, organizational de-
president of the Norwegian Labour Youth, State Secretary
velopment and communications. Elected representative
in the Ministry of Foreign Affairs and Political Advisor to
in the City Council of Bergen and has years of experience
the Foreign Minister from 2005-2013. Board member at
working as a Communications Advisor with companies
Grieg Foundation..
across several industries.
12 — 13
A tradition of giving back Grieg Foundation Grieg Foundation is a celebration of our responsibility to create a more compassionate society.
For generations, the Grieg family has wanted to create strong meaningful change by giving back, by supporting humanitarian, social and cultural aspects of life, and by working in partnerships, encouraging and supporting innovative projects. We believe that local engagement sparks improvement in people’s lives. Our role is to empower visionaries, talents and individuals with ideas and a strong sense of purpose and commitment. OUR PRIORITY All our work is anchored in the UN's Sustainable Development Goals. I N G V I L D H E STA D, M A N AG I N G D I R E C TO R
We believe that local engagement sparks improvement in people’s lives. Our role is to empower visionaries, talents and individuals with ideas and a strong sense of purpose and commitment.
Access to quality education is our main priority. SDG 4, inclusive and equitable quality education, and SDG 5, gender equality is at the heart of our purpose. In addition to education projects in Madagascar, Zambia, Malawi, Rwanda, Eswatini and Brazil, Grieg Foundation prioritized support to several projects in Bergen that help young people with multicultural background as well as school dropouts to get education, find work and become active members of society. THE OCEAN The ocean connects our people, our businesses, our future and our past. In line with SDG 14 to sustainably manage and protect marine and coastal ecosystems
GRIEG MATURITAS | ANNUAL REPORT 2020
from pollution, Grieg Foundation started the project
on women´s health, cancer and cardiac disease. In
“Clean ports, clean oceans” with WWF. The three-year
2020, we played a crucial role in establishing Centre
project aims to reduce the flow of plastic waste in the
for Research on Cardiac Disease in Women at the
Philippines by improving waste management in ports.
University of Bergen and Haukeland University
The Grieg Group companies will contribute with their
Hospital.
cutting-edge expertise in this important project. We are a small foundation with big ambitions. The HEALTH
employees within the Grieg Group are our most
Grieg Foundation also partnered with the Norwegian
valuable resource. It is their hard work and daily efforts
Refugee Council to create a green shift in humanitarian
that make it possible for Grieg Foundation to make
aid. Grieg Foundation supports innovative medical
a difference. Together we create change. This is our
research that can have wide-reaching impact. We are
common accomplishment. We do not believe profit
aligned with SDG 3 to ensure healthy lives, and focus
builds success. People do.
14 — 15
Sustainability at Grieg We will restore our oceans The Grieg Group has a long tradition for creating shared value for both business and society. In March 2019, we launced a new strategy centered around our purpose: ‘We will restore our oceans’.
At Group level we have defined SDG 8, 16, and 17 as our license to operate, or “foundation”. These goals represent the groundwork for how we run our businesses, with a focus on employee health and wellbeing, inclusive economic growth, transparency and accountability, and partnering to achieve greater impact on the sustainability challenges facing the industries in which we operate. In addition to this foundation, we have set ourselves five impact goals, or “stretch” goals, relating to the areas in which we can really make a difference, and to help us focus our efforts in areas that are relevant for our business and our stakeholders. These goals relate G RY L A RS E N L E A D E R S U STA I N A B I L I T Y A N D P U B L I C A F FA I R S
specifically to SDG 4, 5, 9, 13, 14. We have set clear ambitions for all SDGs (see page 27-29). Each goal and ambition have objectives and KPIs at
Using the UN Sustainable Development Goals (SDGs)
Group level. Operationalizing is delegated largely
as our framework, we revised our business strategy to
to each individual company. The Grieg Group is a
meet the future as more resilient, more innovative and
member of the United Nations Global Compact and in
more sustainable.
December 2020 we reported our “Communication of progress” for the first time. We continue to support the
The 17 SDGs are interdependent and equally important.
Global Compact and it's ten principles. We are also a
However, some of the sustainability themes are more
signatory of the UN Global Compact’s Ocean Principles.
relevant to the businesses we operate within, and it has therefore been natural for us to choose SDGs where we
We have established a Grieg Group Sustainability
can have the greatest impact and where we also have
Advisory Committee (SAC) consisting of members from
the largest challenges at an industry level.
the top management team from each Grieg company to ensure internal transparency and accountability
GRIEG MATURITAS | ANNUAL REPORT 2020
Doing good is the obvious business opportunity Using the UN Sustainable Development Goals (SDG’s) as our framework, we have revised our business strategy to meet the future as a more resilient, innovative and collaborative group of companies.
for implementing strategic objectives. The Committee
sector we are now active participants
also addresses the main issues that are relevant for
cooperation between different participants in the
all companies. In the Grieg Group we strongly believe
maritime and offshore sectors, tasked with developing
that sharing and learning from each other is essential
an infrastructure to produce and transport ammonia
for success. The SAC met three times in 2020, and
as a non-greenhouse gas fuel for ships and off-grid
topics discussed included EU Green Deal/Taxonomy,
power. Our role is to design and ultimately build an
biodiversity,
climate-risks,
reporting,
in Zeeds, a
sustainable
ammonia tanker fuelled by ammonia: the MS Green
innovation and collaboration within and across
Ammonia. The project received governmental funding
companies. At our last meeting in December 2020, the
in 2020. The planned launch of the ship is 2024. In the
Minister of Local Government and Administration,
aquaculture sector, we joined forces with partners to
Nikolai Astrup, presented the Ministry’s work on the
support soy vendors to the salmon industry end trade
new national action plan for the sustainability goals.
of deforestation linked soy in Brazil. Furthermore,
The Grieg Group is committed to be part of local,
we continue our three- year partnership with WWF
national and international partnerships to reach
through Grieg Foundation, aimed at identifying ways
the SDGs. In March 2020 we also partnered with
to reduce plastic pollution globally. Initially, the project
Development Goals Forum (DGF) and their UN Theme
aims to reduce waste by 50% in three ports in the
week and facilitated a workshop with cases from Grieg
Philippines, identify ways of scaling efforts globally,
Group companies.
as well as identifying new business opportunities and partnerships.
Partnerships for the SDGs will continue to be a priority for the Grieg Group. In 2020 we have further developed
Although much has been done, both at group-level
many of our partnerships. For example, in the maritime
and in the companies since we adopted our new
16 — 17
strategy, we decided in September 2020 to strengthen
To further strengthen our work we have decided to
our Sustainability-work in the Group with Gry Larsen
revise our internal KPIs and objectives so that we can
as Leader Sustainability and Public Affairs. At the
take further steps in the realization of our ambitions.
Grieg Group we have huge ambitions for our work on
New KPIs and objectives will be introduced in 2021.
sustainability, both at Group-level and in the different
One important part of our work will be to continously
companies within the group. Having a sustainability-
innovate to meet the challenges of the SDGs, through
team in the Grieg Group reflects our ambitions, our
new partnerships and cross sector cooperation.
willingness to invest and allows us to more effectively seek opportunities that will continue to simultaneously
To become a positive driving force for sustainable
create value for our owners, our customers, and other
development we must think big and create a purpose-
key stakeholders, as well as society at large.
driven organisation with a culture of innovation. Innovation, both within and across our industries,
OUTLOOK: 2021 AND FORWARD
is critical to our future success, but this must be
We will continue our journey to make sure sustainability
sustainable; innovation that moves us in a direction that
is securely embedded at the core of our business,
is aligned with the sustainable development goals. We
across the Group. Our sustainability agenda has been a
continuously work to secure and expand partnerships
successful catalyst for collaboration internally between
to ensure that impact from our efforts across the Grieg
Grieg companies, enabling us to leverage different
Group are relevant for, and deliver maximum value to a
competencies we have within the group and to seek
range of stakeholders.
solutions to sector specific challenges.
Grieg Group Sustainbility Foundation Goals Be in the lead of the industries in which we operate by: • Fostering a great, inclusive working-environment, with sound economic growth • Creating an inviting, open-minded, transparent and inclusive business-spirit utilizing the strengths of our core business and competency, be an engaged and committed enabler of the SDG 8. Grieg Group´s shared value approach defines the compass by which we navigate when doing business across the world. By spreading these in the areas we work we will continue to enable inclusive, just and accountable business relations and advocate for strong societies and institutions.
We will strive to be innovative to meet the challenges of the SDGs, through new partnerships and cross sector cooperation. We will do this by being honest, exchange ideas and seek to understand and learn from our surroundings. We have an open-minded business approach and strive to create room for action and possibilities, which will enable strong partnerships with both public and private parts of society.
GRIEG MATURITAS | ANNUAL REPORT 2020
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Grieg Group Sustainbility Stretch Goals Employees shall be provided with learning opportunities that promote competence and are aligned with their personal career goals. Each employee should possess the skills and knowledge required to enable Grieg to be in the forefront of the industries in which we operate. Our strategy for competence development shall be aligned with company level business strategies and be based on market trends and customer expectations. We will strive to be in the forefront on diversity within the businesses we operate. We will work towards gender parity at all levels of the organizations in the Group, both for onshore and offshore operations. And we will also promote gender equality and diversity towards business and supply chain partners.
To become a positive driving force for sustainable development we must think big and bold and create a purpose-driven organization with a culture of innovation. To achieve this, we will promote collaboration within and across all companies in The Grieg Group, inspiring, challenging and learning from each other. We will also seek cooperation both among our competitors and our existing partners. We have a vision of zero net emissions operations in all industries in which we operate. We will also continue to be an advocate for zero emissions operations in all relevant industries and increase awareness internally and in dialogue with key stakeholders.
As with climate action, we will work towards a zero-effluent vision. All companies within the Group will work towards this target, but businesses in certain industries will be expected to take greater steps where the impact is greater. Our impact on marine resources will be carefully managed and we will be open and transparent about this impact, as well as the results from the efforts we make to reduce it.
18 — 19
Working together to fight Covid-19 At the beginning of the pandemic in early 2020, the Grieg Group successfully formed an Emergency Response Team with members from all the Grieg Group companies.
The team centralized our competence and skills to manage the pandemic and it's challenges. We have witnessed incredible courage and flexibility across the Group, who have all shown great willingness to adapt under exceedingly difficult circumstances. As a result, we have grown to become even more resilient. The cross-group crisis team was previously led by Grieg Maturitas CEO, Sirine Fodstad, and is now led by Cherin Myrdal Vervik, lawyer at Grieg Group Resources. Handling the pandemic together has truly shown the value of group affiliation. We are grateful to all who has contributed to manage the Response Team, sharing knowledge, and helping each other through these unprecedented times. The Emergency Response Team have met regularily during the pandemic and has provided leaders and CEOs within the Grieg Group with necessary communication and guidance.
GRIEG MATURITAS | ANNUAL REPORT 2020
Handling the pandemic together has truly shown the value of group affiliation. We are grateful to all who has contributed across companies to manage the Response Team, sharing knowledge and helping each other through these unprecedented times. C H E R I N M Y R DA L V E RV I K , L A W Y E R , G R I E G G R O U P R E S O U R C E S
The seafarer crisis One year after the Covid-19 pandemic started, many countries still deny seafarers entry or make it difficult for them to join or leave their vessel. Grieg Star has for a year fought for the world to recognise seafarers as key workers. Since the beginning of the pandemic, our teams in Manila and Bergen have worked hard to make crew changes possible. But those who have carried the brunt of the hardship are our colleagues at sea.
Maritime Forum's 2020 Virtual High-Level Meeting. The declaration is a joint global "call to action" to revitalise and underline the ongoing crewing crisis. It focuses on actions needed to ensure crew changes and safeguard global supply chains: •
Recognise seafarers as key workers and give them priority access to Covid-19 vaccines.
•
Establish and implement a gold standard health protocol based on existing best practice.
•
Increase collaboration between ship operators and charterers to facilitate crew changes.
•
Ensure airline connectivity between key marine hubs for seafarers.
We have and will continue to work all possible angles to ease the situation for our seafarers.
The present situation for seafarers worldwide clearly
AT L E S O M M E R H E A D O F G R I E G STA R
initiatives, and Grieg Star proudly supports all
shows that they have not yet received key workers status. We need to support both official and private objectives and deliverables within "The Neptune
This is about wellbeing and safety. But it is also about
Declaration."
compliance with flag state legislation, ILO and MLC requirements and Collective Bargain Agreements. "In fact, it is about basic human rights," says Head of Grieg Star, Atle Sommer. "It should not be necessary to fight for such basic rights and compliance, but, sadly, it is". OVERCOMING THE SEAFARER CRISIS Early 2021, we signed "The Neptune Declaration on Seafarer Wellbeing and Crew Change – overcoming the Seafarer Crisis". The Maritime Industry Crew Change Taskforce developed the declaration after the Global
20 — 21
Group structure
Grieg Maturitas AS
Grieg Maturitas II AS
Grieg Foundation
Grieg Kapital
Grieg Aqua
Grieg Group Resources
Grieg Investor Grieg Investor Holding AS Grieg Investor AS
Grieg Kapital AS
Grieg Aqua AS
Grieg Holding II AS Rensefiskgruppen AS Grieg Gaarden AS Grieghallen Parkering II AS
Grieg Seafood
Silves Odissey Lda AS Nestun Uldvarefabrik
Grieg Seafood ASA Grieg Seafood Rogaland AS Grieg Seafood Canada AS Grieg Seafood Finnmark AS Grieg Seafood Hjaltland UK Ltd Grieg Newfoundland AS Grieg Seafood Norway AS
GRIEG MATURITAS | ANNUAL REP ORT 2020
Grieg Shipbrokers Grieg Shipbrokers KS
Grieg Logistics Grieg Logistics AS
Grieg Maritime Group Grieg Maritime Group AS
Grieg Shipbrokers
Scandinavian Harbour
Grieg Edge AS
Valuation Services KS
Service AS
Grieg Green AS
Grieg Shipbrokers Ltd
Mosjøen Industriterminal AS
Grieg Shipholding AS
Grieg Shipbrokers Asia AS
Grieg Port Security AS
Grieg Shipowning AS
Grieg Strategic Services AS
Grieg Star AS
Grieg Connect AS
Grieg Star 2017 AS
AS Joachim Grieg & Co
Grieg Star Bulk AS Grieg Star Bulk Oh Pool AS GriegMaas AS G2Ocean Holdein AS1
1
G2Ocean Holding AS is owned 35% of the Grieg Group For more information see note 8 and 9
22 — 23
Grieg Maritime Group We started our Open Hatch shipping activities in the early 1960s, building, managing and operating a fleet of high-quality multipurpose vessels. Today we grown several different business units that cover ship owning, ship management, maritime sustainability services and maritime innovation.
It showed that robust and resilient foundations coupled with brilliant and talented teams are the best line of defence towards any unexpected black swan event. Our organisation's handling of the pandemic makes us confident that we can overcome any new challenges in the future. On the basis of this commitment, innovation, and professionalism of our organisation, we are now well set to take advantage of the improving markets in 2021. The Covid-19 pandemic has had an immense impact on society and individuals, and it’s lasting effects are still impossible to comprehend. But for some, the loss of loved ones, of their job or home, will forever mark this M AT T H E W D U K E C E O, G R I E G M A R I T I M E G R O U P
Last year was a challenging year for our business and the world as a whole. It brought on many challenges that we overcame thanks to our teams’ extraordinary efforts.
difficult period. These are unprecedented times, and we shall find a path through them - one step at a time. For the Grieg Maritime Group, the global lock-down meant significant obstacles in our usual way of doing business. We have been used to travel around the world to visit ships, attend dry dockings or IHM inspections, and meet teams from our global offices. Overnight, we had to find alternative ways of conducting business. The way our teams have handled this is nothing short of impressive. Still, we are grateful that our previous years’ strategy had been completed. Implementing new digital tools during the last months of 2019 provided our business exactly what we needed when the local lock-downs required us to work from home.
GRIEG MATURITAS | ANNUAL REPORT 2020
More so, we see that the pandemic has accelerated our
always with sustainability as a requirement. The team
digital transformation.
has developed several exciting projects throughout the year, despite the hindrances of the pandemic. And at
A larger problem is how many countries have treated
the end of the year, Grieg Edge received significant
seafarers during this pandemic. All the countries in
project funding from the Norwegian scheme, Pilot
the world are relying on getting food, medicines, and
E. They confirmed they would support a project to
equipment. Still, they have denied those who sail
develop an ammonia fuelled ammonia tanker, the MS
the ships carrying these goods to travel to and from
Green Ammonia.
their ship and denying them shore access for medical reasons. These are breaches of human rights. The
Financially, 2020 will end as an uncommon year.
result is seafarers stuck onboard for up to 13 months
Despite the pandemic, we almost maintain our
and others not being able to support their family
revenues from 2019. Both open hatch and conventional
because they are not allowed to work. This January, we
bulk have done better than we feared when the
signed the Neptune Declaration on Seafarer Wellbeing
pandemic started.
and Crew Change. We hope this initiative will move all countries worldwide to accept seafarers as essential
The value of our Open Hatch fleet has been a discussion
workers.
point internally for some years. We purchased parts of the fleet at a very high price point in the shipping
Due to the reduced economic activity following the
cycle. We have decided to normalise these values in
pandemic, we see a drop in GHG emissions worldwide.
our books. For our annual accounts, that means a
But we know this is not the new normal, and we still have
write-down of 83.3 million USD. We find it prudent
work to do to reach the UN Sustainable Development
to mention that this paper write down does not affect
Goals. As a signatory of the UN Global Compact since
our group liquidity, nor does it impact our financial
2008, we still stand by the principles. We base our
obligations. It should be noted that in the first months
strategy on the Sustainable Development Goals, and
of 2021 we are very pleased to see a significant market
we believe it is possible to do so and yet build thriving
improvement. The Grieg Maritime Group is living its
businesses. And as an example of that, 2020 saw us
values: Solid, Open, Proud and Committed.
establish a new subsidiary: Grieg Edge. Their goal is to identify and develop new business opportunities within shipping and related maritime segments – Our companies
24 — 25
Grieg Maritime Group: A new name for a new time Over the past two years, Grieg Star Group has undergone a series of minor and more significant changes; we brought on a new CEO and Chair of the board; we restructured the organisation; we founded Grieg Edge and we brought Grieg Green closer into the group.
All of these shifts and adjustments were essential steps in delivering on our strategy. For many years, Grieg Star has been the overlying brand for the group, even though Grieg Star AS is the ship management company. The group’s name has been “Grieg Star Group”. To avoid confusion regarding the group’s different areas, the group will now adopt a new name and proudly retain the Star-branding for our ship management company. The Grieg Maritime Group will consist of four building blocks: • Grieg Green: Sustainability services, green recycling, IHM • Grieg Edge: Maritime innovations with sustainability as a prerequisite • Grieg
Star:
Ship
management
and
owners
representative for ships in external management as well as ship manning through Grieg Philippines
GRIEG MATURITAS | ANNUAL REPORT 2020
• Our ship owning activities, including:
solving capabilities. So, we put together a group of
− Grieg Shipowning: ship ownership within the
people from all three companies to question our
open hatch and conventional bulk segments,
practices. The goal was to increase fuel efficiency and
including Grieg Maas, a joint venture with Maas
thereby reduce CO2 emissions and cut cost.
Capital − G2 Ocean: a joint venture with Gearbulk within open hatch and bulk shipping
"In the beginning, many of us found it difficult to challenge our routines. It is easy to start defending what you have been a part of. But through 2020, we got
ON THE PATH TO SUSTAINABLE INNOVATIONS
there," says Manager Portfolio, Strategy & Innovation
Grieg Maritime Group established Grieg Edge as its
in Grieg Maritime Group, Kjerstin Hernes. The team
innovation hub at the beginning of 2020. The company
consisted of people from different professions in all
aims to deliver innovative, sustainable solutions to
three companies, e.g., engineers, logistics professionals
the challenges of maritime business. The MS Green
and IT experts.
Ammonia project is it’s first big venture. The project results from a Nordic industrial collaboration group
NEW IT SOLUTIONS
initiated by Zeeds (Zero Emission Energy Distribution
At the start of the year, G2 Ocean set a goal of improving
at Sea). Friday the 18th of December, the Norwegian
its fuel performance by two per cent in 2020. Through
funding scheme Pilot-E confirmed they would support
the year, several initiatives have contributed to
the MS Green Ammonia project with 46,3 million NOK.
reaching that goal. In June, the team launched a Fuel
Grieg Edge and Wärtsilä Norway are jointly running
Calculator, making it easier to spot which vessels
the project to launch the GHG emission-free tanker in
performed good and which did not. "We are confident
2024. “We regard the funding from Pilot-E as a valuable
that the new method of measuring vessel performance
stamp of approval for our plans. Both Wärtsilä and we
and, consequently, establishing accurate speed and
feel confident that this project represents the future
consumption figures contribute to achieving our goal,"
for the maritime sector. To have the support from the
says Fuel Performance Analyst Lydia Helle in G2 Ocean.
Norwegian Research Council and Innovation Norway is a significant step towards completion,” Head of Grieg
The Red Team implemented new routines for hull
Edge, Nicolai Grieg says.
cleaning, based on performance instead of periodically cleanings. Also, they tested a new solution for in-transit
CROSS-COMPANY COLLABORATION
cleaning of the hull to reduce drag and proposed and
While we are waiting for carbon-free fuels, fuel
implemented other new systems to improve voyage
efficiency is the quickest way to lower greenhouse gas
management.
emissions. Together with Gearbulk and G2 Ocean, we established a red-team to speed up our fuel-efficiency.
CHALLENGE EVERYTHING "What we have done in 2020 gives us a good foundation
An essential part of our SDG base is goal number 17,
for further work. We have started 2021 by setting new
partnership for the goals. Hence, it was an obvious
initiatives in motion and will continue to look for new
choice to work together with our partners in G2 Ocean
ways of operating," says Kjerstin Hernes. It isn't easy to
and Gearbulk when we decided to challenge our fuel
calculate how much CO2 emissions we have cut due to
consumption.
the proposals from the Red Team. Some measures have a hidden effect, but we know it affects our emissions.
RED TEAM
And that is what matters. "The project also shows that
A red team is a group that helps organisations to
you can gain a lot by challenging the way you think. If
improve themselves by providing opposition to the
the companies hadn't set this up as a shared Red Team,
point of view of the organisation that they are helping.
we would never get where we are today,” says Hernes.
They are often effective in helping organisations overcome cultural bias and broaden their problem-
Our companies
26 — 27
People at Grieg Malin Gåsvær Haugen
Malin has always known that she wanted a maritime career. The 23-year-old from Bergen grew up with both grandfathers working as sailors and has always loved spending time at sea.
Malin is a final-year cadet student and a surveyor in Grieg Green. This summer, she starts her journey towards her big dream of becoming a captain.
DREAMS OF INTERNATIONAL WATERS “After high school, I did compulsory military service and was assigned to work on a Norwegian Frigate. Working in the navy opened my eyes to a workplace offshore – and I haven’t looked back since,” Malin says. This summer she finishes the undergraduate program in maritime studies at the University of South-Eastern Norway in Horten. Then she will be able to pursue her dream of becoming a captain – and sail in international waters.
GRIEG MATURITAS | ANNUAL REPORT 2020
“There are so many wonderful places to work offshore, and I want to experience all these places and all the different ports the world has to offer whilst working as a sailor,” she says. MAKES THE WORLD SAFER AND GREENER Alongside her studies, Malin has been working as an IHM surveyor for Grieg Green for almost two years. “I heard about the job through the university, and I applied immediately. Then I did several interview rounds before attending a course and finally, I got the job offer,” she says. As a surveyor Malin makes sure that shipowners recycle their ships in a way that meets environmental standards, so that hazardous waste doesn't end up in the ocean. “This is a huge development, as a lot of ship owners used to sell their ships to middlemen, with the ships ending up rusting on beaches, or scrapped at sub-optimal yards typically in the far southeast.” Grieg Greens’s surveyors also develop safe working routines for crew members and employees at shipyards around the world. “Working as a surveyor, you are definitely part of something big that contributes to a greener and safer world for all,” Malin says. REMOTE INSPECTIONS The combination of part-time job and studies have
About Malin Gåsvær Haugen
made Malin much more efficient and structured: “I
• 23 years old
would say that my work as a surveyor has made me
• Originally from Bergen. Spent her summers
a better student”, she says. Surveyors are normally required to travel to shipyards and carry out IHM inspections. Since the pandemic started, international authorities have granted surveyors the opportunity to conduct IHM inspections remotely.
and holidays at her family’s cabin, close to the sea . • Final-year student at Bakkenteigen, The University of South-Eastern Norway • Surveyor at Grieg Green
“We have been able to do this together with the crew on board the ships. This has been crucial for us as surveyors and has proven that we can carry out IHM inspections in China when working from Norway!”
Our companies
28 — 29
Grieg Shipbrokers Grieg Shipbrokers was established in 1884 and was the first company in the Grieg Group. We provide a full range of services within all markets, covering every aspect of chartering, contracting, sales and purchase, in addition to innovative research and analysis.
I am grateful to all who has contributed to keep wheels turning during this difficult and challenging year. As we look back at an unprecedented and challenging year, I am grateful and quite frankly impressed by the Grieg Shipbrokers team's efforts to see us through these uncharted waters safely. The Covid19 pandemic profoundly affected our employees, families, customers, and other stakeholders' daily lives. However, the team's collective efforts saw us navigate our most challenging year in modern times with impressive operational results. With the ongoing pandemic in Q1, the company M O RT E N M Ü L L E R I N T E R I M M A N AG E M E N T L E A D, GRIEG SHIPBROKERS
The Covid-19 outbreak has caused a huge impact on people’s lives, families, businesses and communities. I am deeply proud of what our organization has accomplished during the pandemic.
initiated several measures to ensure sound operations, considering all possible outcomes. Q3 saw the resignation of Finn Engelsen jr as Managing Director.
Ivar Sandvig Thorsen and myself were
appointed as the interim management. I would like to thank Finn for his contribution to Grieg Shipbrokers. Finn has been instrumental in broadening the range of services and markets we are serving. Moreover, I am confident that his continuous efforts to recruit young and talented individuals will pay off going forward. In 2020, Grieg Shipbrokers achieved our highest turnover ever with a comfortable operating margin. Unfortunately, this was somewhat overshadowed by
GRIEG MATURITAS | ANNUAL REPORT 2020
The Covid-19 pandemic affected our employees, families, customers and other stakeholders’ daily lives profoundly. However, the team’s collective efforts saw us navigate our most challenging year in modern times with convincing operational results. M O RT E N M Ü L L E R , I N T E R I M M A N AG E M E N T L E A D, G R I E G S H I P B R O K E R S
provisions associated with the restructuring of our
We are currently experiencing tailwinds in several
overseas subsidiaries. in Q4, we decided to exit our large
areas and are thus optimistic that the painful measures
dry bulk business in Asia as the venture failed to extract
we have implemented will ensure a bright future for
the internal synergies anticipated. The consequence is
Grieg Shipbrokers.
that we have had to incur significant write-downs, and hence the company will have negative equity of MNOK -36.5. Although the decision was not taken lightly, this will give us greater financial flexibility to grow in segments where we have a competitive advantage.
Our companies
30 — 31
Grieg Logistics Grieg Logistics is a international provider of ships services, advanced digital systems, and industrial terminal operations in Norway and other countries. They operate within oil and gas, shipping, maritime and general industries.
In 2018 we made some important strategical changes in our company, moving from a traditional supplier of logistical services, to an international supplier of advanced, digital technology and services. The opportunities in the maritime industry are tremendous, and I truly believe we can make a difference being a central part of the much-needed change within the maritime sector. This is good for both society and business. The foundation of our business strategy is embedded in the UN Sustainable Development Goals. In addition to the Grieg Groups' foundation and stretch goals, goal number 4 – quality education, 5 – gender equality, MICHELLE WILLIAMS C E O, G R I E G LO G I S T I C S
The most important learning outcome from the pandemic, must be that partnerships are unavoidable to resolve some of the world’s biggest challenges facing us across sectors and industries.
9 –industry, innovation, and infrastructure, and 11 - sustainable cities and communities, are the most important ones. If we should highlight one important learning outcome from the on-going pandemic, it would have to be that we can’t manage unknown and complex challenges like Covid-19, unless we cooperate and work together. We have been witnessing this in Grieg Logistics, within the Grieg Group, and we have seen how industries have come together to solve the biggest crisis in modern history. I am proud to be part of an organization, and part of an industry that actively seek partnership when problem-solving is on the agenda.
GRIEG MATURITAS | ANNUAL REPORT 2020
P O RT SYS T E M S
70
Clients supported
S H I P S E RV I C E S
I N D U ST R I A L T E R M I N A L S
1 500
1 080
Annual Port calls
Mill. tonn cargo handeled
During the special year of 2020 I have witnessed an
Norwegian Army and Inschape Shipping Services, the
organization working around the clock to keep wheels
latter being a prosperous partnership we look forward
turning and make the best out of a difficult situation. I
to develop further. At Mosjøen Industrial Terminal,
am truly grateful to all within Grieg Logistics for your
operations are carried out successfully, on time and
effort to make the best out of these unprecedented
on budget. I am duly impressed with all areas of our
times.
company.
Even though not everything worked out as planned
Moving forward, Grieg Logistics will take an even bigger
during the past year, Grieg Logistics can look back at an
part in the important digital shift we are witnessing in
eventful and successful 2020. We have signed several
the maritime industry, providing advanced technology
new partnerships, among them Senja Kommune and
to partners and customers across sectors and countries.
Port of Kaskinen in Finland, we are developing new
We are well on our way on our strategical timeline and
digital solutions to the maritime industry, focusing on
look forward to the future.
automatization and efficiency, and we are continuing our very important partnership with the Royal
Our companies
32 — 33
People at Grieg Kolfinna Magnusdottir
BETTER THAN EXPECTED When the Covid-pandemic started in March 2020, Kolfinna admits she was worried about how it would affect their activity at Grieg Logistics. Shortly after the initial
For Grieg Logistics CFO Kolfinna Magnusdottir, 2020 turned out to be a far less devastating year for business than she first feared.
shock, however, the company group renewed a contract with Alcoa in Mosjøen, a five-year agreement. “We are one of the few companies with whom they have chosen to renew their contract, instead of bringing in a new partner, which was very good. There was a challenging period where people worried about market development and activity, but 2020 was better than we thought it would be at the start of the pandemic. We have a lot of great and motivated people. Although they had to work from home and be away from each other, my colleagues have shown a great attitude towards getting the job done. I would even go as far as to say that it was a good year,” she says.
GRIEG MATURITAS | ANNUAL REPORT 2020
It is an exciting company, and I feel motivated to play a part in developing Grieg Logistics, and participating on such a high level while working on many different things to further develop the company KO L F I N N A M AG N U S D O T T I R C F O, G R I E G LO G I ST I C S
EXCITING WORKPLACE
In addition to making processes more efficient, X-ledg-
Kolfinna is from Iceland and has been working at Grieg
er have the possibility of being linked to other systems,
Logistics for eleven years. She has a background in eco-
including the port management systems we have de-
nomics and business administration, including a mas-
veloped. That means that you can take data from the
ter's degree from NHH Norwegian School of Econom-
port and invoice customers directly. With X-ledger,
ics. One of the things that attracted Kolfinna to Grieg
many aspects of the operation can become much more
Group was all the different areas of expertise in which
automatic.
they practice. LOOKING FORWARD Grieg have a prominent role as both shipping agents
Kolfinna anticipates that moving forward Grieg Group
and terminal agents in Mosjøen. We have subsidiaries
will be mostly “business as usual”. However, she is ex-
that develops software for ports in Norway and is cur-
cited about new developments happening withing the
rently the largest supplier in the sector, and through a
companies, for instance at Grieg Connect.
separate company, Grieg has a cooperation agreement with The Ministry of Defence.
“Grieg Connect, our IT-company developing modular port systems for sale outside of Norway, has gained
“It is an exciting company, and I feel motivated to play
customers in Sweden and Finland during the last year.
a part in developing Grieg Logistics, and participating
This year, I am sure, we will take it further”.
on such a high level while working on many different things to further develop the company,” Kolfinna says. WORKING ON XLEDGER During the past year, one of the main projects running through Grieg Group has been the implementation of X-ledger – a cloud-based financial management plat-
About Kolfinna Magnusdottir
form going into 60 companies under the supervision
• 57 years old
of Grieg. As CFO Kolfinna has been part of the project
• Originally from Reykjavik, Iceland. She now
group from the start. “We are not quite done with everything that needs to be put in place, but so far it looks good. Implementing systems like this is always challenging, but it will have significant ripple effects at the group level when we can
lives in Bergen with her family and works as Chief Financial Officer at Grieg Logistics. • She holds a Master in Business Administration from Norwegian School of Economics (NHH).
match all the companies in the Grieg Group with each other,” she says.
Our companies
34 — 35
People at Grieg Vidar Fagerheim
Digitalization has become somewhat of a buzzword. However, the use of big data and online communication tools in the maritime sector has enormous potential in simplifying the complex logistic chain in ports
From founder of a small company to managing director of Grieg Connect. Vidar is passionate about creating a seamless and low-carbon logistic chain in the maritime industry.
and terminals all over the world. “Whenever a sea vessel is entering or leaving a port, there is a lot of information that has to be exchanged, both for logistic and security reasons. Instead of having manual registrations that are poorly coordinated, we are offering a full-scale digital system using real time data,” Vidar says. A GROWING INDUSTRY With a degree in law and management, Vidar entered into the world of maritime software development after working for a business who specialized in offshore electronics.
GRIEG MATURITAS | ANNUAL REPORT 2020
We soon realized, with the amount of data available, that the potential of digitalization in the maritime industry is huge. Not only in regards to cargo ships, but also smaller boats, ferries and terminals. V I DA R FAG E R H E I M C F O, G R I E G C O N N E CT
A few years later Vidar and his friend started their own
of arrival for trucks and other goods coming into the
company called Shiplog AS, developing scalable sys-
terminal, we can create an even more seamless opera-
tem solutions based on the collection and processing
tion of loading and unloading a cargo ship at port.”
of Automatic Identification System data – a public database showing ship movements in real time.
BENEFITS OF AI-TECHNOLOGY Over the last few years Grieg Connect has increased
“We soon realized, with the amount of data available,
their product portfolio to include port managing, ter-
the potential of digitalization in the maritime indus-
minal operations, security, traffic management and
try. Not only in regard to cargo ships, but also smaller
data harvesting to predict actual time of arrival using
boats, ferries and terminals,” he says.
AI-based data.
In 2017 the company was bought by Grieg Logistics.
Taking advantage of machine-learning algorithms,
A year later Grieg Logistics merged another software
they analyze several years of vessel traffic to produce
company Seamless into Shiplog, and created Grieg
data that in conjunction with live vessel position,
Connect, where Vidar become managing director.
course and speed data automatically calculates Estimated Time of Arrival (ETA) for port calls.
DIGITAL PLATFORM During the last year Grieg Connect has been breaking
“It sounds complicated, but for our customers it helps
new ground in developing a digital platform for port
to simplify daily tasks, while enhancing efficiency, pre-
traffic, gathering information about port infrastruc-
dictability and performance.”, Vidar says.
ture and services. The interactive platform works as a user-friendly tool for port owners and others involved in docking a ship. So far it has been implemented in ports in Tromsø, Bodø and Oslo. “This is a big step towards making ports and terminals smarter and more sustainable. We believe that a shared and user-friendly digital platform, with real time information about the port area, will save time and money, increase security and allow for future innovation in the maritime industry”, Vidar says. During the last year Grieg Connect has had an 80 percent increase in customers. “Our goal is to create smart value chains expanding beyond ports and terminals. If we can estimate the time
Our companies
36 — 37
Grieg Seafood Rooted in nature – farming the ocean for a better future. Grieg Seafood was established in 1992 in Rogaland, Norway. Grieg Seafood ASA operates in Norway, UK, Canada and Shetland, farming Atlantic salmon to global markets. Grieg Seafood aims for an annual harvest of at least 130 000 tonnes by 2025.
Repeated lockdowns had a major impact on salmon prices during most of the year, which affected our 2020 result in all regions. Still, the pandemic has shown us how resilient our relatively young industry has become. We have been operational throughout the year, harvesting a record high volume, due to the skills, flexibility, and passion of our dedicated employees. Demand for salmon remained strong but shifted from restaurants to retail as consumers ate more dinners at home. Our global value chains have for the most part been open and operational. The high unemployment rates caused by the pandemic have also demonstrated how important secure jobs are A N D R E A S KVA M E C E O, G R I E G S E A F O O D
2020 was unlike what any of us expected. The Covid-19 pandemic surprised governments, businesses, and citizens alike across our production regions and in all our markets.
to our communities, and further highlighted the role that our industry can play to ensure continued value creation in the rural areas where we operate. COMPETITIVENESS FOR A POST-PANDEMIC WORLD Grieg Seafood did not deliver on the ambitious 2020 targets we set for ourselves. That was due not only to the pandemic, but also to extraordinary biological challenges in several regions. During the year, we implemented mitigating measures to set the stage for stronger profitability and increased competitiveness in a post-pandemic world. Going forward, we will invest in Norway and Canada as strong production regions, supplying the geographically close European and US markets respectively.
GRIEG MATURITAS | ANNUAL REPORT 2020
Increased survival and improved fish health and wel-
We established a new farming region in Newfound-
fare are at the heart of profitability in fish farming. Re-
land, Canada, where we have exclusive rights to farm
ducing the time that the fish spend in the sea is a key
fish in Placentia Bay. We are also investing in growth
measure to improve fish health and welfare, which is
opportunities in our Norwegian regions and British
precisely the aim of our post-smolt strategy.
Columbia, especially through increased access to postsmolt, which allows us to utilize our licenses better. We
A NEW MARKET APPROACH TO INCREASE
will consider all technologies that work in practice and
VALUE
that will help us grow sustainably.
During the next few years, we will evolve from purely being a supplier of farmed salmon and become an in-
DRIVING CHANGE TOWARDS A SUSTAINABLE
novation partner for selected customers. The aim is to
GLOBAL FOOD SYSTEM
improve synergies with our farming operations, reduce
The Covid-19 pandemic has only accelerated the global
price volatility, and increase the value created from our
sustainability agenda. Aquaculture can be an impor-
salmon downstream.
tant part of the solution in a sustainable global food system, but only if we continue to get better. Improv-
In 2020, we took significant steps on this journey. We
ing fish welfare, working more preventatively, and re-
dissolved our previous external sales arm, Ocean Qual-
ducing our environmental impact are at the heart of
ity, and established our own, fully integrated sales and
our production focus. Going forward, a more holistic
market organization, which will become fully opera-
approach to sustainability is needed to safeguard our
tional in all markets during the first half of 2021.
license to operate and to remain attractive for tomorrow’s consumer. Reducing our climate impact, protect-
When the hotel and restaurant segment recovers, we
ing human rights and nature, improving Indigenous
expect demand to increase significantly. With better
relationships, more sustainable feed ingredients, and
control over Covid-19 in sight, and long-term con-
producing more food from fewer resources are key
sumer trends boosting demand for healthy and cli-
challenges to solve.
mate-friendly products, it is the perfect time to intensify our focus on the market and grasp opportunities
2020 was tough for all of us, and we are still not out of
in this area.
the pandemic. But the light at the end of the tunnel is getting stronger every day. With the measures we have
SUSTAINABLE PRODUCTION GROWTH
implemented during 2020, we are prepared for and ex-
During 2020, we also moved towards our goal of har-
cited about the opportunities that lie ahead. Grieg Sea-
vesting 130 000 tonnes (excluding Shetland) in 2025.
food is in a good shape to meet the future.
Our companies
38 — 39
Commitment from Soy vendors in Brazil The Brazilian soy suppliers to the salmon industry, CJ Selecta, Caramuru, and Imcopa, will implement a 100 percent deforestation and conversion free soybean value chain with 2020 as their cut-off date. No soy grown on land deforested after this deadline will be traded
GRIEG MATURITAS | ANNUAL REPORT 2020
This bold and historic move sets a new benchmark for global sustainable supply chains. This is the very first time Brazilian soy suppliers make such a commitment. As a result of the move, the majority of the global farmed salmon industry, including the entire European salmon sector and all of Grieg Seafoods operations, will source soy from Brazilian suppliers whose soybean value chains are 100 percent deforestation and conversion free. The decision also marks the first time an animal protein industry has set such a voluntary and sector-wide benchmark. “Companies in the salmon industry work hard to reduce our impact on production and our supply chains, towards a more sustainable food system. Being the first sector to have deforestation-free Brazilian suppliers is
We greatly applaud this historic decision by CJ Selecta, Imcopa and Caramuru, and are encouraged to see much-needed action by these Brazilian soy suppliers. The move reduces risk to the entire Brazilian soy industry and we urge the rest of the Brazilian soy traders to follow their lead. K R I S T I N A F U R N E S C O M M U N I C AT I O N M A N AG E R , G R I E G S E A FO O D
a huge step forward! The entire salmon industry cele-
Maurício Voivodic, WWF Brazil Executive Director,
brates this fantastic achievement and the leadership
said:“We see this voluntary sector-wide commitment
shown by CJ Selecta, Imcopa, and Caramuru,” says Tor
as a benchmark to inspire other global animal protein
Erik Homme, Director of Feed and Nutrition in Grieg
sectors, as well as other markets linked to the soy sup-
Seafood.
ply chain. We celebrate together this relevant private sector-led process for the protection of the unique Bra-
“The move proves that sometimes it’s the small com-
zilian Cerrado.”
panies that take the boldest action. We hope the rest of the Brazilian soy industry will follow their example,”
Ida Breckan Claudi, Senior Adviser to the Rainforest
Homme says.
Foundation Norway, said:“The Brazilian soy suppliers and the Norwegian salmon industry show true
IMPACT BEYOND THE SALMON INDUSTRY
leadership and sets the new bar for sustainable supply
CJ Selecta, Caramuru, and Imcopa/Cervejaria Petrópo-
chains. This historic commitment by their Brazilian
lis have set August 2020 as the cut-off date for their de-
soy suppliers will be a game-changer for the sustain-
forestation and conversion free soybean supply chain.
ability standard for global supply chains. Global pork,
Together with the sustainability standard owner Pro-
poultry, and beef producers are lagging behind, by still
Terra and WWF Brazil, the soy suppliers have agreed
allowing deforestation in their supply chain. To stop
on robust Monitoring, Reporting, and Verification
being complicit in deforestation, the meat industry
(MRV) system to implement and enforce their commit-
must follow suit and require their suppliers to become
ment to zero deforestation.
fully deforestation-free.”
The Brazilian suppliers have delivered certified and
REDUCES RISK
deforestation-free soy to the European aquaculture in-
Kristina Furnes, Global Communications Manager
dustry for a number of years while delivering non-guar-
Grieg Seafood joins international retailers, processors
anteed products to other markets. This new commit-
and salmon farmers in applauding the decision:
ment extends their deforestation-free commitment to their entire soybean business, also outside the salmon
“As companies with Brazilian soy in our supply chains,
value chain. This means that soybeans produced on
we are deeply concerned about the ongoing deforest-
land converted after August 2020 cannot enter the sup-
ation rates in the country. We greatly applaud this
ply chain of any of these soy companies. The decision
historic decision by CJ Selecta, Imcopa and Caramu-
will have an immediate effect on all new contracts of
ru, and are encouraged to see much-needed action by
soy purchase.
these Brazilian soy suppliers. The move reduces risk to the entire Brazilian soy industry and we urge the rest of
Grieg Seafood applauds this bold and historic move by
the Brazilian soy traders to follow their lead.
CJ Selecta, Caramuru, and Imcopa, an important step towards ending soy related deforestation in Brazil.
As a result, Brazilian soy used to feed European farmed salmon is not only certified, it is also supplied by Bra-
SETS A NEW BENCHMARK
zilian vendors with 100 percent deforestation and
The move is celebrated by NGOs as setting a new
conversion free soybean value chains. This is one im-
benchmark for animal protein supply chains.
portant step towards a more sustainable global food system.”
Our companies
40 — 41
Promising outlook for post-smolt as solution Our experience so far with the transfer of post-smolt salmon to our sea farms indicates they are less vulnerable to disease and need fewer sea lice treatments. Reducing the time farmed salmon spend at sea is poised to strengthen ocean farming.
“First of all, we have proven that post-smolt works,” says Kjetil Ørnes. He is interim Regional Director at Grieg Seafood Rogaland, the region where the Grieg Seafood is piloting its post-smolt program. During the first stages of their life, salmon are raised in onshore freshwater facilities. In traditional salmon farming, fish are transferred to the sea once they have undergone the smoltification process, making them physiologically ready for life in saltwater. However, Grieg Seafood’s post-smolt strategy means that, after smoltification, the fish are grown for a longer period on land or in closed facilities in the sea, thereby shortening the time they spend in open sea-pens by several months. In 2014, the average weight of the salmon transferred
GRIEG MATURITAS | ANNUAL REPORT 2020
to sea farms in Grieg Seafood Rogaland was 90 grams.
50%,” says Kjetil.
In 2020, the average weight at the time of transfer was around 400 grams.
Pancreas disease (PD) has been one of the biggest biological challenges in Rogaland, and has had a negative
The change has happened step by step. Kjetil has been
impact on survival, fish welfare, growth, quality, and
in the salmon farming industry for more than 30 years,
costs.
and knows first-hand how delicate biology is. Biting off more than you can chew will always backfire.
“We found that PD often occurred at the end of the salmon’s production cycle, just before harvest. In 2017,
“In recent years, we have tested transferring groups of
we had PD at more than half of our farms, while in
fish of many different sizes from freshwater facilities to
2020 we had only one outbreak. Indications show that
our sea farms. We can conclude that fish of various siz-
a shorter time at sea has reduced the risk of PD.,” Kjetil
es at transfer thrive and grow well. When we launched
explains.
our post-smolt program some years ago, we believed it would work, but we did not know for sure,” Kjetil ex-
ADAPTING TO A NEW PRODUCTION CYCLE
plains.
Big data analyses further support our post-smolt strategy. Grieg Seafood has used data analytics to better
SUSTAINABILITY AND PROFITABILITY
understand outbreaks of winter ulcers, ISA, and PD in
Grieg Seafood strongly believes that post-smolt trans-
its Norwegian regions. The analyses all corroborate the
fer will improve both sustainability and profitability. A
benefits of reducing the time that the salmon spend at
shorter time at sea reduces exposure to sea lice, diseas-
sea. Avoiding the last few months in the ocean signifi-
es, low oxygen, harmful plankton, and other environ-
cantly reduces risks posed by these challenges.
mental issues. The aim is to achieve a reduced environ-
Still, more real-life experience is needed before a con-
mental impact, improved fish welfare, survival, quality
clusion can be drawn.
and biological control, and lower costs. In other words, shorter time at sea strengthens ocean-based salmon
“While it looks promising, we need to farm more gener-
production.
ations before we can say anything for sure. With a production cycle of 2–3 years for each salmon, it always
“While still early days, we see some promising indica-
takes time to conclude in salmon farming. Biology is
tions. In our experience so far, post-smolt salmon need
very complex,” Kjetil emphasizes.
fewer sea lice treatments. At the Teistholmen sea farm in 2020, where we raised one group of post-smolt and
For more information visit www.griegseafood.com
one group of regular smolt, we reduced the number of sea lice treatments applied to our post-smolt fish by
About Grieg Seafood’s post-smolt strategy • To reduce the time that the fish spends in open net pens in the sea is central to Grieg Seafood’s efforts to reduce our impact, improve fish welfare and increase biological control. • Grieg Seafood is piloting the post-smolt strategy in Rogaland with post-smolt production at the freshwater facility Trosnavåg and the post-smolt joint venture Tytlandsvik Aqua. • The company is also investing in post-smolt at the new freshwater facility under construction in Gold River in British Columbia, at the new freshwater facility in Newfoundland, and at the post-smolt joint venture Nordnorsk Smolt and the freshwater facility Adamselv in Finnmark.
Our companies
42 — 43
People at Grieg Roy Evan Strømskag
With the help of advanced technology and great computing power, the employees at the operational center in Grieg Seafood Rogaland fine-tune their professional competence in feeding. It began two years ago with
Today, seven million fish living on 12 farms are remotely fed from one land-based operational center in Rogaland. This is only the beginning of how digitalization, machine learning and AI may transform salmon farming.
a pilot project, where remote feeding started on two farms. Today, they are feeding 12 farms from the operational center in Judaberg in Stavanger. FEED WHEN THE FISH IS HUNGRY “During the pilot period, we have become better feeding experts. As a result, we see that the fish is growing better, without increasing the feed factor,” says manager of the operational center, Roy Evan Strømskag. Feed is a resource and a major input factor in salmon production. Better control of feeding means increased fish welfare and less feed waste, which in turn is impor-
GRIEG MATURITAS | ANNUAL REPORT 2020
During the pilot period, we have become better feeding experts. As a result, we see that the fish is growing better, without increasing the feed factor R OY EVA N S T R Ø M S K AGT O P E R AT I O N S M A N AG E R
tant for the environment and cost control.
real-time status from from various measuring instruments and data sources. Collecting this information
“Through cameras in the pens we can observe the
over time allows us to learn from the history the data
fish continuously from the screens at the operational
gives us. Collecting, interpreting and taking advantage
center. Now we can more easily feed when the fish are
of big data gives us more knowledge and decision sup-
hungry and during larger parts of the day. This is better
port in production planning and execution of all farm-
for the salmon, and it also frees more time for employ-
ing practices,” says Strømskag.
ees on the farms for other tasks,” says Roy Evan. “In practice, we become better at making the right DATA ANALYTICS AND ARTIFICIAL INTELLI-
choices and that gives us better opportunities to plan
GENCE
for what is ahead.”
The concept "Grieg Seafood Precision Farming" aims to improve sustainability and productivity. Environmental data collected in pens at the farms, such as weather, currents, oxygen saturation, temperatures, salinity, wave measurement and feed quantity, will over time be valuable when they are processed to provide better insight and control of the feeding and other farming operations. The data will provide decision support to farmers via data analytics and artificial intelligence. Grieg Seafood aims to utilize the data to work more preventatively, reduce the company’s environmental impact and improve fish welfare. Some of the questions asked by salmon farmers are: how big is the fish swimming around in this particular pen right now? How much feed does the fish need today? What is the correct feeding speed given environmental and weather conditions? Why does the fish in
A number of computer screens with images from the
one pen eat better than the fish in the neighboring pen
many pens provide a full overview both above and below
at the same farm?
water. - Remote feeding has made us better at feeding, says operations manager Roy Evan Strømskag at the op-
“We ask such questions every day, and today we get
Our companies
erational center.
44 — 45
Grieg Investor Grieg Investor is an independent investment advisor for Norwegian institutional clients. Preparation of investment strategies, the selection of good asset managers and the composition of these contribute to our customers’ good results.
Opportunities to think new and to solve tasks differently than before, precisely because we had to. And despite the most significant economic downturn since World War II, both the stock market, our customers and Grieg Investor saw positive results by the end of the year When the world turned upside down in March, we decided to focus exclusively on existing customers and their need for security and advice. New sales were deliberately less prioritized. The result was still that we got several new customers and that 2020 was the best year in history. Capital under advice in Grieg Investor is now 95 billion, and the 15 billion increase from last year consists of a mix of new sales and returns on existT I R I L J A KO B S E N C E O, G R I E G I N V E S TO R
2020 was the year no one could have imagined in advance or made plans for. The Covid-19 pandemic posed significant challenges for all of us, both professionally and personally. But it also provided opportunities.
ing customer funds. OUTLOOK: 2021 AND BEYOND Grieg Investor is in a position where we can really reap the benefits of our investments over time, both in data and digital technology such as Enigma, framework development, employees, and our focus on sustainability. Our "do no harm - make it happen" framework fits perfectly into the EU taxonomy of sustainable finance, which require that economic activity contributes to solutions and does not cause harm. I sincerely look forward to the future, contributing even more to value for our customers, owners, business partners, and especially our employees.
GRIEG MATURITAS | ANNUAL REPORT 2020
MOVING CAPITAL CAN CHANGE THE WORLD
Our companies
46 — 47
People at Grieg: Marte Løfman and Christian S. Akselsen Although Covid-19 generated immense challenges for businesses worldwide, 2020 turned out to be the best in Grieg Investor’s history. Thanks to our long-term strategical work, employees say.
When the world turned upside down in March last year,
"We have positioned ourselves very well, and we think
Grieg Investor decided to focus exclusively on existing
this is just the beginning. It has taken us many years to
customers and their need for security and advice. As
build up Grieg Investor to what it is today", says Chris-
a result of their commitment and trustworthiness, the
tian S. Akselsen, who has been in the company since
investment consultancy company reached an impres-
2003. Today he works as a Senior Advisor within the
sive amount of 25 new customers and a growth of 15
pension fund segment.
billion NOK, leading to an exceptional year. "I agree. We feel that the good results did not occur beMarte Løfman and Christian S. Akselsen are two of the
cause of what happened exclusively last year. We have
company's employees that made the new heights pos-
not made any shortcuts to increase sales. Instead, we
sible to reach.
have focused on building trust and reputation in the market over time", Marte Løfman adds.
GRIEG MATURITAS | ANNUAL REPORT 2020
MOVING CAPITAL CAN CHANGE THE WORLD
cially a digital one. For Grieg Enigma, 2020 became the
As a Senior Analyst, Løfman has been in charge of sus-
year where the system could prove its strengths.
tainable and impact investments within the analysis department since 2016. With a background in environ-
As the demands on the footprints of investments in-
mental risk and international political economy, she
crease, Grieg Investor’s digital solution, called “Enig-
is currently conducting sustainability assessments of
ma” has helped investors analyze their investment
various funds for their clients.
portfolios' sustainability to among others reduce carbon emissions.
"I have an untraditional background compared to many other people in finance, but I intentionally pursued a
"Becoming greener will be crucial if corporations want
career in the field because I believe that you have to
to thrive in Europe in the future, as sustainable finance
move capital if you want to change the world", she says.
is a focus area in the EU right now", Løfman says.
Today, sustainability has become a fundamental ele-
According to the EU's "The European Green Deal,"
ment in many strategy processes, increasingly also in
Europe's goal is to be the world's first climate-neutral
pension funds. "This is the intersection between Chris-
region by 2050. To make this happen, EUs taxonomy
tian and me", Løfman explains and adds that they are,
– a classification system establishing a list of environ-
sharing another vital connection: Their big passion for
mentally sustainable economic activities – is a critical
Grieg Investor.
enabler to scale up the sustainable investment.
PROUD TO WORK AT GRIEG INVESTOR
"If we are going to reach net zero emissions in 30 years,
"I saw that Grieg Investor was willing to invest in sus-
it means that we have to go through many changes. If
tainability early on through the development of among
you do not think about sustainability when you invest,
others Grieg Enigma, which I thought gave credibility
you will risk losing", Løfman states.
to the company. Today, everyone is talking about sustainability in finance, but that was not the case five
The same applies to the pension milieu – being some of
years ago. I admire the responsible and conscientious
Norway’s biggest investors, according to Akselsen.
people working here and the company’s focus on worklife balance", Løfman says.
"Therefore, I think Grieg Enigma is a great tool, as it gives full transparency in terms of what you have in-
Akselsen, who, previously worked in the insurance side
vested in, which I believe is truly important if we want
of pension schemes, decided to pursue a career in Grieg
to enable investors to invest sustainably", says Løfman
Investor after suggestions from some acquaintances. Although he could choose from various job offers, he
Ultimately, both of them highlight that having the sup-
wanted to work solely for Grieg Investor. Now he is as-
port and understanding of their business model from
sisting pension funds with strategic advice, educating
Grieg Group as their owner has helped their company
them how they can implement asset management. He
to thrive, not only during 2020.
also helps to locate funds. "We feel that we are being heard all the time. It is an "The company provides excellent social and academic
advantage to have such a firm owner that shares our
conditions, and several of my best friends are also col-
values", Akselsen declares.
leagues of mine. We have an outstanding reputation in the market which means a lot to us and me personally. I am proud to work here", Akselsen says. NEW DIGITAL SOLUTIONS Often, we need a push to enable a new change, espe-
Our companies
48 — 49
Grieg Kapital Grieg Kapital is a unifying investment and asset management company within the Grieg Group. The company’s mandate is to safeguard and develop its financial asset portfolio.
2020 has been a satisfying year for Grieg Kapital. In early 2020 we sold Grieg Newfoundland to Grieg Seafood, a company that was originally initiated by Grieg Kapital AS and Per Grieg Jr. in collaboration with their local partner Ocean Choice International Ltd. in 2014. We have had satisfied financial return on investments overall throughout the year. Stabilizing financial markets after the summer had a great impact on our results. A GLANCE AT THE NEWFOUNDLAND PROJECT In 2015, a memorandum of understanding (MOU) to produce Atlantic salmon on seawater grow-out sites across four areas of Placentia Bay was signed with the Province of Newfoundland. 11 licenses for sites are curG R I E G K A P I TA L I N V E ST M E N TS
Grieg Kapital is the Grieg Group’s investment company that owns Grieg Gaarden, Grieghallen Parkering, Grieg Holdings, Silves Odissey, Nestun Uldvarefabrik and Rensefiskgruppen.
GRIEG MATURITAS | ANNUAL REPORT 2020
rently approved or in different stages of application. The Newfoundland project received Environmental Impact Study (EIS) approval in August 2018 for Placentia Bay, which comprises a high-end Recirculating Aquaculture System (RAS) facility. Construction of the onshore smolt-facility commenced in April 2019. OUTLOOK We are monitoring the situation related to Covid-19 closely and will further continue to create value to our owners and contribute to an overall sustainable business.
DOING GOOD IS THE OBVIOUS BUSINESS OPPORUNITY
Our companies
50 — 51
Grieg Group Resources Grieg Group Resources AS is a shared service centre for the companies within the Grieg Group. They represent an important support function for the Grieg Group, delivering services such as ICT, HR and personnel, operations and procurement, finance, accounting and legal.
Witnessing an increased frequency of cyber-attacks, we had a special focus on cyber security during 2020. Many attacks worldwide were related to the Covid-19 pandemic, and our IT department has taken measures and will continue this important work throughout 2021 together with specialized partners in the field. In addition to focusing on cyber security, our finance department implemented a new, cloud-based accounting system in 2020. The system will result in a better overview and more efficient accounting processes and project management. We are grateful to all who has contributed their time and effort to make the implementation go smoothly. Together with the owner comW E N C H E KJ Ø L Å S CEO
Grieg Group Resources acts on behalf of the group and helps with coordination and fulfillment of joint measures and specific projects.
pany, Grieg Maturitas, Grieg Group Resources have organized and led the Emergency Response Team during the Covid-19 pandemic and contributed to social activities and training across the Group. The pandemic has been a true challenge to us all, and many of us in the Grieg Group have been working from home since the outbreak in March 2020. We were well positioned for digital meetings throughout the Grieg Group when Covid hit, due to our IT departments implementation of modern office tools for all employees. Hopefully we will be able to return to our offices soon, and in the meantime, we are happy to make the best out of this special and unprecedented situation, offering digital training sessions and online quizzes across the Group, to give our employees a break from work. In 2021 we will continue to provide Group companies with support and management, while looking forward to meeting our colleagues in person again.
GRIEG MATURITAS | ANNUAL REPORT 2020
Lighted hearts at Grieg Gaarden Grieg Gaarden represents the Grieg Groups headquar-
lot of businesses, construction sites, and public build-
ter, located in Bergen, Norway. In addition to Grieg
ings have done the same. In collaboration with Amas
Group Companies, the offices are also hired out to ex-
Lyd og Lys and Axnor we managed to build and put up
ternal companies. Grieg Gaarden is certified as an Eco
three lighted hearts at Grieg Gaarden early in Decem-
Lighthouse, and operated by Grieg Group Resources.
ber:
During the winter of 2020 we decorated the building
"Grieg Gaarden is a noticeable building in the heart of
with lighted hearts, contributing to brighten the chal-
Bergen, and by doing this we reached out to a lot of peo-
lenging times, together with other businesses and con-
ple. Our intention was to contribute to spreading some
structions sites across the city.
joy during the time before the holidays", says Camilla Grieg, co-owner at the Grieg Group and board member
Together with Amas and Axnor, Grieg Gaarden became
at Grieg Gaarden AS.
decorated with lighted hearts, contributing to a more joyful time before the holidays in December. It all started with an idea from Førde, a city in Vestland county, where Hans Martin Holsen decorated the new police station with a lighted heart in November. Since then, a
Our companies
52 — 53
People at Grieg Christian Sandqvist Smith Christian´s motivation comes from his fellow colleagues at Grieg. Over the last year, a large portion his time has been spent implementing a new financial management platform.
During Covid-19 he has been project manager of the
THE BENEFITS OF SKY-BASED REPORTING
implementation of Xledger – a cloud-based platform
Moving the financial management into a sky-based
for financial management. When a large company such
platform has saved valuable time for employees and
as Grieg Group changes its financial report system,
head of staff. Specific tasks have been reduced down
it involves a lot of people. All in all, 60 companies
from three days’ work, to 15 minutes, according to
have transitioned to Xledger under his supervision.
Christian.
“When choosing a supplier, we wanted someone who is involved in Grieg, and also understands that
“One of the main benefits of this system is that we
sustainability is becoming increasingly important
are able to present numbers in real time. This way,
for operational activities, societal commitment and
the board and management are not limited to make
financial impact”, says Christian.
decisions based on outdated financial data. Equipped with real time financial data, we are able to make
GRIEG MATURITAS | ANNUAL REPORT 2020
When choosing a supplier, we wanted someone who is involved in Grieg, and also understands that sustainability is becoming increasingly important for operational activities, societal commitment and financial impact. C H R I S T I A N S A N D Q U I S T S M I T H C H I E F AC C O U N TA N T, G R I E G G R O U P R E S O U R C E S
informed decisions faster, which may be a competitive
by Annicken Kildahl from Grieg Star Group, Kolfinna
advantage or a necessity in today’s market” he says.
from Grieg Logistics, and project manager Christian from Grieg Group Resources.
Christian explains by simplifying their financial operations, they have created a more streamlined
Christian is mostly grateful for everyone else in the
value chain which enhances the overall performance
company who has been at the center of the transition
of the group.
to a new system.
INVOLVING EVERYONE FROM DAY ONE
“I am amazed and impressed by the positive attitude
In the process of finding the right supplier, the project
in the organization, and the willingness to make this
group started up by examining the different needs and
new system work. Especially during Covid-19, when
important functionalities throughout the workplace
everyone has been working from home. For some it
and in the companies within the group.
have been a big change. Luckily, it has proven to be a well-suited system for our need”, he says.
“We completed interviews and had a thorough examination of the different needs in our companies. By including all levels of our value chain, we were able to define specific challenges, and make sure we chose a supplier that would resolve and improve our financial reporting process”, Christian says. The system has proven to be both flexible and scalable at the same time, making it easy to adjust to our different businesses . It is also well-suited for a complex group such as Grieg Group. They understand our needs and even have experts on the maritime industry. HATS OFF TO THE COLLEAGUES A large project group has been involved in ordering and implementing the system. In addition to Christian as project manager, the group consists of CFO in Grieg Logistics Kolfinna Magnusdottir, VP Business Controlling & Transformation Raymond Nordvik and Rolf Wangsholm from KPMG. Wenche Kjølås has been in charge of the steering committee, accompanied
Our companies
54 — 55
Highlights from 2020
JANUARY
MARCH
Grieg Edge was established as part of Grieg Star Group
The Covid-19 outbreak effected our work and personal
as its innovation hub at the beginning of 2020. The
life and did immediately affect our crewmembers
company aims to deliver innovative, sustainable
and seafarers. The Grieg Group established an
solutions to the challenges of maritime business.
Emergency Response Team with members from all
Nicolai Grieg was appointed Head of Grieg Edge.
the Group companies in order to manage the crisis and share knowledge and experience through these unprecedented times.
FEBRUARY Grieg Seafood takes the next step on their growth journey by acquiring Grieg Newfoundland in Eastern Canada. The Newfoundland project was initiated by Grieg Kapital AS and Per Grieg Jr. in collaboration with their local partner Ocean Choice International Ltd. in 2014. The purchase agreements from Grieg Kapital to Grieg Seafood was signed in February 2020.
APRIL The ZEEDs (Zero Emission Energy Distribution at Sea) initiative was awarded funding of NOK 1,5 million from Nordic Innovation. The ZEEDs initiative is a collaboration of five leading industry companies, Wärtsilä, Aker Solutions, Equinor, DFDS, Kværner and Grieg Star. The initiative aims to develop a zeroemissions solution for the shipping industry.
GRIEG MATURITAS | ANNUAL REPORT 2020
MAY
AUGUST
Grieg Foundation donates NOK 4 million to the
Grieg Seafood aligns targets with the Paris Climate
establishment of a new center dedicated to research
Agreement, aiming to become a net zero emissions
on women’s heart diseases at the University of Bergen
company in 2050 and to reduce carbon emissions with
and Haukeland University Hospital. The University of
35 % by 2030.
Bergen is at the forefront of international research on women´s hearts diseases, and the new center makes it possible to bring together leading researchers and doctors from the University and Hospital.
JUNE The Grieg Group strengthens the team and hires Marte Leirvåg as new Communications Manager in Grieg Maturitas. The newly created position will be responsible for strategic and operational communication at the group level.
SEPTEMBER New interim management team at Grieg Shipbrokers. Finn Engelsen Jr announced his resignation as Managing Director of Grieg Shipbrokers in the fall of 2020. Morten Müller was appointed as Head of Operations, who together with CFO Ivar Sandvig Thorsen will be the interim management of the company.
Our companies
56 — 57
OCTOBER Grieg Edge becomes part of groundbreaking arctic ammonia project. Local politicians in Svalbard, Northern Norway are looking into closing the local coal power plant, and replace it with greener solutions. One of the solutions is ammonia from a planned factory in Berlevåg. The Berlevåg factory is one of the plans which is part of the ZEEDs initative. The factory will use power from the wind turbine park at Raggovidda to produce ammonia. The project is based on the same ideas as the original ZEEDs plans, and the goal is to store the ammonia in underwater containers until it is transported to Svalbard by ships.
The Port of Kaskinen in Finland, is entering into
Grieg Seafood is granted five new farming licenses in
a partnership with the Norwegian company Grieg
Newfoundland, reaching eight licenses in the region,
Connect to build the port´s future digital management
corresponding to a total production capacity of up to
system. The partnership comprises a long-term
30 000 tonnes of annual harvest.
development
of
different
digital
solutions
and
applications, streamlining the port´s operations to cut costs and emissions and eventually connecting all the port´s clients to the system.
Gry Larsen, former Secretary General at CARE was hired as Leader Sustainability and Public Affairs in Grieg Maturitas. The hire of Gry Larsen wil further strengthen the Grieg Groups commitment to sustainability.
GRIEG MATURITAS | ANNUAL REPORT 2020
G2 Ocean G2 Ocean has been awarded the Gold medal by EcoVadis for its performance in Corporate Social Responsibility (CSR), with a score of 71/100.
NOVEMBER
DECEMBER
Port of Senja and Grieg Connect has entered into a
G2 Ocean among top sustainable companies. G2 Ocean
five-year agreement for the development of a port
has been awarded the Gold medal by EcoVadis for
management information system (PMIS). The port
its performance in Corporate Social Responsibility
system is designed to handle port calls, streamline
(CSR), with a score of 71/100. They improve six points
operations and simplify invoicing and statistics
in EcoVadis’ annual sustainability ranking and is
reporting.
placed among the top five per cent of companies for its sustainable business practices.
Grieg Seafood will sell their Canadian and Scottish salmon from their new, fully integrated sales- and market organization, replacing the previous sales joint venture Ocean Quality. The first sales of Norwegian fish are estimated to start at the end of the first quarter. Until then, the sales company Sjór, previously the Norwegian arm of Ocean Quality, will sell Grieg Seafood’s salmon from Finnmark and Rogaland.
Grieg Group introduces a new, cloud-based accounting system. Following a long tender process, Grieg Group chose XLedger as their new accounting system supplier.
Our companies
58 — 59
GRIEG MATURITAS | ANNUAL REPORT 2020
GRIEG MATURITAS
Directors’ Report & Group Result 2020 The Grieg Group is rooted in a long and proud maritime history. We have lived by and with the ocean for 138 years. Profitable growth throughout our history has made us capable of building sustainable businesses and give back to the societies in which we operate.
In 2019 we incorporated the UNs Sustainable Develop-
Seafood has established its own sales organisation.
ment Goals as part of our business strategy, because
These entities are classified as held for sale and discon-
doing good is the obvious business opportunity.
tinued operations, in the consolidated financial statement. The income and expenses from these operations
2020 was a challenging year for the Grieg Group over-
are presented as a net amount from discontinued op-
all. Disrupted and tough markets due to the Covid-19
erations in the consolidated profit and loss statement
pandemic affected almost all parts of the Grieg Groups
for both 2020 and the 2019 comparable figures. This
activities. Group turnover was MNOK 6 765, operat-
significantly impacts the operating revenue for the
ing profit (EBIT) MNOK -555, and the profit before tax
Grieg Group, as the excluded revenue from these enti-
MNOK – 878 vs. MNOK 1 025 in 2019.
ties amounts to MNOK 4 053 and MNOK 3 521 for 2020 and 2019 respectively. Turnover in Ocean Quality in
The negative results are mainly related to impairment
2020 was approx MNOK 3 084 and Shetland operations
in Grieg Maritime Group, disrupted markets due to the
MNOK 969. For further details we refer to note 25.
Covid-19 pandemic in Grieg Seafood and re-organizing in Grieg Shipbrokers. Grieg Investor made 2020 their
Grieg Seafood sales are below the estimated budget
best year ever, delivering a result of MNOK 28 before
due to severe shift in demand, and lower prices in the
tax. Grieg Logistics has continued developing and in-
core market. Following a period of biological and oper-
vesting in Grieg Connect, and made a zero-profit result
ational challenges, combined with the current market
overall. Although the Grieg Group has an overall satis-
uncertainty and reduced visibility due to the Covid-19
fied cash situation, challenging markets, especially in
pandemic, Grieg Seafood has performed a strategic
shipping and seafood affected us through all of 2020.
evaluation of current operations and postponed or
Grieg Seafood ASA’s profit before tax and discontinued
slowed down the pace of investment of some of their
operations is (NGAAP) MNOK - 22, down from MNOK
growth initiatives. Measures under these priorities in-
1 051 in 2019, and turnover is MNOK 4 408, down from
clude a continued focus on cost-improving initiatives,
MNOK 4 783 in 2019.
improved fish health, and welfare and smolt infrastructure developments.
Grieg Seafood aims to divest its Shetland operations during 2021 in order to focus on the Norwegian and
Grieg Seafood (GSF) has also considered alternative
Canadian regions. Furthermore, the joint sales organ-
models for funding smolt infrastructure expansion,
isation Ocean Quality has been sold in 2020 as Grieg
and in January 2021, they invested in the joint venture
From the Boardroom
60 — 61
1 710
6 765
-878*
31 .1 2 . 2020
2020 · MNOK
2020 · MNOK
Employees
Operating Revenue
Profit before tax
* Profit before tax is mainly effected by impairment in Grieg Maritime Group of MNOK 773. Profit before tax, ex write downs is – 105 MNOK.
Årdal Aqua with Vest Havbruk and Omfar. Årdal Aqua
of several L-class ships' impairment, whereas the esti-
will produce at least 3 000 tonnes of post-smolt annu-
mated value is no longer valid. Even though the pan-
ally and grow fish to harvest size in a new land-based
demic has been challenging for Grieg Maritime Group,
facility in Rogaland. Total harvest in 2020 was 86 847
they have managed to do operations remotely, creating
tonnes (71 142 tonnes ex Shetland), compared to 82 973
new and more sustainable ways of working. In Decem-
tonnes in 2019 (71 700 tonnes ex Shetland).
ber, Grieg Edge was granted funding from the Norwegian funding scheme Pilot-E, and is now collaborating
In April 2020 the Grieg Group, through the subsidiary
with Wärtsilä, aiming to build the world's first ammo-
Grieg Seafood ASA, acquired 60% of the shares in Grieg
nia tanker. And for the first time, Grieg Green has been
Newfoundland AS. The Grieg Group already held a 39%
conducting IHM-inspections from their home offices
share of the company through the subsidiary Grieg Ka-
in collaboration with shipyards and crewmembers
pital AS. Grieg Newfoundland controls licenses for fish
worldwide.
farming in the Placentia Bay area in Newfoundland, Canada and includes a Recirculating Aquaculture
Grieg Investor delivers the best results ever due to
System (RAS) facility under construction in the same
solid financial markets and good performance. They
region. The acquisition is accounted for as a business
increased their customer relations, with a specialized
combination and further described in note 24.
focus on technology and the EU green deal and EU taxonomy.
Grieg Maritime Group – the new name after reorganizing Grieg Star at year end – delivered a negative profit
Grieg Logistics had lower activity in 2020 than the year
before tax of MNOK 943, compared to negative MNOK
before, but has managed to improve Grieg Connect’s
64 in 2019 . Due to the challenging markets in shipping
performance, delivering port technology to several
industry, the decision was taken to make an impair-
new Scandinavian ports in 2020.
ment of approx MNOK 773 on the shipping fleet, while restructuring into Grieg Maritime Group. The compa-
Grieg Shipbroker was facing a challenging market
nys balance sheet now reflects the competitive values
globally and decided to sell all Asia activity in late 2020
of their assets. The negative result is also effected by a
to focus more on core business and re-organize their
combination of higher travel costs due to the Covid-19
company. During the fall, Managing Director Finn En-
pandemic and the ongoing crew-crisis. It is also a result
gelsen jr. stepped down. An interim management lead
GRIEG MATURITAS | ANNUAL REPORT 2020
is now running the company with the goal of recruiting a new Managing Director in 2021. The Group is well-positioned for the future. In 2020 we strengthened our team, hiring a Communications Manager and Leader Sustainability and Public Af-
Highlights 2020 Disrupted and challenging markets in shipping and seafood
fairs. Besides, we have taken several necessary steps to a more professionalized structure, working together across companies to achieve specific goals, especially following our commitment to the UN SDGs, which we implemented as part of our strategic framework in
Funding granted from Pilot-E to Grieg Edge, aiming to build the world’s first ammonia tanker together with Wärtsilä
2019. Even though the pandemic has been an actual human and business challenge, a crisis can also bring opportunities. To us, the crisis has resulted in demand for more digitalization in the maritime sector, and
Grieg Shipbrokers sells its Asia-activities to Affinity to grow core business at home
more effort to deliver zero-emission solutions to the maritime industry. We believe we must be part of the resolution, or else we will be left behind. Using the crisis as an opportunity is not new to us because it is part
Grieg Green conducts remote IHM-operations worldwide from their home offices
of our culture to seek new opportunities that can better impact society. The entire year of 2020 has been affected by the pan-
Grieg Logistics delivering cutting-edge technology to ports across Scandinavia
demic. And we enter 2021 with the same uncertainty related to when society can re-open, and businesses fully enter the new normal. The Covid-19 pandemic is still spreading globally, and no industry is unaffected,
Covid-19 crisis management across companies within the Grieg Group
handeling shifting and uncertain market situations. Our people are our most valuable resource. During the pandemic, we have been witnessing a tremendous effort from all of Grieg Groups' employees, and for that, we are truly grateful. We continue to monitor the situa-
Strengthening team within Grieg Maturitas administration hiring Communications Manager and Leader Sustainability and Public Affairs
tion closely, but the extent and duration of these effects are still uncertain, and we cannot predict its results
Building in-house sales- and market organi-
and impact at this time. However, we are optimistic,
sation within Grieg Seafood
soon wrapping up the first quarter of 2021 with a much better start than we had at the same time last year. GRIEG SEAFOOD ASA Covid-19 has disrupted the salmon market, with a significant shift in demand, away from Hotels, Restaurants, and Catering (HoReCa) and to a greater extent towards the retail segment. Sales to HoReCa has been at a low level since the pandemic entered our private and business life in March, impacted by restrictions and lock down in most markets, particularly in Europe.
From the Boardroom
62 — 63
Highlights 2020
Grieg Seafood sales have remained good, however with global supply growth and volumes to the market at a higher level than the first lockdown, but salmon pric-
Participating as speakers at the OCEAN-conference 2020
es have suffered, particularly in the European market throughout 2020. Average spot price for the period was NOK 53,70 pr kg,
Conducting Remote Dry-Docking operations within Grieg Star
compared to NOK 78,3 pr kg end 2019, and down by NOK 3,5 pr kg compared to average spot price in 2019. Total harvest volume was 71 142 ton (ex Shetland), 5% below target volume of 75 000 ton, and 1 % lower than
Grieg Star Group changes its name to Grieg Maritime Group
New interim management lead at Grieg Shipbrokers
2019 (ex Shetland). The negative effect of lower prices was somewhat offset by favourable fixed price contracts in Norway. The company´s earnings are primarily driven by performance in Norway, while the long-term initiatives to address biological challenges in British Columbia continued to yield positive results. In Shetland in particu-
Grieg Kapital sells Newfoundland to Grieg Seafood
lar, cost has remained at a high level for a long time, resulting in a decision to sell all activity at Isle of Skye during 2021. Besides this, Grieg Seafood has been settling for the future, building their own in-house sales-
Brazilian soy vendors to Grieg Seafood have committed to becoming 100 % deforestation free, halting scale of deforestation-related soy to all customers
and marketing organization, and as the first worldwide global salmon producer they have invested in a postsmolt land-based farming facility in Rogaland. Despite challenging times, Grieg Seafood continues to improve where they can, reducing their impact on the environment and local communities. In 2020 they successfully took part in contributing to end all use of deforestation soy to the salmon industry. This was the very first time Brazilian soy suppliers made such a commitment. Moving forward, Grieg Seafood scales its operations towards 2025 globally, through M&A activity, with costs at or below industry average, with an ambition to reach 150 000 tonnes by 2025. GRIEG MARITIME GROUP The pandemic has been a true challenge for the shipping industry, and many of Grieg Star’s crew members had to onboard our ships for too long due to national and international restrictions in relation to Covid-19. Grieg Maritime Group has been working continuously trying to solve this unprecedented situation, working
GRIEG MATURITAS | ANNUAL REPORT 2020
to fulfil our commitment to the Neptune Declaration stating that crew members worldwide are crucial work-
In addition to all activities the past year, Grieg Star
ers, and a demand to provide them with necessary vac-
Group changed its name to Grieg Maritime Group. Over
cines. In addition, Grieg Maritime Group established
the past two years, Grieg Star Group has undergone sev-
a fund to provide salary to crewmembers who were
eral minor and more significant changes. Restructur-
banned to travel onboard our ships due to local restric-
ing the organization, bringing Grieg Green closer into
tions.
the Group, and with the establishment of Grieg Edge it was about time we re-named the Group of companies
2020 started with the establishment of Grieg Edge, a
to avoid confusion regarding the Groups different areas
maritime innovation company. Grieg Edge joined the
of expertise.
ZEEDs initiative early in 2020 and is collaborating with companies such as Equinor, Statkraft, Aker Solutions,
GRIEG LOGISTICS
Wärtsilä, DFDS and Kvaerner in seeking sustainable,
Grieg Logistics Group has among all other companies
zero-emissions solution for the shipping industry.
been affected by the pandemic and the uncertain market situation. Throughout the year they have contin-
Grieg Green, another subsidiary of the Grieg Maritime
ued their investments in Grieg Connect, a company
Group is one of few companies providing sustainable
providing advanced technology to ports across Scandi-
ship and rig recycling. In total Grieg Green has com-
navia. In late 2020 they signed off a deal with Port of
pleted more than 120 recycling projects as well as 1500+
Kaskinen in Finland, and they were newly a winner of
IHM operations. The pandemic made it challenging
an agreement with Senja commune in Norway.
to travel worldwide conducting IHM-operations, but Grieg Green managed to establish a remote solution
Normally Grieg Strategic Services, a subsidiary com-
in collaboration with shipyards and crewmembers. In
pany within Grieg Logistics takes part in several army
2020 they have also been signed a contract together
rehearsals throughout the year, but because of the pan-
with Norscrap West Askøy to dismantle the Norwegian
demic there has been a lack in activities with the Royal
Frigate “KNM Helge Ingstad”. We expect the green re-
Norwegian Army.
cycling business to continue to grow, and with this so will Grieg Green.
At Mosjøen Industrial Terminal business continues
O P E R E AT I N G R EV E N U E MNOK 1200 1000 800 600 400 200 0 2013
From the Boardroom
2014
2015
2016
2017
2018
2019
2020
64 — 65
as usual, not very much affected by the pandemic, be-
GRIEG INVESTOR
sides shift in market demand. Grieg Logistics partner-
2020 was Grieg Investor’s best year throughout his-
ship with Alcoa has continued to develop during the
tory. For the first time they managed assets of MRD-
year, with both partners being satisfied with the cur-
NOK 100 for more than 100 clients including founda-
rent agreement.
tions, associations, family-owned companies, pension funds, insurance companies and municipalities. Their
Building on Grieg Logistics strategy they will contin-
continuous focus on digitalization and efficiency has
ue to develop their company towards a more digital
made Grieg Investor a leader in key areas. Investment
and technology-driven future, aiming to provide more
in responsible and sustainable investments continues
ports with advanced technology and solve obscure
and is a strong focus area both internally in our own
problems within the maritime and other industries.
organization, towards customers as well as towards
They are also developing NoX digital – a platform in
the market in general. Responsible and sustainable in-
which shipping and other offshore companies can
vestments will play an increasingly central role for the
track their NoX emissions, making reporting seamless.
company’s customers in the future. It is therefore stra-
Grieg Logistics focus is to build more scalable solutions
tegically important for Grieg Investor to take a clear
that can be both profitable, valuable, and sustainable.
position in this market and be perceived as a leading
In 2020 GL results before tax are 0, same as last year.
advisor with a high level of trust. With the entrance of EU Green deal and EU taxonomy, Grieg Investor are
GRIEG SHIPBROKERS
well set for the future, counting 28 employees in 2020.
Facing the same challenges as of the rest of the maritime industry, Grieg Shipbrokers witnessed a tremen-
GRIEG KAPITAL
dous shift in markets when the pandemic hit us in
Grieg Kapital is a combined investment and asset man-
March. During the summer these markets stabilized,
agement company in the Grieg Group. The company
and at-home business went almost back to normal. De-
will partly run liquidity management as a buffer for its
spite stabilizing markets Grieg Shipbrokers have been
core business, as well as new business areas. In addi-
witnessing unsatisfied results for their oversea activi-
tion, Grieg Kapital manage a portfolio of direct invest-
ties for a very long time, leading to the decision to sell
ments, including real estate and private equity.
all Asia-activities to Affinity in January 2021. During the fall of 2020, Grieg Shipbrokers long-time
A new strategy for the company´s liquidity portfolio
Managing Director, Finn Engelsen jr. stepped down.
was established towards the end of 2018, and the portfo-
Since his resignation, Morten Müller (COO) and Ivar
lio was invested according to strategy at the beginning
Sandvig Thorsen (CFO) have been leading interim
of 2019. As part of a new strategy, new guidelines for re-
management, providing the company with the neces-
sponsible investments were also implemented. These
sary stability. For that we are truly grateful.
guidelines are in line with the Grieg Group’s goals and ambitions in terms of sustainability and accountabil-
Grieg Shipbrokers marks its highest income ever in
ity. Grieg Kapital has also assisted Grieg Maturitas II
2020, celebrating a turnover of MNOK 100 million.
in creating an almost identical liquidity portfolio. It is
Still, the net balance will end up in minus MNOK -36,6
the sum of these two portfolios that will constitute the
million. The decision to sell Asia-activities, with a
Group’s total capital buffer.
much-needed reorganization of the company are key explanatory factors of the results, along with uncertain
Grieg Kapital has been facing overall good perfor-
markets due to the pandemic.
mance in the capital market in 2020, and they received good return the past year, with a profit before tax of
Focusing more on core business at home, along with more profitable business solutions we believe Grieg Shipbrokers are well on their way.
GRIEG MATURITAS | ANNUAL REPORT 2020
MNOK 122.
BALANCE SHEET, FINANCIAL SITUATION AND
ganizationally and financially in March 2020. Manag-
CASHFLOW
ing Covid-19 has been one of the true challenges in the
The Grieg Group has a strong financial position. Total
Grieg Groups history, and to all who has contributed
current assets amount to MNOK 4 458 (MNOK 5 863),
across companies – we are forever grateful. In March
of which MNOK 1 579 (MNOK 1 544) is made up of bank
we established an Emergency Response Team led by
deposits, market based financial investments and
our CEO, consisting of all Grieg Group companies. We
other financial investments. Current liabilities total
developed plans, discussed measures, and communi-
MNOK 1 136 (MNOK 2 192), which gives positive work-
cated throughout the entire organization. The Emer-
ing capital of MNOK 3 322 (MNOK 3 671). The Groups
gency Response Team has met regularly since then,
total fixed assets is MNOK 10 772 (MNOK 10 937), of
providing each other with expertise and knowledge.
which MNOK 7 552 (MNOK 6 078) is financed through
In addition, we supported our CEOs and leaders with
loans from financial institutions, financial leasing, and
necessary information to employees and offered digi-
other long-term debt.
tal training sessions and social gatherings. In addition,
Grieg Seafood sucessfully issued for first time a Green
Grieg Maritime Group has been managing the on-go-
Bond on Euronext of MNOK 1 500 in 2020. Grieg Mari-
ing crew crisis together with others in the maritime
time Group refinanced part of its debt in 2020, and has
industry, working to state seafarers and crewmembers
limited maturities going forward in the next two years.
as critical workers, and provide them with necessary vaccines. We are proud that we have committed our-
CASHFLOW
selves to the “Neptune Declaration of Seafarers Well-
In total, the Group had a positive cashflow of MNOK
being and Crew Change”. And we are proud of all who
389 (MNOK 1 460) from operations. Due to investments
has been working from home, not being able to travel
in fixed and intangible assets, sales and purchase of
to their loved ones, and those that have been working
shares, the net cashflow from investing activities is
hard to keep wheels turning during these special times.
negative at MNOK 1 265 (MNOK 395). The net cashflow from financing activities is positive at MNOK 802 (neg-
ORGANIZATION AND WORKING ENVIRONMENT
ative MNOK 740), mainly due to increased debt, but
Our people are our most valuable resource. Performing
also some repayment, changes in bank overdraft and
competitively in our business areas requires compe-
dividends paid. In total, the Group had a negative cash-
tent and empowered people working safely together
flow of MNOK 74 in 2020 (MNOK 325).
across the Grieg Group companies. Sustainability Development Goals (SDG) 4, Quality education, is one of
FINANCIAL RISK AND RISK MANAGEMENT
the Grieg Groups’ stretch goals.
When operating in a global market across different
The total number of employees in 2020 was 1 663.
business areas, the companies of the Grieg Group are
Their qualifications constitute a substantial part of
exposed to different types and degrees of risk, ranging
the business capital. Keeping a diverse workforce and
from market operations and financial risk to compli-
providing our employees with learning opportunities
ance and regulatory frameworks. Risk management
that promote competence aligned with their personal
is a continuous process, and an integrated part of the
career goals, will ensure that we always have the best
Group’s governing model. Thus, we are constantly fo-
hands and minds on board.
cusing on how to identify and monitor the risk areas in the Group companies, as well as developing strategies
DIVERSITY AND GENDER EQUALITY
to mitigate such risk. For further information concern-
We believe that a diverse and balanced working envi-
ing financial risk, see note 17 to the Group accounts.
ronment is crucial for success, and we strive to be in the forefront on diversity within the businesses we op-
RISK MANAGEMENT: COVID-19
erate. SDG 5 Gender Equality is also one of our stretch
Even though we are well prepared as a group for un-
goals in business. Grieg Group will work towards gen-
certain times; we had no chance to be prepare for the
der parity at all levels of the organization, both for on-
challenges following the pandemic that hit us both or-
shore and offshore operations. We will also promote
From the Boardroom
66 — 67
To become a driving force for sustainable development we must create a purpose-driven organization embedded in an innovative culture. gender equality and diversity towards business and
We focus on preventing sick-leave by creating a good
supply chain partners.
working environment and conduct close follow-ups with our employees, also during this year with people
We still have work to do in several Grieg Group compa-
working from home offices during the year. The Group
nies. In total, only 18 percent of our employees world-
also facilitates participation in physical activities and
wide are women. Counting only Norway, 25 percent of
are also a long-term supporter of Aktiv mot Kreft and
the employees in total are women. Moving to CEO lev-
“Aktivt Kontor”.
el, 50 percent of all CEOs within the main companies
*Norwegian employees at the Grieg Group companies
in the Grieg Group (only counting Norway) are women. In theese companies' 44 percent of all board members
INNOVATION
are women.
Innovation, our stretch goal SDG 9, is vital to becoming sustainable. The Grieg Group companies engage in sev-
The level of success in achieving our stretch goals as a
eral research initiatives especially in the shipping and
group, is defined by the work in the different compa-
seafood industries. In 2020, Grieg Maritime Group has
nies. All our companies measure gender balance and
continued its work with maritime innovation through
are committed to improve gender balance among all
the establishment of Grieg Edge, and the participation
employees. Besides, all companies have a written poli-
in the ZEEDs initiative. In December 2020, Grieg Edge
cy against workplace discrimination.
was granted funding through the Norwegian funding scheme PILOT-E together with Wärtsilä, aiming to
The Grieg Group companies uses the SHE Index as a
build the world’s first ammonia tanker. Grieg Seafood
reporting tool on these questions and topics.
is also lead in several innovation projects within the industry, focusing on technology to improve biology and
HEALTH AND SAFETY
fish welfare, reducing their impact and contribute to a
The Grieg Group companies continuously focus on
better society.
training and facilitating a safe working environment for all employees by identifying and evaluating poten-
The Grieg Group is constantly working to improve and
tial risks on an ongoing basis.
digitalize our tools and working methods. In 2020 the group implemented a new accounting and reporting
In Grieg Maritime Group we have no reported severe
system across companies in the Group, adding new
working injuries. In Grieg Seafood, absence rates are
ways to analyze and report on our work with both fi-
mainly related to long-term sickness and employees
nance and sustainability, to mention some.
taking time off while waiting to be tested for Covid-19. They conducted a global Great Place to Work survey
To become a driving force for sustainable development
in 2020, where all regions received the Great Place to
we must create a purpose-driven organization embed-
Work certification with a total satisfactory score of 84
ded in an innovative culture. Within the Grieg Group
%, improving from 79 % in 2019.
we strive to collaborate across all companies in, inspiring, challenging and learning from each other. In ad-
The sick leave percentage is still low overall in the Grieg
dition, we believe sustainable business development
Group. In 2020 the sick-leave percentage was at 2,46*.
only can derive from partnerships across sectors, com-
GRIEG MATURITAS | ANNUAL REPORT 2020
From the Boardroom
68 — 69
panies, and industries, and hence the SDG number 17 (partnership for the goals) is the most important one
CORPORATE GOVERNANCE
to us.
The Grieg Group always strive to do business in a fair and proper way. We apply the Norwegian Recommen-
CLIMATE AND ENVIRONMENT
dation on Corporate Governance to ensure that the
The ocean connects our people, our businesses, our
responsibility and roles between administration, the
future, and our past. Recognizing that nature must be
Board of Directors and the General Meeting is based on
managed on behalf of future generations, we were ear-
sound practice. Deviation may arise given the fact that
ly movers making sustainability part of our strategy.
the Group is privately owned.
Besides this, SDG 13, Climate Action, and SDG 14, Life Below Water, are our stretch goals. We have a vision of
Our SDG goals within corporate governance is SDG 8
zero net emissions operations in all industries in which
(Decent work and economic growth), SDG 16 (Peace,
we operate, and we will continue to be an advocate for
justice, and strong institution) and SDG 17 (Partner-
zero emissions operations in all relevant industries and
ships for the goals). In 2020 the Grieg Group has devel-
increase awareness internally and in dialogue with key
oped its partnership with UN Global Compact, and we
stakeholders.
comply with the UN Global Compact principles on the areas of human rights, labour, the environment, and
In 2020 we have continued our partnership with WWF
anti-corruption.
and Grieg Foundation to reduce plastics pollution in the Philippines. To solve one of the world’s biggest
We will strive to be innovative to meet the challenges of
threats on climate and human life we have to provide
the SDGs, through new partnerships and cross sector
solutions where the problem is at its largest. We have
cooperation. We do this by being honest, exchange ide-
set a clear ambition: 50 percent reduction of plastic
as and seek to understand and learn from our surround-
pollution in three Philippine port cities by 2023.
ings. We have an open-minded business approach and strive to create room for action and possibilities, which
In 2020 Grieg Seafood also marked a milestone in their
will enable strong partnerships from both public, and
work promoting deforestation-free soy distribution in
private parts of society.
Brazil. The Brazilian soy suppliers to the salmon industry, CJ Selecta, Caramuru, and Imcopa, have com-
Through Grieg’s more than 138 years history, it is our
mitted to implement a 100 percent deforestation and
capacity to manage the challenges of the times, and to
conversion free soybean value chain with 2020 as their
innovate and adapt, that has put us in the position to
cut-off date. No soy grown on land deforested after this
drive the changes we want to see in the world today.
deadline will be traded. This bold and historic move sets a new benchmark for global sustainable supply
GOING CONCERN
chains.
The Board of Directors confirm that the annual accounts have been prepared on a going concern basis,
This is the very first-time Brazilian soy suppliers make
and that this assumption is valid, based on the Group’s
such a commitment. As a result of the move, most of
solid financial position and expectations of future prof-
the global farmed salmon industry, including the en-
its. The Board believes that the submitted annual ac-
tire European salmon sector and all of Grieg Seafoods
counts give a correct picture of the result, cashflow and
operations, will source soy from Brazilian suppliers
economic situation. No events have taken place after
whose soybean value chains are 100 percent deforest-
the balance sheet date that could materially affect the
ation and conversion free. The decision also marks
accounts. COVID-19 may still influence the 2021 figures
the first time an animal protein industry has set such
going forward, see below.
a voluntary and sector-wide benchmark. Our main office building, Grieg-Gaarden is also certified as an
OUTLOOK
Eco-lighthouse office building.
The outbreak of the coronavirus has caused a change
GRIEG MATURITAS | ANNUAL REPORT 2020
and a reduction in activity levels in the Norwegian
purpose-driven organization with a culture of inno-
and international economy. Nobody knows what lies
vation. To achieve this, we will continue promoting
ahead or how long the impact of Covid-19 will last. The
collaboration within and across all companies in the
escalation of both spread and measurements taken, is
Grieg Group, inspiring, challenging and learning from
currently causing high uncertainties for most of our
each other. We will also seek cooperation both among
businesses but entering the new year we are witness-
our competitors and our existing partners, the ZEEDs
ing stabilizing and improving markets in both shipping
initiative being a good example.
and seafood. Markets can still be unstable, and we don’t know how Shipping rates are moving upwards and international
the pandemic will affect us moving forward. But our
trade are increasing, affecting our part of the industry
risk profile is balanced, and we are handling the portfo-
with more optimisme. Also seafood prices are increas-
lio in a secure manner.
ing, forecasts indicating levels where profit is reasonable and in addition consumptions and demand for
Going forward, we will continue focusing and adapting
salmon is growing despite we still have a “lock down”
to changing markets and pursue opportunities as they
in most countries in hotels and restaurants. But we see
arise, given the uncertainty in the global economy.
households buying more salmon, and this is expected
Securing our businesses, employees health and cash
to continue even when the world opens up again for
situation will be given highest priority. But we still
more traditional “dining out” in addition.
think supporting new business ideas and facilitating innovation initiatives within the Group is of even more
The shift in demand, and the reduction in global trade
importance in these new circumstances. We are still
we have seen in 2020 is although influencing our op-
using the UN Sustainable Development Goals (SDG) as
erations, along with the lockdowns across Europe, and
our framework for our strategy, and we strongly believe
in Norway. But necessary actions is taken and will be
that we will act as an inspiration to other companies,
taken, moving forward in all Grieg Group companies
organizations, partners, and the rest of the community
and at Group level, to secure employees, the financial
to join our pledge: We will restore our oceans.
situation, our customers, and our partners. Thinking in long term pays off. And in the Grieg Group we are in it
The Board of Directors would like to express our thanks
for the long run.
to all employees in all our companies for their solid dedication and contribution to the Grieg Group, espe-
To become a positive driving force for sustainable de-
cially during these unprecedented times.
velopment, we must think big and bold and create a
Bergen, 14th of April, 2021 The Board of Directors of Grieg Maturitas AS
Elna-Kathrine Grieg Board Member
Elisabeth Grieg Chair
Camilla Grieg Board Member
Nina W. Grieg Board Member
Nicolai H. Grieg Board Member
Knut Nesse Board Member
Rolv-Erik Spilling Board Member
Sirine Fodstad CEO
From the Boardroom
Per Grieg jr. Board Member
70 — 71
GRIEG MATURITAS | ANNUAL REPORT 2020
Annual Accounts Annual Accounts Profit and loss statement
74
Balance sheet
75
Cashflow statement
79
Notes 1
Accounting principles
81
2
Segment information
85
3
Other operating expenses
86
4
Payroll costs, number of employees, remuneration etc.
87
5
Pensions and pension commitments
88
6
Fixed tanglible assets
90
7
Fixed intangible assets
92
8
Investments in subsidiaries
93
9
Investments in associated companies and joint ventures
97
10
Financial items
98
11
Sharehildings and other investments
99
12
Inventories and biological assets
100
13
Recievables due in more than one year
100
14
Market based financial investments
101
15
Debt, payable after 5 years
101
16
Mortgages/Guarantee liability/restricted funds
102
17
Financial risk
104
18
Contingencies and subsequent events
105
19
Taxes
106
20
Equity
108
21
Share capital and share information
109
22
Related parties
110
23
Remuneration to auditor
111
24
Business Combinations
112
25
Assets held for sale and discontinued operations
116
72 — 73
PROFIT AND LOSS STATEMENT
Amounts in NOK 1 000
GRIEG MATURITAS AS 2019
2020
1 973
-
Note 2
Operating Revenue
GRIEG GROUP 2020
2019
6 764 636
7 088 395
Operating Costs -2 848 -
-892 377
- 869 863
-
6,7
4
Payroll and social security costs Depreciation
-707 441
- 592 898
-
6
Write-down
-789 612
-
-
-
3
Operating costs - shipping
-994 195
- 882 808
-
-
3
Cost of sales - fish farming
-1 724 466
-1 531 746
-782
-216
3,23
Other operating expenses
-2 211 126
- 2 010 812
-3 630
-216
Total operating expenses
-7 319 217
-5 888 128
-1 657
-216
2
Operating profit - EBIT
-554 581
1 200 267
90 000
90 000
8
Income from investments in subsidiaries
-
-
390
169
10
Other Financial income
71 437
112 125
-
-
14
Change in value of market based assets
62 422
47 790
-
-
9
Results of investments in associated companies
-2 932
4 327
Financial items
-1
-3
10
Other Financial expenses
-454 222
-339 637
90 389
90 166
2
Net financial items
-323 295
-175 395
88 731
89 950
2
Profit before tax
-877 876
1 024 872
-215
-478
19
Tax
-86 473
-265 157
20
Profit for the year from continued operations
-964 349
759 715
25
Net profit for the year from discontinued operations
-142 568
18 771
-1 106 917
778 487
To minority interests
-351 222
515 182
Majority proportion
-755 695
263 305
88 947
89 472
Net profit and loss for the year
GRIEG MATURITAS | ANNUAL REPORT 2020
BALANCE SHEET
Amounts in NOK 1 000
GRIEG MATURITAS AS 2019
2020
Note
GRIEG GROUP 2020
2019
525 893
9 340
-
-
1 559 423
1 162 036
3 558
22 555
Assets Fixed assets Intangible assets -
-
7
Goodwill
478
-
19
Deferred tax assets
-
-
7
Licenses
-
-
7
Contracts
7
Other intangible assets
15 416
18 419
Total intangible assets
2 104 290
1 212 350
1 523 420
1 013 714
5 083 895
6 254 010
-
-
478
-
-
-
6
Land and real estate
-
-
6
Vessels
-
-
6
Vehicles, machinery and equipment
1 790 200
2 103 092
-
-
6
Total tangible assets
8 397 515
9 370 816
Tangible assets
Long-term financial assets 4 021 796
8
Investments in subsidiaries
-
4 021 796
9
Investments in associated companies
-
13
-
11
-
13
-
-
128 307
174 072
Loans to associated companies
35 837
81 125
Shareholding and other investments
31 863
46 445
Other receivables
4 021 796
4 021 796
Total long-term financial assets
4 022 274
4 021 796
Total fixed assets
From the Boardroom
74 423
52 462
270 430
354 104
10 772 236
10 937 271
74 — 75
Amounts in NOK 1 000
GRIEG MATURITAS AS 2019
2020
Note
GRIEG GROUP 2020
2019
2 309 284
2 895 834
372 755
659 757
Current assets -
-
12
Inventory and biological assets Receivables
-
-
Accounts receivable
90 000
90 000
-
-
15
6
Other receivables
196 812
762 935
90 015
90 006
Total receivables
569 567
1 422 692
67 321
87 481
Receivables from subsidiaries
Financial Investments -
-
11
Shareholding and other investments
-
-
14
Market based financial investments
744 970
614 029
-
-
Total financial Investments
812 291
701 510
41 035
40 669
Cash and bank deposits
767 051
842 161
131 050
130 675
Total current assets
4 458 193
5 862 197
-
-
Assets held for sale
1 752 172
-
4 153 324
4 152 471
16 982 601
16 799 468
16
25
GRIEG MATURITAS | ANNUAL REPORT 2020
Total assets
BALANCE SHEET
Amounts in NOK 1 000
GRIEG MATURITAS AS 2019
2020
Note
GRIEG GROUP 2020
2019
1 124
1 124
Equity and liabilities Equity Paid-up equity 1 124
1 124
409 763
409 763
Share premium
409 763
409 763
410 887
410 887
Total Paid-up equity
410 887
410 887
21
Share capital
Retained earnings 3 652 109
3 651 581
Other equity
3 683 387
4 275 241
3 652 109
3 651 581
Total retained earnings
3 683 387
4 275 241
2 813 087
3 253 908
446 040
-
3 259 127
3 253 908
7 353 402
7 940 037
Minority interests Minority interest contingent consideration Total Minority interests
4 062 995
4 062 467
From the Boardroom
20
Total equity
76 — 7 7
Amounts in NOK 1 000
GRIEG MATURITAS AS 2019
2020
GRIEG GROUP
Note
2020
2019
57 209
55 091
607 266
524 607
Liabilities Provisions -
-
5
Pension liabilities
-
-
19
Deferred tax
-
-
Other provisions
1 074
9 137
-
-
Total provisions
665 549
588 836
6 603 767
5 044 251
1 693
17 069
Other long-term liabilities -
-
15,16
Liabilities to financial institutions
-
-
15
Other long-term liabilities
-
-
16
Lease liabilities
-
-
Total long-term liabilities
946 491
1 017 132
7 551 951
6 078 452
13 317
438 322
623 394
947 985
-
-
25 211
222 632
58 139
96 913
123 273
129 365
Current liabilities -
-
24
-
Accounts payable
56
4
Accounts payable group companies
-
-
31
-
90 000
90 000
219
-
Other current liabilities
292 634
356 926
90 329
90 004
Total current liabilities
1 135 968
2 192 143
-
-
275 731
-
90 329
90 004
9 629 199
8 859 431
4 153 324
4 152 471
16 982 601
16 799 468
16
19
Bank overdrafts
Taxes payable Public duties payable
20
25
Dividend
Liabilities associated with the assets held for sale Total liabilities Total equity and liabilities
Bergen, 14th of April, 2021 The Board of Directors of Grieg Maturitas AS
Elna-Kathrine Grieg Board Member
Elisabeth Grieg Chair
Camilla Grieg Board Member
Nina W. Grieg Board Member
Nicolai H. Grieg Board Member
Knut Nesse Board Member
Rolv-Erik Spilling Board Member
Sirine Fodstad CEO
GRIEG MATURITAS | ANNUAL REPORT 2020
Per Grieg jr. Board Member
CASHFLOW STATEMENT
GRIEG MATURITAS AS 2019
Amounts in NOK 1 000
2020
GRIEG GROUP 2020
2019
Profit before tax
-877 877
1 035 722
Taxes paid
-222 632
-140 456
Gain/loss from sale of fixed assets
-
-29 905
Dividends receivable taken to income
-
-
Ordinary depreciation
707 441
683 075
Write-down (reversal) of fixed assets
789 612
-
Unrealised gain/loss market based investments
-62 422
-47 790
Change in inventory
-67 824
-495 503
Cashflow from operations 88 731
-90 000
89 950
-90 000
1
-
-31
-76
-331
-241
Change in accounts receivable
172 956
481 365
Change in accounts payable
46 024
166 151
Change in accruals
-8 063
-435
Difference in expenses pensions and payment in/out
-5 073
2 513
Effect of change in exchange rate
12 044
-1 337
2 932
-4 327
-98 071
179 669
Gain/loss from sale of market based investments
-3 316
-9 247
Net cash flow from operating activites for discontinued operations
3 505
-
389 236
1 460 157
Share of profit from associated companies (equity method) Change in other provisions
-1 629
From the Boardroom
-367
Net cashflow from operations
78 — 79
GRIEG MATURITAS AS 2019
Amounts in NOK 1 000
2020
GRIEG GROUP 2020
2019
Cashflow from investing activities Sale of fixed assets Purchase of fixed assets/newbuilding contracts Purchase of intangible assets
90 000
-4 196
-70 935
-
30 628
-
Sale of subsidiary, deconsolidation of cash and cash equivalents
-84 754
-
45 289
-210 256
Payments from other group companies 151 627
295 956
-169 900
-210 079
-121 537
-
-1 265 279
-394 863
Net change in bank overdraft
-425 005
-217 535
Loan repayment (short/long-term)
-501 386
-1 200 129
Loan proceeds
1 977 750
1 048 220
Dividends paid
-129 365
-370 293
-120 161
-
801 833
-739 737
-74 211
325 558
842 161
516 603
Purchase of shares and securities Net cash flow from investing activites for discontinued operations 90 000
-164 233
Payments on business combinations
Sale of shares
90 000
708 681 -974 969
Accumulated cash acquired in business combinations
Loan to associate 90 000
781 -882 245
Net cashflow from investing activities Cashflow from financing activities
-90 000
-90 000
Net cash flow from financing activites for discontinued operations -90 000
-90 000
-1 661
-367
42 665
41 035
41 035
40 669
Net cashflow from financing activities Net cashflow for the period Opening balance of cash and cash equivalents Cash postition in assets held for sale Cash and equivalents 31.12
GRIEG MATURITAS | ANNUAL REPORT 2020
898
-
767 051
842 161
Note 1
Accounting principles
The Annual Accounts for Grieg Maturitas AS have been
OPERATING REVENUE
prepared in accordance with Norwegian Accounting
Operating revenues are entered as income at the time
Act and generally accepted accounting principles.
of delivery. The time of delivery is understood as the time of transfer of risk and control related to the de-
GROUP ACCOUNTS
livery. Freight revenues from voyages are recognised
The consolidated accounts include the subsidiar-
on the basis of the number of days the voyage lasts.
ies specified in note 8 and shows the accounts of the
Revenue is shown, net of value added tax, returns and
parent company and the subsidiaries as a single eco-
discounts.
nomic unit. Shareholdings and investments in subsidiaries are eliminated on the basis of the acquisition
CLASSIFICATION OF ASSETS AND LIABILITIES –
method. The cost of shareholdings and investments in
MAIN RULE
subsidiaries is eliminated against the book equity of
Assets intended for long-term ownership or use are
the shares/investments at the date of acquisition. Any
classified as fixed assets. Other assets are classified as
difference arising is posted to the identifiable assets.
current assets. Receivables due within one year are
Any surplus value that cannot be attributed to specif-
classified as current assets. The corresponding criteria
ic assets, or the company’s own intangible assets, is
are applied to classify liabilities. Certain items are stat-
described as goodwill and is depreciated over its esti-
ed on the basis of special valuation rules, in accordance
mated lifetime. Intra-group transactions and internal
with accounting legislation, as detailed below. Other
balances are eliminated.
assets and liabilities are classified as fixed assets and long-term liabilities, respectively.
Companies that are bought or sold during the year, is included in the group accounts from the time of con-
INVENTORIES
trol arises or ceases. Changed owner share in subsidi-
Inventories are recognised at the lower of cost and fair
aries, where the company after the transaction still is a
value. Goods in progress, and finished goods are recog-
subsidiary, is an equity transaction for the Group. The
nised at the lower of full cost and net sales value. The
income statements and balance sheets of the group en-
net sales value of finished goods is calculated as sales
tities that have a functional currency different from the
value less sales costs. The stock of bunkers consists of
presentation currency are translated into the presenta-
fuel and diesel and are recognised at cost on the basis
tion currency as follows:
of the FIFO method.
(i) assets and liabilities are converted at the closing rate
FOREIGN CURRENCY
on the date of the balance sheet,
Assets and liabilities denominated in foreign curren-
(ii) income and expense items in the income statement
cies are stated at the year-end exchange rate. Agio,
are converted at average exchange rates for the period
or disagio, on settlements or conversion of monetary
(unless this average is not a reasonable estimate of the
items in foreign currency on the day of balance is allo-
cumulative effect of the rates prevailing on the trans-
cated. Transactions in foreign currencies is recalculat-
action dates, in which case income and expenses are
ed to transaction rate.
translated on the dates of the transactions), (iii) translation differences are recorded against equity
Foreign exchange hedging derivatives purchased in or-
and specified separately.
der to reduce the currency risk for the sub-group Grieg Star and Grieg Shipbrokers are recognised as hedging
From the Boardroom
80 — 81
transactions. Gains/losses of foreign exchange con-
are provided for in the accounts of the subsidiary. If the
tracts are therefore recorded in the same period as the
dividend exceeds the profit after the acquisition, the
hedged transactions. Please refer to note 17. Unrealized
surplus amount represents repayment of the capital in-
gain/loss on the hedging contracts is not posted on the
vestment and the distributions are deducted from the
balance sheet.
amount of the investment in the balance sheet. INVESTMENTS IN LIMITED PARTNERSHIPS
FOREIGN EXCHANGE RATES (NOK) 01.01.2020
31.12.2020
Average 2020
Investments in limited partnerships are recorded on
CAD
6,7570
6,6976
7,0076
the basis of the cost method whereby the investment is
GBP
11,5936
11,6462
12,0514
EUR
9,8638
10.4703
10,7207
USD
8,7803
8,5326
9,4004
I INTEREST RATE HEDGING Interest rate hedging contracts are recognised and classified in the same way as the related mortgage loan. The interest received/paid under the contract is therefore recognised in the interest period in question and is included in interest cost/income for the period. Unrealized gain/loss on the hedging contracts is not posted on the balance sheet. ACCOUNTS RECEIVABLE Accounts receivable are stated at nominal value less provisions for expected losses. The loss provision is based on an individual assessment of each accounts receivable. INVESTMENTS IN SUBSIDIARIES A company is defined as a subsidiary if the Group has a decisive influence on its operations. This is normally the case where the Group holds more than 50% of the voting share capital. Subsidiaries are posted in the company accounts applying the cost method. The investment is stated at historical cost of the shares unless a write-down has been necessary. The investment is written down to fair value when the reduced value is due to causes which are not deemed to be temporary. Write-downs are reversed when the grounds for the write-down no longer exist. Dividends and other distributions are recognised in the year in which they
GRIEG MATURITAS | ANNUAL REPORT 2020
stated at cost in the balance sheet. The distribution of profits/contribution to cover losses from investments in limited partnerships is taken to income/charged against profits under financial items. Profits from investments in limited partnerships are taxable in the hands of the respective participants. INVESTMENTS IN PORTFOLIO AND PRIVATE EQUITY COMPANIES A portfolio of investments are recorded as a current asset, and is valued at the lower of cost price and estimated fair value for the portfolio as a whole when the intention behind the portfolio is to diversify the risk through a balanced portfolio with respect to time, branches and geography. For unlisted investments, with no observable price, the fair value is determined by recently third party-trades, or with a reference to the fair value of similar investments. Investments with significant and permanent impairment is removed from the portfolio. INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES An associated company is a company where the Group has significant influence, but not control. Significant influence is deemed to exist for investments where the Group has between 20% to 50% of voting capital. Investments in associated companies and joint ventures are recorded on the basis of the equity method in the consolidated accounts, unless the investment value is immaterial. Investments in 50/50% joint ventures are stated according to gross method. The share of the results in associated companies is posted separately
under financial items. The investments in associated
impairment whenever events or changes in circum-
companies are posted as a financial asset. The Group’s
stances indicate that the carrying amount may not be
share of a loss is not posted in the income statements if
recoverable. An impairment loss is recognised for the
this means that value of the investment in the balance
amount by which the asset’s carrying amount exceeds
sheet becomes negative. Provisions will be made if the
its recoverable amount. The recoverable amount is the
Group has undertaken an obligation on behalf of the
higher of an asset’s fair value less costs to sell and value
associate.
in use. For the purpose of assessing impairment, assets
FIXED ASSETS
arately identifiable cashflows (cash-generating units).
Fixed assets are valued at acquisition cost, but are
The Group’s open hatch vessels are sailing in a pool,
written down to fair market value where the decline
which are market and operated by G2 Ocean AS. Also
in value is not expected to be temporary. Fixed assets
for the bulk activities, consisting of cargo contracts,
with a limited economic lifetime are depreciated on a
owned and chartered vessels, G2 Ocean AS markets
straight-line basis over the expected lifetime of the as-
and operates the vessels in Grieg Star Bulk and Grieg-
set. Long-term liabilities are stated in the balance sheet
Maas in a dry bulk supramax/ultramax pool.
at the nominal amount on the establishment date. Cur-
Having the vessels sail in a pool means that the oper-
rent assets are valued at the lower of acquisition cost
ational use of the vessels, including optimization of
and fair market value. Current liabilities are stated in
routes, is combined for the fleet. Earnings of each in-
the balance sheet at the nominal amount on the estab-
dividual vessel is therefore affected by the earnings of
lishment date. Periodic classification and maintenance
other vessels in the pool. The open hatch fleet and the
costs are posted in the balance sheet and depreciated
bulk fleet are therefore considered to be the respective
on a straight-line basis until the next planned docking.
cash-earnings of other vessels in the pool. The open
The docking costs are included in the balance sheet
hatch fleet and the bulk fleet are therefore considered
along with the value of the ship. The depreciation of
to be the respective cash-generating units.
docking costs is included in operating costs.
Newbuilding contracts are included in the fleet impair-
are grouped at the lowest levels for which there are sep-
ment and unpaid installments are deducted. INTANGIBLE ASSETS
Non-financial assets other than goodwill which have
Goodwill is depreciated over its economic lifetime.
been impaired are reviewed for possible reversal of the
The surplus value attached to the fleet’s contracts of
impairment at each date.
employment and the company’s right to renominate Grieg Star tonnage is defined as “contracts” in the bal-
PENSION COMMITMENTS
ance sheet and is depreciated over 20 years. Licenses
Defined contribution plans
with unlimited economic lifespan is subject to an an-
The Group’s main pension scheme is a defined contri-
nual impairment test. Licenses with limited economic
bution plan, for which the companies pay contribu-
lifespan is depreciated annually. Expenses related to
tions to an insurance company. The companies have
the company’s own development are recorded in the
no further payment obligations once the contributions
balance sheet from the point when it is likely that the
have been paid. Contributions are recorded as payroll
development work will result in an identifiable intan-
expenses.
gible asset. Defined benefit plan ASSET IMPAIRMENTS
Some companies have defined benefit plans, including
Assets that are subject to depreciation are reviewed for
AFP. A defined benefit plan is a pension scheme that
From the Boardroom
82 — 83
defines the pension payment an employee will receive
lessee, the rights and obligations relating to the leas-
on reaching retirement age. The pension payment nor-
ing contracts are recognised in the balance sheet as
mally depends on one or more factors, such as age, pe-
assets and liabilities. The interest element in the lease
riod of service with the company and salary level. The
payment included in the interest costs and the capital
pension commitment under defined benefit schemes
amount of the lease payment is recorded as repayment
posted in the balance sheet is the present value of the
of debt. The lease liability is the remaining part of the
defined benefit schemes at year-end less the fair value
principal. For operational leases, the rental amount is
of the pension fund assets, adjusted for unposted de-
recorded as an operating cost.
viations from estimate. The pension commitment is calculated annually by an independent actuary based
TAXATION
on a linear accrual of pension entitlements. Changes in
The tax charge in the profit and loss account consists
benefits under the pension plan are posted in the prof-
of the tax payable and the change in net deferred tax.
it and loss account on an ongoing basis. The pension
Taxes are charged when they arise. Deferred tax in the
schemes are funded through payments to insurance
balance sheet is calculated on the basis of timing dif-
companies or financed through operations. Post-em-
ferences between values for taxation and accounting
ployment benefit obligations associated with the early
purposes. Taxable and tax-deductible timing differ-
retirement pension (AFP), under the LO/NHO arrange-
ences which are reversed or can be reversed within the
ment, are a multi-employer defined benefit plan, but
same period are netted against each other and entered
the plan is recorded as defined contribution, as it is not
net. Some of the companies of the Group are subject
measurable.
to shipping taxation under the Norwegian tonnage tax system pursuant to chapter 8 of the Taxation Act.
MARKET BASED FINANCIAL ASSETS Short-term investments in shares and mutual funds
CASHFLOW STATEMENT
are regarded as part of the trading portfolio and are
The statement of cashflows is prepared on the basis of
stated at fair value at year-end. Dividends received and
the indirect method. Accordingly, the cashflows from
other distributions are entered as income under other
investment and financing activities are reported gross,
financial income.
while the accounting result is reconciled against the net cashflow from operations. Cash and cash equiva-
ESTIMATES
lents include cash, bank deposits and other short-term
When preparing the annual accounts in accordance
liquid investments that can immediately and with no
with good accounting practice, the management make
major exchange rate risk be converted into a known
estimates and assumptions which affect the profit and
amount and maturing less than three months from the
loss account and the valuation of assets and liabilities
transaction date.
as well as information about contingent assets and liabilities at year-end. Contingent losses which are likely and quantifiable are charged against income on an ongoing basis. LEASING The companies differentiates between financial leasing and operational leasing based on an evaluation of the lease contract at the time of inception. A lease contract is classified as a financial lease when the terms of the lease transfer substantially all the risk and reward of ownership to the lessee. All other leases are classified as operational leases. When a lease contract is classified as a financial lease where the company is the
GRIEG MATURITAS | ANNUAL REPORT 2020
Note 2
Segment information
GRIEG GROUP
Amounts in NOK 1 000 Operating revenue 2020
2019
4 408 1 579
Grieg Logistics Grieg Investor
Grieg Seafood (NGAAP)
2
Grieg Maritime Group
Grieg Shipbrokers Grieg Kapital
3
Other 1 Sum Grieg Group 1
Operating profit
Net financial Items
2020
2019
2020
4 783
205
1 071
-227
1 499
-762
118
-181
482
464
0
-4
-0
103
90
28
22
119
134
-1
Profit before tax
2019
2020
2019
-20
-22
1 051
-182
-943
-64
-1
-0
-5
0
0
28
23
7
-11
-4
-12
2
127
169
-8
12
130
-
122
12
-53
-50
-17
-26
-33
32
-51
6
6 765
7 088
-555
1 200
-323
-175
-878
1 025
Other includes the Groups’s holding company, mangement service company and eliminations
2
For discontinued operations and held for sale assets, please refer to note 25 for information
3
The Grieg Kapital Segment includes gain on shares sold within the Group, and is eliminted in the “Other” segment
From the Boardroom
84 — 85
Note 3
Other operating expenses
GRIEG GROUP
Amounts in NOK 1 000
Operating costs - shipping Timecharter costs - shipping
2020
2019
356 788
287 670
Ship operating costs
637 407
595 138
Total operating costs - shipping
994 195
882 808
Cost of sales - fish farming
2020
2019
1 731 233
2 047 382
-6 767
-515 636
1 724 466
1 531 746
Other operating expenses
2020
2019
Freight and cost of services
339 760
339,009
Other operating expenses
1 871 365
1 671 812
Total other operating expenses
2 211 126
2 010 820
Cost of sales - fish farming Change in inventories Total cost of sales fish farming
The Group has the following long term operating lease agreements related to chartering of vessels, offices, plant and machinery.
2020 Long-term time charter Bare-boat hire Other lease amount charged in the year
Duration
Number of vessels
Annual operating lease expense
0 - 5 years
6
254 751
1-12 years
4
104 344
2-10 years
118 830 477 925
Total lease amount charged
2019
Duration
Number of vessels
Annual operating lease expense
Long-term time charter
0-5 years
6
189 231
Bare-boat hire
1-13 years
4
100 337
Other lease amount charged in the year
2-10 years
Total lease amount charged
GRIEG MATURITAS | ANNUAL REPORT 2020
174 952 464 520
Note 4
Payroll, employee and remuneration
PARENT COMPANY Payroll and social security costs
Amounts in NOK 1 000 2020
2019
Salaries and other benefits
-
2 390
Social security costs
-
351
Pension costs
-
91
Other benefits
-
15
Total
-
2 848
The company had no employees in 2020. The Managing Director has been employed in Grieg Maturitas II from 01.06.2019. There has been no remuneration to the Board of Directors in Grieg Maturitas. The remuneration to the Board of Directors is paid from Grieg Maturitas II. Total remuneration to Managing Director and Bord members from the Group is spesified below.
GRIEG GROUP Payroll and social security costs
2020
2019
7 00 100
680 812
Social security costs
60 786
69 134
Pension costs
49 203
46 319
Other benefits
82 288
73 598
892 377
869 863
1 052
1 010
658
720
1 710
1 730
Salaries
Total
Number of employees Number of sailing personnel1 Total
1
Amounts in NOK 1 000
Salary costs are recognised in the P&L as operating costs - shipping.
REMUNERATION TO EXECUTIVES In 2020 totalt payments to salary, pension premium og other remuneration to present Managing Director was NOK 3,1 mill. and to present Board Members NOK 17,4 mill. (NOK 3,9 mill. are Board remuneration and NOK 13,5 mill. are salaries from companies in the group). Remuneration to the Board members and Managing Director is paid from the companies where the Director is employed or a member of the Board. The Group CEO is entitled to 6 months severance pay after termination of the employment relationship by the company.
From the Boardroom
86 — 87
Note 5
Pensions and pension commitments
PARENT COMPANY
The company had no employees in 2020, and therefore no employees covered by pension schemes in 2020.
GRIEG GROUP
The Group companies in Norway have pension schemes which meet the requirements of the Act relating to compulsory occupational pension schemes. Most of existing employees in Group companies in Norway are now transferred from having a defined benefit based pension scheme to having a defined contribution based pension scheme. All new employees are offered a contribution based pension scheme. Most of the Group companies abroad have a defined contribution based pension scheme.
Amounts in NOK 1 000 Total pension costs distributed as follows
2020
2019
45 900
38 403
Defined benefit pension, incl. AFP
2 119
4 520
Pension costs - discontinued operations
1 183
3 396
49 203
46 319
Defined contribution pension
Total
DEFINED CONTRIBUTION BASED PENSION SCHEME The defined contribution based pension scheme covers full-time and part-time employees and amounts to between 2% and 20% of salary. The contribution charged in the accounts in 2020 amounted to NOK 45,9 million (excluding National Insurance Contributions). DEFINED BENEFIT BASED PENSION SCHEME Some companies in the Group have defined benefit pension scheme. The Group pension scheme is funded through the accumulation of pension fund assets in an insurance company or through operations. The scheme give an entitlement to defined future benefits. In 2020 a total of 77 persons (including pensioners and persons on early retirement) were covered by the benefits based scheme.
GRIEG MATURITAS | ANNUAL REPORT 2020
Net pension costs, including National Insurance Contribution Present value of pension entitlements Interest expenses on pension entitlements Return on pension fund assets Accounting effect of estimate divergences and plan changes This year’s change, provision for undercoverage CPA Administration expenses
2020
2019
1 077
4 648
2 409
2 916
-3 062
-3 696
790
-67
-
-
904
719
2 119
4 520
2020
2019
-143 757
-138 024
79 968
83 509
6 581
-576
Net pension fund assets/(liabilities)
-57 209
-55 091
Of which unfunded obligations
-30 896
-28 969
2020
2019
Norway
Norway
1,70 %
2.30%
Anticipated rise in salaries
2,25 %
2.25%
Anticipated return on pension fund assets
2,70 %
3.80%
Anticipated increase of pensions
2,00 %
2.00%
Anticipated rise in pensions, regulation of National Insurance Base rate
2,00 %
2.00%
Pension costs for the year Pension fund assets/liabilities Calculated pension commitments Pension fund assets (at market value) Unposted effect of estimate divergences
Financial assumptions: Discount rate
From the Boardroom
88 — 89
Note 6
Fixed tangible assets
GRIEG GROUP
Amounts in NOK 1 000 Land and real estate
Vehicles, machinery and equipment
Vessels
Total
1 372 960
4 245 189
11 166 699
16 784 848
-91 547
-342 983
-
-434 530
Acquisition of business
127 009
3 693
-
130 702
Currency translation differences
-36 540
2 502
-319 923
-353 960
Additions
551 690
307 207
104 456
963 353
Disposals
-701
-36 665
-48 312
-85 678
Purchase cost at 31.12
1 922 871
4 178 943
10 902 921
17 004 735
Depreciation accumulated
-394 234
-2 345 714
-5 077 902
-7 817 850
-5 216
-43 029
-741 125
-789 370
1 523 420
1 790 200
5 083 895
8 397 515
40 323
248 205
367 400
655 929
-
1 069
773 324
774 393
Economic lifetime
20-50 years
3-20 years
10 years
25-30 years
Depreciation plan
Linear
Linear
Linear
Linear
-
527 858
543 962
1 071 820
Purchase cost at 01.01 Assets classified as held for sale
Write-down accumulated Balance sheet value at 31.12 Depreciation Write-down (reversal)
Book value of financial lease agreements included in the table above
GRIEG MATURITAS | ANNUAL REPORT 2020
FIXED ASSETS Investments in 2020 relates primarily to Grieg Seafood ASA and the Grieg Newfoundland project and the RAS plant in BC, in addition to other growth- and maintenance-investments. The Newfoundland-project comprises licenses for fish farming, a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility currently under construction. The acquisition is accounted for as a business combination and further described in note 24, and assets acquired is shown as acquisition of business in the table above. In Grieg Maritime Group an impairment test of the fleet consisting of 31 open hatch vessels was carried out using the discounted cash flow method and resulted in write-down of the fleet's book value, including a write-down of goodwill, to achieve better harmonisation with the fleet's fair market value. The Group has also written down the book value of the 50% owned bulker. FINANCIAL LEASE AGREEMENTS Grieg Seafood has financial lease agreements on vehicles, machinery and other equipment , with a book value of NOK 496 million. The corresponding amount of lease liabilities recognized is NOK 433 million and the undiscounted amount of future lease payments is NOK478 million as of 31.12.2020. Rensefiskgruppen has financial lease agreements with a book value of NOK 31 million on vehicles, machinery and other equipment, and lease liabilites amounts to NOK 22 million as of year-end 2020.
From the Boardroom
90 — 91
Note 7
Intangible assets
GRIEG GROUP
Amounts in NOK 1 000 Goodwill
Contracts
Other intangible assets
Licenses
Total
177 663
163 387
31 750
1 233 780
1 606 580
-
-
-
-477 894
-477 894
604 419
-
-
806 215
1 410 634
Currency translation differences
-71 919
-4 453
-
-84 716
-161 088
Additions
10 019
-
2 206
165 727
177 951
Disposals
-
-
-
-397
-397
Purchase cost at 01.01 Assets classified as held for sale Acquisition of business
Purchase cost at 31.12
720 182
158 934
33 956
1 642 715
2 555 787
Accumulated depreciations
-99 519
-145 324
-18 540
-83 291
-346 674
Accumulated write-down
-94 770
-10 052
-
-
-104 822
525 893
3 558
15 416
1 559 423
2 104 290
24 210
10 200
5 209
11 894
51 513
5 167
10 052
-
-
15 220
3-20 years
10 years
3 -10 years
5-25 years/ unlimited
Linear
Linear
Linear
Linear/none
Balance sheet value at 31.12
Depreciation Write-down (reversal)
Economic lifetime Depreciation plan
Investments in 2020 relates primarily to Grieg Seafood ASA and the Grieg Newfoundland project and the RAS plant in BC, in addition to other growth- and maintenance-investments. The Newfoundland-project comprises licenses for fish farming, a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility currently under construction. The acquisition is accounted for as a business combination and further described in note 24, and assets acquired is shown as acquisition of business in the table above. Contracts represent excess values related to the vessels' contracts of affreightment through the participation in the G2 Ocean pool and purchased dividend rights in the Grieg Shipbrokers Group. At year-end 2020 the remaning goodwill and contract value in Grieg Maritime Group were written off as part of an impairment assessment of the Group's open hatch vessels. Other intangible assets relates to logistic systems in Grieg Logistics Group, digital software solutions in Grieg Investor AS and Grieg Green AS. Licenses relates mainly to fish-farming licenses in Grieg Seafood ASA and Rensefiskgruppen Group. Most licenses have an unlimited economic lifetime, but is subject to a yearly valueassessment to determine if write-downs are required. GRIEG MATURITAS | ANNUAL REPORT 2020
Note 8
Investments in subsidiaries
GRIEG GROUP
Subsidiary
Amounts in NOK 1 000 Registered office
Ownership
Proportion of voting shares
Book equity 100%
Book value
Dividend
Bergen
75%
100%
4 269 627
4 021 796
90 000
Grieg Maturitas II AS
Grieg Maturitas II AS, which is owned 75% by Grieg Maturitas AS and 25% by Grieg Foundation, is the common holding company of the Group.
GRIEG GROUP
The consolidated financial statements comprise the company Grieg Maturitas AS and Grieg Maturitas II AS with the following subsidiaries:
Grieg Maturitas II AS owns the following companies:
Registered office
Grieg Maritime Group AS
Directly ownership
Directly and indirectly ownership
Proportion of voting shares
Bergen
100%
100%
100%
Grieg Logistics AS
Bergen
100%
100%
100%
Grieg Kapital AS
Oslo
100%
100%
100%
Grieg Aqua AS
Bergen
100%
100%
100%
Grieg Shipbrokers KS
Bergen
45%
55%
55%
AS Joachim Grieg & Co
Bergen
100%
100%
100%
Grieg Investor Holding AS
Oslo
45%
45%
80%
Grieg Group Resources AS
Bergen
100%
100%
100%
From the Boardroom
92 — 93
Grieg Maritime Group AS 1 owns the following companies:
Registered office
Grieg Edge 2 Grieg Green AS Grieg Green Consulting and Advisory Company Limited Grieg Shipholding 4 Grieg Star AS Grieg Star Philippines inc. Grieg Shipowning AS
Ownership
Proportion of voting shares
Bergen
100%
100%
Oslo
100%
100%
China
100%
100%
Bergen
100%
100%
Bergen
100%
100%
Philippines
100%
100%
Bergen
100%
100%
Grieg Shipping II AS
Bergen
100%
100%
Grieg International II AS
Oslo
100%
100%
Grieg Shipping III AS Grieg Star Bulk AS
Bergen
100%
100%
Bergen
100%
100%
Grieg Star 2017 AS
Bergen
100%
100%
Grieg Star OH Pool AS
Bergen
100%
100%
Grieg Star Bulk Pool AS 3
Bergen
100%
100%
GriegMaas AS
Bergen
50%
50%
GriegMaas Supramax AS
Bergen
100%
100%
GriegMaas Ultramax AS
Bergen
100%
100%
The group changed its name from Grieg Star Group to Grieg Maritime Group and has reorganized its companies and established three new companies. Grieg Maritime Group is a new company and was established 30.12.2020.
1
2
Grieg Edge is a new company established 06.01.2020
3
Grieg Star Bulk Pool AS is a new company established 20.07.2020
4
Grieg Star Group changed name to Grieg Shipholding in December 2020
From 30.12.2020 the ownership in Grieg Green AS and Grieg Edge AS is transferred to Grieg Maritime Group AS from Grieg Shipholding AS (former Grieg Star Group AS).
Grieg Shipbrokers KS owns the following companies:
Registered office
Grieg Shipbrokers Valuation Services KS
Bergen
90%
90%
Grieg Shipbrokers Ltd.
UK
100%
100%
Grieg Shipbrokers Asia AS
Bergen
100%
100%
Grieg Shipbrokers Asia Pte. Ltd.
Singapore
100%
100%
Grieg Shipbrokers Asia Ltd.
Hong Kong
100%
100%
AS Joachim Grieg & Co. owns the following companies:
Registered office
Ownership
Proportion of voting shares
Grieg Shipbrokers KS
Bergen
10%
10%
Grieg Shipbrokers Valuation Services KS
Bergen
10%
10%
GRIEG MATURITAS | ANNUAL REPORT 2020
Ownership
Proportion of voting shares
Grieg Logistics AS owns the following companies:
Registered office
Scandinavian Harbour Service AS
Tønsberg
Proportion of voting shares
100%
100%
Mosjøen Industriterminal AS
Mosjøen
100%
100%
Grieg Connect AS
Kristiansund
100%
100%
Grieg Strategic Services AS
Bergen
100%
100%
Grieg Port Security AS
Bergen
100%
100%
Grieg Aqua owns the following companies:
Registered office
Ownership
Proportion of voting shares
Grieg Seafood ASA
Bergen
50,17%
50,17%
Bergen
100%
100%
Grieg Seafood Finnmark AS
Alta
100%
100%
Grieg Seafood Canada AS
Bergen
100%
100%
Canada
100%
100%
Canada
100%
100%
Canada
100%
100%
UK
100%
100%
UK
100%
100%
Bergen
100%
100%
UK
100%
100%
Canada
100%
100%
Bergen
99%
99%
Grieg Seafood Rogaland AS
Grieg Seafood BC Ltd. Grieg Seafood Sales North America Inc.
2
Grieg Seafood Premium Brands Inc. 6 Grieg Seafood Hjaltland UK Ltd. Grieg Seafood Shetland Ltd. Grieg Seafood Norway AS
1
Grieg Seafood Sales UK Ltd. 5 Grieg Seafood Sales USA Inc. Grieg Newfoundland AS
3
6
Canada
100%
100%
Grieg Newfoundland Seafarms Ltd.
Canada
100%
100%
Grieg Newfoundland Nurseries Ltd.
Canada
100%
100%
Grieg Newfoundland Development Ltd.
Canada
100%
100%
Grieg Seafood Newfoundland Ltd.
1
Ownership
4
New company established: Grieg Seafood Norway AS.
Name change: Ocean Quality North America Ltd = Grieg Seafood Sales North America Inc. 3 Ocean Quality USA = Grieg Seafood Sales USA Inc. 4 Grieg Newfoundland Salmon Ltd = Grieg Seafood Newfoundland Ltd 2
Name changes at the end of 2020, registered in 2021: Ocean Quality UK Ltd. = Grieg Seafood Sales UK Limited 6 Ocean Quality Premium Brands Inc = Grieg Seafood Premium Brands Inc. 5
6
Grieg Seafood ASA has an option to purchase the latest percentage in the company Grieg Newfoundland AS
From the Boardroom
94 — 95
Grieg Investor Holding AS owns the following companies:
Registered office
Grieg Investor AS
Oslo
Grieg Kapital AS owns the following companies:
Registered office
Grieg Holdings II AS
Ownership
Proportion of voting shares
100%
100%
Ownership
Proportion of voting shares
Bergen
100%
100%
Finnøy
80%
80%
Ryfylke Rensefisk AS
Finnøy
100%
100%
Finnmark Rensefisk AS
Alta
100%
100%
Marin Innovasjon AS
Finnøy
100%
100%
Finnøy
100%
100%
Talgje Rensefisk AS
Finnøy
100%
100%
Austevoll Rensefisk AS
Austevoll
Rensefiskgruppen AS
Ryfylke Berggylt AS
72%
72%
100%
100%
74%
90%
AS Nestun Uldvarefabrik
Bergen
Silves Odissey Inv. and Techn. Lda.
Portugal
Grieg Gaarden AS
Bergen
100%
100%
Grieghallen Parkering II AS
Bergen
47,52%
47,52%
Bergen
100%
100%
93,15%
93,15%
Grieghallen Parkering AS Maris Reinvest AS
GRIEG MATURITAS | ANNUAL REPORT 2020
Oslo
Note 9
Investments in associated companies and joint ventures
GRIEG GROUP
Amounts in NOK 1 000 Ownership %
Registered office
Book value 01.01.
Fram Marine AS 1
25,00%
Oslo
2 281
Tytlandsvik Aqua AS
33,33%
Hjelmeland
38 638
Nordnorsk Smolt AS
50,00%
Hasvik
42 433
Bergen
42 065
Grieg Newfoundland 2 G2 Ocean Holding AS
35,00%
Bergen
48 155
Rogaland Havbrukspark Eiendom AS
50,00%
Finnøy
500
Sum
1 2
174 072
Addition/ Disposals
Share of profit/loss for the year
Other changes
Book value 31.12
Excess value incl. in book value 31.12
2 281
219
4 520
43 158
-
-1 169
41 264
-
-
-
41 105
-
500
-
128 307
219
-42 065 -6 274
-42 065
-2 923
-776
-776
Booked according to the cost method. In 2020, Grieg Kapital AS sold their shares in Grieg Newfoundland AS to Grieg Seafood ASA. For more information, please see note 24.
From the Boardroom
96 — 97
Note 10
Financial items
Amounts in NOK 1 000 Parent company Other Financial Income
Grieg Group
2020
2019
2020
2019
169
390
17 442
30 789
Gain on sale of investments
-
-
30 055
33 739
Other financial income
-
-
23 941
47 596
Total financial income
169
390
71 437
112 124
Interest income
Parent company Other Financial Expenses
Group
2020
2019
2020
2019
Interest expenses
-
-
307 411
270 841
Write-down of financial fixed assets
-
-
180
40 044
Loss on sale of investments
-
-
-
9
Other financial expenses
3
1
146 631
28 744
Total financial expenses
3
1
454 222
339 638
GRIEG MATURITAS | ANNUAL REPORT 2020
Note 11
Shareholdings and other investments
GRIEG GROUP
Amounts in NOK 1 000
Shareholdings and other investments - classified as current assets Ownership
Purchase cost
7,62 %
27 225
Proximar Seafood AS
14,32%
10 218
Voxtra East Africa Agribusiness Fund
5,44 %
5 740
Blueye Robotics AS
3,81 %
5 250
25,00 %
5 008
Company Argentum Investment Partner IS
Fremre Asset 3 AS DNB Private Equity III ( IS)
1,41 %
4 262
F 14 Invest AS
3,81 %
980
Rem Nor AS
8,82 %
3 000
Union Real Estate Holding AS
0,74 %
2 427
Karihaugveien 22 Holding AS
6,70 %
1 456
Sahara Forest Project AS
2,10 %
1 150
Idekapital Fund 2 IS
Book value 31.12.
606 67 321
67 321
Ownership
Purchase cost
Book value 31.12.
Mercell Holding AS
3,52 %
17 003
17 003
UACC Ross Tanker DIS
3,00 %
1 569
1 569
Total - classified as current assets
1
Shareholdings and other investments - classified as fixed assets Company
Other investments Total - classified as fixed assets 2
66 542
13 291
85 114
31 863
Portfolio investments: the portfolio of investments on the list is valued at the lower of cost price and estimated fair value (market value). The investments are treated as a portfolio where gains and losses are off-set, and the cost price are measured against the estimated fair value on the total portfolio. The portfolio investments are classified as current assets. 2 Direct share investments: the shares are valued on the basis of the cost method at an individual basis, and written down if fair value is lower than the cost price. Writedowns are reversed when the grounds for the write-down no longer exist. The direct share investements are classified as fixed assets. 1
From the Boardroom
98 — 99
Note 12
Inventories and biological assets
GRIEG GROUP
Amounts in NOK 1 000
Raw materials - fish farming Goods in progress - fish farming Finished goods Bunkers and lube oil Total inventories and biological assets
Note 13
2020
2019
80 278
180 323
2 209 169
2 684 933
155
111
19 682
30 468
2 309 284
2 895 834
Receivables due in more than one year
GRIEG GROUP
Loan to associated companies Other receivables Total
Amounts in NOK 1 000 2020
2019
35 837
81 125
74 423
52 462
110 260
133 587
The reduction in loan to associated companies due in more than one year is mainly related to the consolidation of Grieg Newfoundland AS - which was an associated company in 2019.
GRIEG MATURITAS | ANNUAL REPORT 2020
Note 14
Market based financial investments
GRIEG GROUP
Amounts in NOK 1 000 Purchase cost
Market value
20 929
36 787
309 350
395 288
Bonds
173 890
188 885
Money market funds
120 733
124 010
624 902
744 970
Individual shareholdings Mutual funds
Total Unrealised gain this year of market based financial investments
Note 15
62 422
Debt payable after 5 years
GRIEG GROUP
Long-term debt - maturity more than 5 years
Long-term finance lease liabilities - maturity more than 5 years1
Amounts in NOK 1 000 2020
2019
100 879
81 487
2020
2019
453 517
522 222
The long-term finance lease liabilites relates to leases of barges, cage installations, plant, machinery and other equipment in the segment Grieg Seafood group and leases of vessels in the segment Grieg Maritime Group.
1
From the Boardroom
100 — 101
Note 16
Mortgages/guarantee liability/restricted
PARENT COMPANY
Restricted deposits related to employees’ tax deduction
GRIEG GROUP
Restricted deposits related to employees’ tax deduction Debt secured by mortgage (including overdraft facilities) Mortgaged debt - long term Factoring and short term debt Total mortgaged debt
Amounts in NOK 1 000 2020
2019
-
-
Amounts in NOK 1 000 2020
2019
42 158
30 237
2020
2019
6 035 633
6 048 139
9 654
437 775
6 045 287
6 485 915
Out of the total long-term mortgaged debt, NOK 946 million is long-term financial lease liabilities. For further details on leased assets see note 6. Group assets have been given as mortage security.
Balance sheet value of mortgaged assets
2020
2019
221 241
522 595
4 496 663
5 452 601
1 459 959
915 064
Other assets
1 122 081
2 018 858
Licences
809 947
1 133 630
2 280 270
2 865 255
1 107 076
-
11 497 237
12 908 004
Receivables Vessels and newbuildings Real estate
Inventories Assets held for sale Total
Pledges include shares in subsidiaries. The book value of these shares is 0 in the consolidated accounts.
Undrawn borrowing facilities
GRIEG MATURITAS | ANNUAL REPORT 2020
2020
2019
1 940 029
918 572
LOAN COVENANTS For Grieg Seafood the financial covenant of the syndicated loan agreements is equity-ratio of minimum 35%, measured on the book value of the consolidated Grieg Seafood Group (exclusive of Ocean Quality). In
30%, measured consistent with the Group’s equity-ratio financial covenants as defined in its syndicated loan agreement with secured lenders. Grieg Seafood ASA was in compliance with the financial covenants of the bond agreement at 31 December 2020.
addition, there is a rolling last-twelve months NIBD/
Grieg Maritime Group is per year end 2020 required
EBITDA leverage-ratio requirement. The leverage-ra-
to have a minimum of liquid funds of USD 25 mill. /
tio metric of NIBD/EBITDA is linked to their equi-
5% of total interest bearing debt. A common covenant
ty-ratio requirement: if equity-ratio is more than 40%,
for all mortgage loans in the Grieg Maritime Group is
maximum leverage-ratio is 5.0, and if equity-ratio is
that the Group must continue to be controlled by the
equal to or less then 40%, maximum leverage ratio is
Grieg family and have a booked equity ratio > 25%.
4.5. Grieg Seafood Group had 31 December 2020 an eq-
Grieg Maritime Group have been in compliance with
uity ratio (according to IFRS) of 41%, while the equity
the covenants throughout the year.
ratio of the Grieg Seafood Group according to financial covenants was 43%, compared to 51% at 31 December 2019.
In addition to the guarantees listen above, Grieg Shipowning AS is providing guarantees in the amount of USD 20,2 mill. per 31.12.2020 for Grieg International II
Grieg Seafood was in Q4 2020 granted an amendment
AS vessels, USD 60,7 mill. for the Grieg Shipping II AS
to the covenants through the third quarter of 2021. In
vessels, USD 8,8 mill. for the Grieg Shipping III AS ves-
this period which the temporary amended terms to
sel and USD 46,7 mill. for the GriegMaas Ultramax AS
the syndicated loan agreement apply, Grieg Seafood
vessels. Grieg Shipping II AS and Grieg International II
is required to have a minimum free liquidity of NOK
AS is providing guarantees in the amount of USD 198,4
200 million. In addition, there is a set requirement for
mill. for Grieg Shipowning AS. The companies have
the 12 month rolling EBITDA throughout the period.
been in compliance with the covenants throughout
NIBD/EBITDA will thus not be measured, according to
the year.
agreements with our creditors, through Q3 2021. At 31 December 2020, Grieg Seafood ASA was in compliance with these temporary amended terms. In 2020 Grieg Seafood issued a Green Bond listed on Euronext (Oslo Stock Exchange). The bonds financial covenant is an quity-ratio requirement of minimum
From the Boardroom
102 — 103
Note 17
Financial risk
The Group is exposed to a range of financial risks; mar-
CREDIT AND COUNTERPARTY RISK
ket risk (including currency risk, cashflow interest rate
The Group’s credit risk that counterparties do not
risk, fair value interest rate risk and price risk), credit
have financial ability to meet their obligations is
risk and liquidity risk. The Group make use of finan-
relatively low due to solid customers, and a diversified
cial derivatives to manage the financial risk.
portfolio. Historical losses on receivables have been
MARKET RISK Several of the Group’s companies hold significant financial investment portfolios, and changes in the value of international securities and interest rates directly affect the valuation of these. The portfolios are managed in accordance with long-term strategies and within defined mandates, also reflecting the Group’s business principles. FOREIGN EXCHANGE RISK A large proportion of the Group’s revenues, assets and liabilities are in foreign currencies, mainly USD and EUR. Changes in foreign exchange rates therefore affect the group accounts presented in NOK. The Group
minor amounts. The Group strive to mitigate the counterparty credit risk by making use of procedures and systems and developing these on an ongoing basis. In specific parts of the Group with a large customer portfolio, the risk is reduced by maintaining robust procedures for assessing counterparty risk and credit rating. LIQUIDITY RISK The Group constantly monitors liquidity reserves and needs. The Group’s liquidity risk has increased, but strong liquidity and a focus on cash management ensure that there is sufficient liquidity to meet the Group’s obligations when they mature.
companies have strategies and procedures in place to
INTEREST RATE RISK
reduce the exchange rate risk.
Interest rate risk arises in the short and long term
Grieg Maritime Group hedges expenditures in currencies other than USD through forward contracts. At 31.12.20 the company had entered into hedging agreements for the use of currency swaps for USD 4.8m. Total unrealized MTM value, not recognized in the balance sheet at 31.12.20, was USD 1.5m. Grieg Seafood apply hedge accounting to foreign currency contracts relating to non-current physical delivery contracts. The company do not utilize hedge accounting for its short-term foreign currency forward contracts. At 31 December 2020, no hedging contracts through comprehensive income at fair value is present for the Group, as the hedging arrangements have matured before the balance sheet date. Grieg Shipbrokers had 31.12.20 forward contracts to hedge a total of USD 17.6m, with an unrealized not recognised gain of NOK 1.1m.
as most parts of the Group’s debt are at a floating rate of interest. A change in interest rates will therefore impact the interest expense. The application of interest rate derivatives increases the predictability of the financing cost. A change in interest rates will also affect the returns on the investment portfolio and the rates on cash deposits. The Group’s strategy is to employ a certain level of hedging using interest rate swap agreements to ensure low volatility in the Group’s interest expenses. Grieg Maritime Group hedges part of its interest rate exposure. Gains and losses arising from valuation of interest rate swaps in Grieg Maritime Group are recognised in the same period as the related interest expense. At 31.12.20 the Grieg Maritime Group held interest rate swap agreements of USD 209.4m. Total unrealized MTM value, not recognized in the balance sheet, was USD 11m.
GRIEG MATURITAS | ANNUAL REPORT 2020
Gains and losses arising from interest rate swaps in
time used as a risk management instrument in order
Grieg Seafood are not subject to hedge accounting
to smooth out freight volatility. The FFA contracts
and are recognized at the lowest of cost and fair val-
are settled as an adjustment of operating income. At
ue. At 31.12.20 Grieg Seafood held interest rate swap
31.12.20, the Group had not entered into any Forward
agreements with a total of NOK 1 910m. Unrealized
Freight Agreements (FFA).
gains related to these agreements, not recognized in the balance sheet, amounts to NOK -6.55m. The interest rate swap agreements have a duration of four years. The Company constantly evaluates whether these periods should be rolled over.
PRICE RISK The Group is exposed to fluctuations in spot prices for salmon, which is mainly determined by global supply. Although the effect of changing prices is somewhat reduced through geographical diversification, long
FREIGHT RISK
production cycles make it challenging to respond
The Group’s ship earnings are to a large extent related
rapidly to change in marked prices. Salmon is primari-
to cargo transportation contracts as a considerable
ly traded at spot prices. The price risk is partly hedged
share of the shipping activities are of an industrial
through financial sales and purchase contracts. At
character. The open hatch fleet’s earnings are to a
31December 2020, the Group had financial salmon
large extent related to long term cargo contracts. This
contracts for 2020 with an unrealized gain of NOK 76
implies that revenues are less volatile than in the spot
million, of which all were sales contracts, and physical
market, and that change in market conditions gener-
delivery contracts recognized as liability, was zero.
ally have a delayed effect on the results. The Group’s
The unrealized gain is not recognized as an income or
dry bulk activity is on the other hand more exposed to
asset, as the contracts are recognized at the lower of
general spot market movements.
cost and market value.
Forward Freight Agreements (FFA) are from time to
Note 18
Contingencies and subsequent events
INSPECTION – EUROPEAN COMMISSION The European Commission DG (Director General) Competition performed an inspection at Grieg Seafood Shetland on the 19th of February 2019 to explore potential anti-competitive behavior in salmon industry. Grieg Seafood aims to be open, transparent and forthcoming and will provide all necessary information requested by the European Commission DG Competition on its investigation. There is no new information as of the Group annual accounts approval date. Furthermore, the amount of the contingent liability related to a negative outcome of this matter cannot be reasonably estimated, due to the lack of information. Consequently, no provision has been recognized in relation to both the EU and the US investigation, nor to
SALE AND ACQUISITION OF GRIEG NEWFOUNDLAND AS The sale and acquisition of Grieg Newfoundland AS was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Grieg Kapital AS (consolidated subsidiary) and 39% by Kvasshøgdi AS (owned by Per Grieg jr). The remaining of the shares were owned by the local partner Ocean Choice International Ltd (19.5%) and Knut Skeidsvoll (2.5%). The transaction included a contingent consideration which involves that if certain production volumes are reached within the next ten years, additional payments are triggered. Please see note 9 for further details. Additional details regarding the transaction can also be obtained from Grieg Seafood
any of the civil lawsuits
ASA Annual Report 2020 on www.griegseafood.com
From the Boardroom
104 — 105
Note 19
Taxes
PARENT COMPANY Tax expense consists of:
Amounts in NOK 1 000 2020
2019
Ordinary result before tax
89 950
88 731
Permanent differences
-89 975
-89 712
12
15
-13
-965
13
-
-
-
2020
2019
-
-
Change in deferred tax
478
-216
Tax expense (-income)
478
-216
2020
2019
47
59
Change in temporary differences Basis of tax payable in profit and loss account Tax losses carried forward Basis for payable taxes in the income statement
Components of the income tax expense Payable tax on this year’s result
Deferred tax Taxable differences Tax-deductible differences
-
-
Tax credit carried forward
-2 246
-2 233
Basis for deferred tax
-
-2 174
Deferred tax assets in the balance sheet
-
478
GRIEG MATURITAS | ANNUAL REPORT 2020
GROUP Tax expense consists of:
Amounts in NOK 1 000 2020
2019
Profit before tax
-877 876
1 024 872
Profit before tax, companies subject to shipping tax
-899 756
-52 727
21 880
1 077 599
Profit before tax, companies not subject to shipping tax Permanent differences
-72 734
36 645
Change in temporary differences
-178 219
-242 693
Change in tax loss carried forward
335 767
91 272
Basis of tax payable, companies not subject to shipping tax
106 694
962 824
Tax payable, companies not subject to shipping tax
25 241
235 557
Tax payable
25 241
227 636
Increase / (decrease) in deferred tax
61 231
29 602
86 473
265 158
2020
2019
20 884
221 606
Tax charge for the year on ordinary result
Tax payable in balance sheet Tax payable, companies not subject to shipping tax Tonnage tax
3 277
3 486
Other adjustments (treasure trove)
1 051
-2 460
Total tax payable in balance sheet
25 212
222 632
2020
2019
3 039 481
2 582 712
-59 308
-64 433
Deferred tax Taxable timing differences Tax-deductible timing differences Tax loss to be carried forward Net timing differences Deferred tax on net timing differences Unposted deferred tax assets Net deferred tax in balance sheet
Loss carried forward Norway, companies not subject to shipping tax UK Canada USA
-967 493
-849 451
2 012 680
1 668 827
494 999
447 213
112 267
77 394
607 266
524 607
2020
2019
-579 792
-343 586
-
-152 846
-91 288
-
-17 345
-
Companies subject to shipping tax
-279 067
-353 019
Total
-967 493
-849 451
From the Boardroom
106 — 107
Note 20
Equity
PARENT COMPANY
Amounts in NOK 1 000 Share capital
Share premium
Other equity
Total
1 124
409 763
3 652 109
4 062 995
Profit of the year
-
-
89 472
89 472
Provision for dividend
-
-
-90 000
-90 000
1 124
409 763
3 651 581
4 062 467
Equity - Opening Balance
Equity - Closing Balance
GROUP
Amounts in NOK 1 000
Share capital
Share premium
Group reserves
Minority interests
Miority interests contingent consideration
Equity - Opening Balance
1 124
409 763
4 275 241
3 253 908
-
7 940 037
Profit for the year
-
-
-755 695
-351 222
-
-1 106 917
Provision for dividend at year end
-
-
-90 000
-33 273
-
-123 273
Dividend paid during the year
-
-
-
-21 888
-
-21 888
Capital increase - business combination 1
-
-
306 952
96 243
446 040
849 235
Currency translation differences 2
-
-
-15 848
-15 991
-
Equity transactions 3
-
-
-
-65 560
Other changes 4
-
-
-37 263
-49 131
-
-86 394
1 124
409 763
3 683 387
2 813 087
446 040
7 353 402
Equity - Closing Balance
1
Total
-31 839 -65 560
Relates to the acquistion of Grieg Newfoundland AS and includes:
Capital increase from consideration shares issued to minority in Grieg Seafood ASA Contingent asset classified as equity Fair value of investment already held less the book value of that investment For further details see note 24 Business combinations
2
Currency translation differences: this is primarily the effect of converting subsidiaries from local currencies into NOK
3
Equity transactions: Sale of the subsidiary Ocean Quality and derecognition of the non-controlling interests
Other changes: the total amount is similar to the OCI (other comrehencive income) from Grieg Seafood ASA in their IFRS financial statements, which is converted to NGAAP for consolidation purposes in Grieg Maturitas Group.
4
GRIEG MATURITAS | ANNUAL REPORT 2020
Note 21
Share capital and share information
In 2020 the general assembly of Grieg Maturitas AS has granted voting rights to the shares that previously did not have voting rights (B-shares). As of this date there is only one class of shares in the company, all with equal rights. THE SHARE CAPITAL CONSISTS OF THE FOLLOWING SHARE CL ASSES: Class Ordinary shares
The company’s shareholders are as follows:
Number of shares
Nominal
Book value
1 123 530
1,-
1 123 530
Ownership %
Ordinary shares
Kvasshøgdi AS
4,37 %
49 111
Thomas WG AS
4,50 %
50 559
Joachim WG AS
4,50 %
50 559
Benedicte WG AS
4,50 %
50 559
Nina WG. AS
4,50 %
50 559
Salthavn Invest AS
7,49 %
84 097
Klar Invest AS
4,96 %
55 750
Maneo Holding AS
4,96 %
55 750
Nyhavn Investment AS
4,96 %
55 750
GMC Invest AS
22,37 %
251 347
Suletind AS
22,37 %
251 347
Capelka AS
10,52 %
118 142
100 %
1 123 530
Total
Through the companies specified above, the Board members Elisabeth Grieg, Per Grieg, Camilla Marianne Grieg, Elna-Kathrine Grieg, Nicolai Hafeld Grieg and Nina Willumsen Grieg and their families have control of 100% of the shares in Grieg Maturitas AS.
From the Boardroom
108 — 109
Note 22
Related parties
PARENT
1
Amounts in NOK 1 000 Operating revenue
Operating cost
Financial income 1
Financial expenses
Accounts payable
Current receivables 1
0
0
90 000
0
4
90 000
Dividend from subsidiaries
GROUP
Amounts in NOK 1 000
Members of the board and managing director of the parent company, including their related parties, are with companies in the Group considered as closely related parties. Transactions and intercompany balances with Group companies are eliminated in the Group accounts, and is not mentioned below. Remuneration to directors and managing director, see Note 4.
Associated companies Other related parties Total
Operating revenue
Operating cost
Financial income
Financial expenses
Receivables
Liabilities
1 224 641
-
11 797
-
12 492
9 318
14 154
114 713
-
-
1 937
-
1 238 795
114 713
11 797
-
14 429
9 318
Transactions with related parties are governed by market terms and conditions in accordance with the arms length principle. ACQUISITION OF GRIEG NEWFOUNDLAND AS Grieg Seafood Group's acquisition of Grieg Newfoundland AS (99%) was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Kvasshøgdi AS (owned by Per Grieg Jr and a shareholder in Grieg Maturitas). For further information on the transaction see note 24 - Business combinations
GRIEG MATURITAS | ANNUAL REPORT 2020
Note 23
Remuneration to auditor
Amounts in NOK 1 000 PARENT Specification of Group auditor’s fee 1
GROUP
2020
2019
2020
2019
38
71
6 507
7 350
13
7
2 005
1 789
Other assurance services
-
-
700
867
Other assistance
7
20
4 967
1 597
57
98
14 179
11 604
1 916
1 823
2020
2019
Total Group auditor
346
139
Total other auditors
624
1 245
Total fees discontinued operations (excluding VAT)
970
1 384
Statutory audit (incl. technical assistance annual accounts and notes) Taxation advice
Total (except VAT) The amount above includes remuneration to other auditors with:
1
Containing continued and discontinued operations
Group Auditor's fee related to discontinued operations included in the table above
From the Boardroom
110 — 111
Note 24
Business Combinations
The Group gained control over the entity Grieg Newfoundland AS in 2020. The entity, previously owned 39% and accounted for as an associate is therefore consolidated from 15 April 2020. On this date, Grieg Maturitas, the subsidiary Grieg Seafood ASA (GSF) completed the acquisition of Grieg Newfoundland AS (GNL). At the acquisition date, 99% of the shares were transferred, while the remaining 1% is subject to a put/call option accounted for as contingent consideration. GNL holds ownership in a fish farming business under development in Newfoundland, Canada. As the Grieg Maturitas Group already held 39% of the shares through subsidiary Grieg Kapital AS, the acquired shares for the Group is the remaining 60% acquired from entities outside the Group. ABOUT GRIEG NEWFOUNDLAND The Newfoundland-project comprises licenses for fish farming in the Placentia Bay area in Newfoundland. The project includes a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility in Marystown Marine Industrial Park, close to Placentia Bay. The facility currently under construction includes a hatchery, nursery and a smolt unit. Further information on the acquired entity can be found in the Annual Report of Grieg Seafood ASA (note 6 to the consolidated financial statements). TRANSACTION Grieg Newfoundland was a project initiated by the Grieg Group and Per Grieg Jr. in collaboration with their Canadian partner. Per Grieg Jr. is a member of the Board in Grieg Maturitas AS, and through related party Kvasshøgdi AS held 39% of the shares in GNL now acquired by the Group. The transaction has been approved by the General Assembly in Grieg Seafood ASA in line with the section 3-8 of the Public Limited Liability Companies Act. The consideration is split into three parts - the net cash payment, the completion shares and contingent consideration. Compensation to Kvasshøgdi AS for their 39 % stake in Grieg Newfoundland AS consist of a cash settlement of 62,9 MNOK, fair value of consideration shares in Grieg Seafood ASA of 53,8 MNOK and a contingent consideration estimated to have a fair value of 291,7 MNOK on the date of the transaction.
GRIEG MATURITAS | ANNUAL REPORT 2020
Amounts in NOK 1 000
Cost of business combination
15.04.2020
Cash payment for the shares adjusted for leakage cost
70 935
Completion shares in Grieg Seafood ASA
124 575
Adjusted to fair value the transaction day
-28 332
Consideration transferred at closing Contingent consideration
96 243 167 177 446 040
Consideration business combination
613 217
Fair value of the shares held by Grieg Maturitas Group prior to the acquisition
349 017
Total cost of business combination
962 235
Total cost
962 235
Book value of equity, excluding goodwill Excess value to be allocated
78 629 883 605
CONTINGENT CONSIDERATION If certain production volumes are reached within the next ten years, additional payments are triggered. The additional amount becomes unconditional when GNL has reached a planned annual harvest volume of 15 000 tonnes, and the amount increases with volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000-20 000 tonnes, and NOK 55 per kg for volumes between 20 00033 000 tonnes, with a 4% per annum inflation adjustment in the period 2023-2029. Fair value estimate of the additional amount has been arrived at by using the DCF-model based on four different scenarios of volume development and the timing of this development. Volumes exceeding 15 000 tonnes require further investments in additional post-smolt modules, biomass, and seafarm equipment. The high probability of such investments being made have been incorporated in the scenario analysis. The maximum nominal amount is estimated to NOK 930 million +4% annual increase in the period from 2023 to 2029. The additional amount is settled in shares in GSF and/or cash. The sellers may require a cash payment of maximum 33.34%. Further GSF has the discretion to increase the cash portion up to 100% cash. If settlement is made in shares, the number of settlement shares is calculated based on the last month’s volume weighted average listed price from time the conditions are met. CLASSIFICATION OF THE CONTINGENT CONSIDERATION It is within the Grieg Seafood Group's sole discretion to decide whether the expansion investments are to be carried out in line with the production plan. If stage two and three of the post-smolt facilities are not constructed within ten years, the additional milestone payments will not be triggered. On this basis the contingent consideration is classified as equity. Classification as equity reflects that the sellers continue to share the risk of the operations. Only if the first phase of the operation is successful, the seller will receive a payment when the next phase is entered into. Due to the materiality of the amount, the contingent consideration is presented as a separate component of equity.
From the Boardroom
112 — 113
Amounts in NOK 1 000
Allocation of the excess value (NOK 1 000)*
15.04.2020
Licences (incl. warranty licences)
748 017
Goodwill
604 419
Property, plant and equipment Indemnification assets Excess value assets Deferred tax Net excess value allocated Assets acquired and liabilities assumed Licences (incl. warranty licences)
-493 230 24 400 883 605 883 605 15.04.2020 762 171
Other intangible assets (incl. exclusivity agreement)
44 044
Property, plant and equipment
130 702
Indemnification assets
24 400
Other receivables Cash and cash equivalents Total assets acquired Deferred tax Long-term debt Current liabilities Total obligations assumed
12 779 30 628 1 004 723 584 639 62 269 646 908
Identified net assets
357 815
Goodwill
604 419
Net assets at acquisition
GRIEG MATURITAS | ANNUAL REPORT 2020
962 234
VALUATION OF LICENSES Aquaculture licenses are valued assuming an indefinite useful life. At the time of the transaction, GNL had been granted a long-term exclusive right to operate in Placentia Bay and received approval for 11 site holds in the area. An awarded site hold grants an exclusive right for the holder to the farming location in question, while the application process is in progress. When the application process is finalized and approved, the site hold is converted into a fish farming license. Without the granting of a farming license, the value of the site holds is deemed to be immaterial. At the time of the transaction, three of the site holds were approved and converted to fish farming licenses, in addition one freshwater license was approved. For site holds with a fish farming license granted at the transaction date, valuation is based on expected volumes using reasonable income and cost assumptions to the amount of NOK 213.5 million value added per license. For three additional site holds, the seller has granted a warranty as to the value of the license. If a farming license is not obtained for three additional sites within 31 December 2021, the seller is obliged to compensate for loss incurred by the non-receipt of the licenses in the period 2020-2021. However, if the licenses are granted within 31 December 2024, the compensation will be based on the calculated loss in the intermediate period up until the licenses are granted. The approval of the license is valid for five years until it must be renewed, but this is merely a formality if conditions in the licenses are adhered to. The exclusivity agreement states that GNL has the exclusive right to the area Placentia Bay for a period up to 20 years. We expect to be the sole or leading operator in the area, creating high barriers of entry to other operators. EXCLUSIVITY CONTRACT GNL has received a grant to operate in the production area in Placentia Bay, and an exclusivity agreement for 12 years plus an option of eight years. This means no one else can operate in this geographical area in this period, which is similar to a non-compete advantage. The book value of the cost for the work with the documentation and meetings required in the application process to receive the exclusivity agreement is NOK 38.7 million. The book value is considered a reasonable proxy for the fair value of the exclusivity. This exclusivity will be depreciated over the duration of the agreement. GOODWILL Intangible assets that do not meet the conditions for separate recognition are subsumed into goodwill. The project GNL has been going on for some years, where the sellers have developed the area for salmon farming and started construction of a high-end RAS facility, providing a going-concern value. The exclusive rights to be the sole salmon farmer in the Placentia Bay area long-term, reduces biological risk, with long distances and low interconnectivity between sites, thus providing synergies between the various components of the facilities. The sites and production areas are minimum 100-meter-deep, have good currents and optimal oxygen levels. Goodwill also covers the licenses pending approval. At year-end 2020, eight licenses are finally approved, while three are in different stages of application. Newfoundland is also close to the US market, which may create synergies with existing operations in British Columbia. Goodwill from the acquisition is depreciated on a linear basis over 20 years from transaction date. The nature of the goodwill, in particular relating to exclusive rights and pending licenses, represent long term values. The relatively long economic lifetime of the goodwill is based on achieving an appropriate matching of the depreciation charge and the economic benefits the goodwil represents. TAX For valuation purposes and calculation of deferred tax assets and liabilities, the value of deferred tax and deferred tax assets are set to zero. The basis for this is that the expected present value of taxation on net excess values is close to zero.
From the Boardroom
114 — 115
Note 25
Assets held for sale and discontinued operations
All note disclosures in these consolidated financial statements for 2020 of Grieg Maturitas have been prepared for the Group’s continuing operations if not otherwise explicitly stated in the specific note disclosure. This Note 25 of the consolidated financial statements has been prepared for the Group's assets classified as held for sale and discontinued operations only. THE EFFECT OF NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS: In 2020, there are two disposal groups within the Group. Both of these are within the segment Grieg Seafood and has been classified as assets held for sale and presented as discontinued operations during the year. The activity within the Grieg Seafood Group have thus been separated into our continuing operations and our discontinued operations. The two disposal groups are “Ocean Quality” and “Grieg Seafood Shetland”, of which the assets in Ocean Quality has been divested within year-end 2020, while the assets associated with the GSF Shetland disposal group are classified as assets held for sale at the balance sheet date year-end 2020. The Group’s Income Statement and have been re-presented for the comparative figures of 2019 for the effects of the disposal group's GSF Shetland and Ocean Quality. The Statement of Financial Position has not been re-presented for the comparative 31 December 2019 figures. The consolidated statement of cash flow includes both the continued and discontinued operations. When preparing the financial information of the two disposal group’s, intercompany balances and -transactions between the entities within the disposal group's, as well with other Group Companies, have been eliminated in the consolidated financial statement. On 23 May 2020, we entered into an agreement with Bremnes Fryseri to dissolve the Ocean Quality sales partnership. At the same time, we announced that we would establish a fully owned sales organization to support our growth and downstream strategy. Our new global sales organization is operational in Q1 2021, and before year-end we have completed the transaction with Bremnes Fryseri to sell our shares (60%) in Ocean Quality AS. The discontinued operations were defined as the operations related to Ocean Quality's sale of fish produced by Bremnes Fryseri, as well as the trading activity within Ocean Quality (purchase and resale of fish not produced by Grieg Seafood nor Bremnes Fryseri). As the transaction with Bremnes Fryseri for the sale of all Grieg Seafood's shares in Ocean Quality AS was completed at 31 December 2020, the financial position of Ocean Quality AS is not consolidated at year end. All activity up until the sale 31 December 2020 is, however, reflected in the net profit for the year from discontinued operations and cash flow statement of the Group. Upon deconsolidation of Ocean Quality AS at year-end 2020, again of NOK 5.0 million was recognized. The gain is also classified as part of the net profit (loss) from discontinued operations in 2020. Grieg Seafood ASA has assumed ownership of Ocean Quality USA, however, the part of the Ocean Quality USA sale attributable to fish produced by Bremnes Fryseri has been defined as discontinued operations.
GRIEG MATURITAS | ANNUAL REPORT 2020
This means that the part of Ocean Quality that related to the sale of fish farmed by Grieg Seafood has not been defined as discontinued operations, as we will continue to farm and sell our Atlantic salmon through our new sales organization
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS GREIG SE AFOOD SHETL AND*
Operating income Operating expenses Operating profit - EBIT
Estimated taxation
TOTAL
2019
2020
2019
2020
2019
968 729
816 430
3 084 108
2 704 578
4 052 837
3 521 008
-1 220 800
-832 637
-3 058 240
-2 678 534
-4 279 040
-3 511 171
-252 071
-16 207
25 868
26 044
-226 203
9 837
-5 560
-7 989
10 271
9 003
4 711
1 014
-257 631
-24 196
36 139
35 047
-221 492
10 851
82 368
16 166
-8 476
-8 245
73 892
7 921
26 802
-142 568
18 772
Gain on the sale of the subsidiary after income tax Profit for the period from discontinued operations
OCE AN QUALIT Y
2020
Net financial items Profit before tax from discontinued operations
Amounts in NOK 1 000
5 033 -175 264
-8 030
32 696
CLASSES OF ASSETS AND LIABILITIES OF THE DISPOSAL GROUP
Amounts in NOK 1 000
GREIG SE AFOOD SHETL AND
OCE AN QUALIT Y
TOTAL
31.12.2020
31.12.2020
31.12.2020
Deferred tax assets
157 869
-
157 869
Other intangible assets
477 796
-
477 796
Tangible assets
501 666
-
501 666
Inventory and biological assets
474 315
-
474 315
Trade receivables and other receivables
139 516
112
139 628
855
43
898
1 752 017
155
1 752 172
78 517
-152
78 365
Current liabilities
196 396
970
197 366
Liabilities directly associated with the disposal group
274 913
818
275 731
1 477 104
-663
1 476 441
Cash and cash equivalents Assets directly related with the disposal group Non-current liabilities
Net assets directly associated with the disposal group
From the Boardroom
116 — 117
Independent Auditor’s report
GRIEG MATURITAS | ANNUAL REPORT 2020
Independent Auditor’s report
From the Boardroom
118 — 119
Independent Auditor’s report
GRIEG MATURITAS | ANNUAL REPORT 2020
From the Boardroom
120 — 121
GRIEG MATURITAS | ANNUAL REPORT 2020
Annual report Design/production Marte Leirvåg Wenche Kjølås Hilde Farsund Ulsted Sveinung Tvedt Grieg Group companies Designed by Mission
Photos Photo: Grieg Green
1, 28, 29
Photo: Pixabay / Michelleraponi
2
Photo: Bilde av Elisabeth
4
Photo: Pixabay / Matt Hardy
7
Photo: AKVA Group ASA
11
Photo: GVI / Gture
11
Photo: Grieg Foundation
15
Mission har funnet dette
17
Photo: Grieg Maritime Group / Ivymourie
20
Photo: G2Ocean
25, 26, 58
Photo: Grieg Maritime Group / Reanmer Baldoza
31
Photo: Grieg Maritime Group / Kai Xuan
37
Photo: Mosjøen Industriterminal
33
Photo: Grieg Group Resources
36
Photo: Grieg Seafood
38, 39, 40, 42, 43, 44, 45, 50, 57, 60
Photo: VIEW Ledger
55
Photo: Pixabay / Sebastian Voortman
74
Photo: Grieg Group Photo: Ingvild Festervoll Melien
117 10, 11, 12, 13, 14, 16, 21, 24, 30, 32, 34, 46, 52, 53, 56, 57, 58
From the Boardroom
122 — 123
THE OCEAN CONNECTS OUR PEOPLE OUR BUSINESSES OUR FUTURE AND OUR PAST