Stena AB /

Stena Finance

Stena Finance’s main task is to manage the funding requirements of the Stena Group, both short and long term. Stena Finance also manages the operational business units’ financial risks in the interest rate, currency and oil markets. In addition, Stena Finance manages the Group’s liquidity and financial investments. Another important role is to act as a resource for the operational units when identifying, analysing and conducting new business deals.

IMPROVED GROWTH IN THE GLOBAL ECONOMY

The global economy was characterised by caution in 2016. The EU referendum in Great Britain as well as the presidential election in the United States were preceded by months of uncertainty, but neither political outcome had any significant effect on the global economy during 2016. Growth stabilised in China, and also in the United States and Europe, while oil prices increased. US interest rates were raised in December 2016 and there will be more increases in 2017. The purchasing managers’ index (PMI) has recently improved which can be seen as an indicator of continuing stabilisation of the global economy.

STRONG LIQUIDITY FOR THE FUTURE

During 2016, Stena cancelled a credit facility amounting to SEK 6.7 billion, which has substantially decreased cost for commitment fees. The cancellation of the credit facility affected Stena’s liquidity, but a strong cash flow and additional measures, such as the disposition of Blue Puttees and Highlanders to Marine Atlantic, have secured a liquidity as strong as last year. Stena has focused on liquidity to ensure the Group is well equipped for the coming years, until the oil exploration market strengthens again.

PORTFOLIO INVESTMENTS

In recent years, Stena has reduced its shareholdings in companies active in oil and gas, and has instead invested in companies in the healthcare, pharmaceutical and retail sectors. In recent years, Stena has increased its exposure to the bond and interest rate market. In 2016, Stena began to increase its exposure to the oil and gas sector again. The equity portfolio consists of around 60 companies listed on Nordic, European, US and Asian markets. The value of Stena’s investment portfolio including fixed income investments but excluding Adactum has increased by 11% compared with the World Index (MXWD index). Stena’s bond portfolio generated a good return during the year.


Peter Claesson

CEO, Stena Finance

Stena as a Group has reduced its level of capital investment and will continue to be selective about new projects in the period ahead. Our flexibility has thus been increased by continuously strengthening our liquidity and that will be our focus for the forthcoming years. Our high level of liquidity, and backloaded maturity profile combined with future cash flow leave the company well-equipped to face future challenges. We are concerned that international uncertainty will diminish global trade, and hence affect the rate of investment.

Liquidity1)

 

 
Investment portfolios1)

 

1) Stena Group at 31 December 2016

Interest-bearing liabilities1)

 

1) Stena Group at 31 December 2016