The financial year in summary
THE YEAR IN BRIEF
- Another year with good operational performance by all business areas.
- Continuing strong earnings.
– Total income amounted to SEK 33.7 billion, compared with SEK 34.8 billion in 2016.
– EBITDA (operating profit before depreciation), excluding valuation of our investment properties and sales of non-current assets, amounted to SEK 6.6 billion, compared with SEK 9.0 billion in 2016.
– EBITDA decreased compared to the previous year, mainly as a result of the decline in the tanker- and drilling operations due to the challenging market situation they face.
– Profit before tax was SEK 1.3 billion, compared with SEK 2.3 billion in 2016, including sales of non-current assets amounting to SEK 1.1 billion and SEK 474 million, respectively.
- A healthy balance sheet with an equity ratio of 39% as at 31 December 2017.
- Strong liquidity position.
- Stena Line´s result was in line with 2016. This was achieved, despite increased net bunker costs, by increasing volumes, cost reduction measures, tonnage changes and continuing improvements in existing operations.
- Stena Drilling’s result decreased compared to 2016 due to the challenging market situation. The average commercial utilisation rate for drilling units under contract 2017 was 96%. During the year, Stena Drilling has continued to focus on the cost reduction programme that has been implemented to address the current market situation.
- Stena Bulk experienced low earnings for the main part of 2017, but maintained a good utilisation rate for both the tanker and the LNG-segment during the year. Stena Bulk started to see better earnings for LNG-vessels at the end of the year.
- Stena RoRo reported a continued high utilisation rate during the year and also worked on chartering in and out vessels for Stena Line, and selling vessels no longer needed in Stena Line’s operations.
- Stena Property continued to be profitable, with a very high average occupancy rate of around 96%.
- Stena Adactum had another successful year in the subsidiaries and reported sales growth in all companies except Stena Renewable.
Significant business events 2017
In March 2017, Stena Line GmbH acquired the chartered vessel M/S Mecklenburg Vorpommern from Postbank Leasing GmbH, and the vessel was sold on to Havgalleskären AB on the same day. The new owner, Havgalleskären AB, is chartering back the vessel to Stena Line GmbH on a five-year bareboat charter.
In October 2017, Stena Line started a new route between Poland to Sweden, Gdynia–Nynäshamn.
In December 2017, the already chartered vessels Stena Superfast VII and Stena Superfast VIII were acquired from Tallink AS. The vessels will continue to operate on the Irish Sea.
On 1 June 2017, Stena Atlantic Ltd, an affiliate of Stena Drilling Ltd, has notified the Korean shipbuilder, Samsung Heavy Industries Co Ltd (SHI), that it has exercised its right to cancel their contract for the construction of “Stena MidMAX”, a semisubmersible drilling unit. The rig was ordered in June 2013 with a delivery date in March 2016. SHI has, however, been unable to complete and deliver the unit within the contractually agreed timeframe. As per 31 December, 2017, the capitalized expenses of SEK 2,815 million, previously accounted as assets under construction have been reclassified to a long-term receivable. Under the contract terms, if Stena Atlantic is held to have validly terminated the contract, Stena Atlantic is entitled to reimbursement of USD 215 million in pre-delivery installments paid to SHI, plus accrued interest and reimbursement for the value of certain equipment it supplied during construction. Stena Atlantic has also pursued claims for further compensation in respect of its costs incurred in relation to the project.
SHI has disputed Stena Atlantic’s cancellation of the contract and the parties are now engaged in a London arbitration process to resolve the dispute.
During 2017, the rig Stena Clyde was written down by USD 18.5 million.
In March 2017, Stena Drilling signed a contract with Summit Exploration and Production Limited for the drilling unit Stena Spey. The drilling campaign, which was in the UK North Sea, commenced in June 2017 with a duration of 55 days.
In July 2017, Stena Drilling signed a contract with Repsol Sinopec Resources UK Limited for the drilling unit Stena Spey. The drilling campaign, which was in the UK North Sea, commenced in August 2017 and was ongoing as at 31 December 2017.
In November 2017, Stena Drilling signed a Contract Amendment with Esso Exploration and Production Guyana Limited, whereby the contract for the drilling unit Stena Carron’s drilling campaign in Guyana was extended to January 2019 on a well by well option basis.
Shipping – Stena Bulk
In April 2017, Stena Bulk acquired the remaining 50% of the shares in Stena Weco A/S from its partner WECO Shipping. This means that Stena Weco A/S is now a wholly-owned subsidiary of Stena Bulk Denmark Aps.
Four new IMOIIMAX vessels were delivered during 2017 from a shipyard in China.
Shipping – Stena RoRo
In September 2017, Stena RoRo sold the ropax vessels Napoles and Sicilia.
In November, 2017 Stena RoRo acquired the vessel Hammerodde from Danske Faerger.
During 2017, ten properties in total were sold for just over SEK 2 billions. Swedish properties of 63,000 m2 were sold for approximately SEK 1,5 billion. International properties of 18,000 m2 were sold for SEK 500 million.
During December 2017 it was agreed that Stena Properties will sell properties in Uppsala, Stockholm and Gothenburg for approximately SEK 6,8 billion net, where the majority of the properties will be taken over in 2018, to the Stena Sessan Group.
In addition, it was agreed, in December 2017, to sell one property in Malmö of approximately 7,000 m2 that will be taken over by the buyer in February 2018.
The economic occupancy rate was 96.4% at the end of December 2017. In Sweden, the economic occupancy rate was 99.1% for residential premises and 95.2% for commercial premises. Internationally the economic occupancy rate was 86.2%.
Stena Adactum had another successful year and continued to develop and expand its operations.
During July 2017 the associated company Midsona AB aquired Bringwell AB by a directed share issue to the shareholders in Bringwell. Consequently, Stena Adactum’s participating interest in Midsona declined from 25% of the equity and 30% of the voting power to 24% of the equity and 28% of the voting power. The total purchase price for Bringwell amounted to approximately SEK 280 million.
On 1 March 2017, the recycling operations, which were included in the IL Recycling AB acquisition in 2016, were sold to Stena Recycling AB. Other operations, mainly property, remain with the Stena AB Group.
Stena and its joint venture partner SeaLine has agreed that Stena is leaving the cooperation in the Black Sea as of April 3, 2017. SeaLine will continue operating the route.
As part of developing the logistic area within Stena, a 25 percent share in the logistics and transport company NTEX AB was acquired in December 2017.
In January 2018, Stena Drilling signed a contract with Energean Oil & Gas for the development drilling of the Karish Field, offshore Israel. The drilling unit Stena Forth has been selected to drill three development wells in first quarter 2019 (with provision made for further options).
In January 2018 it was decided that Stena Renewable AB will build three new wind tubines in Saxberget and sixteen new wind turbines in Kronoberget.
In February 2018, Stena Drilling signed a contract with Nexen Petroleum UK Ltd for the drilling unit Stena Spey. The drilling campaign is around 110 days with a potential additional option well in the UK Central North Sea.
In February 2018, Stena Drilling signed a contract with Northern Oil & Gas Australia Pty Ltd, on drilling for 30 days, with the drilling unit Stena Clyde.
In February 2018, the last IMOIIMAX vessel, in a serie of 13 vessels, was delivered from a shipyard in China.