The financial year in summary

The year in brief

  • Another year with good performance by all business areas.
  • Continuing strong earnings.
    – Total income amounted to SEK 34.8 billion, compared with SEK 36.4 billion in 2015.
    – EEBITDA (operating profit before depreciation), excluding valuation of our investment properties and sales of non-current assets, amounted to SEK 9.0 billion, compared with SEK 9.4 billion in 2015.
    – EBITDA was in line with the previous year, mainly as a result of improvements in ferry operations during the year, while drilling and shipping operations have shown a decline due to the challenging market situation they face.
    – Profit before tax was SEK 2.3 billion, compared with SEK 4.5 billion in 2015, including sales of non-current assets amounting to MSEK 474 and SEK 2.3 billion, respectively.
  • A healthy balance sheet with an equity ratio of 38% as at 31 December 2016.
  • Stena Line improved its earnings compared with 2015. This was achieved by increasing volumes, cost reduction measures, tonnage changes, lower bunker costs and continuing improvements in existing operations.
  • Stena Drilling was in line with the previous year. The average commercial utilisation rate was just over 94%. During the year, Stena Drilling has focused on the cost reduction programme that has been implemented to address the current market situation.
  • Stena Bulk experienced a year of varying earnings, but maintained a good utilisation rate for both the tanker and the LNG segment during 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 portfolio companies and reported sales growth in all companies except Stena Renewable.

Significant business events 2016

Ferry Operations

The vessel M/S Trelleborg was sold in February 2016. 

In April, a contract was signed to build four new RoPax ­vessels, with an option for a further four vessels. Deliveries are scheduled for 2019 and 2020. The vessels will be built at the AVIC Shipyard in China. 

In December 2016, an agreement was reached on the acquisition of the chartered vessel M/S Mecklenburg ­Vorpommern from Postbank Leasing GmbH.

Offshore Drilling 

On 14 January 2016, Stena Drilling Ltd., Aberdeen, received a ruling by the Oslo District Court regarding potential capital gains tax in Norway following the divestment of the Stena Dee drilling rig in 2006. The court ruled entirely in accordance with the claims presented by the company, and the Norwegian Tax Agency decided not to appeal the ruling, which has now taken legal effect.

During the third quarter of 2016, the drillship Stena IceMAX was written down by MUSD 160 to its recoverable amount, which corresponded to the projected value in use at the time.

In October 2016, the Norwegian oil company Statoil gave notice of early termination of the contract for the drilling unit Stena Don. The original contract was due to expire in early February 2017. Statoil paid a termination penalty, and the ­outcome of this early termination will have a neutral effect on EBITDA. 

In November, Stena Drilling signed an agreement with Cairn Energy on drilling for 130 days, plus options, off Senegal, with the drillship Stena DrillMAX

In November, Stena Drilling signed a contract with Providence Resources PLC for the drillship Stena IceMAX to drill off Ireland for 60 to 90 days, plus options. 

In December 2016, Stena Drilling signed a borehole contract with Repsol Sinopec for the drilling unit Stena Spey, starting in April 2017. The unit has been warm stacked since the EnQuest assignment ended in mid November.

Delivery of the Stena MidMAX, a semi-submersible drilling rig for harsh environments, was scheduled for March 2016 but its construction has been substantially delayed. The rig is now expected to be completed mid-2018. The builder, Samsung Heavy Industries and Stena Drilling are in discussions regarding the implications of this delay.

Shipping – Stena Bulk

Four new IMOIIMAX vessels were delivered from a shipyard in China in 2016. After the latest delivery in March 2017, Stena Weco is now operating a total of ten IMOIIMAX vessels. A ­further three sister ships will be delivered. 

During the year, Stena Weco established a new office in Dubai to meet increased demand in the region.

Shipping – Stena RoRo

In February 2016, the vessel Highlanders was delivered to Marine Atlantic Inc., which had exercised its purchase option in the previous year.

Shipping – Northern Marine Group

In May 2016, Northern Marine Group acquired Clyde Group Ltd, further strengthening the company’s product portfolio in offshore and marine training.

New businesses

In September, Stena Adactum signed a letter of intent regarding acquisition of 26% of the listed bathroom company ­Svedbergs i Dalstorp AB for approximately MSEK 200. At the same time, it was decided that Ballingslöv would sell the assets of its bathroom company Macro International AB to Svedbergs i Dalstorp AB for approximately MSEK 180. These transactions were conducted in December 2016. 

Stena Adactum had another successful year and continued to develop and expand its operations.

Property

Stena Property acquired 1,225 apartments in Landskrona in Sweden during the year. The properties were taken over on 30 December 2016. 

The property Krabban 1 in Mölndal was taken over on 15 December 2016 and is now the head office of SCA Hygiene Products. The property consists of 25,000 m2 of offices and a laboratory. 

In 2016, three properties were sold in Danderyd, one property was sold in Mölndal, while two properties were sold to housing associations in Lund.

The economic occupancy rate was 95.5% at the end of December 2016. In Sweden, the economic occupancy rate was 99.4% for residential premises and 96,2% for commercial premises. Internationally the economic occupancy rate was 83.3%.

Other

During the second quarter, Stena acquired IL Recycling AB, a supplier of recycling services, with operations in Sweden and Poland. IL Recycling AB has 700 employees and a turnover of approximately SEK 2 billion. The acquisition took effect on 30 June 2016. The Polish operations were sold to Stena Recycling AB in November 2016.

Subsequent events

On 1 March 2017, the remaining recycling operations, which were included in the IL Recycling AB acquisition, were sold to Stena Recycling AB. Other operations, mainly property, remain with the Stena AB Group. 

In December 2016, an agreement was reached on the acquisition of the chartered vessel M/S Mecklenburg Vorpommern from Postbank Leasing GmbH. Stena Line GmbH acquired the vessel on 14 March 2017 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 March 2017, a commercial property of 35,000 m2 was sold in Haninge in Stockholm. 

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.