Reg. no. 690409-0460
Consolidated Financial Statements
for the year ended 31 December 2021
EUR
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Appendices:
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46
52
Contents
Endorsement and Statement by the Board of Directors and the CEO .....................................................................................
Independent Auditors' Report .....................................................................................................................................................
Consolidated Statement of Comprehensive Income .................................................................................................................
Consolidated Statement of Financial Position ..........................................................................................................................
Consolidated Income Statement ................................................................................................................................................
Quarterly Statements - unaudited .............................................................................................................................................
Non-Financial Reporting ..............................................................................................................................................................
Consolidated Statement of Changes in Equity .........................................................................................................................
Consolidated Statement of Cash Flows .....................................................................................................................................
Notes to the Consolidated Financial Statements ......................................................................................................................
Corporate Governance Statement ..............................................................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Highlights & Operations in 2021
Endorsement and Statement by the Board
Eimskip is a leading transportation company in the North Atlantic providing container and reefer liner services with connections to
international markets and is specialized in worldwide freight forwarding with focus on frozen and chilled commodities. Eimskip
offers its customers a broad range of services related to shipping, logistics and supply chain management solutions on land, sea
and air. Eimskip currently operates 57 offices in 20 countries. The consolidated financial statement of the Group includes the
financials of the parent company and its subsidiaries. The Group consists of a total of 68 companies in addition to six foreign
branches.
of Directors and the CEO
Revenue amounted to EUR 882.7 million compared to EUR 668.3 million the year before. Reported EBITDA amounted to EUR
104.1 million, up from EUR 61.7 million in 2020 and EBIT was EUR 53.0 million, an increase from EUR 17.1 million in 2020. Adjusted
EBITDA and EBIT, adjusted for EUR 10.2 million settlement with the Icelandic Competition Authority expensed in Q2, was EUR
114.3 million and EUR 61.7 million, respectively. Net earnings as reported for the year 2021 are a total of EUR 40.4 million (2020:
EUR 4.5 million) according to the Consolidated Income Statement.
Property, vessels and equipment decreased by EUR 17.7 million in 2021 and amounted to a total of EUR 229.9 million by year-end.
Interest-bearing debt decreased by EUR 14.2 million in the period and amounted to EUR 146.8 million by year-end. Total equity at
31 December 2021 amounted to EUR 261.5 million (2020: EUR 230.7 million) according to the Statement of Financial Position. In
2021 the company paid dividends to its shareholders equal to EUR 3.0 million, and reduced share capital by payment to
shareholders of EUR 11.2 million. Please refer to note 17 for further information.
Cash flow from operations increased substantially from previous year and amounted to EUR 75.6 million, an increase of EUR 26.0
million from 2020, despite a one-off payment of EUR 10.2 million settlement to the Icelandic Competition Authority (ICA).
Subsequently, the company’s liquidity position is strong, with cash and cash equivalents equal to EUR 37.0 million on 31 December
2021. The capital expenditure of the Group was unusually low during the year, both due to longer delivery times of ordered
equipment, and management focus on operations, rather than investments, in a challenging environment.
Eimskip’s financial results of the year 2021 are record high and driven by strong performance in the liner services as well as the
international forwarding services. Both segments are affected by the unusual conditions in the global transportation markets. In
the freight forwarding segment, shortage of space on vessels and available equipment has decreased volume by 4%, however this
same shortage has put upwards pressure on prices which has increased Eimskip’s margin from each forwarding job substantially.
On the other hand, the volume in Eimskip’s container liner services saw a double-digit growth] from 140,367 TEUs in 2020 to
159,101 TEUs in 2021. The container liner volume increase can mainly be attributed to increased economic activity in key markets,
capacity increase on the Trans-Atlantic route as well as acquisition of new customers, especially in the Trans-Atlantic services.
Price development in the container liner business has also been favorable, thanks to increased internal focus on pricing strategis
and revenue management, supported by development in market rates. The container liner volume increase can mainly be
attributed to increased economic activity in key markets, capacity increase on the Trans-Atlantic route as well as acquisition of
new customers, especially in the Trans-Atlantic services. The reefer liner services performed well financially although volume was
on similar level as the previous year.
Various internal initiatives and efforts serve as a vital contributor to the good operational performance of 2021. The streamlining
and integration measures introduced and executed in 2019 and again in 2020, including employee reduction and decrease in office
space, have permanently lowered the groups’ cost base, and agile revenue management has ensured improved profitability of the
container sailing system. Eimskip’s focus on service excellence has been important to secure its strong position in a highly
competitive market where customers’ expectations and demand for performing logistic solutions in today’s challenging
operational environment have reached new heights.
In September 2021, the vessel holding company ElbFeeder Inc., an equity accounted investee in which Eimskip holds 47.9% share,
sold one of its container vessels. The sale positively affected Eimskip’s earnings in 2021 by EUR 3.0 million. ElbFeeder now owns
six container vessels in the range of 700 – 3,000 teus which are all on charter to various operators. ElbFeeder chooses to value its
vessel fleet at fair value, which has increased by EUR 68.0 million (an increase of 125%) in the year 2021 with the equivalent
positive effect on Elbfeeder’s income statement and balance sheet, according to ElbFeeder’s draft financial statement. However,
the fair value increase is not reflected in Eimskip’s financial statement, since Eimskip applies the cost method for vessel
accounting (see further note 13).
In June 2021, Eimskip and the Competition Authority reached a settlement regarding the competition case that had been under
investigation since 2013. As a result, Eimskip agreed to pay a settlement amounting to 1.5 billion ISK or approximately EUR 10.2
million. Please refer to note 26 for further information.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Highlights in 2021, continued
Outlook and uncertainties
Effects of COVID-19
Corporate Governance
The outlook in the beginning of the year 2022 is generally positive. Demand for Eimskip’s services continues to be strong with
volumes during the first weeks of the year exceeding expectations. There are no signs of a sharp change in market conditions in
the near future, and major analysts expect the global supply chain disruption to continue well into 2022. However, there is an
uncertainty regarding mid- to long-term economic development, with inflation well above normal levels and anticipated tapering
of economic stimulus in Eimskip’s key markets. Furthermore, the company has experienced increase in employee turnover in
recent months and considers difficulties in retaining talent a potential risk in some of the company’s markets, mainly for reasons
related to the pandemic and its effect on the labour market. The company is well equipped to meet unexpected events, given its
strong balance sheet and active management of financial and operational risk.
In response to COVID-19, the company has during the year 2021 strived to secure the safety and health of employees and to
maintain and secure the logistic chain and customer services. The pandemic has had a strong impact on the global transportation
market, causing disruption in various parts of the supply chain. This situation has created operational challenges for Eimskip, e.g.,
temporary shortage of equipment and decrease in employee retention, but has not had an adverse effect on the company's
earnings. The income tax subsidies and government grants the group companies have received due to COVID-19 are few and
immaterial to the group. Given the recent development of the pandemic, the company does not consider it a severe operational or
financial risk, but the management monitors the situation closely.
The Company complies with Article 63 of Act no. 2/1995 on Limited Liability Companies (Company Act), as the Company's Board of
Directors currently consists of three females and two males. The Executive Management and the CEO consists of seven males and
two females. The Company's gender ratio is 68.8% males, 30.6% females and 0.6% other genders. Further information on the
number of full-time equivalents is provided in note 7.
Eimskip's management is of the opinion that practicing good Corporate Governance is vital for Eimskip and is in the best interests
of the shareholders, employees and other stakeholders. The framework for Corporate Governance practices within Eimskip consists
of the provisions of law, the parent company's Articles of Association, Rules for Issuers of Financial Instruments listed at Nasdaq
Iceland and the 6th edition of Corporate Governance Guidelines issued by the Iceland Chamber of Commerce, SA – Confederation of
Iceland Enterprise and Nasdaq Iceland.
Corporate Governance practices are designed to ensure open and transparent relationship between the Company's management,
its Board of Directors, its shareholders, and other stakeholders. Management has emphasized and increased level of information
shared with investors and other stakeholders in quarterly reporting as well as communication with customers on current affairs.
The Corporate Governance in Eimskip is also designed to ensure sound and effective control of the Company's affairs and a high
level of business ethics. Further information is provided in the Corporate Governance Statement which is an appendix to these
Financial Statements.
Active risk management plays an important role at Eimskip ensuring stable operations and earnings. The Company’Treasury Policy
aims to minimize potential negative effects on operations and earnings from financial activities and to keep risk at acceptable
levels. Information on matters related to financial risk management is disclosed in note 21. Furthermore, the Company has an
active risk management program to map and manage the company’s main risk exposure, both operational and financial.
The Board of Directors proposes a dividend payment to shareholders in 2022 in the amount of ISK 14.27 per share. The proposed
dividend payment is ISK 2,499.7 million, or approximately EUR 17.7 million, which represents 43.8% of net earnings for the year
2021.
This significant increase in vessel valuation can be attributed to the unusual situation in the global vessel market. The unusual
market situation has put upwards pressure on both vessel prices and charter rates which have reached unprecedented heights.
Eimskip saw substantial increase in chartering costs in the year 2021, which increased by around EUR 5 million in 2021 and are
foreseen to increase further by over EUR 9 million in 2022. Higher charter rates, along with longer time charter periods, cause a
substantial increase in the Group’s right-of-use assets and lease liabilities, which are calculated according to IFRS 16. All charter
vessels in the current fleet have been fixed until 2023-2025.
Endorsement and Statement by the Board
of Directors and the CEO
At the beginning of the year 2021, Eimskip published an EBITDA guidance for the year 2021 in the range of EUR 68-77 million. In
June 2021, due to higher results than anticipated in light of good performance, the Company adjusted its EBITDA guidance to EUR
77-86 million. In December 2021, due to stronger operational results than expected, the Company again adjusted its EBITDA
guidance to EUR 109.5-112.5 million.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
4
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Non-Financial Reporting
Share capital and articles of association
Shareholder:
1. Samherji Holding ehf..................................................................... 57,453,585 32.80% 51,170,175 28.29%
2. Lífeyrissjódur verzlunarmanna *.................................................. 21,574,181 12.32% 27,235,070 15.06%
3. Gildi - lífeyrissjódur **................................................................... 19,510,224 11.14% 26,643,247 14.73%
4. Lífeyrissjódur starfsmanna ríkisins A-deild and B-deild............ 8,800,000 5.02% 12,225,160 6.76%
5. Stefnir hf. ***................................................................................ 8,656,789 4.94% 0 0.00%
6. Birta lífeyrissjódur......................................................................... 8,600,839 4.91% 10,737,477 5.94%
7. Stapi lífeyrissjódur......................................................................... 7,764,310 4.43% 9,581,897 5.30%
8. Landsbréf ****.............................................................................. 3,754,567 2.14% 391,272 0.22%
9. Sjóvá-Almennar tryggingar hf. .................................................... 3,466,777 1.98% 1,235,653 0.68%
10. Arion banki hf............................................................................... 3,350,864 1.91% 11,706,250 6.47%
11. Almenni lífeyrissjódurinn............................................................. 3,218,098 1.84% 3,611,558 2.00%
12. Söfnunarsjóður lífeyrisréttinda................................................... 2,798,754 1.60% 3,302,823 1.83%
Other shareholders ............................................................................ 26,219,302 14.97% 23,026,661 12.73%
Total outstanding shares ..................................................................
175,168,290
100.00%
180,867,243
100.00%
Treasury shares ................................................................................. 31,710 6,132,757
Total issued shares ........................................................................... 175,200,000 187,000,000
*) Lífeyrissjódur verzlunarmanna, Lífeyrissjódur verzlunarmanna/Ævileid 1 and 2 with total shareholding of 12.32%
Endorsement and Statement by the Board
The Company is defined as a large Public Interest Entity according to the Icelandic Financial Statement Act. The Act states that
these companies should disclose as an attachment to the Endorsement of the Board of Directors and CEO relevant and useful
information on their policies, main risks and outcomes relating to environmental, social and employee matters, their human rights
policy and how they counteract corruption and bribery, in addition to a short description of the Company's business model. The
Company's policies and outcome of these matters are further discussed in the Non-Financial Reporting which is an appendix to
these Consolidated Financial Statements. In November 2020 Eimskip conducted an ESG risk assessment and ESG targets for the
next three years plans were developed. Eimskip has now published its Sustainability Statement for 2021 that reflects the ESG
guidelines issued by Nasdaq Iceland and the Nordic countries in March 2017. Please refer to the Company's website.
The number of shareholders at year-end 2021 was 851 which was a increase of 158 from the beginning of year. The Company's
twelve largest shareholders at the year-end are the following:
The Company's Board of Directors consists of five Directors and two alternate Directors, all elected at an annual general meeting in
March 2021. Those who intend to run for the Board of Directors shall notify the Board of Directors of their candidacy at least ten
days before a shareholders' meeting. The Company's articles of association may only be amended by a lawful shareholders'
meeting, as long as the proposal for the amendment is described in the invitation to the meeting. The decision to amend the
articles of association will only be valid if it is approved by 2/3 of the votes and approved by shareholders controlling at least 2/3 of
the votes represented at the shareholders' meeting.
Further information on matters related to the share capital is disclosed in note 17. Additional information on shareholders is
provided on the Company's website, www.eimskip.is/investors.
****) The shareholders are Landsbréf - Úrvalsbréf, Landsbréf - Öndvegisbréf, Landsbréf - Hekla, Landsbréf - LEQ-UCITS ETF and
Landsbréf - LEQ150 ETF.
***) The shareholders are Stefnir - Innlend hlutabréf, Stefnir- ÍS-5 and Stefnir - Ardgreidslusjodur
**) Gildi lífeyrissjódur, Gildi lífeyrissjódur/Framtídarsýn 1 and 2 with total shareholding of 11.14%
of Directors and the CEO
Shares in
%
2021
2020
Number of
shares
Number of
shares
Shares in
%
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Statement by the Board of Directors and the CEO
Reykjavík, 17 February 2022
Board of Directors:
Baldvin Thorsteinsson, Chairman
Gudrún Ó. Blöndal, Board Member
Margrét Guðmundsdóttir, Board Member
Ólöf Hildur Pálsdóttir, Board Member
CEO:
Vilhelm Már Thorsteinsson
The Consolidated Financial Statements of Eimskipafélag Íslands hf. and its subsidiaries (together referred to as "Eimskip", "the
Group" or "the Company") are prepared and presented in accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU and additional requirements for listed Icelandic companies. The Financial Statements are presented in
thousands of EUR.
According to the best of our knowledge, it is our opinion that these annual Consolidated Financial Statements give a true and fair
view of the consolidated financial performance of Eimskip for the year 2021, its assets, liabilities and consolidated financial
position as at 31 December 2021 and its consolidated cash flows for the year 2021.
Further, in our opinion the Consolidated Financial Statements and the Endorsement by the Board of Directors and the CEO give a
fair view of the development and performance of Eimskip's operations and its position and describe the principal risks and
uncertainties faced by Eimskip.
Endorsement and Statement by the Board
of Directors and the CEO
In our opinion, the Consolidated Financial Statements of Eimskipafélag Íslands hf. for the year 2021 identified as
“549300IUR8Q7Y44KBL02-2021-12-31-en.zip” are prepared in all material respects, in compliance with the ESEF Regulation.
The Board of Directors and the CEO have today discussed the Consolidated Financial Statements of Eimskipafélag Íslands hf. for
the year 2021 and confirm them by means of their signatures. The Board of Directors and the CEO recommend that the
Consolidated Financial Statements will be approved at the Annual General Meeting of Eimskipafélag Íslands hf.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
6
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To the Board of Directors and the shareholders of Eimskipafélag Íslands hf.
Opinion
Our opinion is consistent with our additional report to the Audit Committee and the Board of Directors.
The consolidated financial statements comprise
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Basis for Opinion
Independence
Key Audit Matters
Independent Auditors' Report
We have audited the accompanying Consolidated Financial Statements of Eimskipafélag Íslands hf. and its subsidiaries (the
group) for the year 2021, excluding the endorsement and statement by the Board of Directors and the CEO.
In our opinion, the Consolidated Financial Statements give a true and fair view of the consolidated financial position of the group
as at December 31, 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the European Union (EU), and applicable articles in
Icelandic law on annual accounts.
We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are
further described in the auditor’s responsibilities for the audit of the consolidated financial statements section of our report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
We are independent of the group in accordance with Icelandic laws on auditors and auditing and the code of ethics that apply to
auditors in Iceland and relate to our audit of the group's consolidated financial statements. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
Notes to the consolidated financial statements, which include significant accounting policies and other explanatory
information.
Consolidated statement of changes in equity for the year ended December 2021.
Consolidated statement of financial position as at 31 December 2021.
Consolidated statement of cash flows for the year 2021.
Consolidated statement of comprehensive income for the year 2021.
Consolidated income statement for the year 2021.
Endorsement and statement by the Board of Directors and the CEO.
The endorsement and statement by the board of directors and the CEO and appendices to the financial statements are excluded
from the audit, refer to section reporting on other information.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the group and its
subsidiaries are in accordance with the applicable law and regulations in Iceland and that we have not provided non-audit services
that are prohibited under Article 5.1. of Regulation (EU) No. 537/2014.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Key Audit Matters How the matter was addressed in our audit
Revenue recognition
Our audit procedures included:
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- Testing the IT setups supporting the revenue recognition.
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Reporting on other information, including the endorsement and statement by the board of directors and the CEO
Responsibilities of the Board of Directors and the Chief Executive Officer
Operating revenue amounts to EUR 881.950 thousand in
the year 2021.
Recognition of revenue is complex due to the volume of
transactions and the different types of logistic contracts
with individually negotiated terms.
We focused on this area due to the significance of amounts
involved and because recognition of revenue involves
accounting policy decisions and judgements made by
management.
Further, the volume of transactions and extent of different
contracts require various IT setups to ensure correct
revenue recognition.
Considering the appropriateness of the revenue recognition
accounting policies and assessing compliance with applicable
accounting standards.
Obtaining understanding of the revenue and accounts
receivable accounting process.
Data analytics on selected revenue streams and testing
journal entries on revenue.
Substantive procedures over invoicing and relevant contracts
in order to assess the accounting treatment and principles
applied.
Reference is made to notes 5 and 28.k. in the consolidated
financial statements.
Independent Auditors' Report
Detailed testing on timing to ensure that the revenue is
recognised in the correct financial year.
Relevant notes have been reviewed.
The board of directors and chief executive officer are responsible for other information. The other information comprises of the
endorsement and statement by the board of directors and the CEO and appendices to the consolidated financial statements,
including quarterly statements, corporate governance statement and non-financial reporting, which we obtained prior to the date
of this auditor’s report.
In addition other information comprises the annual report not yet published, but is expected to be made available to us prior to
publication.
Our opinion on the consolidated financial statements does not cover the other information, including the endorsement and
statement by the board of directors and the CEO.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. In addition, in light of the
knowledge and understanding of the entity and its environment obtained in the course of the audit, we are required to report if
we have identified material misstatements in other information that we obtained prior to the date of this auditor’s report. We
have nothing to report in this respect.
With respect to the endorsement and statement by the board of directors and the CEO we have, in accordance with article 104, of
the Icelandic law on annual accounts reviewed that to the best of our knowledge, the endorsement and statement by the board of
directors and the CEO accompanying the consolidated financial statements includes applicable information in accordance with
Icelandic law on annual accounts if not presented elsewhere in the consolidated financial statements.
The board of directors and the chief executive officer are responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with International Financial Reporting Standards as adopted by the EU, and applicable articles
in Icelandic law on annual accounts, and for such internal control as determined necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
8
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Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
Those charged with governance are responsible for overseeing the group's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards
on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with International Standards on Auditing, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
Independent Auditors' Report
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
In preparing the consolidated financial statements, management is responsible for assessing the groups' ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so. The Group's
management must provide appropriate explanations regarding its ability to continue as going concern, if applicable, and why
management applies the presumption of going concern in the preparation and presentation of the consolidated financial
statements.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
9
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Report on Other Legal and Regulatory Requirements
Report on European single electronic format (ESEF Regulation)
Appointment
Reykjavík, 17 February 2022
PricewaterhouseCoopers ehf.
Bryndís Björk Guðjónsdóttir
certified public accountant
Kristinn Freyr Kristinsson
certified public accountant
We were first appointed as auditors at the company's annual general meeting on March 25, 2021. Consequently we have been the
auditors for one year.
The board of directors and chief executive officer are responsible for preparing the consolidated financial statements in accordance
with law no. 20/2021. This responsibility includes preparing the consolidated financial statements in a XHTML format in
accordance to EU regulation no. 2019/815 on the european single electronic format (ESEF regulation).
Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the consolidated
financial statements are prepared in all material respects, in accordance with the ESEF Regulation, and to issue a report that
includes our opinion. The nature, timing and extent of procedures selected depend on the auditor's judgement, including the
assessment of the risks of material departures from the requirements set out in the ESEF regulation, whether due to fraud or
error.
In our opinion, the consolidated financial statements of Eimskipafélag Íslands hf. for the year 2021 with the file name
“549300IUR8Q7Y44KBL02-2021-12-31-en.zip” is prepared, in all material respects, in accordance with the European single
electronic format regulation EU no. 2019/815.
Independent Auditors' Report
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
As part of our audit of the consolidated financial statements of Eimskipafélag Íslands hf. we performed procedures to be able to
issue an opinion on whether the consolidated financial statements of Eimskipafélag Íslands hf. for the year 2021 with the file
name “549300IUR8Q7Y44KBL02-2021-12-31-en.zip” is prepared, in all material respects, in accordance with law no. 20/2021 Act
on securities issuer obligations to issue information and self-report relating to requirements under the European single electronic
format regulation EU no. 2019/815, which include requirements concerning preparation of the consolidated financial statements in
XHTML format and iXBRL markup.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
10
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Notes 2021 2020
5
6
5
10-12 51,010 )( 44,590 )(
7 7,555 )( 8,574 )(
13
8
(
(
9
The notes on pages 16 to 44 are an integral part of these Consolidated Financial Statements.
Consolidated Income Statement
for the year 2021
Revenue
Expenses
Operating revenue .................................................................................................................
Other revenue ........................................................................................................................
Operating expenses ...............................................................................................................
Salaries and related expenses ..............................................................................................
Operating profit, EBITDA
.................................................................................................
Depreciation, amortization and impairment .......................................................................
Results from operating activities, EBIT
.....................................................................................
Settlement with the Icelandic Competition Authority .......................................................
Basic and diluted earnings per share (EUR per share) ........................................................
Equity holders of the Company ............................................................................................
Earnings per share:
Finance income ......................................................................................................................
Income tax .............................................................................................................................
Finance expense ....................................................................................................................
Net earnings before income tax
..................................................................................
Net earnings for the year
...............................................................................................
Non-controlling interest ........................................................................................................
Net earnings for the year attributable to:
Share of earnings of equity-accounted investees ..............................................................
Net finance expense ..............................................................................................................
Net foreign currency exchange loss gain ............................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
11
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
Notes 2021 2020
Items that are or may subsequently be reclassified to the income statement
8,21 17 )( 778
25 137 )( 727 )(
The notes on pages 16 to 44 are an integral part of these Consolidated Financial Statements.
Total comprehensive income for the year attributable to:
Equity holders of the Company ............................................................................................
Non-controlling interest ........................................................................................................
Consolidated Statement of Comprehensive Income
for the year 2021
Total comprehensive income for the year ..............................................................
Net earnings for the year ..........................................................................................................................................
Other comprehensive income:
Foreign currency translation difference of foreign operations ..........................................
Effective portion of changes in fair value of cash flow hedges, net of income tax .........
Fair value changes of minority put option liability ..............................................................
Total other comprehensive income for the year ..............................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
12
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
Notes
2021
2020
Assets:
10
11
12
13
14
15,21
16
Equity:
Total equity attributable to equity holders of the parent company
17
Liabilities:
18
19
25
14
18
19
20
The notes on pages 16 to 44 are an integral part of these Consolidated Financial Statements.
Total non-current assets
Property, vessels and equipment ....................................................................................
Intangible assets ..............................................................................................................
Equity accounted investees .............................................................................................
Finance assets ..................................................................................................................
Deferred tax assets ..........................................................................................................
Right-of-use assets ..........................................................................................................
Total equity and liabilities
Share premium .................................................................................................................
Reserves ............................................................................................................................
Retained earnings .............................................................................................................
Non-controlling interest ...................................................................................................
Loans and borrowings ......................................................................................................
Loans and borrowings ......................................................................................................
Trade and other payables .................................................................................................
Income tax payable ...........................................................................................................
Total equity
Total non-current liabilities
Deferred tax liability .........................................................................................................
Other long-term liabilities ................................................................................................
Lease liabilities .................................................................................................................
Lease liabilities .................................................................................................................
Consolidated Statement of Financial Position
as at 31 December 2021
Total liabilities
Total current liabilities
Share capital ......................................................................................................................
Total assets
Total current assets
Inventories ........................................................................................................................
Trade and other receivables ............................................................................................
Cash and cash equivalents ...............................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
13
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________________________________________________________________________________
Fair value
Trans- changes Un- Non-
Share Share lation Hedging of minority distributed Retained controlling Total
capital premium reserve reserve put options profits earnings Total interest equity
The notes on pages 16 to 44 are an integral part of these Consolidated Financial Statements.
Reserves .............................................................................................
Equity at 31 December 2020 ..............................................................
Equity at 31 December 2021 ...............................................................
Treasury shares purchased ................................................................
Share capital reduction ......................................................................
Reversal of prior year dividend
Profit of subsidiaries net of dividend received ................................
Other changes in non-controlling interest .......................................
Treasury shares received (note 17) ....................................................
Dividend paid (0.0166 EUR per share) ..............................................
Other changes in non-controlling interest .......................................
Total comprehensive income for the period ....................................
Minority put options exercised ..........................................................
Changes in Equity 2020:
Equity at 1 January 2020 ....................................................................
Consolidated Statement of Changes in Equity
Changes in Equity 2021:
Equity at 1 January 2021 .....................................................................
for the year ended 31 December 2021
Attributable to equity holders of the Company
Total comprehensive income for the period ....................................
Reserves
of treasury shares received (note 17) .............................................
Profit of subsidiaries net of dividend received ................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
14
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
Notes 2021 2020
Cash flows from operating activities:
10-12
7
13
(
(
8,14
(
(
(
(
(
Change in current assets and liabilities
(
(
(
(
(
Net cash from operating activities
Cash flows from investing activities:
10
(
(
12
(
(
11
(
(
(
Net cash used in investing activities
(
(
Cash flows from financing activities:
(
(
(
(
(
18
18
(
(
19
(
(
Net cash used in financing activities
(
(
(
(
Investing and financing activities not affecting cash flows:
11
77,706)
(
39,548)
(
19
77,706
39,548
0
5,409)
(
0
5,409
0
170
0
170)
(
The notes on pages 16 to 44 are an integral part of these Consolidated Financial Statements.
Effects of exchange rate fluctuations on cash held ........................................................................................
Proceeds from non-current loans and borrowings .........................................................
Repayment of non-current loans and borrowings .........................................................
Cash and cash equivalents at year-end
..................................................................................
Changes in cash and cash equivalents ......................................................................................................
Cash and cash equivalents at the beginning of the year ............................................................................
Dividend paid to equity holders of the company ............................................................
Dividend paid to non-controlling interest and other changes .......................................
Repayment of lease liabilities .........................................................................................
Purchased treasury shares ...............................................................................................
Reversal of prior year dividend of treasury shares received ..........................................
Payables, change ..............................................................................................................
Investment in finance assets ..........................................................................................
Proceeds from the sale of property, vessels and equipment ........................................
Share capital reduction .....................................................................................................
Dividend from equity accounted investee ......................................................................
Consolidated Statement of Cash Flows
for the year 2021
Changes in current assets and liabilities:
Adjustments for:
Depreciation, amortization and impairment ...............................................................
Net earnings for the year .................................................................................................
Share of loss of equity-accounted investees ..............................................................
Net finance expense .....................................................................................................
Change in deferred taxes ..............................................................................................
Other changes ...............................................................................................................
New or renewed leases .....................................................................................................
Inventories, change .......................................................................................................
Receivables, change ......................................................................................................
Changes in finance assets ................................................................................................
Payables, change ...........................................................................................................
Interest paid ..................................................................................................................
Interest received ...........................................................................................................
Taxes paid ......................................................................................................................
Acquisition of property, vessels and equipment ............................................................
Acquisition of intangible assets ......................................................................................
Proceeds from the sale of property, vessels and equipment ........................................
Proceeds from the sale of equity accounted investees .................................................
Short term borrowings, change .......................................................................................
Acquisition of right-of-use assets ..................................................................................
Aquisition of right-of-use assets ....................................................................................
Minority put options exercised ........................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
15
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
General presentation Page
1
Reporting entity ..............................................................................................................................................................
17
2
Basis of accounting .........................................................................................................................................................
17
3
Measurement of fair values ...........................................................................................................................................
17
4
Changes in significant accounting policies ....................................................................................................................
17
28
Significant accounting policies .......................................................................................................................................
38
29
Standards issued but not yet effective .........................................................................................................................
44
Notes to the Consolidated Income Statement
5
Segment reporting ..........................................................................................................................................................
18
6
Salaries and related expenses ........................................................................................................................................
20
7
Finance income and expense ..........................................................................................................................................
20
8
Income tax .......................................................................................................................................................................
20
9
Earnings per share ...........................................................................................................................................................
21
Notes to the Consolidated Statement of Financial Position
10
Property, vessels and equipment ...................................................................................................................................
21
11
Right-of-use assets ........................................................................................................................................................
22
12
Intangible assets .............................................................................................................................................................
23
13
Investment in equity-accounted investees ...................................................................................................................
25
14
Deferred tax assets and liabilities ..................................................................................................................................
26
15
Trade and other receivables ...........................................................................................................................................
26
16
Cash and cash equivalents ..............................................................................................................................................
27
17
Capital and reserves ........................................................................................................................................................
27
18
Loans and borrowings .....................................................................................................................................................
28
19
Lease liabilities ................................................................................................................................................................
29
20
Trade and other payables ................................................................................................................................................
30
21
Financial risk management .............................................................................................................................................
30
Other information
22
Leases ..............................................................................................................................................................................
34
23
Related parties ................................................................................................................................................................
35
24
Auditor's fees ..................................................................................................................................................................
36
25
Group entities ..................................................................................................................................................................
36
26
Other matters ..................................................................................................................................................................
36
27
Subsequent events .........................................................................................................................................................
37
Notes to the Consolidated Financial Statements
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
16
___________________________________________________________________________________________________________________________________________
1. Reporting entity
2. Basis of accounting
a.
b.
c. Functional and presentation currency
d. Use of estimates and judgements
Note 5 and 27 k - Revenue
Note 12 - Intangible assets and impairment testing
Notes 15 and 20 - Trade and other receivables
3. Measurement of fair values
4. Changes in significant accounting policies
The accounting policies applied in these Consolidated Financial Statements are the same as those applied in the Group's
Consolidated Financial Statements as at and for the year ended 31 December 2020. IFRS standards effective as at 1 January
2021 had immaterial effects on the Consolidated Financial Statements.
Notes to the Consolidated Financial Statements
These Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and additional Icelandic disclosure requirements for consolidated financial information of listed
companies in accordance with Icelandic Financial Statement Act No. 3/2006 and rules for issuers of financial instruments at
Nasdaq Iceland.
domiciled in Iceland . The address of the Company's registered office is Sundabakki 2, 104 Reykjavík . The Consolidated
Financial Statements of the Company for the year ended 31 December2021 comprise the Company and its subsidiaries
(together referred to as "Eimskip” or the "Group"). The Parent Company is an investment company focused on investments
in shipping and logistic services. The Company's shares are listed at Nasdaq Iceland.
These Consolidated Financial Statements are presented in EUR, which is the Parent Company's functional currency. All
financial information presented in EUR has been rounded to the nearest thousand unless otherwise indicated.
The preparation of the Consolidated Financial Statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
The financial statements were approved and authorized for issue by the Company's Board of Directors on 17 February 2022.
Basis of measurement
The Consolidated Financial Statements have been prepared on the historical cost basis, except for the valuation of minority
put option liabilities and cash flow hedges which are valued at fair value through other comprehensive Income. The methods
used to measure fair values for disclosure purposes are discussed in note 3.
Statement of compliance
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that
have the most significant effect on the amounts recognized in the financial statements are described in the following notes.
Details of the Group's accounting policies are included in Note 27.
Given the recent development of the COVID-19 pandemic, the company does not consider it a severe operational or financial
risk, but the management monitors the situation closely.
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities. Fair values have been measured for measurement and/or disclosure purposes based on
the present value of future cash flows, discounted at the market rate of interest at the reporting date. When applicable,
further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or
liability.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
17
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
5. Segment reporting
Business segments
Liner Forwarding Un- Consoli-
services services allocated dated
For the year 2021
507,696 375,021 0 882,717
20,869 34,198 0 55,067
528,565 409,219 0 937,784
419,901)( 348,538)( 10,219)( 778,658)(
34,198)( 20,869)( 0 55,067)(
EBITDA
.......................................................................................................................
74,466 39,812 10,219)( 104,059
44,097)( 6,913)( 0 51,010)(
EBIT
...............................................................................................................................
30,369 32,899 10,219)( 53,049
4,883)( 2,672)( 0 7,555)(
7,017 151 0 7,168
4,054)( 8,217)( 0 12,271)(
28,449 22,161 10,219)( 40,391
481,178 153,146 0 634,324
277,298 95,561 0 372,859
11,129 1,024 0 12,153
Liner Forwarding Consoli-
services services dated
For the year 2020
402,841 265,475 668,316
15,474 29,025 44,499
418,315 294,500 712,815
350,698)( 255,940)( 606,638)(
29,025)( 15,474)( 44,499)(
38,592 23,086 61,678
37,744)( 6,846)( 44,590)(
848 16,240 17,088
5,282)( 3,292)( 8,574)(
176 86 262
308)( 4,017)( 4,325)(
4,566)( 9,017 4,451
410,675 125,456 536,131
225,130 80,344 305,474
48,033 652 48,685
Revenue, external ...................................................................................................
Eimskip has two reportable segments, as described below, which are Eimskip's strategic business units. The strategic
business units offer different products and services on different markets and are managed separately. The segment
reporting is based on an internal reporting function of Eimskip. The following summary describes the operations in each of
Eimskip's reportable segments:
Liner services: The main emphasis in Eimskip's operations is the sale of transportation of goods to and from Iceland, Norway
and the Faroe Islands through its service routes in the North Atlantic. These services include sea transportation, trucking,
warehousing and logistic services.
Forwarding services: The second segment represents transportation solutions outside Eimskip's own operating system,
utilizing the global network of Eimskip's offices and associates, mainly in the reefer sector.
Total .........................................................................................................................
EBIT
............................................................................................................................
EBITDA
.......................................................................................................................
Non-lease capital expenditure ...............................................................................
Share of earnings of equity-accounted investees ................................................
Income tax ...............................................................................................................
Net (loss) earnings for the year ..............................................................................
Segment liabilities ..................................................................................................
Segment assets ......................................................................................................
Depreciation and amortization ...............................................................................
Inter-segment revenue ...........................................................................................
Net finance expense ...............................................................................................
Expenses, external .................................................................................................
Inter-segment expense ..........................................................................................
Net (loss) earnings for the year .................................................
Segment assets ..........................................................................
Segment liabilities ......................................................................
Non-lease capital expenditure ...................................................
Notes
Revenue, external .......................................................................
Inter-segment revenue ..............................................................
Total .............................................................................................
Expenses, external .....................................................................
Inter-segment expense ..............................................................
Depreciation and amortization ..................................................
Net finance expense ...................................................................
Share of earnings of equity-accounted investees ....................
Income tax ...................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
18
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
5. Segment reporting, continued
Geographical segments
North Other
Consoli-
Atlantic
territories dated
For the year 2021
750,128 132,589 882,717
603,365 30,959 634,324
12,100 53 12,153
For the year 2020
611,668 56,648 668,316
520,482 15,649 536,131
48,609 76 48,685
Revenue, external ...................................................................................................
Segment assets ......................................................................................................
Non-lease capital expenditure ...............................................................................
Non-lease capital expenditure ...............................................................................
Revenue, external ...................................................................................................
Segment assets ......................................................................................................
In presenting information on the basis of geographical segments, segment revenue and assets are based on the
geographical location of assets.
Notes
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
19
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
6. Salaries and related expenses
Salaries and related expenses are specified as follows:
2021 2020
102,018 94,556
11,209 10,277
9,078 8,705
122,305 113,538
1,620 1,637
1,670 1,678
1,624 1,611
7. Finance income and expense
Finance income is specified as follows:
471 655
163 50
0 0
634 705
Finance expense is specified as follows:
2,891)( 3,086)(
3,937)( 3,741)(
907)( 752)(
0 5)(
7,735)( 7,584)(
454)( 1,695)(
7,555)( 8,574)(
8. Income tax
(i)
Current tax expense:
9,016 4,741
Deferred tax:
3,051 223)(
204 193)(
3,255 416)(
12,271 4,325
(ii)
52,662 8,776
20.0% 10,532 20.0% 1,755
3.8% )( 1,990)( 8.5% )( 746)(
5.7% 3,001 18.7% 1,644
1.5% 791 5.7% 496
0.3% 154 10.4% 915
0.0% 0 2.2% 195
0.4% )( 217)( 0.8% 66
23.3% 12,271 49.3% 4,325
Salaries and related expenses .................................................................................................................
Average number of full-time equivalents during the year ....................................................................
Average number of employees ................................................................................................................
Interest on lease liabilities .......................................................................................................................
Under or over provided in previous years ..................................................
Number of full-time equivalents at year-end .........................................................................................
Loss on sale of shares ..............................................................................................................................
Gain on sale of shares ...............................................................................................................................
2021
Dividend received ......................................................................................................................................
Net finance expense .................................................................................................................................
Other changes ...........................................................................................................................................
Current year ...............................................................................................................................................
Tax benefit derecognized ...........................................................................
2020
Notes
Origination and reversal of temporary differences ................................................................................
Income tax using the Company's domestic tax rate ................................
Interest on long-term loans .....................................................................................................................
Other finance expense ..............................................................................................................................
Effective income tax rate ...........................................................................
Finance expense ........................................................................................................................................
Income tax recognized in the income statement:
Non-deductable expenses ..........................................................................
Other changes .............................................................................................
Net earnings before income tax ................................................................
Net foreign currency exchange (loss) income .........................................................................................
Finance income .........................................................................................................................................
Interest income .........................................................................................................................................
Income tax reassessment for vessel subsidiaries, see note 25 ...............
Increase in income tax relating to the cash flow hedge in other comprehensive income amounted to EUR 4 thousand (2020:
Decrease EUR 195 thousand).
Reconciliation of effective income tax rate:
Effect of tax rates in foreign jurisdictions ................................................
Total income tax .......................................................................................................................................
Defined pension contribution plan .........................................................................................................
Other related expenses ............................................................................................................................
Salaries ......................................................................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
20
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
9. Earnings per share
Basic and diluted earnings per share
2021 2020
38,302 4,465
187,000 187,000
6,133)( 4,122)(
0 1,056)(
4,306)(
0
0 666)(
176,561
181,156
0.2169 0.0246
10. Property, vessels and equipment
Property, vessels and equipment are specified as follows:
Vessels Containers
Land and under and
buildings Vessels construction equipment Total
Cost
103,655 84,152 26,380 170,341 384,528
6,542
63,277
63,277)
(
8,159)
(
1,617)
(
2,797 2,605 36,897 3,508 45,807
292)( 0 0 3,732)( 4,024)(
739)( 543)( 0 584)( 1,866)(
111,963 149,491 0 161,374 422,828
111,963 149,491 0 161,374 422,828
630 0 0 630)( 0
1,383 789 0 6,809 8,981
1,342)( 0 0 16,128)( 17,470)(
811 773 0 1,285 2,869
113,445 151,053 0 152,710 417,208
Depreciation
32,774 39,789 0 85,722 158,285
241)( 0 0 4,721)( 4,962)(
3,883 6,646 0 13,699 24,228
600)( 188 0 1,893)( 2,305)(
35,816
46,623
0
92,807
175,246
35,816 46,623 0 92,807 175,246
819)
(
0
0
14,533)
(
15,352)
(
3,823 8,611 0 12,930 25,364
342 406 0 1,286 2,034
39,162 55,640 0 92,490 187,292
The calculation of basic earnings per share was based on earnings attributable to shareholders and a weighted average number
of shares outstanding during the year. Diluted earnings per share is equal to earnings per share whereas Eimskip has not issued
convertible bonds nor granted stock options. Calculations are as follows:
Basic and diluted earnings per share (EUR) ............................................................................................
Effect of treasury shares purchased in thousands ................................................................................
Balance at 31 December 2020 .........................................
Net earnings attributable to equity holders of the Company ...............................................................
Number of issued shares at 1 January in thousands ..............................................................................
Reclassification of assets ...............................................
Effect of treasury shares at 1 January in thousands ...............................................................................
Weighted average number of outstanding shares at 31 December ......................................................
Balance at 1 January 2020 ................................................
Additions ..........................................................................
Balance at 1 January 2021 .................................................
Additions ..........................................................................
Reclassification of assets ...............................................
Disposals ...........................................................................
Currency adjustments ......................................................
Balance at 31 December 2021 ..........................................
Disposals ...........................................................................
Currency adjustments ......................................................
Effect of share capital reduction .............................................................................................................
Notes
Effect of treasury shares from A1988 hf. received in thousands, see note 16 ....................................
Disposals ...........................................................................
Balance at 31 December 2020 .........................................
Currency adjustments ......................................................
Balance at 31 December 2021 ..........................................
Depreciation .....................................................................
Depreciation .....................................................................
Balance at 1 January 2020 ................................................
Currency adjustments ......................................................
Disposals ...........................................................................
Balance at 1 January 2021 .................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
21
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
10.
Property, vessels and equipment, continued
Vessels Containers
Land and under and
Carrying amounts buildings Vessels construction equipment Total
70,881 44,363 26,380 84,619 226,243
76,147 102,868 0 68,567 247,582
74,283 95,413 0 60,220 229,916
Pledges
11.
Right-of-use assets
Buildings and Vehicies and
Land Cold storage Vessels Equipment Total
Cost
9,900 19,718 7,119 18,953 55,690
439 29,119 6,062 5,831 41,451
0 1,636)( 3,224)( 485)( 5,345)(
0 388)( 640)( 5,288)( 6,316)(
0 14)( 0 139)( 153)(
10,339 46,799 9,317 18,872 85,327
10,339 46,799 9,317 18,872 85,327
4,837
6,710
62,149
4,742
78,438
0
1,534)
(
5,866)
(
531)
(
7,931)
(
0 4,838)( 3,480)( 2,549)( 10,867)(
0 1,789 4 125 1,918
15,176 48,926 62,124 20,659 146,885
Depreciation
318 3,999 1,305 5,582 11,204
319 4,922 6,190 3,851 15,282
0 1,636)( 3,225)( 485)( 5,346)(
0 244)( 385)( 2,431)( 3,060)(
0 134)( 26 21)( 129)(
637 6,907 3,911 6,496 17,951
637 6,907 3,911 6,496 17,951
397 5,479 11,316 3,609 20,801
0 1,534)( 5,866)( 531)( 7,931)(
0 1,007)( 1,898)( 1,774)( 4,679)(
0 194 10)( 45 229
1,034 10,039 7,453 7,845 26,371
New and amended leases ...............................................
Currency adjustments ......................................................
Expired leases ..................................................................
Divestments .....................................................................
Notes
At 31 December 2021 ........................................................
Right-of-use assets are specified as follows:
Property, vessels and equipment with a carrying amount of EUR 117,7 million (2020: EUR 123.6 million) have been pledged as
security for loans amounting to EUR 146,0 million (2020: EUR 160.8 million) at year-end.
New and amended leases ...............................................
Expired leases ..................................................................
Balance at 1 January 2021 .................................................
Divestments .....................................................................
Currency adjustments ......................................................
Balance at 31 December 2021 ..........................................
Divestments .....................................................................
At 31 December 2020 .......................................................
Balance at 1 January 2020 ................................................
Balance at 1 January 2020 ................................................
Expired leases ..................................................................
Balance at 1 January 2021 .................................................
Depreciation .....................................................................
Balance at 31 December 2021 ..........................................
Divestments .....................................................................
Currency adjustments ......................................................
Expired leases ..................................................................
Balance at 31 December 2020 .........................................
Depreciation .....................................................................
Balance at 31 December 2020 .........................................
At 1 January 2020 .............................................................
Currency adjustments ......................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
22
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Buildings and Vehicies and
11. Right of use assets, continued Land Cold storage Vessels Equipment Total
Carrying amounts
9,582 15,719 5,814 13,371 44,486
9,702 39,892 5,406 12,376 67,376
14,142 38,887 54,671 12,814 120,514
Lease categories
Leases not yet commenced
12. Intangible assets
Intangible assets and amortization are specified as follows:
Market and
Brand customer
Goodwill name Software related Total
Cost
27,411 15,140 27,113 25,756 95,420
0 0 44 0 44
0 0 2,878 0 2,878
0 0 9)( 0 9)(
0 0 1,317)( 0 1,317)(
66)( 34)( 7)( 373)( 480)(
27,345 15,106 28,702 25,383 96,536
27,345 15,106 28,702 25,383 96,536
0 0 2,440 0 2,440
309 41 3 288 641
27,654 15,147 31,145 25,671 99,617
Amortization
0
0
20,789
8,404
29,193
0 0 3,420 1,660 5,080
0 0 9)( 0 9)(
0 0 1,279)( 0 1,279)(
0 0 7)( 170)( 177)(
0
0
22,914
9,894
32,808
Reclassification of assets ..............................................
Currency adjustments ......................................................
Eimskip has not commited to material leases that have not yet commenced which will lead to a right-of-use asset and a lease
liability.
Land: Eimskip leases land for operations of terminal areas. The lease terms and the remaining lease terms on the date of the
initial application, varies between 1 and 50 years.
Currency adjustments ......................................................
Notes
Vessels: Eimskip charters vessels for use in the sailing system. The lease terms and the remaining lease terms on the date of
the initial application, varies between 2 months and 5 years.
Disposal ............................................................................
Balance at 31 December 2020 .........................................
1 January 2020 ..................................................................
31 December 2020 ............................................................
31 December 2021 .............................................................
Sales during the year .......................................................
Amortization ....................................................................
Vehicles and equipment: Eimskip leases vehicles and containers for use in its logistics and terminal operations. The lease terms
and the remaining lease terms on the date of the initial application, varies between 1 and 8 years.
Balance at 1 January 2020 ................................................
Additions ..........................................................................
Balance at 31 December 2021 ..........................................
Balance at 31 December 2020 .........................................
Additions ..........................................................................
Currency adjustments ......................................................
Balance at 1 January 2021 .................................................
Disposal ............................................................................
Sales during the year .......................................................
Balance at 1 January 2020 ................................................
Buildings and cold storages: Eimskip leases buildings for regional offices and cold storages for use in logistics. The lease terms
and the remaining lease terms on the date of the initial application, varies between 1 and 40 years.
Eimskip leases vessels, buldings and cold storages, land, vehicles and equipment under operating leases.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
23
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
12. Intangible assets, continued
Market and
Brand customer
Goodwill name Software related Total
0
0
22,914
9,894
32,808
0 0 3,187 1,658 4,845
0 0 3 131 134
0 0 26,104 11,683 37,787
Carrying amounts
27,411 15,140 6,324 17,352 66,227
27,345 15,106 5,788 15,489 63,728
27,654 15,147 5,041 13,988 61,830
Impairment testing
2021 2020
1.0-2.5%
1.0-2.5%
6.29 -10.94% 5.9-9.0%
30%-71% 26-70%
Weighted-average cost of capital ...........................................................................................................
Sector debt-ratio .......................................................................................................................................
Due to COVID-19 the operational environment has been challenging due to demand and supply disruption, however the
financial impact on the CGU's have been favorable due to positive margin developement.
Balance at 1 January 2021 .................................................
Amortization ....................................................................
The carrying amount of goodwill and brand name are tested annually for impairment. No impairment has been recognized.
Balance at 31 December 2020 .........................................
Notes
At 31 December 2021 ........................................................
Future growth rate ...................................................................................................................................
The impairment tests were performed in the fourth quarter of 2021 and were based on the results of 31 December 2021 as well
as the board approved budget for the year 2022. The impairment tests are in the form of discounted cash-flow analysis. The
periods projected are the years 2022-2026 with a fixed growth rate after the projected period when estimating the terminal
value. The material variables in the test are revenue growth, EBITDA margin, investments and growth rate after the five year
forecasted period. The projected variables are based on past experience and market research. The growth in EBITDA margins
used to estimate future cash flows are based on management best estimates that take into account past performance and
experience, external market growth assumptions and any uncertainties in the market the CGU operates or depends on.
At 31 December 2020 .......................................................
Intangible assets other than goodwill and brand names are stated at cost less any accumulated amortization. Goodwill and
brand name were assessed to have an indefinate useful life since there was no foreseeable limit to the period over which the
asset is expected to generate net cash inflows for the entity.
The Company has acquired several subsidiaries. Each acquired company is considered to be one Cash Generating Unit ("CGU")
for the purpose of impairment testing. The carrying amounts of goodwill related to the acquisition of Mareco N.V. is EUR 9.8
million, EUR 3.9 million is related to SHIP-LOG A/S, EUR 7.6 million related to Extraco Internationale Expeditie B.V and EUR 3.4
million related to Tromsøterminalen AS. These CGU's are all part of forwarding services.
At 1 January 2020 .............................................................
Currency adjustments ......................................................
Three individual CGU's are sensitive for impairment. In each individual case, if one of the variables, individually or collectively, of
future growth rate increases or decrease by 0 - 1%, EBITDA increases or decreases by 0- 10% or WACC increases by 0 - 1% it
leads, in each case, to an impairment in the range EUR 0.1 - 2.0 million.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
24
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
13. Investments in equity-accounted investees
Share of Share of
earnings earnings Book value Book value
Shares in associated companies
Ownership 2021 2020 2021 2020
Qingdao Port Eimskip
30.0% 141 86 948 725
20.5% 0 375 0 0
36.0% 10 0 38 0
49.0% 57 177 2,888 2,705
40.0% 0 25)( 0 0
208 613 3,874 3,430
Joint ventures
47.9% 6,703 625)( 12,247 6,412
49.0% 0 0 12 12
49.0% 212 42 599 386
50.0% 26 30 945 918
51.0% 19 202 510 491
6,960 351)( 14,313 8,219
7,168
262
18,187
11,649
Summarised financial information for ElbFeeder Inc.
Income Statement:
2021
2020
12,876 4,644
743)( 873)(
5,265 0
927)( 1,345)(
3,059)( 2,957)(
65,389 4,915
78,801 4,384
78,801 4,384
64,808)( 6,363)(
13,993 1,979)(
6,703 625)(
Financial Position:
106,229 44,318
1,863 1,643
7,586 1,400
12,507)( 17,398)(
0 6,058)(
2,114)( 2,985)(
101,057 20,920
Vessels .......................................................................................................................................................
Working capital .........................................................................................................................................
Cash and cash equivalents .......................................................................................................................
Notes
Net assets .................................................................................................................................................
Feederstar Verwaltung GmbH ........................................
P/F Gervi, The Faroe Islands ...........................................
and joint ventures .......................................................
Coldchain Log. Co. Ltd., China .........................................
Feederstar GmbH & Co. KG, Germany .............................
P/F í Ánunum, The Faroe Islands ...................................
Tromsøterminalen Eiendom AS, Norway .......................
The Group has long term receivables on one of it's equity-accounted investees amounting to EUR 0.6 million at year-end 2021
(2020: EUR 3.4 million)
Operating results ......................................................................................................................................
Administration costs ................................................................................................................................
Net finance expenses ...............................................................................................................................
Vessels revaluation ...................................................................................................................................
Profit for the period ..................................................................................................................................
Depreciation and amortization ................................................................................................................
Profit for the period ..................................................................................................................................
Eimskip has interests in a number of associates and joint ventures. The ownership percentage, carrying amounts and share of
earnings (loss) is specified as follows:
Eimskip adjustment to ElbFeeders' fair value accounting ....................................................................
Eimskip's share in results (47.9%) ..........................................................................................................
Gain on sale of vessel ...............................................................................................................................
Adjusted profit ..........................................................................................................................................
Bank loans .................................................................................................................................................
Trade and other payables .........................................................................................................................
Loan from shareholders ...........................................................................................................................
Total equity accounted investees
TLR Europe Asp ...............................................................
Krít eignarhaldssjódur, Iceland ........................................
Hammerfest Fryseterminal AS, Norway ........................
*The joint venture ElbFeeder Inc. chooses to value its vessel fleet at fair value which the Group reverses before applying the
equity method. Please see summarized financial information here below:
ElbFeeder Inc., The Marshall Islands* ............................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
25
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
13. Investments in equity-accounted investees, continued
Reconciliations to carrying amounts:
2021 2020
20,920 17,641
78,801 4,384
3,238)( 0
4,574 1,105)(
101,057 20,920
14. Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
2021
Assets Liabilities Net
655 2,286)( 1,631)(
128 257)( 129)(
311 14,331)( 14,020)(
831 17)( 814
73 0 73
14,407 0 14,407
54 3,694)( 3,640)(
47 0 47
16,506 20,585)( 4,079)(
15,175)( 15,175 0
1,331 5,410)( 4,079)(
2020
Assets Liabilities Net
489 1,703)( 1,214)(
142 239)( 97)(
187 3,712)( 3,525)(
1,196 4,128)( 2,932)(
62 0 62
3,425 0 3,425
443 406)( 37
2,802 0 2,802
8,746 10,188)( 1,442)(
6,002)( 6,002 0
2,744 4,186)( 1,442)(
15. Trade and other receivables
Trade and other receivables are specified as follows:
2021 2020
135,107 102,534
1,485 442
16,082 12,476
152,674 115,452
Current liabilities ...............................................................................................................
Tax loss carried-forward ....................................................................................................
Current assets ....................................................................................................................
Current liabilities ...............................................................................................................
Intangible assets ...............................................................................................................
Total tax assets (liabilities) ..............................................................................................
The Group had in the year-end 2020, tax losses carried-forward that had not been recognized. In the year-end 2021 those
unrecognized tax-losses carried forward were immaterial (2020: EUR 1.2 million).
Other receivables ......................................................................................................................................
Net tax assets ....................................................................................................................
Set off tax ..........................................................................................................................
Trade receivables ......................................................................................................................................
Other ...................................................................................................................................
Trade and other receivables total ............................................................................................................
Restricted cash .........................................................................................................................................
Restricted cash consists of deposits for guarantees issued towards tax authorities, customs, port authorities and leases of
office buildings.
Property, vessels and equipment .....................................................................................
Intangible assets ...............................................................................................................
Set off tax ..........................................................................................................................
Current assets ....................................................................................................................
Total tax assets (liabilities) ..............................................................................................
Other ...................................................................................................................................
Notes
Lease liabilities ..................................................................................................................
Net tax assets ....................................................................................................................
Opening net assets 1 January ...................................................................................................................
Profit for the period ..................................................................................................................................
Dividends paid ...........................................................................................................................................
Closing net assets .....................................................................................................................................
Property, vessels and equipment .....................................................................................
Right-of-use assets ..........................................................................................................
Tax loss carried-forward ....................................................................................................
Lease liabilities ..................................................................................................................
Right-of-use assets ..........................................................................................................
Translation difference ..............................................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
26
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
15. Trade and other receivables, continued
Allowance for impairment losses of trade receivables are specified as follows:
6,496)( 6,058)(
528 258
2,176)( 696)(
8,144)( 6,496)(
16. Cash and cash equivalents
Cash and cash equivalents are specified as follows:
6,095 100
29,958 14,602
933 938
36,986
15,640
17.
Capital and reserves
Share capital
Shares issued to A1988 hf.
Share premium
Reserves
Undistributed profits
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
According to the composition agreement for A1988 hf., finalized in 2009, a 4.2% shareholding in Eimskipafélag Íslands hf. was
not distributed to creditors but reserved for A1988 hf. to satisfy contingent claims that might arise in coming periods resulting
from events prior to the composition agreement. The shares did not have voting rights attached to them.
Write-offs ..................................................................................................................................................
Money market ...........................................................................................................................................
Bank deposits ............................................................................................................................................
Cash on hand .............................................................................................................................................
Cash and cas equivalents total ................................................................................................................
Due to the insignificant amount of write-offs, these are not shown separately in the Consolidated Income Statement. For
more information regarding trade and other receivables see note 21.
The
fair value reserve
comprises the cumulative net change in the fair value of minority put options.
According to Icelandic law, companies are required to recognize share in profit or loss of subsidiaries and associated companies
that exceeds dividend received or declared from those companies in a restricted reserve among equity. If a subsidiary or an
associated company is sold or liquidated, the undistributed profit or loss relating to that entity shall be transferred to retained
earnings.
The Company's capital stock is nominated in Icelandic króna (ISK). The nominal value of each share is ISK 1 and one vote is
attached to each share. Total authorized and issued shares were 187,000,000 the beginning and 175,200,000 at the end of the
year. The shares are listed on the Icelandic Stock Exhange (Nasdaq Iceland) under the ticker symbol EIM. The shares are in a
single class bearing equal rights.
Balance at beginning of year ....................................................................................................................
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
In April 2020, Eimskip received 904,213 shares in Eimskipafélag Íslands hf. from A1988 hf., formerly known as HF.
Eimskipafélag Íslands. As described in Eimskip’s Prospectus dated 22 October 2012, A1988 did hold shares in Eimskipafélag
Íslands hf. which were to be returned to Eimskipafélag Íslands hf. upon certain conditions being met. These conditions were
met in 2020. Previously, as disclosed on 12 March 2014, A1988 transferred 7,441,950 shares to Eimskipafélag Íslands hf. A1988
hf. no longer holds any shares in Eimskipafélag Íslands hf.
Balance at year-end ..................................................................................................................................
Total outstanding shares were 180,867,243 at the beginning of the year and 175,168,290 at the end of the year. They
decreased by 5,700,000 due to a share capital reduction. The share capital of the Company is now ISK 175.2 million and the
number of Company's treasury shares is ISK 31.710, or 0.018% of the total share capital of the Company. The EUR amount of
capital stock was 1.1 million at year-end 2021.
Changes in allowance for impairment losses .........................................................................................
Share premium represents excess of payment above nominal value that shareholders have paid for shares sold by the
Company. The balance of the share premium account can be used to offset losses not covered by other reserves or to offset
stock splits.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
27
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
17.
Capital and reserves, continued
Reduction of treasury shares in relation to previous share buy back programs
Reduction of share capital with a payment to shareholders
Dividend
18. Loans and borrowings
Loans and borrowings consist of the following:
2021 2020
146,264 160,906
569 111
146,833 161,017
13,034)( 15,125)(
569)( 111)(
13,603)( 15,236)(
133,230 145,781
Secured bank loans
Secured bank loans are as follows:
Nominal Carrying Nominal Carrying
interest amount interest amount
1.4% 141,568 1.6% 154,369
4.5% 2,858 5.4% 3,725
2.0% 1,426 1.6% 1,809
- 412 - 1,003
146,264 160,906
Aggregated annual maturities of secured-bank loans are as follows:
Bank overdraft and short term borrowings ............................................................................................
2020
Loans in USD ...............................................................................................
Bank overdraft and short term borrowings ............................................................................................
The loan agreements of Eimskip contain restrictive covenants. At year-end 2021 and 2020 Eimskip complied with all restrictive
covenants.
The reduction of treasury shares was executed on April 7th. The Company‘s treasury shares were reduced by ISK 6,100,000, or
from ISK 187,000,000 to ISK 180,900,000 nominal value.
The share capital reduction with a payment to shareholders consisted of a share capital reduction of 5,700,000 million shares
or from 180,900,000 to 175,200,000 issued shares with a payment to shareholders in the amount of ISK 1,675.0 million or EUR
11.2 million. The payment date was 30 April 2021.
Subsequent to the shareholder distributions above share capital is ISK 175,200,000 and each share is divided into one ISK.
Treasury shares are ISK 31,710 and outstanding shares are ISK 175,168,290. Prior to the reduction in treasury shares they
amounted to 3.28% of total issued shares, but is after the reduction 0.018% of total issued share capital.
Non-current loans and borrowings ..........................................................................................................
The Board of Directors has approved the following dividend policy: "The policy of Eimskipafélag Íslands hf. is to pay annual
dividend that equals an amount in the range of 10-65% of net profit after taxes. Decisions on dividend payment, and the exact
amount, are subject to the Company’s future investment plans, market outlook and satisfactory capital structure at any given
time."
This note provides information on the contractual terms of Eimskip's interest bearing loans and borrowings. For more
information about Eimskip’s exposure to foreign currency risk, see note 21:
Treasury shares are not entitled to receive dividend. The Board of Directors proposes a dividend payment to shareholders in
2022 in the amount of ISK 14.27 per share. The proposed dividend payment is ISK 2,499.7 million, or approximately EUR 17.7
million, which represents 43.8% of net earnings for the year 2021.
Loans in EUR ...............................................................................................
2021
The Annual General Meeting of Eimskip approved on 25 March 2021 a dividend payment of ISK 2.47 per share to shareholders.
The dividend payment amounted to ISK 446.7 million or EUR 3.0 million. The payment date was 15 April 2021. According to a
resolution made on the Company's 2020 annual General Meeting, no dividend was paid to shareholders in 2020 for the year
2019.
Secured bank loans ...................................................................................................................................
Total secured bank loans ............................................................................
Total loans and borrowings ......................................................................................................................
Current maturities of secured bank loans ...............................................................................................
Loans in other currencies ...........................................................................
Loans in ISK .................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
28
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
18. Loans and borrowings, continued
2021 2020
13,034 15,125
13,387 13,337
11,451 13,123
11,363 11,380
11,239 11,275
85,790 96,666
146,264 160,906
Reconciliation of movements of loans and borrowings to cash flow's financing activities
2021 2020
161,017 163,004
18,896 47,287
33,996)( 46,534)(
459 46
14,641)( 799
457 2,786)(
457 2,786)(
146,833 161,017
19. Lease liabilities
Lease liabilities are as follows:
2021 2020
11,310 7,236
53,786 10,778
18,340 10,526
27,520 26,666
9,041 8,947
119,997 64,153
28,229)( 10,861)(
91,768 53,292
Maturity analysis:
28,229 10,861
25,992 6,863
15,601 5,419
7,850 3,811
2,219 1,953
40,106 35,246
119,997 64,153
After 60 months .......................................................................................................................................
Currency adjustments ..............................................................................................................................
Repayment of non-current loans and borrowings ..................................................................................
Lease liabilities in USD .............................................................................................................................
36 - 48 months .........................................................................................................................................
Non-current maturities ............................................................................................................................
12 - 24 months ..........................................................................................................................................
48 - 60 months .........................................................................................................................................
Lease liabilities in ISK ...............................................................................................................................
24 - 36 months .........................................................................................................................................
12 - 24 months ..........................................................................................................................................
Within 12 months ......................................................................................................................................
48 - 60 months .........................................................................................................................................
Balance of loans and borrowings as at 1 January ....................................................................................
Proceeds from non-current loans and borrowings with cash effects ...................................................
Non-cash changes of loans and borrowings:
Changes in short-term borrowings ..........................................................................................................
Lease liabilities in NOK ............................................................................................................................
Total secured bank loans ..........................................................................................................................
Total non-cash changes of loans and borrowings ..................................................................................
Changes from financing cash flows:
Total changes from financing cash flows ...............................................................................................
36 - 48 months .........................................................................................................................................
Lease liabilities in other currencies .........................................................................................................
Total ...........................................................................................................................................................
Current maturities ....................................................................................................................................
After 60 months .......................................................................................................................................
Total ...........................................................................................................................................................
Loans and borrowings at 31 December 2021 ...........................................................................................
24 - 36 months .........................................................................................................................................
On demand or within 12 months ..............................................................................................................
In 2020, the proceeds from the financing of the two vessels, Brúarfoss and Dettifoss were used to repay other long-term loans
and revolving credit facilities.
Lease liabilities in EUR .............................................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
29
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
19. Lease liabilities, continued
Reconciliation of movements of lease liabilities
64,153 41,259
19,057)( 14,095)(
19,057)( 14,095)(
0 0
77,706 39,548
5,793)( 963)(
2,988 1,596)(
74,901 36,989
119,997 64,153
20. Trade and other payables
Trade and other payables are attributable to the following:
2021 2020
55,644 43,003
37,567 26,125
93,211 69,128
21. Financial risk management
Overview
- Credit risk
- Liquidity risk
- Market risk
Risk management framework
(i) Credit risk
2021 2020
528 258
Credit risk is the risk of financial loss to Eimskip if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from Eimskip's receivables from customers and investment securities.
Eimskip's risk management policies are established to identify and analyze the risks faced by Eimskip, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and Eimskip's activities. Eimskip, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Board of Directors oversees how management monitors compliance with Eimskip's risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by Eimskip.
The carrying amounts of financial assets represent the maximum credit exposure. Impairment losses on financial assets
recognised in profit or loss were as follows.
Impairment loss on trade and other receivables (note 15) ....................................................................
Currency adjustments ..............................................................................................................................
Total ...........................................................................................................................................................
Lease liabilities at 31 December 2021 ......................................................................................................
Balance of lease liabilities as at 1 January ...............................................................................................
Total changes from financing cash flows ...............................................................................................
Non-cash changes of loans and borrowings:
Changes from financing cash flows:
Divested leases .........................................................................................................................................
New or renewed leases .............................................................................................................................
Finance lease liabilities reclassified to lease liabilities ..........................................................................
Repayment of lease liabilities ..................................................................................................................
Other payables ..........................................................................................................................................
The Board of Directors has overall responsibility for the establishment and oversight of Eimskip's risk management framework.
Trade payables ..........................................................................................................................................
Total non-cash changes of loans and borrowings ..................................................................................
Eimskip has exposure to the following risks from its use of financial instruments:
This note presents information about Eimskip's exposure to each of the above risks as well as operational risk, Eimskip's
objectives, policies and processes for assessing and managing risk, and Eimskip's management of capital. Further quantitative
disclosures are included throughout these Consolidated Financial Statements.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
30
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
21. Financial risk management, continued
Trade and other receivables
Exposure to credit risk
2021 2020
Carrying Carrying
Note amount amount
3,941 7,354
15 152,674 115,452
16 36,986 15,640
193,601 122,806
Impairment risk
The aging of trade receivables at the reporting date was as follows:
Gross Impairment Gross Impairment
2021 2021 2020 2020
100,225 440)( 72,879 580)(
28,547 225)( 21,610 252)(
4,818 104)( 2,694 69)(
9,661 7,375)( 11,847 5,595)(
143,251 8,144)( 109,030 6,496)(
(ii) Liquidity risk
At year-end 2021 and 2020 there were no signifiant concentration of credit risk for trade and other receivables by individual
counterparties or individual countries.
Past due 91 - 180 days ................................................................................
Past due 1 - 90 days ....................................................................................
Not past due ................................................................................................
Total .............................................................................................................
Liquidity risk is the risk that Eimskip will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial assets. Eimskip's approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to Eimskip's reputation. The Company has undrawn revolver facility
amounting to EUR 36.9 million at year-end 2021 (2020: EUR 51.3 million).
Given the recent development of the COVID-19 pandemic, the company does not consider it a severe operational or financial
risk, but the management monitors collections closely.
Finance assets ...................................................................................................................
Cash and cash equivalents ................................................................................................
Total ...................................................................................................................................
Eimskip's exposure to credit risk is influenced mainly by the individual characteristics of each customer. No single customer
accounts for more than 10% of Eimskip's revenue from sales transactions.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was as follows:
Trade and other receivables ..............................................................................................
More than 180 days ....................................................................................
Eimskip has established a credit policy under which each new customer is analyzed individually for creditworthiness before
Eimskip's standard payment and delivery term and conditions are offered. Eimskip's review includes external ratings, when
available, and in some cases bank references. Customers that fail to meet Eimskip's benchmark creditworthiness may transact
with Eimskip only on a prepayment basis.
Goods that are shipped or transported may be with-held until payment for service rendered has been received. Eimskip usually
does not require collateral in respect to trade and other receivable.
Eimskip establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables and investments. The main components of this allowance are a specific loss component that relates to individually
significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have
been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics
for similar financial assets.
The fair value of financial assets and liabilities equals their carrying amount, as the impact of discounting is not significant.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
31
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
21. Financial risk management, continued
(ii) Liquidity risk, continued
Carrying Contractual Less than 1 - 2 2 - 5 More than
Financial liabilities
amount cash flow 1 year years years 5 years
31.12.2021
Secured bank loans ............................. 146,833 159,428 15,940 15,439 65,131 62,918
Lease liabilities ................................... 119,997 188,491 33,319 30,062 35,176 89,934
Trade and other payables ................... 93,211 93,211 93,211 0 0 0
Income tax payable ............................. 4,562 4,562 4,562 0 0 0
Total ..................................................... 364,603 445,692 147,032 45,501 100,307 152,852
31.12.2020
Secured bank loans ............................. 161,017 167,796 18,588 15,002 71,389 62,817
Lease liabilities .................................. 64,153 140,086 14,628 9,936 19,470 96,052
Trade and other payables ................... 69,128 70,891 70,891 0 0 0
Income tax payable ............................. 1,763 1,763 1,763 0 0 0
Total ..................................................... 296,061 380,536 105,870 24,938 90,859 158,869
(iii) Market risk
Exposure to currency risk
31 December 2021
USD ISK EUR DKK Other
2,888 83 0 955 26
48,257 24,936 3,495 2,243 7,539
13,722 6,442 855 684 2,608
2,858)( 815)( 650)( 0 108)(
51,348)( 17,255)( 0 27)( 1,632)(
18,407)( 16,202)( 441)( 1,021)( 6,031)(
0 1,267)( 0 0 0
7,746)( 4,077)( 3,260 2,833 2,402
Lease liabilities ................................................................
Net balance sheet exposure ............................................
Trade and other payables ................................................
Cash flows included in the maturity analysis are not expected to occur significantly earlier, or at significantly different amounts.
Eimskip's exposure to foreign currency risk is as follows based on EUR amounts:
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices, such
as bunkers. The objective of market risk management is to manage and control market risk exposure within acceptable
parameters, while optimizing the return.
The Group uses cash flow hedges to hedge its exposure to currency risk for salaries in Icelandic kronur (ISK) and other add-hoc
material foreseeable payments, e.g. dividend and investments. The Group evaluates its exposure to currency risk on an regular
basis and uses hedge instruments to limit the effect of fluctuations in currency rates. The hedge reserve which is a part of
equity due to currency hedges was negative by EUR 5 thousand in the year-end 2021.
The exposure to the fluctuations in bunker prices is mostly offset by the bunker adjustment factor (BAF) borne by customers.
If at any time, a material exposure is identified, the Group uses commodity hedges to limit the risk.The hedge reserve which is
a part of equity due to commodity hedges was positive by EUR 145 thousand in the year-end 2021.
Cash and cash equivalents ..............................................
The following are the contractual maturities of financial liabilities, including estimated interest payments:
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in currencies other than the
respective functional currencies of the Group entities. At year-end 2021 the primary risks are attached to the US Dollar (USD),
the Icelandic krona (ISK), the Euro (EUR) but also the Danish crown (DKK) as can be seen in the table below.
Trade and other receivables ............................................
Loans and borrowings .....................................................
Income tax payable ..........................................................
Finance assets .................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
32
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
21. Financial risk management, continued
Exposure to currency risk
31 December 2020
USD ISK EUR GBP Other
7,930 64 0 0 0
34,744 19,056 2,649 736 5,751
3,873 200 805 184)( 949
3,725)( 1,170)( 718)( 0 391
7,464)( 9,077)( 0 0 0
10,759)( 17,637)( 667)( 2,326)( 1,521)(
24,599 8,564)( 2,069 1,774)( 5,570
Sensitivity analysis
2021 2020
768
1,914)
(
335 690
259)( 156)(
223)( 394)(
151)( 59)(
69 142
49)( 53)(
The following significant exchange rates were applied during the year:
EUR:
2021 2020 2021 2020
1.1824 1.1418 1.1370 1.2215
129.8118 121.8166 130.8600 126.1250
0.8597 0.8900 0.8403 0.8932
150.1235 154.5572 147.5750 156.0900
7.6267 7.8758 7.2269 7.9724
7.4369 7.4537 7.4371 7.4425
4.5641 4.4463 4.5891 4.5601
Interest rate risk
Variable rate instruments
2021 2020
36,986 15,640
146,833)( 161,017)(
109,847)( 145,377)(
ISK ................................................................................................................
GBP ...............................................................................................................
Average rate
At the reporting date the interest rate profile of Eimskip's interest bearing financial instruments was:
Cash and cash equivalents .......................................................................................................................
Carrying amount
Net exposure .............................................................................................................................................
Financial liabilities ....................................................................................................................................
DKK ..............................................................................................................
RMB .............................................................................................................
JPY ................................................................................................................
PLN ...............................................................................................................
Finance assets .................................................................
Trade and other receivables ............................................
Loans and borrowings .....................................................
A 10% weakening of the EUR against the above currencies would have had the equal but opposite effect on the above
currencies to the amounts shown above on the basis that all other variables remain constant.
Trade and other payables ................................................
A 10% strengthening of the EUR against the following currencies at 31 December would have changed result after income tax
by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The
analysis was performed on the same basis for the previous year.
Cash and cash equivalents ..............................................
PLN ............................................................................................................................................................
USD ..............................................................................................................
Net balance sheet exposure ............................................
ISK ..............................................................................................................................................................
EUR ............................................................................................................................................................
Lease liabilities ................................................................
JPY ..............................................................................................................................................................
A change of 100 basis points in interest rates at the reporting date would increase (decrease) result after income tax by EUR
(63) thousand (2020: EUR 406 thousand). This analysis assumes that all other variables, in particular foreign currency rates,
remain constant. The analysis was performed on the same basis for the year 2020. Eimskip does not account for any fixed-rate
financial assets or financial liabilities at fair value through profit or loss.
The Group uses interest rate swaps to fix interest rates on its long term borrowings, where a certain proportion of interest
rates are to be fixed according to the Group's Treasury Policy. The hedge reserve which is a part of equity due to interest swaps
was positive by EUR 36 thousand in the year-end 2021.
Reporting date spot rate
GBP ............................................................................................................................................................
USD ............................................................................................................................................................
DKK ............................................................................................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
33
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
21. Financial risk management, continued
(iv) Operational risk
Capital management
(i) Equity ratio
2021 2020
261,465 230,657
634,324 536,131
41.22% 43.02%
266,830 225,170
3,941)( 7,354)(
36,986)( 15,640)(
225,903 202,176
104,059 61,678
2.17 3.28
22. Leases
Lease expenses in the Income Statement
2021 2020
20,801 15,282
3,728 3,539
422 695
227 417
25,178 19,933
EBITDA .......................................................................................................................................................
Eimskip's policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future
development of the business.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior
management within each business unit.
Eimskip manages operational risk in order to avoid financial losses and damage to Eimskip’s reputation. When managing this
risk, overall cost effectiveness and avoidance of control procedures that restrict initiative and creativity are considered.
The Board of Directors of Eimskip has approved a long-term target capital structure. The objective is to maintain an equity ratio
near 40%, a benchmark leverage in the range of 2-3 for net debt against EBITDA. This is a long-term objective through the
business cycle that can vary from quarter to quarter based on general economic and business conditions as well as strategic
initiatives.
Total interest-bearing debt and lease liabilities .....................................................................................
Net debt .....................................................................................................................................................
Net debt / EBITDA ....................................................................................................................................
Total expenses due to leases in the Income Statement .......................................................................
Depreciation of right-of-use assets ........................................................................................................
Interest on lease liabilities .......................................................................................................................
Expenses related to low-value leases .....................................................................................................
Expenses related to short-term leases ...................................................................................................
Cash and cash equivalents .......................................................................................................................
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with Eimskip’s processes,
personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those
arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise
from all of Eimskip's operations.
Total assets ...............................................................................................................................................
Finance assets* ........................................................................................................................................
Equity ratio ................................................................................................................................................
Total equity ...............................................................................................................................................
(ii) Net debt to EBITDA ratio (benchmark leverage)
For the purposes of managing capital, management monitors the equity ratio and the net debt to equity ratio. The goal is to
maintain both a strong equity ratio and a strong ratio of net debt to EBITDA.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
34
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
22. Leases, continued
Cash outflow for leases
19,057)( 14,095)(
649)( 1,112)(
19,706)( 15,207)(
23. Related parties
Fee paid to the Board of Directors Shares at
year-end*
2021 2020 2021 2020 2021
8,286 6,543 55 42 244,959
7,802 5,820 52 38 3,089
6,369 5,925 42 38 0
4,888 0 33 0 30,000
4,888 0 33 0 13,200
2,681 3,677 18 24 14,527
0 0 0 0 0
2,378 7,832 16 51 0
1,455 4,438 10 29 0
Salaries and benefits paid to Executive Management
Shares at
2021
Base salary Other ** Base salary Other year-end*
41,302 9,541 275 64 240,173
293,366 69,995 1,954 466 378,841
Shares at
2020
Base salary Other ** Base salary Other year-end*
36,414 12,388 236 80 136,473
294,591 75,248 1,906 487 585,547
Vilhelm Már Thorsteinsson, CEO ....................................
Lease payments of low-value and short-term leases ............................................................................
Fee in EUR
In ISK
Repayment of leases in the cash-flow statement .................................................................................
Gudrún Ó. Blöndal, Board Member ...................................
Vilhjálmur Vilhjálmsson, former Board Member .............
Fee in ISK
Total cash outflow for leases ...................................................................................................................
In EUR
Executive Management*** .............................................
Transactions with the largest shareholder Samherji Holding ehf. and related companies during the year amounted to EUR 13.1
million (2020: EUR 8.7 million) and receivables at year-end amounted to EUR 2.8 million (2020: EUR 1.4 million). Transactions
with material equity accounted investees amounted to EUR 7,1 million and payables at year-end amounted to EUR 0.2 million.
Transactions with related parties are on arm's length basis.
The Company's largest shareholder Samherji Holding ehf. with 32.8% shareholding of outstanding shares is considered a
related party, as well as subsidiaries, material equity accounted investees and key management personnel. Intercompany
transactions with subsidiaries are eliminated in the consolidation.
Óskar Magnússon, Alternate of the Board ......................
Margrét Guðmundsdóttir, Board Member .......................
During the year there were no transactions nor outstanding balances at year-end with key management personnel.
Jóhanna á Bergi, Alternate of the Board ..........................
Lárus L. Blöndal, Vice-Chairman .......................................
Hrund Rudolfsdóttir, former Vice-Chairman ...................
Baldvin Thorsteinsson, Chairman .....................................
Executive Management*** .............................................
In ISK In EUR
Ólöf Hildur Pálsdóttir, Board Member ..............................
** Cash incentives, travel allowance, pension contributions and house and car benefits.
* Number of shares held directly by members of the Board of Directors and Executive management or parties related to them.
Vilhelm Már Thorsteinsson, CEO ....................................
***The Executive Management consists of Hilmar Pétur Valgardsson COO of Operations, Bragi Thór Marinósson EVP of
International Operations, Edda Rut Björnsdóttir EVP of Human Resources and Communication, Björn Einarsson EVP of Sales
and Business Management, Böðvar Örn Kristinsson EVP of Iceland Domestic Operations, María Björk Einarsdóttir CFO, Hilmar
Karlsson CIO and Davíd Ingi Jónsson General Councel. The figures for 2021 also include Egill Örn Petersen former CFO,
Gudmundur Nikulásson former EVP of Iceland Domestic Operations as well as Elín Hjálmsdóttir former EVP of Human
Resources and Matthías Matthíasson former EVP of Sales. The figures for 2020 do not include Hilmar Karlsson CIO , Davíð Ingi
Jónsson General Councel, Böðvar Örn Kristinsson EVP of Iceland Domestic Operations nor María Björk Einarsdóttir CFO.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
35
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
24. Auditor's fees
2021 2020
354 416
572 556
926 972
3 236
223 134
226 370
1,152 1,342
25. Group entities
Ownership Ownership
Interest Interest
2021 2020
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
80% 80%
100% 100%
51% 51%
100% 100%
26. Other matters
Investigation of the Icelandic Competition Authority
Other services fees to other auditors ......................................................................................................
Total audit fees .........................................................................................................................................
As a result of a purchase price allocation for acquisition in subsidiaries, Eimskip has recognized in the statement of financial
position, a financial liability in the amount of EUR 2.8 million which reflects the estimated exercise price of put options issued
towards non-controlling interests for their shareholding in the subsidiaries acquired. The financial liability is initially carried at
fair value and classified as non-current. The fair value changes of the liability are recognized through equity. In the event that
the options expire unexercised, the liability is derecognised with a corresponding recognition of a non-controlling interest in
equity and to other equity.
Eimskipafélag Íslands hf. and its subsidiaries, Eimskip Ísland ehf. and TVG-Zimsen ehf., have been under investigation of the
Icelandic Competition Authority (ICA) for nearly a decade.
Country of
The Group's direct subsidiaries are as follows:
Audit fee to the auditor of the Parent Company* .................................................................................
USA
Sæferdir ehf. ..............................................................................................
The Netherlands
Faroe Islands
Iceland
England
Iceland
Canada
Eimskip Holding B.V. ...................................................................................
In the fourth quarter of 2021, Eimskip exercised put option towards the non-controlling interests of Extraco Internationale
Expeditie B.V. and SHIP-LOG A/S.
The Netherlands
In June 2021, Eimskip and the Competition Authority reached a settlement regarding the competition case that had been under
investigation since 2013, where the main period of investigation was 2008 to 2013. As a result, Eimskip agreed to pay a fine
amounting to 1.5 billion ISK or approximately EUR 10 million. The fine was expensed in Q2 but the payment date was July 15th
2021. This settlement concludes the investigation towards Eimskip and there will be no further investigation or proceedings
against the Company or its employees on behalf of the Icelandic Competition Authority regarding the matter.
Iceland
Eimskip UK Ltd. ...........................................................................................
Eimskip USA, Inc. ........................................................................................
Total Auditor's fees for audit for the relevant fiscal year ......................................................................
Audit fee to other auditors ......................................................................................................................
At year-end the Company owned directly nine subsidiaries that are all included in the consolidation. The direct subsidiaries
owned 58 subsidiaries at year-end. The Company holds the majority of voting power in all of its subsidiaries. Assets, liabilities,
revenues and expenses in Consolidated Financial Statements that include a non-controlling interest are immaterial to the
Group.
Eimskip Asia B.V. ........................................................................................
TVG-Zimsen ehf. .........................................................................................
incorporation
*The auditors of the Parent Company for the year 2021 are PwC in Iceland but was KPMG in Iceland for the year 2020.
P/f Skipafélagid Føroyar .............................................................................
Harbour Grace CS Inc. ..................................................................................
Other services fees to the auditor of the Parent Company* .................................................................
Eimskip Ísland ehf. .....................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
36
Amounts are in thousands of EUR
__________________________________________________________________________________________________________________________________________
Notes
26. Other matters, continued
Icelandic District Prosecutor
Tax related matters
27. Subsequent events
There are no subsequent events to report.
The Icelandic Directorate of Internal Revenue ruled in December 2017 regarding the taxation of the operation of foreign vessel
subsidiaries of Eimskip. The Internal Revenue Board confirmed the ruling in March 2019. Due to this ruling Eimskip expensed
EUR 3.4 million in the Income Statement in the first quarter of 2019 and has paid EUR 0.7 million as well as utilized EUR 2.7
million of tax-losses carried forward.
The Environment Agency of Iceland reported Eimskipafélag Íslands hf. and Eimskip Ísland ehf. to the District Prosecutors for
alleged violation of the Icelandic Waste Management Act due to the vessels Godafoss and Laxfoss in 2019 that were recycled in
India 2020. The Company rejects these allegations as the Company complied with all laws and regulations in the sale process.
Eimskip has been informed that the investigation relates to whether the Act. No. 55/2003 on treatment of waste and
subsequent regulations have been infringed. It is impossible for the Company to estimate possible financial affects as the Act
contains sanctions provisions without stating any specific amounts. The only amount referenced in the Act relates to the
Icelandic Environmental Agency’s authority to apply administrative fines towards legal entities amounting up to ISK 25 million.
No individuals have a legal status in the matter.
Eimskip disagreed with the ruling of the Internal Revenue Board and referred the case to Reykjavik District Court which ruled
against claims made by the Company on April 8th 2021 which had no effect on the Company's financial statements. The
Company decided on April 29th 2021 to refer the case to the Court of Appeal.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
37
Amounts are in thousands of EUR
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies
a.
(i)
(ii)
Subsidiaries
(iii)
Transactions eliminated on consolidation
(iv) Investment in equity-accounted investees
b.
(i) Foreign currency transactions
(ii) Foreign operations
Business combinations
Notes
Foreign currency differences are recognized in other comprehensive income and accumulated translation reserve, except for
the extent that the translation difference is allocated to non-controlling interest.
The accounting policies set out below have been applied consistently to all periods presented in these Consolidated Financial
Statements, and have been applied consistently by Group entities.
Basis of consolidation
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has right to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date on which
control commences until the date on which control ceases.
Intra-group balances and transactions and any unrealized income and expenses arising from intra-group transactions, are
eliminated in preparing the Consolidated Financial Statements.
Associates are those entities in which the Group has significant influence, but not control, over financial and operating
policies. Joint ventures involves contractual sharing of control. Investment in equity-accounted investees is accounted for
using the equity method. They are initially recognized at cost, which includes transaction costs. Subsequent to recognition,
the Consolidated Financial Statements include the Group's share of the profit or loss and other comprehensive income of
equity-accounted investees, until the date on which significant influence or joint control ceases.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary
items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for
effective interest and payments during the year and the amortized cost in foreign currency translated at the exchange rate
at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair
value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognized in profit or loss.
The assets and liabilities of foreign operations, including fair value adjustments arising on acquisition, are translated to EUR
at foreign exchange rates at the reporting date. The income and expenses of foreign operations are translated to EUR at the
average exchange rate for the year.
The disclosures to the Consolidated Financial Statements are prepared on the basis on the concept of materiality. Therefore
information that is considered immaterial for the user of the Consolidated Financial Statements is not disclosed.
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired.
Any goodwill that arises is tested annually for impairment. Any gain on an bargain purchase is recognized in profit or loss
immediately. Transactions costs are expensed as incurred, except if related to the issue of debt or equity securities.
When a foreign operation is disposed of in its entirety or partially such that control or significant influence is lost, the
cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the
gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, the relevant
proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of an
associate while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or
loss.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
38
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies, continued
c. Financial instruments
(i) Non-derivative financial assets
(ii) Derivative financial instruments and hedge accounting
(iii) Cash and cash equivalents
(iv) Non-derivative financial liabilities
(v) Share capital
Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition these financial liabilities are measured at amortized cost using the effective interest method.
Share capital is classified as equity. Incremental costs directly attributable to issue of share capital is recognized as a
deduction from equity, net of any tax effects.
When a derivative is designated as a cash flow hedging instrument, the effective portion of the changes in the fair value of
the derivative is recognized in other comprehensive income and accumulated in the hedging reserve in equity. Any
ineffective portion of the changes in the fair value of the derivative is recognized immediately in profit or loss. The amount
accumulated in equity is retained in other comprehensive income and reclassified to profit or loss in the same period or
periods during which the hedged foreceast cash flows affect profit or loss or the hedged item affects profit or loss.
A derivative is a financial instrument or other contract, the value of which changes in response to a change in an underlying
variable such as an exchange or interest rate, which requires no initial net investment or initial net investment that is
smaller than would be required for other types of contracts that would be expected to have a similar response to changes in
market factors, and which is settled at a future date. Derivatives are recognized at fair value. Fair value changes are
recognized in the income statement as finance income and expense. Derivatives with positive fair values are recognized as
financial assets and derivatives with negative fair values are recognized as trading liabilities.
The Group holds derivative financial instruments to hedge a part of its exposure to fluctuation in oil prices, currency and
interest rates.
When share capital is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of
any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are
presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is
recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share
premium.
The Group has the following non-derivative financial assets: trade and other receivables, cash and cash equivalents and
unlisted equity shares.
Notes
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
The Group has the following non-derivative financial liabilities: loans and borrowings and trade and other payables.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
39
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies, continued
d. Property, vessels and equipment
(i) Recognition and measurement
(ii) Subsequent costs
(iii) Depreciation
15 - 50 years
5 - 25 years
2 - 10 years
e. Intangible assets
(i) Goodwill and brand names
(ii) Customer related intangible assets
(iii) Amortization
3 - 7 years
10 years
Buildings ....................................................................................................................................................................
Containers and equipment .......................................................................................................................................
Market and customer related ...................................................................................................................................
Gains and losses on disposal of an item of property, vessels and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, vessels and equipment, and are recognized net in profit or loss.
Notes
The estimated useful lives of buildings, vessels and equipment are as follows:
Items of property, vessels and equipment are measured at cost less accumulated depreciation and any accumulated
impairment losses.
Depreciation methods, useful lives and residual values are reviewed at each year-end and adjusted if appropriate.
When parts of an item of property, vessels and equipment have different useful lives, they are accounted for as separate
items (major components) of property, vessels and equipment.
Vessels .......................................................................................................................................................................
Cost includes expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral
to the functionality of the related equipment is capitalised as part of that equipment.
Amortization methods, useful lives and residual values are reviewed at each year-end and adjusted if appropriate.
Software ....................................................................................................................................................................
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill and brand names are measured at cost less
accumulated impairment losses. The value of the brand name „Eimskip“ and the brand names of other acquired subsidiaries
are included among brand names.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other
than brand name, from the date that they are available for use, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in the asset. The estimated useful lives are as follows:
Customer relationships and other intangible assets with finite useful lifes that have been acquired as part of aqusitions are
amortized using the straight line method.
Depreciation is calculated for the depreciable amount, which is the cost of an asset less its residual value.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
property, vessels and equipment, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not
depreciated.
The cost of replacing part of an item of property, vessels and equipment is recognized in the carrying amount of the item if
it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be
measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of
property, vessels and equipment are recognized in profit or loss as incurred.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
40
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies, continued
f. Leases
(i)
(ii) Short-term leases and leases of low-value assets
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments;
The Group presents right-of-use assets and lease liabilities separately in the statement of financial position.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the
amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
– variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
– amounts expected to be payable under a residual value guarantee; and
Notes
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Leases in which the Group is a lessee
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases that have a lease term of 12 months or less, with the exception of vessel leases that have a lease term that
varies between 4 months and 5 years. The Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
– the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a
lease unless the Group is reasonably certain not to terminate early.
Eimskip is not a third-party lessor in any material instances.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease
term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-
use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
41
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies, continued
g. Inventories
h. Impairment
(i) Financial assets (including receivables)
(ii) Non - financial assets
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether
there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event
has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future
cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy and the disappearance of an active market for a security.
The Group considers evidence of impairment for trade receivables at both a specific asset and collective level. All individually
significant trade receivables are assessed for specific impairment. All individually significant trade receivable found not to
be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified.
Trade receivables that are not individually significant are collectively assessed for impairment by grouping together
receivables with similar risk characteristics.
In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the
amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are
such that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its
carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective
interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. Interest on
the impaired asset continues to be recognized through the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into smallest group of assets that generates cash inflows
from continuing use that are largely independent of cash inflows of other assets or groups of assets (the "cash-generating
unit").
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss.
Inventories mainly consist of oil, spare parts and other supplies.
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s
recoverable amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use,
recoverable amount is estimated annually at the same time.
Notes
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
42
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28. Significant accounting policies, continued
i. Employee defined contribution plans
j. Provisions
k. Revenue
(i) Revenue recognistion in Liner services
(ii) Revenue recognistion in Forwarding services
(ii) Payment terms and warranties
l. Finance income and finance expense
m. Income tax
Customers are invoiced on a monthly basis and consideration is payable when invoiced. Payment terms varies but is usually
around 30 days and penal interest collected for overdue invoices. While deferred payment terms may be agreed in rare
circumstances, the deferral never exceeds 12 months. The transaction price is therefore not adjusted for the effects of a
significant financing component. All goods in transports are insured by the cargo owners and they have no claims on the
company for damages or delays
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except
to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive
income.
Finance income comprises interest income on funds invested and dividend income. Interest income is recognized as it
accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that
the Group's right to receive payment is established.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability.
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized.
According to IFRS 15, revenue is recognized when control over a good or service is transferred to a customer. Revenue is
measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer rebates
and other similar allowances.
Liner services is a door-to-door transportation process where customers can enter or exit the process whenever before the
terminal handling in exports and after the terminal handling in imports. Activities included in liner services are pre-carriage,
warehousing, terminal handling, container services, sea-transportation, documentation, on-carriage and distribution.
Eimskip considers each activitiy in the liner transportation process to be a distinct performance obligation. For each activity,
with the exception of sea-transportation, revenue is recognized when the performance obligation has been satisfied or at a
certain point-in-time. Revenue from sea-transportation is recognized over-time in accordance with voyage days of the
vessel already sailed in proportion to total estimated voyage days for the route. The consideration received for the services
is allocated to each performance obligation based on tariff or stand-alone selling prices. Rebates are allocated to each
performance obligation based on tariff or stand-alone selling prices.
Forwarding services are an transportation solution outside Eimskip‘s own operating system but is materially the same
process as the liner services.
Finance expenses comprise interest expense on borrowings.
Borrowing costs that are not directly attributable to the acquisition, construction or production of an qualifying asset are
recognized in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on net basis as finance income or finance expense.
Notes
A defined contribution plan is a post-employment benefit plan under which an entity pays contributions into a separate
entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined
contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which
services are rendered by employees.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
43
___________________________________________________________________________________________________________________________________________
28. Significant accounting policies, continued
m. Income tax, continued
n. Earnings per share
o. Segment reporting
29. Standards issued but not yet effective
- A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 37 and some annual improvements on IFRS 1, IFRS 9, IAS 41
and IFRS 16. Effective 1/1 2022
- Definition of Accounting Estimates - Amendments to IAS 8. Effective 1/1 2023
- Reference to the Conceptual Framework – Amendments to IFRS 3. Effective 1/1 2022
- Property, Plant and Equipment: Proceeds before Intended Use. Amendments to IAS 16. Effective 1/1 2022
A number of new standards are effective for annual periods beginning after 1 January 2021 and earlier application is
permitted; however, Eimskip has not early adopted the new or amended standards in preparing these consolidated financial
statements.
The following amended standards and interpretations are not expected to have a significant impact on Eimskip's
Consolidated Financial Statements
- COVID-19 Related Rent Concessions (Amendment to IFRS 16). Effective 1/4 2021
- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). Effectiver 1/1 2021
- Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37 . Effective 1/1 2022
- Disclosure of Accounting Policies. Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8. Effective 1/1 2023
- Amendment to IAS 12 – deferred tax related to assets and liabilities arising from a single transaction. Effective 1/1 2023
- Classification of Liabilities as Current or Non-current (Amendments to IAS 1). Effective 1/1 2024
- IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts. Effective 1/1 2023
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All
operating segments’ operating results are reviewed regularly by the CEO to make decisions about resources to be allocated
to the segment and assess its performance.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss. In addition, deferred tax is not recognized for taxable temporary
differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realized.
The Group presents basic and diluted earnings per share (EPS) data for its shareholders. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of shares
outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of shares outstanding for the effects of all dilutive potential shares.
Notes
- 'Amendment to IAS 12 - deferred tax related to assets and liabilities arising from a single transaction. Effective 1/1 2023
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
44
___________________________________________________________________________________________________________________________________________
Year 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021
180,228 211,134 236,607 254,748 882,717
163,919 191,639 199,831 223,269 778,658
16,309 19,495 36,776 31,479 104,059
11,797)( 12,243)( 12,962)( 14,008)( 51,010)(
4,512 7,252 23,814 17,471 53,049
1,196)( 2,060)( 2,909)( 1,390)( 7,555)(
221 957 4,071 1,919 7,168
3,537 6,149 24,976 18,000 52,662
703)( 3,031)( 4,256)( 4,281)( 12,271)(
2,834 3,118 20,720 13,719 40,391
* Expenses in Q2 2021 included settlement with the Icelandic Competition Authority in the amount of EUR 10.2 million.
Year 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020
161,670 160,615 170,378 175,653 668,316
152,332 144,614 148,968 160,724 606,638
9,338 16,001 21,410 14,929 61,678
10,932)( 10,966)( 10,964)( 11,728)( 44,590)(
1,594)( 5,035 10,446 3,201 17,088
2,640)( 2,402)( 2,759)( 773)( 8,574)(
317)( 473 201 95)( 262
4,551)( 3,106 7,888 2,333 8,776
400)( 651)( 1,724)( 1,550)( 4,325)(
4,951)( 2,455 6,164 783 4,451
Revenue ..................................................................................
Net (loss) earnings before income tax ..........................................................................................
Operating profit, EBITDA ..........................................................................................
Depreciation and amortization and impairment ................
Results from operating activities, EBIT ..........................................................................................
Share of loss of equity accounted investees ....................
Net finance expense .....................................................................................................
Net (loss) earnings ..........................................................................................
Income tax ..........................................................................................
Quarterly statements - unaudited
Revenue ..................................................................................
Operating profit, EBITDA ..........................................................................................
Depreciation and amortization ............................................
Expenses* ..........................................................................................
Results from operating activities, EBIT ..........................................................................................
Net finance expense ..........................................................................................
Net earnings before income tax ..........................................................................................
Share of profit of equity accounted investees ...................
Income tax ............................................................................
Net earnings ..........................................................................................
Expenses ..........................................................................................
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
45
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About Eimskip
Corporate Governance
Laws and regulations
Eimskip's Financial Statements
Shareholder Relations
The Board of Directors of Eimskip
Corporate Governance Statement
Eimskipafélag Íslands hf. (Eimskip) is a leading transportation company in the North Atlantic providing container and reefer liner
services with connections to international markets and is specialized in worldwide freight forwarding services with focus on
frozen and chilled commodities.
Corporate Governance practices are designed to ensure open and transparent relationship between the Company's management,
its Board of Directors, its shareholders, and other stakeholders. The Corporate Governance in Eimskip is also designed to ensure
sound and effective control of the Company’s affairs and a high level of business ethics.
The Corporate Governance Statement of Eimskip is accessible on the Company’s website, www.eimskip.com/investors, and is
published in a special chapter in the Company’s Financial Statements.
The Corporate Governance Guidelines are accessible on https://leidbeiningar.is/english/
Eimskip is a limited liability company that is governed by Act no. 2/1995 on Limited Liability Companies (Company Act). Acts are
accessible on the Parliament’s website, www.althingi.is.
The supreme authority of the Company is in the hands of the shareholders who attend shareholders’ meetings at least once a
year. Share register is held at the Company’s headquarters where it is available to shareholders.
The Board of Directors holds supreme authority between shareholders’ meetings. It shall ensure that the Company’s organization
and operations are in good order. It shall promote the development and long-term performance of the Company and supervise its
operations. The Board of Directors has statutory role which it is responsible for, unless the Board grants permission by law to
transfer authority by delegation.
Eimskip’s financial year is the calendar year. The Company’s Financial Statements are accessible on the Company’s website,
www.eimskip.com.
Board meetings are called with one-week notice. A meeting schedule is made for the financial year in advance. The invitation
contains the agenda for the meeting. The CEO and the CFO attend Board meetings and other members of the Executive
Management attend as required. The General Counsel serves as secretary to the Board. In 2021, the total number of Board
meetings was 17 and the Board was competent to make decisions in all meetings.
The Board consists of five Directors and two alternate Directors and they are all elected annually at the Annual General Meeting.
Those who intend to run for the Board of Directors shall notify the Board of Directors of their candidacy at least ten days before a
shareholders’ meeting. The majority of the Directors of the Board are independent of the Company and its day-to-day
management, and four Directors are independent of the Company’s significant shareholders. The alternate members of the Board
are either independent or not independent of the Company or its significant shareholders. The Board evaluates whether Directors
are independent of the Company and its significant shareholders. Moreover, the Board evaluates the independence of new
Directors before the Company’s Annual General Meeting and makes available to shareholders the result of its evaluation.
Company news that are considered to affect Eimskip’s share price are published through the company news release distribution
network of Nasdaq Iceland and on the Company’s IR website, www.eimskip.com/investors. Other news is published on the
Company’s website, www.eimskip.com.
Proposals or questions from shareholders to the Board of Directors shall be sent to investors@eimskip.com and
complianceofficer@eimskip.com.
With this statement on the Corporate Governance of Eimskip it is declared that the Company is complying with the accepted
practices in the 6th edition of Corporate Governance Guidelines, issued by the Iceland Chamber of Commerce, SA - Business
Iceland and Nasdaq Iceland.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
46
___________________________________________________________________________________________________________________________________________
Main responsibilities of the Board of Directors
-
-
-
-
-
Rules of Procedure for the Board of Directors
Members of the Nomination Committee are Óskar Magnússon, Chairman, Guðrún Blöndal and Margrét Guðmundsdóttir. In 2021,
the Nomination Committee held a total of eight meetings.
Members of the Remuneration Committee are, Baldvin Thorsteinsson, Chairman, Gudrún Blöndal and Margrét Guðmundsdóttir. In
2021, the Remuneration Committee held a total of four meetings and was competent to make decisions in all meetings.
To handle the recruitment and dismissal of the Company’s CEO.
Extraordinary or major matters which require the approval of four out of five Directors and are therefore not a part of the CEO’s
day-to-day operations are defined in the Rules of Procedure for the Board of Directors.
To take the initiative, together with the CEO, on formulating policies and setting goals and risk parameters for the Company,
both in the short and long term.
To establish an active system of internal controls. This means, among other things, that the arrangement of the internal
controls system shall be formalized, documented and its functionality verified regularly.
To ensure that the Company’s operations are in conformity with existing laws and regulations.
To hold supreme authority between shareholders’ meetings, promote the development and long-term performance of the
Company and supervise its operations. The Board shall regularly assess the performance of the Company’s executive
directors and how the Company’s policies are implemented.
Annually, the Board of Directors conducts an assessment of its work, size, composition and procedures and also evaluates the
work of the Company’s CEO, the Company’s operations and development and whether it is in line with the Company’s objectives.
The assessment entails e.g. evaluation of the strengths and weaknesses of the Board’s work and practices and takes into
consideration the work components the Board believes may be improved. The evaluation is built on self-assessment, but the
assistance of outside parties may be sought as appropriate. The evaluation includes an examination of whether the Board has
operated in accordance with its Rules of Procedure and how the Board operates in general. Examination must be made whether
important matters relating to the Company have been adequately prepared and if enough time is provided for discussions within
the Board. Additionally, individual Directors must be considered with respect to both attendance and participation in meetings.
The assessment for the financial year 2021 will be concluded in the first quarter of 2022.
The principal duties of the Audit Committee are to review all financial information and procedures regarding information
disclosure from day-to-day management and the Company’s independent auditors and to ensure the independence of the
Company’s independent auditors. The role and main responsibilities of the Audit Committee are set out in its rules of procedure.
The role of the Remuneration Committee includes preparing the Company’s remuneration policy and ensuring its enforcement
and negotiating with the CEO on wages and other employment terms. The role and main responsibilities of the Remuneration
Committee are set out in its rules of procedure.
The Board of Directors has appointed three subcommittees, Audit Committee, Remuneration Committee and Nomination
Committee.
Corporate Governance Statement
The Board of Directors has established its Rules of Procedure which were amended and approved at a Board meeting on 26 April
2019. A copy can be obtained from the Company’s website, www.eimskip.com.
Members of the Audit Committee are Lárus L. Blöndal, Chairman, Ólöf Pálsdóttir and Alexander G. Edvardsson. In 2021, the Audit
Committee held a total of six meetings and was competent to make decisions in all meetings.
The role of the Nomination Committee is to assist the Board with the process and oversight of Board succession planning and
identification and nomination of Board candidates as well as member of the Board’s committees. The Board is responsible for the
appointment and activities of the Nomination Committee and it operates under the Board’s authority. The role and main
responsibilities of the Nomination Committee are set out in its rules of procedure.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
47
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The Board of Directors
Baldvin Þorsteinsson, Chairman of the Board
Guðrún Ó.Blöndal
Lárus L. Blöndal
Margrét Guðmundsdóttir
Corporate Governance Statement
Baldvin was born in 1983 and lives in the Netherlands. Previously he was the CEO of Iceland Drilling hf. from 2013 to 2016. He
is currently a chairman of the board of Olíuverzlun Íslands hf., a board member of Iceland Drilling hf., and a board member of
the Canadian fishing company Newfound Resources Limited Ltd. and the Norwegian fishing company Nergard A/S. He
earned a BS degree in Industrial Engineering from the University of Iceland in 2007. Baldvin is currently the Chairman of the
Board of Eimskipafélag Íslands hf. and is the Chairman of the Remuneration Committee. Baldvin owns 244,959 shares in the
Company but does not have a share options agreement. He is not independent of Samherji Holding ehf., which holds 57.5
million shares in the Company at the year-end of 2021.
Guðrún was born in 1960 and lives in Iceland. Guðrún is a Board Member of Landsbankinn hf. and a member of the bank’s
Audit Committee and Remuneration Committee. From 2013 to 2018 Guðrún was CEO of Nasdaq CSD Iceland (Nasdaq Central
Securities Depository Iceland). In 2012 and 2013 she was a Board Member of The Enterprise Investment Fund slhf., Reginn
hf., Míla ehf., Vörður Insurance Company and Vörður Life Insurance. Previously from 2002 to 2012 Guðrún was CEO of Arion
Custody Services, a leading provider in the Icelandic market of fund services, clearing, settlement, local and global custody
services to domestic and foreign financial institution. Prior to this Guðrún held various positions at Kaupthing hf. from 1984
to 2002 such as Executive Director, Corporate Director of Human Resources, Director of Marketing and Director in Asset
Management. Guðrún holds a Cand. Oecon degree from the University of Iceland. She is an independent Board member and
does neither own shares nor share options in the Company. Guðrún has been a member of the Board of Directors since 6
September 2018 and is a member of the Remuneration Committee and Nomination Committee. Apart from being a Board
Member of Landsbankinn hf. she has no interest links with the Company’s main clients, competitors or major shareholders.
Lárus was born in 1961 and lives in Iceland. He is a Supreme Court Attorney and a Partner at Juris Law Offices. Lárus was a
Partner at Almenna lögfrædistofan from 1990 to 2008. Lárus is currently a board member of Orkusalan hf. and the Chairman
of the board of ISFI (Icelandic State Financial Investments). He has been a member of the Competition Appeals Committee
since 2000 and its Vice-Chairman since 2009 and a member of the National Olympics and Sport Association’s executive
committee since 2001, becoming its Vice-President in 2006 and its President in 2013. He has previously been a board
member of the Icelandic Bar Association, the University of Iceland’s Human Rights Institute, the University of Iceland’s
Research Centre in Environmental and Natural Resources law, Hótel Borg ehf., Fastus ehf., the Housing Financing Fund,
Chairman of the National Olympic and Sport Association’s legal committee, and a member of various other official
committees and boards. Lárus has been a Supreme Court Attorney since 1998 and a District Court Attorney since 1990. He
graduated with a Cand.jur. degree from the University of Iceland in 1987. Lárus has been on the Board of Directors since 27
March 2014 and currently serves as the Vice-Chairman of the Board and the Chairman of the Audit Committee. He is an
independent Board member and owns 3,089 shares in the Company but no share options. He has no interest links with the
Company’s main clients, competitors or major shareholders.
Margrét was born in 1954 and lives in Iceland. She is a Vice Chairman of the board of Festi, board member of
Eignarhaldsfélagið Lyng ehf, Hekla hf., Hekla Fasteignir ehf. and Paradís ehf. Margrét was the Chairman of the European
Surgical Trade Association from 2011 to 2013 and a member of its Board from 2009 to 2015. She was the Chairman of Félag
atvinnurekenda from 2009 to 2013, a member of the Board of Reiknistofa bankanna from 2010 to 2011 and 2016 to 2018, the
Board of Isavia from 2017 to 2018 and the Board of SPRON from 2008 to 2009. Margrét was the CEO of Austurbakki, later
Icepharma hf., from 2005 to 2016. Prior to that she was the Retail Manager of Skeljungur from 1995 to 2005, Director of
various business segments of Kuwait Petroleum (Denmark) A/S from 1986 to 1995 and HR Development Manager at Dansk
ESSO (later Statoil) from 1982 to 1986. Margrét was Assistant Secretary General of AIESEC International in Brussels from
1978 to 1979. Margrét holds a Cand. oecon. degree in economics and business administration from the University of Iceland, a
Cand. merc. degree from the Copenhagen Business School and Executive education from CEDEP/Insead in France. Margrét
owns 13,200 shares in the Company but no share options. Margrét has been a member of the Board since 25 March 2021 and
is currently a member of the Remuneration Committee and Nomination Committee. She has no interest links with the
Company’s main clients, competitors, or major shareholders and will be an independent Board member.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
48
___________________________________________________________________________________________________________________________________________
Ólöf Hildur Pálsdóttir
Óskar Magnússon, Alternate Member of the Board
Jóhanna á Bergi, Alternate Member of the Board
The Chief Executive Officer and the Executive Management
Óskar was born in 1954 and lives in Iceland. He is a well-known writer and has published two collections, short stories and
three novels in recent years. He is a farmer and co-owner and chairman of Kerfélagið ehf., the owner of the tourist nature
attraction Kerid Crater. Óskar has been a board member of Samherji hf. Since 1998 and is currently the vice-chairman of the
board, as well as the vice-chairman of Samherji Holding ehf. and board member of several other companies within the
Samherji group. He is the chairman of the Icelandic landowners Association. He has previously been a vice-chairman of the
Icelandic Bar Association and served on various boards of retail companies. Óskar was Publisher/CEO and a major
shareholder of Árvakur hf. from 2009 to 2015, President/CEO of Tryggingamiðstöðin hf. and TM Life Insurance hf. from 2004
to 2007, President/CEO of Vodafone Iceland from 2001 to 2004, Executive Chairman of Baugur from 1998 to 1999 and
President/CEO of Hagkaup hf. supermarkets, that later became part of Baugur Corporation, from 1993 to 1998. Óskar has
served on the city council in his community as well as being the parish chairman since 2004. Óskar has been a Supreme Court
Attorney since 1993. He graduated with an LL.M. degree in International Business Law from George Washington University
Law School in 1986, and with a Cand.jur. degree from the University of Iceland in 1983. He owns 14,527 shares in the
Company, but no share options. Óskar was a board member in 2019 and has been an alternate member of the Board since 26
March 2020 and is currently a member of the Nomination Committee. Óskar is not independent of Samherji Holding ehf.,
which holds, in total, 59.9 million shares in the Company, at the year-end 2020.
Jóhanna was born in 1970 and lives in the Faroe Islands. Jóhanna is the CEO of Atlantic Airways Ltd. and has been since 2015.
Jóhanna was the CEO of P/f Faroe Ship, Eimskip’s subsidiary in the Faroe Islands, from 2006 to 2015, Sales Director of JFK
and Kósin Seafood from 1998 to 2006 and Sales Manager of Faroe Seafood France from 1994 to 1998. She is currently a
board member of the Faroese Confederation of Sports and Olympic Committees, Nordoyatunnilin, Föroya Grunnurin, House
of Industry and Visit Faroe Islands. Jóhanna has a master’s degree in Management from Robert Gordon University in the UK.
She further holds an EE degree from the Danish School of International Marketing and Export. Jóhanna has been an alternate
member of the Board since 3 April 2013, is an independent Board member and does neither own shares nor share options in
the Company. She has no interest links with the Company’s main clients, competitors or major shareholders.
Corporate Governance Statement
The Company’s CEO is responsible for the day-to-day operations, in accordance with law, regulations and the Company’s Articles
of Association and follows the policies and instructions laid down by the Board. The CEO must at all times conduct his work with
integrity and take account of the Company’s interests. Day-to-day operations do not include matters which are unusual or of
great significance. The CEO shall make sure that the Company’s accounts are kept in accordance with law and practice and that
the Company’s assets are kept in a secure manner. The CEO is obligated to abide by all instructions of the Board of Directors and
shall give the auditor any information requested. The CEO does not have the authority to make decisions concerning any matters
that are assigned to others by law or are reserved to the Board under its Rules of Procedure. The CEO shall ensure that Directors
of the Board are regularly provided with accurate information on the Company’s finances, development and operations to enable
them to perform their duties and the information shall be in the form and of the quality determined by the Board. The
information shall be available when needed and as up-to-date and accurate as possible. The CEO is to acquaint the Board with all
major issues involving the operations of the Company or its subsidiaries and is to attend the Board meetings. He participates in
the Boards of the subsidiaries within the group.
Ólöf was born in 1977 and lives in Iceland and is an independent financial advisor. She was the CFO of atNorth ehf., the
largest data center in Iceland, from 2019-2021. Prior to that she worked as an independent Financial Advisor and was a board
member of Reginn hf. and alternate board member of VÍS hf. Ólöf workd at Arion bank and its predecessors from 1997 to
2017 in various roles e.g. as Head of Credit Structuring and Analysis, Deputy Head of IR, Investment strategist and in Asset
Management as a fund manager. Ólöf was also member of the bank’s credit committees and asset and liability committee
(ALCO). Ólöf holds a Cand. Oecon degree in economics and business administration (finance) from the University of Iceland.
Ólöf Hildur owns 30,000 shares in the Company through her holding company, Skaftafell Invest ehf., but no share options.
Ólöf Hildur has been a member of the Board since 25 March 2021 and is currently a member of the Audit Committee. She has
no interest links with the Company’s main clients, competitors, or major shareholders and will be an independent Board
member.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Vilhelm Már Thorsteinsson, Chief Executive Officer
Diversity
Internal Control and Risk Management
The Company issued a policy on diversity in connection with the Board of Directors, Executive Management and Senior
Management on 27 January 2022. The policy can be found on the Company’s website, www.eimskip.com
Further information on the Executive Management is on the Company’s website, https://www.eimskip.com/about-eimskip/key-
executives/.
The Board of Directors regularly communicates with the CEO regarding the identification of, description of and response to
business risks which the Company may be faced with. Risk management within Eimskip is governed by the Board of Directors,
while the Audit Committee is responsible for its review on a regular basis. The Executive Management is responsible for
identifying material risks and developing the Company’s risk management strategy.
Corporate Governance Statement
Risk management is the process of analyzing and assessing the risk factors which could prevent the Company from achieving its
set goals. It also includes that remedial action is taken to minimize the anticipated effects of such risk factors.
An independent auditing firm is elected at the Annual General Meeting each year. The auditors are to review the Company’s
accounting records and material related to the Company’s operations and financial position and they are always to have access to
the Company’s books and documents. They must examine the Company’s Consolidated Financial Statements in accordance with
International Standards on Auditing. Significant findings regarding accounting and internal control deficiencies are reported to the
Board of Directors through the Audit Committee. Independent auditors are not allowed to own shares in the Company.
The Company goes through a detailed strategic and budgeting process each year and a strategy and budget report are prepared.
The Board of Directors approves the Company’s strategy and budget each year. Deviations from the strategy and budget are
carefully monitored on a monthly basis.
Active risk management plays an important role in Eimskip to ensure stable operations and earnings. The risk management
program is aimed at minimizing potential negative effects on operations and earnings from marketing, operational and financial
activities and to keep risks at acceptable levels.
Eimskip’s internal control and risk management procedures regarding financial processes is designed to minimize the risk of
material misstatements. The Company does not have an internal audit function, but it uses internal control systems that are
monitored by the Audit Committee.
The role of internal control is to facilitate the management of an operation and it has been defined as a process which is shaped
by a company’s Board of Directors, the management team, and other employees. The purpose of internal control is to build
foundation for the company to reach success and efficiency in its operations, reliability of financial information and consistency
with laws and regulations.
The Executive Management of Eimskip consists of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer,
Chief Information Officer and the Executive Vice Presidents of International Operations, Human Resources and Communication,
Iceland Sales and Business Management, Iceland Domestic Operations and the General Counsel.
María Björk Einarsdóttir is the Chief Financial Officer, Hilmar Pétur Valgardsson is the Chief Operating Officer, Hilmar Karlsson is
the Chief Information Officer, Bragi Thór Marinósson is the Executive Vice President of International Operations, Edda Rut
Björnsdóttir is the Executive Vice President of Human Resources and Communication, Björn Einarsson is the Executive Vice
President of Sales and Business Management, Böðvar Örn Kristinsson is the Executive Vice President of Iceland Domestic
Operations and Davíd Ingi Jónsson is the General Counsel.
Vilhelm was born in 1971. He was appointed as CEO in January 2019. For over 20 years, he held various positions at bank
Íslandsbanki. He was Managing Director of Corporate & Investment Banking at Íslandsbanki from 2017 to 2019 and Managing
Director of Corporate Banking from 2008 to 2017. He is a Board Member of the Chamber of Commerce in Iceland and a Board
Member and/or CEO of various subsidiaries of Eimskipafélag Íslands hf. Vilhelm earned an MBA Degree from Pace University
in New York; a BSc degree in Business Management, Majoring in Logistics, from Reykjavík University; and is a licensed
Securities broker. Vilhelm owns 40,173 shares in the Company and through his holding company Sjávarlind ehf. 200,000
shares. Vilhelm holds no share options.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Information on violation of rules determined by the applicable authority
Sustainability
Code of Conduct
The Board of Directors approved a revision of the Company’s Code of Conduct in February 2021. The Code of Conduct closely links
to the Company’s values: Achievement, Cooperation and Trust. The Code is also based on Eimskip’s aim to secure good return for
shareholders with profitable growth, create value for customers with outstanding solutions and services, be an outstanding
workplace for employees with great team spirit and ambition and show concern for society with social responsibility and reduced
ecological footprint.
The purpose of this Code of Conduct is to support Eimskip’s mission and vision. It applies to the Board of Directors and all
employees of Eimskip and its subsidiaries and guides them in conducting the Company’s daily activities in an honest, responsible,
and ethical way, based on its values, and generally accepted professional standards of conduct. Suppliers and subcontractors are
also required to conform to high standards. The Code of Conduct is accessible on the Company’s website, www.eimskip.com.
The Environment Agency of Iceland has reported a case concerning the Company to the District Prosecutor, of which the outcome
is not yet determined.
The Company’s risk exposure is discussed at Board meetings and its risk management and risk factors are discussed in the
Annual Report.
Eimskip is a registered participant of the UN Global Compact, the United Nation’s initiative for social responsibility with respect to
human rights, labor, environment, and anti-corruption. With its participation, the Company has committed to managing its
business operations so that the UN Global Compact and its Ten Principles become a part of the Company’s strategy, culture, and
day-to-day operations.
Eimskip’s Sustainability Policy is based on the Nasdaq ESG Reporting Guide, published in March 2017. The Nasdaq voluntary
reporting guide focuses on 30 environmental, social and governance (ESG) performance indicators. Further information on
Sustainability at Eimskip can be found in the Non-Financial information in the financial statement and on the Company’s website,
https://www.eimskip.com/about-eimskip/sustainability.
Eimskip monitors its financial risk factors and the Board of Directors has approved a Treasury policy which, among other, sets
acceptable risk limits and stipulates how to identify, measure and manage financial risk exposure. The Company has in place a
financial reporting and internal control manual to which the group reporting entities must adhere.
Corporate Governance Statement
On 16 June 2021 Eimskip and The Competition Authority in Iceland reached a settlement in the competition case that had been
under investigation for the past years. The main period of investigation was 2008 to 2013 concerning infringements of Art. 10 of
the Icelandic Competition Act and Art. 53 of the EEA agreement.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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About Eimskip
Sustainability
Sustainability Policy
Environment
Society
Governance
Sustainability Structure
Example of projects:
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Non-Financial Reporting
Eimskipafélag Íslands hf. (Eimskip) is a leading transportation company in the North Atlantic providing container and reefer liner
services with connections to international markets and specializing in worldwide freight forwarding services focusing on frozen
and chilled commodities.
The Company has a governance structure for sustainability-related matters where the CEO is responsible for a strategic
sustainability framework. Executive Vice Presidents are responsible for specific categories within the sustainability framework,
environment (E), social (S), and governance (G), and the Sustainability Manager holds the day-to-day responsibility.
In 2020 Eimskip collaborated with the consulting company Circular Solutions (now a part of KPMG) on a risk assessment of The
Company's ESG and established a three-year action plan. Eimskip continues to work in accordance with that action plan. The
focus in 2021 was on projects linked to the UN Sustainability Development Goals Climate action (goal 13), Good health and Well-
Being (goal 3), Responsible Consumption and Production (goal 12), and Peace, Justice and Strong Institution (goal 16)
Eimskip strives to provide its customers with the most efficient and sustainable transportation solutions combined with
outstanding services while securing a good return for its shareholders and being responsible for its employees, society, and the
environment. As a company, Eimskip aims to contribute to a better and safer society wherever it operates, and responsibility
towards the community is an integral part of the Company’s sustainability policy. The sustainability policy is reflected in
Eimskip’s global policies that apply to the Eimskip group.
Eimskip has for over a century offered reliable transportation services and the Company’s vision is to reach excellence in
transportation solutions and services. Eimskip focuses on creating shared value for its shareholders, customers, employees,
society and other stakeholders.
Eimskip offers employees equal opportunities in a safe and healthy working environment and endeavors to be a good
corporate citizen, recognizing its responsibility to work in partnership with the communities in which it operates.
Eimskip strives to ensure an open and transparent relationship between the Company’s management, its Board of Directors,
its shareholders, and other stakeholders.
Eimskip was founded in 1914 and is a publicly-traded company with its shares listed at Nasdaq Iceland. Eimskip runs a network of
57 offices in 20 countries on four continents, operates 17 vessels, and has about 1,620 employees.
Eimskip respects its environment and seeks to limit its impact on the ecosystem and reduce its environmental footprint.
Eimskip’s Sustainability Policy is based on the Nasdaq ESG Reporting Guide, focusing on 30 environmental, social, and
governance performance indicators. Eimskip’s ESG sustainability statement is published on the Company’s website
www.eimskip.com.
Implementation of new/updated policies, e.g., Whistleblower Policy, Money-Laundering Policy, and Supplier Code of
Conduct.
Review of ESG measurements and targets and continued work on extending the ESG scope for more Eimskip offices
globally.
Safety and security measures.
Waste management
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Environment
Social
Employees
Non-Financial Reporting
Eimskip recognizes its responsibility to work in partnership with the communities it operates in. This partnership is connected to
all stakeholders from employees, customers, and society, with the Company’s values achievement, cooperation, and trust always
in mind. Eimskip has a clear human rights policy declaring that everyone shall enjoy equal rights in all respects. The policy is
accessible on the Company´s website.
Eimskip has a diverse team of engaged employees whose knowledge and skills are the Company's most important resources. The
Company employs around 1.600 people across three continents and 18 countries.
Each member brings a unique set of talents, and experiences to the team, which make up a diverse and dynamic work
environment characterized by collaboration, ambition, and innovation. The Company values achievement, cooperation, and trust
drive and motivate the team to act in the same direction.
For Iceland, which bases a large part of its economic foundation on harvesting natural resources from the ocean in a sustainable
way, the changes associated with global warming and pollution of the ocean leave all the critical components of its modern
economy utterly exposed, in addition to threatening the quality of life for future generations. To support global and local
environmental initiatives, Eimskip signed the Reykjavík Declaration on Climate Issues in November 2015. The agreement includes
reducing greenhouse gas emissions, reducing waste, monitoring the measured results, and regularly publicizing the information.
Climate change is one of the main ESG risks in the Company´s operation. The Company respects the environment and recognizes
the effects of climate change on society, its business activities, and the need for a low-carbon economy. Minimizing the
environmental load from the Company’s operations is crucial. The focus is on achieving complete clarity regarding emissions and
waste from each of the emitting sources in the supply chain. Development in data and analytics gives Eimskip a better overview
of its ecological footprint and reduction opportunities. The Company uses an electronic Environmental Management System
linked to all significant assets in the supply chain, streaming reliable and transparent information on its environmental matters.
Digitization of emission and waste-registration data from the supply chain enables continuous measurements and provides
reliable and transparent communication.
Eimskip defines its ecological footprint as a carbon footprint and waste disposal combination. The operation of the Company’s
vessels is the main contributor to its carbon footprint. The calculation of the Company’s carbon footprint is presented as carbon
intensity in scope 1 per transported unit in kgCO2 equivalent (e). Eimskip aims to reduce its footprint by 40% from 2015 to 2030.
In 2021 Eimskip started to publish its environmental statement quarterly. That is a significant milestone in managing and
monitoring the Company’s CO2 emissions. Each quarter, the statement is introduced and discussed with the executive team, and
possible risk factors are discussed. In the environmental statement for 2021, the Company has completed registering scopes 1&2
for all vessels and offices in Iceland. Furthermore, Eimskip’s offices in the Faroe Islands, Germany, Poland, Spain, and the UK are
now a part of the environmental statement for the first time. The goal in 2022 is to finish all scope 1&2 registration for main
offices globally (see scope in ESG statement on the Company’s website www.eimskip.com ).
In 1991, Eimskip became one of the first companies in Iceland to establish an environmental policy as the main driver for improved
ecological footprint.
The Company´s energy mix is 97% fossil fuel, with most emissions coming from the vessels. Development in the vessel fleet is
needed to reach the goal of a 40% reduction in emission before the year 2030. Eimskip looks to the future and recognizes the
need for greener investments to lower emissions. The investments will need to be for equipment with lower emissions and
different energy sources. There is a high focus within the Company on future energy possibilities. Several important steps have
been taken to reduce the GHG emission, e.g., all harbor cranes in Iceland are now electric, investment in electric and methane cars
and reach stackers, and land connection for vessels in Sundahöfn is in the pipeline.
Eimskip monitors changes in legislation that could affect the Company regularly and has considered legislation changes in its risk
management.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Safety
Customer
Eimskip respects human rights and operates according to its employee rights and welfare policies. The Company's principal
policies are Code of Conduct, Human Resource Policy, Salary Policy, Equal Opportunities Policy, Policy against Bullying and
Harassment, Health Policy, Occupational Safety, and Security and Prevention Policy. The Company’s principal policies apply to all
employees of Eimskip and its subsidiaries.
Eimskip actively seeks to ensure that women have a voice at all levels in the Company to ensure dynamic conversations and
ensure broad perspectives. A powerful tool in driving diversity and gender equality in Eimskip's Executive management team is its
Succession Planning process. Furthermore, the Company aspires to develop a diverse group of prospective leaders through the
Company´s Future Leadership Program.
In 2021 the Company continued to implement the Global Service Policy. The goal of the Global Service Policy is to align the service
approach, goal setting, and measurements between different units within Eimskip to ensure that the Company is offering
excellent customer service. The Global Service Policy contains three pillars; Global Team, Proactive, and Simplify.
Non-Financial Reporting
To measure and monitor customer satisfaction for customers globally, Eimskip sends out a Net Promoter Score (NPS) customer
survey each year. The NPS score continues to be strong. In Gallup research among companies in Iceland, the positivity towards
Eimskip is high, and there is increased positivity towards the Company. Also, historically in Iceland, the Eimskip brand is very well
known with 100% brand awareness.
The digitalization and automation of processes are critical elements in developing Eimskip’s services. The Company is determined
to adapt to customers’ needs in a fast-changing technical environment where self-service aspects are increasingly important. A
strong focus on information technology and potential synergies between systems and teams are vital in Eimskip's proactive
commitment to service excellence.
Eimskip is renowned for its excellent service. The Company has a broad customer base and provides a wide range of solutions to
meet diverse requirements. A global team with local expertise provides customers with holistic services, designed specifically for
their needs.
A safe and healthy work environment is one of Eimskip’s top priorities. The objective is that everyone can work safely at Eimskip.
To achieve this objective, the Company emphasizes prevention and training. Employees undergo routine safety training, and
continuous advancements to create a safe work environment. An excellent example of such progress in 2021 was investing in
specialized firefighting equipment for container fires on board vessels. That action is part of Eimskip's emphasis on increasing
onboard security and being a leading company in employee safety.
Eimskip has a First Response Team, whose duty is to respond to various incidents on sea and land. The team’s purpose is to
ensure and assist on proper first response and limit accidents to people and damages to properties, cargo, and the environment.
Also, it is the team’s responsibility to respond to cyber incidents.
The Company’s Loss Prevention Team meets regularly to investigate losses, damages, and accidents and follows up on necessary
changes, training and improvements.
One of the main challenges in 2021 was the COVID-19 pandemic. Significant efforts were put into securing the health and safety
of employees by implementing various safety precautions and focusing on employee well-being. Emphasis was placed on
promoting better work-life balance and on day-to-day well-being. The Company launched several initiatives supporting employee
wellness. For instance, Focus Friday’s aims to reduce meetings on Friday afternoons and provide employees with uninterrupted
time to complete work before the weekend. In October a focus was placed on well-being offering various training and events
related to health and safety. During the pandemic Eimskip has adapted to Hybrid Workplace and set a Hybrid work policy that
supports enhanced flexibility and promotes better work-life balance.
Regular employee engagement surveys are conducted within the Company to improve employee satisfaction and engagement.
The survey´s purpose is to give employees a chance to voice their opinions and empower leaders to understand their team
members better. Two surveys were conducted in 2021, in April and October, measuring the various drivers of engagement, such as
freedom of opinion, growth, management support, meaningful work, equality, peer relationships, and workload. In April, overall
engagement and satisfaction were measured at 8.0 (out of 10). In November, the overall engagement score was 7.8, and
satisfaction was measured at 8.0. Both engagement and satisfaction have remained steady for the past years.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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Projects for the society
Governance
Anti-corruption and bribery
See further information in ESG statement 2021, www.eimskip.com.
Eimskip has in place a Whistleblower procedure for handling reports of alleged misconduct concerning the Company's operations
and the protection of whistleblowers. Eimskip’s Anti-Money Laundering & Sanction Policy prohibits anyone employed by Eimskip
from participating in money laundering, terrorist financing, and sanction breaches. Eimskip has a Supplier Code of Conduct which
will be implemented among vendors and suppliers in 2022.
Non-Financial Reporting
As a company, Eimskip wants to contribute to a better and safer society wherever it operates, and responsibility towards the
community is an integral part of the sustainability policy. The Company supports various projects, charities, sports activities,
culture, innovation, and, finally, projects centered on preventive measures for children and young adults. The Company is
incredibly proud of the bicycle helmet project, which began in 2004 in cooperation with Kiwanis in Iceland (a global community of
clubs, members, and partners dedicated to improving the lives of children one community at a time). Eimskip has given all six-
year-old children in Iceland bicycle helmets and safety reflectors to contribute to youth safety. Eimskip has given helmets to
about 74,100 children. Another great example is that Eimskip supports young people in Arhus that have had tough times in their
lives.
Eimskip strives to ensure open and transparent relationship between the Company´s management, its Board of Directors, its
shareholders, and other stakeholders.
Eimskip’s policy is to fight against corruption and bribery. The Company’s management and its employees strive to always comply
with applicable laws and regulations and with rules and general standards of business ethics and corporate governance to avoid
conflict of interests and maintain confidentiality. The Company’s internal control and risk management are intended to spot
abnormalities, including the risk of corruption and bribery. Eimskip’s policy on Anti-corruption and bribery can be found in the
Company’s Code of Conduct which can be found on www.eimskip.com.
Consolidated Financial Statements of Eimskipafélag Íslands hf. 2021
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