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SIOFF-2022-12-31-ENp1i1 SIOFF-2022-12-31-ENp1i0
SIEM
Offshore
 
Inc. Annual Report 2022
0
Annual Report 2022
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
SIEM
Offshore
 
Inc. Annual Report 2022
Highlights 2022
2
Key Figures
3
Board of Directors’ Report
5
Income Statement
10
Statements of Financial Position – Assets
11
Statements of Financial Position – Equity and Liabilities
12
Statement of Changes in Equity
13
Statement of Cash Flows
15
Notes to the Accounts
16
Corporate Governance
69
Environmental, Social and Governance (ESG) Report
73
Auditor’s Report
74
Vessels in the fleet
79
Local presence in key markets
81
This is Siem Offshore Inc.
83
Responsibility Statement
85
Board of Directors
86
Financial Calendar
87
Alternative Performance Measurement (APM) and other
definitions
88
Front page photo: Siem Offshore
 
 
 
 
 
 
Highlights 2022
SIEM
Offshore
 
Inc. Annual Report 2022
2
Revenue USD 1,000
274,306
Operating margin USD 1,000
103,776
Employees per 31.12.2022
1,179
Vessels in operation per 31.12.2022
28
Highlights for the First Quarter
●
Vessels’ supply-demand balance is shifting in a positive
trend for all segments.
 
●
Awarded a 6-month extension for the Canadian vessel
“Avalon Sea”, securing continued operations well into Q4
2022.
 
●
Entered into agreements with Helix Energy Solutions Group
Inc. for the Well Intervention Vessels “Siem Helix 1” and
“Siem Helix 2”. The agreements will replace the existing
contracts and the new firm period will be 3 years for “Siem
Helix 1” and 5 years for “Siem Helix 2” plus options.
Commencement will be in direct continuation of present
contracts within the first quarter of 2022.
 
●
Appointed a new ESG Director as part of the Company’s
increased focus on sustainability.
 
●
Signed a new contract for the AHTS “Siem Sapphire” for
operations in Taiwan, securing firm utilization well into the
third quarter of 2022, plus options.
 
Highlights for the Second Quarter
●
Received status on vessel class compliance from the
classification society DNV, confirming that Siem Offshore
has over the recent years consistently performed better than
its peers on technical issues, non-conformities and findings
from Port State Inspections.
●
Awarded a new contract for the OSCV “Siem Spearfish”,
securing firm utilization until the end of 2023.
●
The Annual General Meeting of Siem Offshore Inc. was held
on 20 May 2022. All proposed resolutions were unanimously
approved. Following the AGM and a subsequent Board
meeting, the Board is: Mr. Kristian Siem, Chairman. Ms.
Celina Midelfart, Director. Mr. Christen Sveaas, Director. Mr.
Barry Ridings, Director.
●
Decision to no longer pursue a re-domiciliation plan, as was
announced in March 2022.
Highlights for the Third Quarter
●
Awarded a new contract for the Brazilian vessel “Siem
Maragogi” with a duration of 3 years in direct continuation of
current contract in Brazil.
 
●
Received declaration of the first of two options for the PSVs
"Siem Atlas" and "Siem Giant" in Brazil. Both vessels are firm
until June 2023.
 
●
A 3-month option declared for the AHTS “Siem Opal”
commencing in September 2022.
 
●
An 18-month extension has been signed for the Canadian
vessel “Avalon Sea”, ensuring continued operations into Q2
2024.
 
●
Awarded a new 3-year contract for the OSCV “Siem
Stingray”.
 
Highlights for the Fourth Quarter
●
Received notification of the final unfavorable decision of a
Brazilian court in a lawsuit filed against Petrobras. The case is
related to late delivery of the vessel “Siem Marataizes” from
yard back in 2016.
●
Awarded a new 4-6 month contract for the battery hybrid
PSV “Siem Symphony” commencing in Q2 2023 with BP
Canada.
●
Entered into a one-year firm contract plus options for the
MPSV “Siem Dorado” with an undisclosed client. The
contract will commence in direct continuation of the current
contract.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Key figures
3
SIEM
Offshore
 
Inc. Annual Report 2022
(Amounts in USD 1,000)
CONSOLIDATED
INCOME STATEMENT
Ref
2022
2021
Operating revenue
274,306
254,493
Operating expenses
-170,530
-153,909
Operating margin
(1)
103,776
100,585
Operating margin, %
(2)
38%
40%
Depreciation and amortization
-64,305
-63,539
Impairment of vessels
-
-
Gain/(loss) on sale of assets
-95
997
Gain/(loss) on currency derivative contracts
-
204
Operating profit
(3)
39,376
38,247
Net financial items
(4)
-12,340
63,623
Result from associated companies
446
42
Profit /(loss) before taxes
27,482
101,912
Tax benefit/(expense)
250
1,000
Net profit/(loss)
27,732
102,912
Attributable to non-controlling interest
-3,165
-4,947
Net profit/(loss) attributable to shareholders
30,897
107,858
STATEMENT OF FINANCIAL
 
POSITION
31 Dec 2022
31 Dec 2021
Non-current assets
868,323
926,037
Current assets
151,568
147,460
Total assets
1,019,891
1,073,497
Total equity
359,377
340,298
Non-current liabilities
545,206
627,570
Current liabilities
115,307
105,630
Total equity and liabilities
1,019,891
1,073,497
Definitions
(1) Operating Margin is the net of Operating revenue and operating expenses. For 2022 operating revenues
 
USD274,306 less
operating expenses at USD170,530 equals operating margin at USD103,776. The Company considers
 
the operating margin to be a
key number when analyzing the fleets operating performance and the margin that can be allocated to the finance
 
of capital
expenditures, debt-service and other cash disbursements.
 
(2) Operating Margin, %. The relative operating margin is calculated to be the percentage of operating margin
 
to operating
revenue. For 2022 the operating margin at USD103,776 equals 38% of the operating revenue at USD274,306. The Company
considers the operating margin, % to be important when analyzing the vessels' relative performance.
(3) The Operating Profit is the profit before financial items and tax. The operating profit for 2022 is
 
calculated by adding operating
revenues at USD274,306, less operating expenses at USD170,530, less depreciation and amortization at USD64,305, less loss
 
on
sale of assets at USD95 which equal operating profit at USD39,376.
(4) The 2021 net financial items were affected from gains related to financial restructuring. See note 19.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
4
STATEMENT OF CASH FLOWS
2022
2021
Net cash flow from operations
84,172
82,099
Net change in cash
5,000
-3,472
KEY FIGURES
2022
2021
Weighted average no. of outstanding shares (1,000)
238,852
147,050
Weighted average no. of diluted outstanding shares (1,000)
238,852
147,050
Earnings per share (USD)
0.13
0.73
Diluted earnings per share (USD)
0.13
0.73
Share price per year end (USD)
1.34
0.39
Share price per year end (NOK)
13.24
3.40
31/12/2022
31/12/2021
I
 
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28 TOTAL
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28 TOTAL
31/12/2020
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31 TOTAL
31/12/2019
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35 TOTAL
 
31/12/2018
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40 TOTAL
31/12/2022
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28 TOTAL
31/12/2021
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28 TOTAL
31/12/2020
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31 TOTAL
31/12/2019
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35 TOTAL
31/12/2018
I
 
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40 TOTAL
Vessels
 
Vessels in operation
Ownership
 
0-79%
 
100%
 
 
 
 
5
SIEM
Offshore
 
Inc. Annual Report 2022
Board of Directors' Report
The Board of Directors of Siem Offshore Inc. (the “Board”)
 
presents its report
for the fiscal year ended 31 December 2022, together with the
 
audited
consolidated financial statements for the Company and
 
the Parent Company.
It was a year of progress with improved results based on improvement
 
of the
market and good operational execution. The safety performance was
 
at a high
world standard. One vessel was reactivated from lay-up.
THE COMPANY
All references to “Siem Offshore” and the “Company” shall
mean Siem Offshore Inc. and its subsidiaries and associates
unless the context indicates otherwise. All references to
“Parent” shall mean Siem Offshore Inc. as the Parent Company
only.
Siem Offshore is registered in the Cayman Islands and is
listed on the Oslo Stock Exchange (OSE Symbol: SIOFF). The
Company is tax domiciled in Norway.
The Company’s primary activity is the ownership and
operation of offshore support vessels (“OSVs”) for the offshore
energy service industry and the offshore renewables market.
 
FINANCIAL RESULTS, POSITION AND RISKS
Income Statement
The operating revenue was USD274.3 million and the net
profit attributable to shareholders was USD30.9 million, or
USD0.13 per share, compared to operating revenue of
USD254.5 million and a net profit attributable to shareholders
of USD107.9 million, or USD0.73 per share, in 2021. The
increase in revenues was primarily due to better vessel rates
following a steady increase in oil price and improving
estimates for worldwide demand for oil and energy.
 
The
reduced net profit was due to a one-off financial gain in 2021
at USD 91.6million related to financial restructuring of the
Company’s debt. The offshore renewable energy industry
launched several new projects which generated vessel
employment. The supply – demand balance for offshore
vessels has improved.
The Company’s operating margin for 2022 was USD103.8
million compared to USD100.6 million in 2021. The increase in
operating margin was due to improved vessel utilization and
charter rates.
 
Net operating margin as a percentage of
operating revenue was 38% in 2022 compared to 40% in
2021. The margin as a percentage was negatively affected in
2022 from vessel reactivation expenses. In 2021 the Company
received Covid-19 support related to one segment, which did
not apply for 2022.
The Company’s operating profit for 2022 was USD 39.4
million compared to USD 38.2 million in 2021 and includes
depreciation and amortization of USD 64.3 million (2021: USD
63.5million). During 2022, the Company conducted periodic
reviews of vessel valuations, and concluded not to recognize
any impairments. The net gain (loss) on sale of assets was USD
-0.1 million (2021: USD 1.0 million).
The Company’s net financial items were USD -12.3 million
(2021: USD 63.6 million) and included financial expenses of
USD -24.4 million (2021: USD -28.6 million) and a revaluation
gain/(loss) of non-USD currency items of USD 7.7 million (2021:
USD -4.5 million) mainly due to variances in NOK and BRL
compared to USD during the period.
 
Non-USD currency items
are held to match short- and long-term liabilities, including off-
balance sheet liabilities, in a similar currency. In 2021 the
Company recorded USD 91.6 as a one-off financial gain
related to debt that was restructured.
The Parent Company is primarily a holding company
owning shares in subsidiaries.
 
The Board proposes that the Parent’s net profit of USD33.5
million for 2022 be allocated to retained earnings and that no
dividend shall be paid for 2022. Further, the Board proposes
that accumulated retained losses of USD 419.7million in the
Parent be reallocated to the Parent’s share premium account.
The Market
The market in 2022 was improved for almost all OSV
segments. It was the North Sea spot market for AHTS vessels
that experienced the long-awaited increase in day rates for
the summer season, which made June and July one of the best
months in history for this segment. The PSV market has been
steadily rising for some years and although most high-end
PSVs have now been reactivated and a few new builds have
been delivered, the market has absorbed this tonnage without
significant negative impact on rates. Offshore construction
vessels have experienced higher utilization, especially in the
SIEM
Offshore
 
Inc. Annual Report 2022
6
shoulder seasons, which in recent years have been weak. This
market was almost sold out at the end of the year, which
confirms the increase in demand from the offshore Oil and Gas
and renewable activities.
The total firm contract backlog for all OSV vessels at 31
December 2022 was USD 442 million (2021: USD298 million),
including the drillship “JOIDES Resolution” and the 41%-
ownership in the well-stimulation vessel “Big Orange XVIII”.
The total vessel contract backlog is allocated with USD 201
million in 2023, USD 134 million in 2024 and USD 107 million in
2025 and onwards. The contract backlog, as a % of the annual
fleet capacity, is 59% for 2023, 33% for 2024 and 18% for
2025 (2021: 39% for 2022, 19% for 2023, 7% for 2024), also
see Note 18.
Financial Position and Cash Flows
Total equity was USD359 million at year-end 2022 (2021:
USD340 million), and the book equity ratio was 35% (2021:
32%). Shareholders’ equity was USD363 million (2021: USD341
million), equivalent to USD1.52 per share (2021: USD1.43 per
share).
 
The Company recorded USD25 million as capital
expenditures on fixed assets during 2022, related to project-
specific investments in vessels (including battery power
systems), capitalized dry-dockings and periodic maintenance.
The total debt was USD569 million (2021: USD624 million)
and the net interest-bearing debt at year-end was USD474
million (2021: USD532 million). The Company deferred interest
payments of USD0.9 million that, during the year, were added
to the principal loan balance of secured and unsecured credit
facilities related to Payment-in-kind (PIK) agreements (2021:
USD17 million). The minority interest in the AHTS fleet
increased its subordinated shareholder’s loan by USD1.9
million (2021: USD2.8 million), inclusive of accrued interest.
Debt repayments during the year were USD55 million. The
weighted average cost of debt for the Company was
approximately 5.8% p.a. at year-end ((2021: 3.3% p.a.).
 
Cash flows
The cash position at year-end was USD 94.9 million (2021:
USD 91.8 million).
 
The Company paid debt instalments of the equivalent of
USD55 million in 2022 (2021: USD124 million). Debt instalments
included repayments from cash sweeps at USD 23 million
(2021: USD29 million). Following the refinancing in Q2 2021,
fixed repayments of debt have been reduced substantially and
cash sweep mechanisms are in place that will balance
repayments of debt to the Company’s cash position and cash
generating. The Company will be less exposed if cash flows
are negatively impacted from a volatile market. If the
Company’s cash flows are exceeding agreed levels, related to
cash position and related measures, excess installments will
become payable to the European lending banks following a
set of agreed cash sweep mechanisms.
The Company’s cash-flows are primarily denominated in
USD, NOK, BRL, GBP, CAD, AUD and EUR.
 
IFRS
 
The financial statements for the Company and the Parent are
prepared in accordance with the International Financial Re-
porting Standards (“IFRS”) as adopted by the European Union.
Going-Concern
 
The financial statements have been prepared under the
assumption that the Company and the Parent are going-
concerns. The Company’s financial position, financing
arrangements and forecasted cashflows are supporting a
going concern status. No debt will mature before the end of
2024, except for debt that will be subject to cash sweeps if
applicable.
 
Financial Risks
Interest risk
The Company is exposed to changes in interest rates, as
approximately 62% of the interest-bearing debt is based on
floating interest rates and primarily denominated in USD. The
average 3-month USD LIBOR was 2.4% p.a. during 2022
(2021:0.16% p.a.) and the average 3-month NIBOR was 2.1%
p.a. during 2022 (2021: 0.47% p.a.). The Company held no
interest rate swap agreements, nor any cross-currency
interest rate swaps at year-end.
Currency risk
The Company is exposed to currency risk as revenue and
costs are denominated in various currencies. The Company
held no forward exchange contracts at year end.
Inflation Risk
The Company is exposed to inflation risk as inflation rates are
expected to increase. The revenues may not be inflated at
levels that could compensate for inflated operating cost. In
addition to general inflation-rates, the operating expenses
related to spare parts, service-personnel and logistics within
the shipping industry are further exposed to inflation.
 
Liquidity risk
The Company is financed by a combination of debt and equity.
If the Company fails to repay or refinance its credit facilities,
additional equity financing may be required. There can be no
assurance that the Company will be able to repay its debts or
extend the debt repayment schedule through re-financing of
credit facilities. There is no assurance that the Company will
not experience cash flow shortfalls exceeding the Company’s
available funding sources or to remain in compliance with
minimum cash requirements or other covenants. Please see
more information regarding this in the Going Concern
paragraph above.
 
 
Board of Directors’ Report
7
SIEM
Offshore
 
Inc. Annual Report 2022
Refinance risk
The Company holds secured debt, of which a significant share
will mature on 31 December 2024. The debt balance that will
become due for refinancing within end of 2024 is contingent
on debt repayments from a cash sweep mechanism that is in
force with the financial lenders. Further, there is no assurance
that the Company will be able to raise new equity or arrange
new credit facilities on favorable terms and in amounts
necessary to conduct its ongoing and future operations should
this be required.
Climate risk
The Company is exposed to both transition risk and physical
risks associated with climate change. The Company has a
structured approach to monitoring the development of the
offshore oil and gas market and opportunities created by the
transition to offshore renewable energy. The Company’s
strategy is based on market scenario analysis and positioning
of the Company for the energy transition by establishing new
segments to explore business opportunities within offshore
renewable energy.
 
The physical risks associated with climate
change may directly affect our offshore operations through
increased occurrence of extreme weather conditions.
Available days for offshore operations could be limited as
clients could shorten their weather windows. The Company
mitigates this risk through good crew training and awareness
programs, good vessel maintenance programs and close
cooperation with its clients.
War risk
The war in Ukraine could impact the market balance of
offshore support vessels in the Company’s key areas of
operation. There is associated risk of price escalations to
vessel spare parts, logistics and other services. The Company
observes indications of shortages of experienced crew and
escalation of crew costs. Sanctions that have been imposed
on nations and organizations could affect the Company’s
competition directly and indirectly, and its ability to receive
and send payments for its services.
 
OPERATIONS
Fleet, Performance and Employment
The fleet in operation at end of year 2022 totaled 28 vessels,
including partly owned vessels and 3 vessels in lay-up (2021: 4
vessels). The Company performed ship-management services
for 3 vessels owned by related parties. During 2022, the fleet
conducted operations in the North Sea, Brazil, Australia,
Canada, Northern Pacific Ocean, Southeast Asia and West
Africa.
The Company had six PSVs in operation at end of the year
(2021: six). The PSV fleet earned operating revenues of USD
36.2 million and had 90% utilization (2021: USD 39.9 million
and 88%). The operating margin before administrative
expenses was USD 7.4 million (2021: USD 15.1million) and the
operating margin as a percentage of revenue was 20% (2021:
38%).
 
The Company had four OSCVs and two WIVs in operation
at end of the year (2021: six in total). The OSCV and WIV fleet
earned operating revenues of USD 126.9million and had 94%
utilization (2021: USD 111.7million and 88%). The operating
margin before administrative expenses was USD 72.7 million
(2021: USD 64.4 million) and the operating margin as a
percentage of revenue was 57% (2021: 58%).
 
The Company had eight AHTS vessels in operation at end
of the year (2021: eight). The AHTS fleet earned operating
revenues of USD 53.2 million and had 76% utilization
excluding vessels in lay-up (2021: USD 43.1million and 78%
utilization). The operating margin before administrative
expenses was USD 12.2 million (2021: USD 3.8 million) and the
operating margin as a percentage of revenue was 23% (2021:
9%).
 
Siem Offshore Canada LP (previously named Secunda
Holdings Limited)
 
is a wholly owned subsidiary that owns and
operates one offshore support vessel (2021: one). The
Canadian fleet earned operating revenues of USD 8.3 million
and had 98% utilization (2021: USD 12.7 million and 100%). The
operating margin before administrative expenses was USD 5.0
million (2021: USD9.1 million) and the operating margin as a
percentage of revenue was 60% (2021: 72%).
 
Siem Offshore do Brasil S.A. is the Company’s wholly
owned Brazilian subsidiary that owns and operates a fleet of
five smaller OSVs in Brazil (2021: five). This fleet earned
operating revenues of USD 16.1million and had 98% utilization
(2021: USD 15.7million and 98%). The operating margin before
administrative expenses was USD 7.5 million (2021: USD 8.9
million) and the operating margin as a percentage of revenue
was 47% (2021: 57%).
 
The Scientific Core-Drilling segment includes one
scientific drillship which is operating world-wide doing ocean
seabed core-sample drilling.
 
The “JOIDES Resolution”
recorded operating revenues of USD 32.0 million (2021: USD
30.0 million) with an operating margin before administrative
expenses of USD 18.9 million (2021: USD 16.4 million) and the
operating margin as a percentage of revenue was 59% (2021:
55%).
 
HSEQ
Health, Safety, Environment & Quality - Committed to safe,
ethical, and sustainable operations
The Company’s continuous focus on safe operations,
cooperation and environmental initiatives has been important
when dealing with challenges arising in the wake of Covid-19.
Uplift of travel restrictions made it possible to resume vessel
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
8
visits, which has had a huge positive impact on the relationship
between ship and shore.
 
The Officer’s Conference was arranged for the first
time in three years, promoting the collective team- and safety
culture throughout the Company.
Implementing “Unisea” as a new Business
Management System was a milestone - increasing both safety
and efficiency at the same time.
 
The increased frequency of long-term contracts led
to a closer cooperation with our partners. Clients are very
satisfied with our operational and safety performance, which
reflects professional crew and a well-developed safety culture
throughout the Company.
Environment
In 2022, protection of the environment has been a high priority
area. The ESG-strategy (Environmental, Social and
Governance) outlines the Company’s internal goals for
emission intensity reductions and energy management. We
have performed specific studies and research to further
develop emission reduction technologies including use of
alternative fuel types.
 
Siem Offshore Environmental Policy confirms the
Board of Directors and Management’s commitment to
minimize the Company’s impact on the environment, in
relation to biodiversity, resource usage, and water and waste
management.
 
At the senior management level, there is a
constant and shared responsibility to ensure that all staff are
familiar with this policy, and that there are systems and
procedures in place to integrate environmental considerations
in our decision-making and operations.
Ethics, Compliance and Integrity
Siem Offshore is committed to carrying out its business in an
ethical manner and in strict compliance with applicable laws
wherever it operates, latest example being the Transparency
Act that ensures focus on human rights in the supply chain.
The compliance and governance work continued to be a focus
area in 2022, where we have earned trust of our clients,
business partners, suppliers, and other stakeholders by acting
consistently and reliably in accordance with these principles.
 
Management is accountable for compliance, and it is
the responsibility of everyone who works for the Company.
One of the key roles of our compliance and ethics function is
to ensure Management understands, accepts, and fulfils its
accountability.
SHAREHOLDERS AND CORPORATE
GOVERNANCE
Shareholder Information
The Company’s authorized share capital is USD300,000,000
divided into 300,000,000 ordinary shares of a nominal value of
USD1.00 each. The issued share capital on 21 April 2023,
based on the 238,852,052 Company shares issued and
outstanding, is USD 238,852,052. The Company’s shares are
listed on the Oslo Stock Exchange with the ticker symbol
SIOFF. The Company’s largest shareholder is Siem
Sustainable Energy S.a r.l., whose ultimate owner is Siem
Industries S.A., with a 33.6% interest on 21 April 2023. In May
2021, a reverse split 100:1 became effective. During 2022, the
closing share price reached a high of NOK 18.7, a low of NOK
3.40 and closed at NOK 13.2 at year-end.
Corporate Governance
The Company has implemented guidelines for good corporate
governance based on the recommendations and guidelines
given by the Oslo Stock Exchange. The purpose of these
guidelines is to clarify roles of the Shareholders, the General
Meeting, the Board of Directors and the day-to-day
Management beyond what follows from the legislation. A
detailed summary of our corporate governance principles is
included in a separate section of the Annual Report.
THE WORKING ENVIRONMENT AND THE
EMPLOYEES
The Company provides a workplace with equal opportunities
for all employees. We treat current and prospective
employees fairly in relation to salaries, promotions, and
recruitment. The Company offers its employees a sound
working environment, giving opportunities for professional
development equally and free of any discrimination to all
employees.
 
The sick leave rate for onshore and offshore employees was
1.0% and 1.6% respectively on a global basis.
 
The knowledge and experience of the crew is vital for safe and
secure operations of any vessel. Such knowledge includes
good seamanship and understanding of all operational
execution.
OUTLOOK
The expected increase in activity in Brazil, West Africa, and the
North Sea shows signs of realization, as well as new
indications that Australia and South-East Asia will see
increased activity in the next year. Although new projects and
campaigns are entering the market later than expected, we
have good expectations for all segments in the coming years.
For the Offshore Construction segment, we see
significantly more long-term contracts, where Oil and Gas
competes with the Renewables segment to secure tonnage for
the future, indicating that charterers are strategically
positioning themselves to secure the availability of operating
 
 
 
Board of Directors’ Report
9
SIEM
Offshore
 
Inc. Annual Report 2022
assets to carry out their already booked projects in the years
ahead.
We expect PSV activity to increase in line with drilling
activity and the same will apply to the AHTS segment, but here
we will probably have to wait a little longer before floating
wind is commercialized and will need a large number of
vessels that will contribute to a tight market.
The high activity offshore, driven by strong energy
prices and wind installations, indicates a growing demand for
our advanced fleet in the coming years.
Having refrained from taking on long-term contracts
in the previously weak market, the company now has several
vessels in a position to target long-term opportunities in the
coming years.
Further, we strongly believe that consolidation
should continue to be a required objective for the stakeholders
in our industry. As we move forward, the oil and gas industry
will be met with demands to reduce emission of greenhouse
gases from its clients. In order to serve the interest of all
stakeholders, our ambition shall be to lead the consolidation
effort as well as the shift into new technology.
The Board believes that the Company is well-
positioned to compete with its peers based on its modern fleet,
quality backlog, strong operating record, positive reputation,
and its proven ability to provide vessel employment on a
global scale.
APPROVAL OF ANNUAL REPORT
The financial statements and related notes were authorized for
issue by the Board on 21 April 2023 and will be presented to
the shareholders for approval at the Annual General Meeting
to be held on Wednesday 10 May 2023.
21 April 2023
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Celina Midelfart
 
Director
(Sign.)
Christen Sveaas
Director
(Sign.)
 
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income statement
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
10
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
Note
2022
2021
1,118
1,299
Operating revenue
2,3,4,14
274,306
254,493
-4,404
-5,271
Operating expenses
2,8,14,16,17,18
-170,530
-153,909
-3,286
-3,972
Operating margin
4
103,776
100,585
-
-
Depreciation and amortization
4,5
-64,305
-63,539
-
-
Gain/(loss) on sales of assets
21
-95
997
-
-
Gain/(loss) on currency derivative contracts
24
-
204
-3,286
-3,973
Operating profit
39,376
38,247
Financial income and expenses
43,039
109,396
Financial income
19
4,300
96,727
-5,559
-74,880
Financial expenses
19
-24,375
-28,573
1,414
-862
Net currency gain/(loss)
19
7,736
-4,531
38,894
33,654
Net financial items
-12,340
63,623
-
-
Result from associated companies
7
446
42
35,608
29,682
Profit/(loss) before taxes
27,482
101,912
-2,142
-1,308
Tax benefit/(expense)
11
250
1,000
33,466
28,374
Net profit/(loss)
27,732
102,912
-
-
Attributable to non-controlling interest
6
-3,165
-4,947
33,466
28,374
Attributable to shareholders of the Company
30,897
107,858
Weighted average number of outstanding shares (1,000)
20
238,852
147,050
Weighted average number of shares diluted (1,000)
20
238,852
147,050
Statement of comprehensive income
2022
2021
(Amounts in USD 1,000)
2022
2021
33,466
28,374
Net profit/(loss)
27,732
102,912
Other Comprehensive income
Items that will not be reclassified to profit or loss
-
-
Pension remeasurement gain (loss)
-446
-203
Items that may be subsequently reclassified to profit or loss
-
-
Cash flow hedges
11,753
-2,217
-
-
Currency translation differences
-19,959
825
33,466
28,374
Total comprehensive income for the year
19,080
101,317
-
-
Attributable to non-controlling interest
-3,165
-4,947
33,466
28,374
Attributable to shareholders of the Company
22,245
106,263
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Financial Position
—Assets
11
SIEM
Offshore
 
Inc. Annual Report 2022
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
Note
12/31/2022
12/31/2021
Non-Current assets
-
766
Deferred tax asset
11
8,636
8,945
-
-
Vessels and equipment
4,5,18
804,918
844,652
-
-
Capitalized project costs
4,5
1,811
2,433
249,520
224,117
Investment in subsidiaries
6
-
-
-
-
Investment in associated companies
7
2,682
2,495
-
-
CIRR Loan deposit
12,25
20,638
36,763
10,399
3
Long-term receivables
9,14,25
29,636
30,749
259,920
224,885
Total non-current assets
868,323
926,037
Current assets
-
-
Trade receivable
2,25
33,416
34,097
980
1,014
Other short-term receivable
9,14,25
17,868
17,001
-
-
Inventories
26
5,335
4,524
31,394
33,362
Cash
2,10,25
94,949
91,839
32,375
34,376
Total current assets
151,568
147,460
292,295
259,262
Total assets
1,019,891
1,073,497
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Financial Position
—Equity and Liabilities
SIEM
Offshore
 
Inc. Annual Report 2022
12
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
Note
12/31/2022
12/31/2021
Equity
238,852
238,852
Share capital
238,852
238,852
51,875
18,409
Other reserves
124,229
101,984
290,727
257,261
Shareholders' equity
22
363,081
340,836
-
-
Non-controlling interest
-3,703
-538
290,727
257,261
Total equity
359,377
340,298
Liabilities
Non-current liabilities
-
-
Borrowings
2,12,14,25
509,994
576,596
-
-
CIRR Loan
12,25
20,638
36,763
309
-
Tax liabilities
11
698
421
-
-
Pension liabilities
8
989
1,014
-
-
Other non-current liabilities
18
12,887
12,776
309
-
Total non-current liabilities
545,206
627,570
Current liabilities
63
36
Accounts payable
2,25
11,203
13,542
-
-
Borrowings
2,12,14,25
58,978
47,650
-
-
Taxes payable
11
635
971
-
-
Other current provision
13
18,092
16,696
1,196
1,965
Other current liabilities
13,14,18,25
26,399
26,770
1,259
2,001
Total current liabilities
115,307
105,630
1,568
2,001
Total liabilities
660,514
733,200
292,295
259,262
Total equity and liabilities
1,019,891
1,073,497
551,906
606,880
Guarantees
15
686
686
21 April 2023
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Celina Midelfart
 
Director
(Sign.)
Christen Sveaas
Director
(Sign.)
 
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of changes in equity
 
 
13
SIEM
Offshore
 
Inc. Annual Report 2022
CONSOLIDATED
(Amounts in USD 1,000)
Total no.
 
of shares
Share
 
capital
Share
premium
reserves
Other
reserves
Retained
earnings
Share-
holders'
equity
Non-
controlling
interest
Total
equity
Equity as of 31 December 2020
934,738,777
9,347
634,959
-29,332
-557,822
57,152
-44,730
12,423
Net profit/(loss)
-
-
-
-
107,858
107,858
-4,947
102,912
Cash flow hedge
-
-
-
-2,217
-
-2,217
-
-2,217
Currency translation differences
-
-
-
825
-
825
-
825
Pension remeasurement
-
-
-
-
-203
-203
-
-203
Shares issues in Siem Offshore
Inc
22,950,466,494
229,505
-52,084
-
-
177,421
-
177,421
Correction number of shares
following reversed split
-23,646,353,219
-
-
-
-
-
-
-
Equity as of 31 December 2021
238,852,052
238,852
582,875
-30,725
-450,166
340,836
-538
340,298
Net profit/(loss)
-
-
-
-
30,897
30,897
-3,165
27,732
Cash flow hedge
-
-
-
11,753
-
11,753
-
11,753
Currency translation differences
-
-
-
-19,959
-
-19,959
-
-19,959
Pension remeasurement
-
-
-
-
-446
-446
-
-446
Reallocation of retained loss
-
-
-419,715
-
419,715
-
-
-
Equity as of 31 December 2022
238,852,052
238,852
163,160
-38,931
-
363,081
-3,703
359,377
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of changes in equity
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
14
PARENT COMPANY
(Amounts in USD 1,000)
Total no.
 
of shares
Share
capital
Share
premium
reserves
Other
reserves
Retained
earnings
Shareholders'
equity
Equity as of 31 December 2020
934,738,777
9,347
634,959
-22,302
-570,537
51,467
Net profit/(loss)
-
-
-
-
28,374
28,374
Shares issues in Siem Offshore Inc
22,950,466,494
229,505
-52,084
-
-
177,421
Correction number of shares
following reversed split
-
23,646,353,219
-
-
-
-
-
Equity as of 31 December 2021
238,852,052
238,852
582,875
-22,302
-542,164
257,261
Net profit/(loss)
-
-
-
-
33,466
33,466
Reallocation of retained loss
-
-
-419,715
-
419,715
-
Equity as of 31 December 2022
238,852,052
238,852
163,159
-22,302
-88,982
290,727
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of cash flows
 
15
SIEM
Offshore
 
Inc. Annual Report 2022
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
Note
2022
2021
CASH FLOW FROM OPERATIONS
33,466
28,374
Net profit/(loss)
27,732
102,912
5,017
2,408
Interest expenses
23,370
24,187
-8,136
-1,997
Interest income
-4,245
-3,240
-4,515
-3,647
Intercompany interest income
-
-
2,142
1,308
Tax expense
11
-250
-1,000
-
-
Currency hedge
-6,232
-
-14,387
-12,198
Result from associated companies
7
-446
-42
-
-
Gain/(loss) on sale of assets
21
95
-997
-
-91,553
Debt forgiveness from restructuring
19
-
-91,553
-
-
Depreciation and amortization
5
64,305
63,539
-15,474
70,910
Impairment of shares in subsidiaries
19
-
-
-
-
Effect of unreal. gain on currency exchange forward
contracts
24
-1,358
-3,578
709
880
Changes in short-term receivables and payables
-2,648
9,174
-
-
Other changes
-531
2,493
-1,179
-5,516
Cash flow from operations
99,792
101,895
-5,017
-433
Interest paid
-17,432
-23,342
8,136
1,685
Interest received
2,599
3,183
-14
-16
Taxes paid/(received)
-786
363
1,926
-4,280
Net cash flow from operations
84,172
82,099
CASH FLOW FROM INVESTMENT ACTIVITIES
-
-
Investment in fixed assets
4,5
-24,923
-27,736
-
-
Proceeds from sale of fixed assets
21
97
52,463
-6,409
-8,190
Loan to subsidiaries
-
-
-
-
Change in other non-current receivables
763
4,202
-6,409
-8,190
Net cash flow from investment activities
 
-24,062
28,929
CASH FLOW FROM FINANCING ACTIVITIES
-
-
Proceeds from non-controlling interests in consolidated
subsidiary
1,791
10,000
-
-
Repayment of lease liability
18
-1,812
-1,927
-
-
Changes in other non-current liabilities
-126
1,697
-
-6,216
Repayment of long-term borrowing
12
-54,963
-124,270
-
-6,216
Net cash flow from financing activities
-55,109
-114,500
-4,483
-18,686
Net change in cash
5,000
-3,472
33,362
51,777
Cash at bank as of 1 January
91,839
103,225
2,515
271
Effect of currency exchange rate differences
-1,890
-7,914
31,394
33,362
Cash at bank as of 31 December
94,949
91,839
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
16
Note 1
Accounting Principles
1.1 General
Siem Offshore owns and operates a fleet of offshore support
vessels, including Platform Supply Vessels, Offshore Subsea
Construction Vessels, Anchor Handling Tug Supply Vessels
and Well-Intervention Vessels. Siem Offshore Inc.
commenced operations 1 July 2005 and is an exempted
company under the laws of the Cayman Islands and is listed on
the Oslo Stock Exchange. The Company’s headquarter is
located in Kristiansand, Norway and the Company is tax
domiciled in Norway. All references to “Siem Offshore Inc.”,
“Consolidated” and “Company” shall mean Siem Offshore Inc.
and its subsidiaries and associates unless the context
indicates otherwise. All references to “Parent” or “Parent
Company” shall mean Siem Offshore Inc. as a parent company
only.
The principal accounting policies applied in preparation of
these consolidated and parent company financial statements
are set out below. These policies have been consistently
applied for all the years presented, unless otherwise stated.
 
The financial statements were authorized by the Board of
Directors on 21 April 2023.
1.2 Basis of preparation
The consolidated and parent company financial statements
are prepared in accordance with International Financial
Reporting Standards (IFRS) as endorsed by the European
Union. The financial statements also include any additional
applicable disclosures as required by Norwegian law and Oslo
Stock Exchange regulations. The financial statements have
been prepared under the historical cost convention, as
modified by specific financial assets and financial liabilities
(including derivative instruments) measured at fair value and
assets held for sale measured at fair value less costs to sell.
The financial statements have been prepared under the
assumption of going concern.
 
All amounts are in USD thousands, unless otherwise stated.
Management is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities. In addition, the preparation of financial statements in
conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise
its judgment in the process of applying the Company’s
accounting policies. The areas involving a higher degree of
judgment or complexity or areas where assumptions and
estimates are significant to the consolidated financial
statements are disclosed in note 3 Critical Accounting
Estimates and Judgments.
(a) New and amended standards that have been adopted
 
The Company has applied the following standards and
amendments for the first time for their annual reporting period
commencing 1 January 2022:
•
Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
•
Onerous Contracts – Cost of Fulfilling a Contract –
Amendments to IAS 37
•
Annual Improvements to IFRS Standards 2018-2020,
and
•
Reference to the Conceptual Framework –
Amendments to IFRS 3
The amendments listed above did not have any impact on the
amounts recognized in prior periods and are not expected to
significantly affect the current or future periods.
(b) New standards and interpretations not yet adopted
 
Certain new accounting standards, amendments to
accounting standards and interpretations have been
published that are not mandatory for 31 December 2022
reporting periods and have not been early adopted by the
group. These standards, amendments or interpretations are
not expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
•
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction – amendments to IAS 12,
and
•
Disclosure of Accounting Policies – Amendments to
IAS 1 and IFRS Practice Statement 2.
 
 
 
 
Notes to the accounts
17
SIEM
Offshore
 
Inc. Annual Report 2022
1.3 Consolidation
(a) Subsidiaries
Subsidiaries are entities over which the Parent has control. The
Parent controls an entity when the Parent is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Company. They are
deconsolidated from the date that control ceases.
Intercompany transactions, balances, and unrealized gains
on transactions between companies are eliminated.
Unrealized losses are also eliminated. When necessary,
amounts reported by subsidiaries have been adjusted to
ensure consistency with the policies adopted by the
Company.
 
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated income
statement, statement of financial position and statement of
changes in equity respectively.
(b) Business combinations
The Company applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets
transferred and the liabilities assumed to the former owners of
the acquirer and the equity interests issued by the Company.
The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date.
The Company recognizes any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis, either
at fair value or at the non-controlling interest’s proportionate
share of the recognized amounts of acquired entity’s
identifiable net as-sets. Acquisition-related costs are
expensed as incurred. If the business combination is achieved
in stages, fair value of the acquirer’s previously held equity
interest in the acquired entity is re-measured to fair value at
the acquisition date through profit or loss. Any contingent
consideration to be transferred by the Company is recognized
at fair value at the acquisition date. Subsequent changes to the
fair value of the contingent consideration of an asset or liability
are recognized in profit or loss. Contingent consideration that
is classified as equity is not re-measured and its subsequent
settlement is accounted for within equity.
(c) Associated companies
Associates are entities over which the Company has
significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity
method of accounting and are initially recognized at cost. The
Company’s investment in associates includes goodwill
identified on acquisition. The share of profit or loss recorded in
the consolidated financial statements is based on the after-tax
earnings of the associate.
The Company’s share of post-acquisition profit or loss is
recognized in the income statement, and its share of post-
acquisition movements in other comprehensive income is
recognized in other comprehensive income with a
corresponding adjustment to the carrying amount of the
investment. When the Company’s share of losses in an
associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the Company
does not recognize further losses unless it has incurred legal
or constructive obligations or made payments on behalf of the
associate.
Unrealized gains on transactions between the Company
and its associates are eliminated to the extent of the
Company’s interest in the associates. Unrealized losses are
eliminated un-less the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure
consistency with the policies adopted by the Company.
1.4 Classification of items in the financial
statements
Assets designated for long-term ownership or use and
receivables due later than one year after drawdown are
classified as non-current assets. Other assets are classified as
current assets. Liabilities due later than one year after the end
of the reporting period are classified as non-current liabilities.
Other liabilities are classified as current liabilities. All derivative
financial instruments are classified as current assets or current
liabilities.
1.5 Segment reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is
responsible for allocating resources and assessing
performance of the operating segments, has been identified as
the executive management team consisting of the CEO, CFO,
COO, CCO and CHRO.
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
18
1.6 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the
Company’s entities are measured using the currency of the
primary economic environment in which the entity operates
(the “functional currency”). The consolidated financial
statements are presented in USD, which is the Company’s
presentation currency.
 
(b) Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation at year- end exchange rates of monetary assets
and liabilities denominated in foreign currencies are
recognized in the income statement line item Net currency
gain/loss.
(c) Subsidiary companies
The results and financial position of all the subsidiaries of the
Company (none of which have the currency of a
hyperinflationary economy) that have a functional currency
 
different from the presentation currency are translated into the
presentation currency as follows:
 
(i) assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
statement of financial position;
(ii) income and expenses for each income statement are
translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions);
and
(iii) all resulting exchange differences are recognized in other
comprehensive income.
 
As part of the consolidation process, exchange differences
arising from the translation of the net investment in foreign
operations is recognized directly in Other Comprehensive
Income (OCI). When a foreign operation is sold, exchange
differences previously recognized in OCI are reclassified to
profit or loss and included in the gain or loss on sale.
 
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate.
Exchange differences arising are recognized in OCI.
1.7 Non-current tangible assets and maintenance
costs
Land and Buildings and Vessels are stated at their historical
cost less accumulated depreciation and net of any impairment
losses. All non-current tangible assets (excluding Land and
Vessels under construction) are depreciated on a straightline
basis over the estimated remaining useful economic life of the
asset. The vessel residual value is the estimated future sales
price for steel less the estimated costs associated with
scrapping a vessel. The residual value and expected useful life
for all non-current tangible assets is reviewed annually and,
where they differ significantly from previous estimates, the
rate of depreciation charges is changed accordingly. The
vessels presently owned by the Company have an estimated
economic life of 30 years. Some components of the vessels
have a shorter economic life than 30 years. Such components
are depreciated over their individual useful lives. Each part of a
vessel that is significant to the total cost of the vessel is
separately identified and depreciated over that component’s
useful life. Components with similar useful lives are included in
one component. The Company has identified nine significant
components relating to its different types of vessels. See note
5 for additional information.
In accordance with IAS 16 and the cost model, drydocking
costs is a separate component of the vessel’s cost at purchase
with a different pattern of benefits and are therefore initially
recognized as a separate depreciable asset. Subsequently,
the cost of major renovations and periodic maintenance costs
are capitalized as a dry-docking asset and depreciated over
the useful life of the parts replaced. The useful life of the dry-
docking costs will be the period until the next docking,
normally five years. Day- to-day maintenance costs are
immediately expensed during the reporting period in which
they are incurred.
 
Capitalized project cost - Certain vessel contracts require
an investment prior to commencing the contract to fulfil
requirements set by the charterer. These investments are
capitalized and amortized over the term of the specific charter
contract.
Gains and losses on the sale of assets and disposals are
determined by comparing the sales or disposal proceeds with
the net carrying amount and are included in operating profit.
1.8 Newbuild contracts and borrowing costs
Instalments on newbuild contracts are classified as non-
current tangible assets. Direct costs related to the on-site
 
 
 
 
 
 
 
 
Notes to the accounts
19
SIEM
Offshore
 
Inc. Annual Report 2022
supervision and other pre-delivery construction costs are
capitalized per vessel.
General and specific borrowing costs directly related to
the acquisition, construction or production of qualifying
vessels are added to the cost of those vessels, until such time
as the vessels are substantially ready for their intended use or
sale. All other borrowing costs are recognized in the profit or
loss in the period in which they are incurred.
 
1.9 Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible
assets not ready to use are not subject to amortization and are
tested annually for impairment.
 
Assets that are subject to amortization are reviewed for
impairment whenever events or changes in circumstances
indicate
 
that the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. The recoverable amount is
established individually for all assets. 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 and the risk specific to the asset that
is considered impaired.
Average 2022
31.12.2022
Average 2021
31.12.2021
NOK (Norwegian kroner)
0.1043
0.1014
0.1163
0.1134
EUR (Euros)
1.0563
1.0666
1.1851
1.1326
GBP (Pound Sterling)
1.2385
1.2026
1.3755
1.3479
BRL (Brazilian Reals)
0.1933
0.1917
0.1855
0.1792
Prior impairments of non-financial assets (other than goodwill)
are reviewed for possible reversal at each reporting date. A
previously recognized impairment loss is reversed if there has
been a change in the estimates used to determine the
recoverable amount. Reversal of a previously recognized
impairment is limited to an amount that would make the
carrying value of the asset equal to what it would have been
had the initial impairment charge not occurred.
 
1.10 Intangible assets
Intangible assets that are acquired separately are measured
on initial recognition at cost. The cost of intangible assets
acquired in a business combination is recognized at fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortization and any accumulated impairment losses.
Internally-generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is
charged against profits in the year in which the expenditure is
incurred. The useful lives of intangible assets are assessed to
be either finite or indefinite. Intangible assets with finite lives
are amortized over the useful economic life and assessed for
impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period and the
amortization method are reviewed annually. Changes in the
expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted
for by changing the amortization period or method, as
appropriate, and treated as a change in accounting estimate.
The amortization expense on intangible assets with finite lives
is recognized in the income statement in the expense category
consistent with the function of the intangible asset.
 
Intangible assets with indefinite useful lives are tested for
impairment annually either individually or at the cash-
generating unit level. Such intangibles are not amortized. The
useful life of an intangible asset with an indefinite life is
reviewed annually to determine whether the indefinite life
assessment continues to be supportable. If not, the change in
the useful life assessment from indefinite to finite is made on a
prospective basis.
 
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the
acquisition- date fair value of any previous equity interest in
the acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred, non-
controlling interest recognized and previously held interest
measured at fair value is less than the fair value of the net
assets of the subsidiary acquired, in the case of a bargain
purchase, the difference is recognized directly in the income
statement. For the purpose of impairment testing, goodwill
acquired in a business combination is allocated to each of the
CGUs, or groups of CGUs, that is expected to benefit from the
synergies of the combination. Each unit or group of units to
which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating
segment level.
 
Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances indicate
a potential impairment. The carrying value of goodwill is
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
20
compared to the recoverable amount, which is the higher of
value in use and the fair value less costs to sell. Any
impairment is recognized immediately as an expense and is
not subsequently reversed. Trademarks and licenses –
Separately acquired trademarks and licenses are shown at
cost. Trademarks and licenses acquired in a business
combination are recognized at fair value at the acquisition
date. Trademarks and licenses have a finite useful life and are
measured at cost less accumulated amortization. Amortization
is calculated using the straight-line method to allocate the cost
of trademarks and licenses over their estimated useful lives of
three to seven years. Research and development - Research
and Development (R&D) relates to the development of a
production method for drilling process; this R&D is part of the
Other Segment.
 
1.11 Financial assets
1.11.1 Classification
The Company classifies its financial assets in the following two
categories: Financial assets at fair value through profit or loss
and Financial assets at amortized cost. The classification
depends on the purpose for which the financial assets were
acquired. Management determines the classification of its
financial assets at initial recognition and re-evaluates this
designation at every reporting date.
 
(a) Financial assets at fair value through profit or loss Assets at
fair value through profit or loss are derivative contracts and
contingent consideration. Derivatives in this category are
classified as current assets.
(b) Financial assets at amortized cost
A financial asset is classified as at amortized cost if it is held
within a business model whose objective is to collect the
contractual cash flows and the contractual terms give rise to
cash flows that are solely payment of principal and interest.
These assets were classified as loans and receivables under
IAS 39. They are included in current assets, except for assets
with maturities greater than 12 months after the reporting date.
These are classified as non-current financial assets. The
Company’s financial assets at amortized cost include
accounts receivable, current and non-current loans to
management, related parties and other, and the CIRR loan
deposit.
 
1.11.2 Recognition and measurement
Regular purchases and sales of financial assets are recognized
on the trade-date – the date on which the Company commits
to purchase or sell the asset. Investments are initially
recognized at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss. Financial
assets carried at fair value through profit or loss are initially
recognized at fair value, and transaction costs are expensed in
the income statement. Financial assets are derecognized
when the rights to receive cash flows from the investments
have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
Loans and receivables are subsequently carried at amortized
cost using the effective interest method.
 
Gains or losses arising from changes in the fair value of the
‘financial assets at fair value through profit or loss’ category
are presented in the income statement within Operating profit
as gain/(loss) on currency derivative contracts if the gain or
loss is arising from currency contracts entered into in order to
hedge primarily operating expenses in foreign currencies.
Other gains or losses arising from changes in the fair value of
the ‘financial assets at fair value through profit and loss’
category are presented within Net financial items. See for note
19 for additional information.
 
1.12 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount
reported in the balance sheet when there is a legally
enforceable right to offset the recognized amounts and there
is an intention to settle on a net basis or realize the asset and
settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be
enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy of the company or the
counterparty. The Company has evaluated all of their
derivative contract positions and does not currently have the
right to offset the contracts, and therefore reports all derivative
positions at gross amounts.
1.13 Inventories
Lubricating oil and bunkers inventories are valued at the lower
of cost and net realizable value. Cost is determined using the
weighted average cost method. Bunkers and lubricating oil
inventories are an integral part of the vessel, and not sold
separately. Net realizable value is measured based on the
assumed use of the inventory.
1.14 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents
includes cash in hand and bank deposits.
 
 
 
 
 
 
Notes to the accounts
21
SIEM
Offshore
 
Inc. Annual Report 2022
1.15 Accounts receivable
 
Accounts receivable are recognized initially at fair value and
subsequently measured at amortized cost, less provision for
impairment. The interest factor for accounts receivable is
considered to be insignificant and therefore not included in
the measurement of amortized cost. In the case of an
objective evidence of impairment, the difference between
reported value and the present value of the
 
The Company applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for accounts receivable. Lifetime
expected loss is based on Management’s experience of
historical loss levels and taking into account current and
forward-looking information on macroeconomic factors as
well as objective indicators that individual receivables may be
impaired. Such objective indicators include significant
financial problems facing the customer, bankruptcy
proceedings or the customer undergoing financial
restructuring, postponement and non-payment.
expected net future cash flows is reported as a loss.
 
1.16 Share capital
 
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
When any Company entity purchases its own shares, the
consideration paid, including any directly attributable
incremental costs (net of income taxes), is deducted as
appropriate from share capital and share premium reserve and
the shares are cancelled.
1.17 Borrowings
Borrowings are recognized initially at fair value, net of
transaction costs incurred and are subsequently stated at
amortized cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognized in
the income statement over the period of the borrowings using
the effective interest method.
 
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-
cash assets transferred or liabilities assumed, is recognized in
profit or loss as Financial income.
 
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
 
1.18 Commercial Interest Reference Rate (CIRR)
loan
The Company has obtained two Commercial Interest
Reference Rate (CIRR) loans from the Norwegian Export
Credit Agency. The duration of the loans is 12 years and the
cash proceeds from the loans have been deposited in a fixed
interest deposit account with a Norwegian bank at the same
interest rate as the loans (being off-market). The agreed
periods of the deposits are identical with the periods of the
loans. The loan and the deposit are presented gross as there
are different counterparties.
1.19 Taxation
 
The tax expense for the period comprises current and
deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the
tax is also recognized in other comprehensive income or
directly in equity, respectively.
 
Tax expense/benefit includes current taxes and the
change in deferred taxes.
 
For companies under the Norwegian tax regime, the
Company applies a tax rate of 22%. The tax expense consists
of taxes payable and changes in deferred tax assets/liabilities.
 
Deferred income tax is recognized on temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements.
 
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the
related deferred income tax asset is realized or the deferred
income tax liability is settled.
Deferred income tax assets are recognized only to the ex-
tent that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
Deferred income tax liabilities are provided on taxable
temporary differences arising from investments in subsidiaries
and associates, except for deferred income tax liability where
the timing of the reversal of the temporary difference is
controlled by the Company and it is probable that the
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
22
temporary difference will not reverse in the foreseeable future.
Generally the Company is unable to control the reversal of the
temporary difference for associates.
 
Deferred income tax assets are recognized on deductible
temporary differences arising from investments in subsidiaries
and associates only to the extent that it is probable the
temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary
difference can be utilized.
 
Deferred income tax assets and liabilities are offset when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income
taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle
the balances on a net basis.
1.20 Pension costs and obligations
The Company has a defined benefit plan for employees in
Norway. The pension scheme is financed through
contributions to insurance companies or pension funds. A
defined benefit plan defines the amount of pension benefit that
an employee will receive on retirement, usually dependent on
one or more factors such as age, years of service and
compensation.
 
The liability recognized in the statement of financial
position relating to defined benefit plans is the present value of
the defined benefit obligation at the end of the reporting
period less the fair value of the pension fund assets. The
defined benefit obligation is calculated annually by an
independent actuary on the basis of a linear model. The
present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows based on
the interest rate for covered bonds. Since Covered bonds are
not issued for terms exceeding 10 years, a supplement to this
bond rate is calculated by means of estimation techniques to
establish a discount rate that is approximately the same as the
term of the pension obligation.
Past service costs are recognized immediately in income.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income
in the period in which they arise.
For defined contribution plans, the group pays contributions to
publicly or privately administered pension insurance plans on
a mandatory, contractual or voluntary basis. The group has no
further payment obligations once the contributions have been
paid. The contributions are recognized as employee benefit
expense when they are due. Prepaid contributions are
recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available. Interest
expenses are presented in the income statement under
operating expenses.
1.21 Derivatives and hedging activities
The Company enters into derivative instruments for economic
hedging purposes and not as speculative investments.
Derivative instruments are primarily foreign currency contracts
and interest rate swaps, to hedge foreign currency exposures,
for example related to operating expenses and vessel
purchase commitments, and interest rate exposures primarily
related to long-term borrowings. Where derivatives do not
meet hedge accounting criteria, they are accounted for at fair
value through profit or loss.
For cash flow hedges that qualify for hedge accounting,
the effective portion of changes in the fair value of the hedging
instrument that is designated and qualifies as a cash flow
hedge is recognized in equity. These are cash flow hedges
relating to highly probable forecast transactions. The effective
portion of changes in the fair value of the hedging instrument is
recognized in Other Comprehensive Income. Amounts
accumulated in equity are reclassified in the period when the
hedged item affects profit or loss. When the forecast
transaction is no longer expected to occur, the cumulative
gain or loss and deferred costs of hedging that were reported
in equity are immediately reclassified to profit or loss.
 
Derivatives are presented as current assets or liabilities to
the extent they are expected to be settled within 12 months
after the end of the reporting period.
 
Derivatives are initially recognized at fair value on the date
a derivative contract is entered into and are subsequently
remeasured at their fair value.
1.22 Revenue recognition
The Company’s activity is to employ different types of offshore
support vessels, including PSVs, OSCVs, AHTS vessels, WIVs,
OSRVs, standby- and crew-vessels and one scientific core-
drilling vessel. In addition, the Company holds interest in one
limited liability partnership with ownership in one well-
stimulation vessel. Revenue comprises the fair value of the
consideration received or receivable for the sale of goods and
services in the ordinary course of the Company’s activities.
Revenue is shown net of value-added tax, withholding tax,
returns, rebates and discounts and after elimination of sales
within the Company. Revenue is recognized as follows:
 
 
 
 
 
 
 
 
Notes to the accounts
23
SIEM
Offshore
 
Inc. Annual Report 2022
Charter rate contracts
Time charter contracts contain a lease element and a
performance obligation for the provision of time charter
services. The lease of the vessel, representing the use of the
vessel without any associated performance obligations or
warranties, is accounted for in accordance with the provisions
of IFRS 16 Leases. Typically, lease revenues are recognized on
a straight line basis over the lease term. Revenues for time
charter services are recognized over time as the service is
rendered in accordance with IFRS 15.
 
Certain contracts include mobilization fees payable at the
start of the contract. Mobilization fees are recognized on a
straight line basis over the lease term. Expenses that the
mobilization fee is meant to cover, is recognized as an asset
and expensed over the lease term.
Interest income
Interest income is recognized using the effective interest
method. When a receivable is impaired, the Company reduces
the carrying amount to its recoverable amount, which is
determined as the estimated future cash flow discounted at
original effective interest rate of the instrument and continues
unwinding the discount as interest income. Interest income on
impaired loans and receivables is recognized using the original
effective interest rate.
Dividend income
Dividend income is recognized when the right to receive
payment is established.
 
Rendering of services
Service revenue is generally recognized when a signed con-
tract or other persuasive evidence of an arrangement exists,
the service has been provided, the fee is fixed or determinable
and collection of resulting receivables is reasonably assured.
1.23 Accounts payable
Accounts payables are obligations to pay for goods or
services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as
current liabilities if payment is due within one year or less (or in
the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities. Accounts
payable are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest
method.
 
1.24 Earnings per share
Earnings per share is calculated by dividing the net profit/ loss
for shareholders of the Company by the weighted aver-
age number of outstanding shares over the reporting period.
Diluted earnings per share include the effect of the assumed
conversion of potentially dilutive instruments such as
employee stock options and a convertible bond loan. The
impact of share equivalents is computed using the treasury
stock method for stock options.
1.25 Statement of Cash Flows
The Statement of cash flows are prepared in accordance with
the indirect method.
 
1.26 Related party transactions
All transactions, agreements and business activities with
related parties are determined on an arm’s length basis in a
manner similar to transactions with third parties.
 
1.27 Government grants
Grants related to net wages arrangement in Norway are
recognized as a reduction of wage cost.
 
1.28 Leases
The Company leases various office premises, office machines
and communication satellite equipment. Rental contracts are
typically made for fixed periods of 1 to 6 years but may have
extension options. Lease terms are negotiated on an individual
basis and contain a wide range of different terms and
conditions.
 
Leases are recognized as a right-of-use asset and a
corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is
allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
24
is depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially meas-
ured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
●
fixed payments (including in-substance fixed payments),
less any lease incentives receivable
●
variable lease payment that are based on an index or a rate
as at the commencement date
●
amounts expected to be payable by the lessee under
residual value guarantees
Lease payments to be made under reasonably certain
extension options are also included in the measurement of the
liability. The lease payments are discounted using the interest
rate implicit in the lease, if that rate can be determined, or the
group’s incremental borrowing rate.
 
Right-of-use assets are measured at cost comprising the
following:
 
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement
date less any lease incentives received
• any initial direct costs, and
• restoration costs.
 
Payments associated with short-term leases (less than 12
months) and leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Low-value
assets comprise IT-equipment and small items of office
furniture. The Company does not have lease agreements with
variable lease payments of any significance.
Extension and termination options are included in some of
the property leases across the Company. The majority of
extension and termination options held are exercisable only by
the group and not by the respective lessor. In determining the
lease term, management considers all facts and
circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option.
Extension options (or periods after termination options) are
only included in the lease term if the lease is reasonably
certain to be extended (or not terminated).
1.29 Share-based payments
The Company has a share-based compensation plan in place
for executive management. The plan is equity-settled, under
which the entity receives services from three top management
employees as consideration for equity instruments (share-
options) of the Company. The fair value of the employee
services received in exchange for the grant of the options is
recognized as an Operating Expense. For additional
information see note 27 Share-based payments. The total
amount to be expensed is determined by reference to the fair
value of the options granted at grant date, as determined using
a Black-Scholes model. Exercise price is the stock price at
date of the grant. The total expense is recognized over the
vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. The only
condition for vesting is employment with the Company;
options vest over a five-year period after grant date. At the
end of each reporting period, the Company revises its
estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognizes the
impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
Each option gives the holder the right, but not the obligation, to
acquire one share at the exercise price on the terms and
subject to the conditions set out in the Stock Option Plan.
 
When the options are exercised, the Parent issues new
shares or re-issues treasury shares. The proceeds received
net of any directly attributable transaction costs are credited
to share capital (nominal value) and share premium.
 
The grant by the Company of options over its equity
instruments to the employees of subsidiary undertakings in the
Company is treated as a capital contribution. The fair value of
employee services received, measured by reference to the
grant date fair value, is recognized over the vesting period as
an increase to investment in subsidiary undertakings, with a
corresponding credit to equity in the parent entity accounts.
 
The social security contributions payable in connection
with the grant of the share options is considered an integral
part of the grant itself, and the charge will be treated as a
cash-settled transaction.
1.30 Other claims and obligations
Provisions for legal claims, service warranties and make-good
obligations are recognized when the Company has a present
legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognized even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be
small. Provisions are measured at the present value of
management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
25
SIEM
Offshore
 
Inc. Annual Report 2022
 
Note
 
2
Financial Risk Management
2.1 Financial risk factors
The Company is exposed to a variety of financial risks through
its ordinary operations and debt financing. Such risks include
foreign exchange risk, interest rate risk, credit risk and liquidity
risk. To manage these risks, management reviews and
assesses its primary financial and market risks. Once risks are
identified, appropriate action is taken to mitigate the identified
risk. The Company’s risk management is exercised in line with
guidelines approved by the Board.
 
2.2 Foreign exchange risks
USD is the reporting currency for the Company. Functional
currency for the Parent is USD, and for the vessel-operating
subsidiaries USD, NOK, BRL, AUD and CAD are the functional
currencies. Remaining subsidiaries use USD, NOK or EUR as
functional currency. The Company operates internationally
and is exposed to foreign exchange risks arising from various
currency exposures primary with respect to NOK, GBP, EUR,
BRL, CAD and AUD. Foreign exchange risks can be divided
into transaction risk from paying and receiving foreign
currency and translation risk due to recognizing assets and
liabilities in USD. The Company had in 2022 mainly USD, NOK,
EUR, GBP, BRL, CAD and AUD revenues and expenses,
unchanged from 2021.
 
The Company is exposed to foreign exchange risk of
its subsidiaries, including the fluctuations of the Brazilian
currency Real.
The following sensitivity table demonstrates the
impact on the Company’s profit and equity before tax from
potential changes to the exchange rates, all other variables
held constant.
CONSOLIDATED
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2022
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
94,949
4,445
4,445
-4,445
-4,445
Accounts receivable
33,416
1,653
1,653
-1,653
-1,653
Impact on financial assets before tax
6,098
6,098
-6,098
-6,098
Financial liabilities
Accounts payable
11,203
-801
-801
801
801
Borrowings
568,972
-2,527
-2,527
2,527
2,527
Impact on financial liabilities before tax
-3,328
-3,328
3,328
3,328
Income statement
Operating revenue
274,306
15,208
15,208
-15,208
-15,208
Operating expenses
170,530
-10,935
-10,935
10,935
10,935
Impact on operating result before tax
4,273
4,273
-4,273
-4,273
Total increase/decrease before tax
7,042
7,042
-7,042
-7,042
Allocation per currency
NOK
-3,111
-3,111
3,111
3,111
EUR
2,096
2,096
-2,096
-2,096
GBP
2,192
2,192
-2,192
-2,192
BRL
3,544
3,544
-3,544
-3,544
CAD
886
886
-886
-886
AUD
1,436
1,436
-1,436
-1,436
Total increase/decrease before tax
7,042
7,042
-7,042
-7,042
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2022
26
CONSOLIDATED
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
91,839
3,531
3,531
-3,531
-3,531
Accounts receivable
34,097
1,406
1,406
-1,406
-1,406
Impact on financial assets before tax
4,937
4,937
-4,937
-4,937
Financial liabilities
Accounts payable
13,542
-689
-689
689
689
Borrowings
624,246
-5,700
-5,700
5,700
5,700
Impact on financial liabilities before tax
-6,389
-6,389
6,389
6,389
Income statement
Operating revenue
254,493
12,645
12,645
-12,645
-12,645
Operating expenses
153,909
-8,763
-8,763
8,763
8,763
Impact on operating result before tax
3,882
3,882
-3,882
-3,882
Total increase/decrease before tax
2,431
2,431
-2,431
-2,431
Allocation per currency
NOK
-3,705
-3,705
3,705
3,705
EUR
-275
-275
275
275
GBP
804
804
-804
-804
BRL
2,145
2,145
-2,145
-2,145
CAD
193
193
-193
-193
AUD
3,270
3,270
-3,270
-3,270
Total increase/decrease before tax
2,431
2,431
-2,431
-2,431
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
27
SIEM
Offshore
 
Inc. Annual Report 2022
PARENT COMPANY
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2022
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
31,394
233
233
-233
-233
Impact on financial assets before tax
233
233
-233
-233
Financial liabilities
Accounts payable
63
-5
-5
5
5
Impact on financial liabilities before tax
-5
-5
5
5
Income statement
Operating revenue
1,118
-
-
-
-
Operating expenses
-4,404
387
387
-387
-387
Impact on operating result before tax
387
387
-387
-387
Total increase/decrease before tax
615
615
-615
-615
Allocation per currency
NOK
615
615
-615
-615
Total increase/decrease before tax
615
615
-615
-615
PARENT COMPANY
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
33,362
-1,297
-1,297
1,297
1,297
Impact on financial assets before tax
-1,297
-1,297
1,297
1,297
Financial liabilities
Accounts payable
36
-4
-4
4
4
Impact on financial liabilities before tax
-4
-4
4
4
Income statement
Operating revenue
1,299
-
-
-
-
Operating expenses
-5,271
-574
-574
574
574
Impact on operating result before tax
-574
-574
574
574
Total increase/decrease before tax
-1,875
-1,875
1,875
1,875
Allocation per currency
NOK
-1,874
-1,874
1,874
1,874
EUR
-2
-2
2
2
Total increase/decrease before tax
-1,875
-1,875
1,875
1,875
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2022
28
2.3 Credit risks
Concentration risks
The Company's credit risk is primarily attributable to its
trade and other short-term receivables.
 
The exposure to credit risk for trade and other short-term
receivables is measured on an ongoing basis and credit
evaluations are performed for customers identified to be risky.
 
On 31 December 2022, the provision for certain accounts
receivables which may not be paid in full was USD 4.5 million
for the Company (2021: USD 4.2 million and nil for the Parent
(2021: nil).
 
 
The table below presents the concentration risk for 2022
and 2021:
 
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
USD
% of total
USD
% of total
Receivables on 31 December 2022
1 to 5 largest
-
-
18,003
47%
6 to 10 largest
-
-
6,608
17%
Others
-
-
13,345
35%
Provision for bad debt
-
-4,540
Total accounts receivable
-
-
33,416
100%
(Amounts in USD 1,000)
Receivables on 31 December 2021
1 to 5 largest
-
-
28,023
73%
6 to 10 largest
-
-
3,919
10%
Others
-
-
6,305
16%
Provision for bad debt
-
-
-4,151
-
Total accounts receivable
-
-
34,097
100%
Changes in the provision for bad debt can be summarized as follow:
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
2022
2021
Provision bad debt
Opening balance January 1
-
-
4,151
5,881
Reversal provision previous year
-
-
-148
-1,735
Provision current year
-
-
500
6
Currency translation differences
-
-
37
-1
Closing balance 31 December
-
-
4,540
4,151
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
29
SIEM
Offshore
 
Inc. Annual Report 2022
Trade and receivables
The table below presents an aging analysis of the outstanding receivables at year-end 2022 and 2021. Overdue receivables are
monitored continually by Management. The Management considers the net outstanding amounts to be recoverable.
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
USD
% of total
USD
% of total
Aging on 31 December 2022
Not due
-
-
27,643
83%
Due up to 1 month
-
-
5,409
16%
Due 1-4 months
-
-
257
1%
Due more than 4 months
-
-
106
-
Total accounts receivable
-
-
33,416
100%
(Amounts in USD 1,000)
Aging on 31 December 2021
Not due
-
-
26,862
79%
Due up to 1 month
-
-
1,526
4%
Due 1-4 months
-
-
1,128
3%
Due more than 4 months
-
-
4,582
13%
Total accounts receivable
-
-
34,097
100%
The carrying amounts of the Company’s and Parent’s accounts receivable are denominated in the following
 
currencies:
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
2022
2021
Currency
USD
-
-
16,890
20,033
NOK
-
-
2,895
2,926
EUR
-
-
6,759
2,289
GBP
-
-
1,162
748
CAD
-
-
899
3,045
AUD
-
-
3,492
3,812
BRL
-
-
1,320
1,245
Total accounts receivable
-
-
33,416
34,097
The maximum exposure to credit risk at the reporting date is the carrying value of each class of accounts receivable
 
mentioned
above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2022
30
2.4 Cash flow, interest risk and fair value
The Company is financed by debt and equity. If the
Company fails to repay or refinance its loan facilities,
additional equity financing may be required. There can be no
assurance that the Company will be able to repay its debts or
extend re-payment schedules through re-financing of its loan
agreements or avoid net cash flow shortfalls exceeding the
Company’s available funding sources or comply with minimum
cash requirements. Further, there can be no assurance that the
Company will be able to raise new equity, or arrange new
borrowing facilities, on favorable terms and at amounts
necessary to conduct its ongoing and future operations,
should this be required.
 
In the event of insolvency, liquidation or similar event
relating to a subsidiary of the Company, all creditors of such
subsidiary would be entitled to payment in full out of the assets
of such subsidiary before the Company, as a shareholder,
would be entitled to any payments. Defaults by, or the
insolvency of, a subsidiary of the Company could result in the
obligation of the Company to make payments under parent
company guarantees issued in favor of such subsidiary.
The Company is moreover exposed to changes in interest
rates, which may affect the Company’s financial results.
 
These risks are mainly related to the Company’s long-term
borrowings with floating interest rates.
 
Further details of the Company’s borrowings are set out in
Note 12.
 
The Company has no significant interest-bearing assets
other than cash and cash-equivalents and therefore the
Company’s income and operating cash flows are substantially
independent of changes in market interest rates. Cash and
cash-equivalents are invested for short maturity periods,
generally from one day to three months, which mitigates some
of the potential interest rate risk.
 
Following the restructuring the Company and the Parent
Company is exposed to currency and interest risk. The
Company holds fixed interest for 39% of its interest-bearing
debt.
The following sensitivity tables demonstrate the impact on
the Company’s profit before tax and equity from a potential
shift in interest rates, all other variables held constant.
 
CONSOLIDATED
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2022
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
94,949
-949
-949
949
949
Impact on financial assets before tax
-949
-949
949
949
Financial liabilities
Borrowings fixed rate
219,054
-
-
-
-
Borrowings floating rate
 
349,918
3,499
3,499
-3,499
-3,499
Impact on financial liabilities before tax
3,499
3,499
-3,499
-3,499
Total increase/decrease before tax
2,550
2,550
-2,550
-2,550
CONSOLIDATED
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
91,839
-918
-918
918
918
Impact on financial assets before tax
-918
-918
918
918
Financial liabilities
Borrowings fixed rate
244,383
-
-
-
-
Borrowings floating rate
 
385,390
3,854
3,854
-3,854
-3,854
Impact on financial liabilities before tax
3,854
3,854
-3,854
-3,854
Total increase/decrease before tax
2,936
2,936
-2,936
-2,936
For more details, see Note 12.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
31
SIEM
Offshore
 
Inc. Annual Report 2022
PARENT COMPANY
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2022
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
31,394
-314
-314
314
314
Impact on financial assets before tax
-314
-314
314
314
Financial liabilities
Borrowings
-
-
-
-
-
Impact on financial liabilities before tax
-
-
-
-
Total increase/decrease before tax
-314
-314
314
314
PARENT COMPANY
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
33,362
-334
-334
334
334
Impact on financial assets before tax
-334
-334
334
334
Financial liabilities
Borrowings
-
-
-
-
-
Impact on financial liabilities before tax
-
-
-
-
Total increase/decrease before tax
-334
-334
334
334
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2022
32
The Company’s financial assets are classified into the
categories: assets at fair value through the profit and loss,
loans and receivables, and available for sale. Financial
liabilities are classified as liabilities at fair value through the
profit and loss, and other financial liabilities. For further
information about comparison by category, see Note 25.
The Company's following financial instruments are not
evaluated at fair value: accounts receivable, cash and cash
equivalents, other short-term receivables, accounts payable
and long-term liabilities with floating interest.
Because of the short term to maturity, the value of cash and
cash equivalents entered into the Statement of Financial
Position is almost the same as the fair value of these.
Accordingly, the values of accounts receivables and accounts
payables are almost the same as their fair values since they are
entered on “normal” conditions.
 
The fair value of the Company’s non-current liabilities
subjected to fixed interest rates is calculated by comparing
the Company’s terms and market terms for liabilities with the
same terms to maturity and credit risk.
 
The following tables display the book value and the fair
value of financial assets and obligations.
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Financial assets
Book value
Fair value
Book value
Fair value
CIRR loan deposit
20,638
20,130
36,763
37,762
Long-term receivables
29,636
29,636
30,749
30,749
Accounts receivable
33,416
33,416
34,097
34,097
Other short-term receivables
17,868
17,868
17,001
17,001
Cash and cash equivalents
94,949
94,949
91,839
91,839
Total
196,508
195,999
210,449
211,448
Financial liabilities
Borrowings
568,972
555,933
624,246
626,752
CIRR loan
20,638
20,130
36,763
37,762
Other non-current liabilities
12,887
12,887
12,776
12,776
Accounts payable
11,203
11,203
13,542
13,542
Derivative financial instruments
-
-
-
-
Other current liabilities
26,399
26,399
26,770
26,770
Total
640,100
626,552
714,098
717,603
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Financial assets
Book value
Fair value
Book value
Fair value
Long-term loan
10,399
10,399
3
3
Other short-term receivables
980
980
1,014
1,014
Cash and cash equivalents
31,394
31,394
33,362
33,362
Total
42,774
42,774
34,379
34,379
Financial liabilities
Accounts payable
63
63
36
36
Other current liabilities
1,196
1,196
1,965
1,965
Total
1,259
1,259
2,001
2,001
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
33
SIEM
Offshore
 
Inc. Annual Report 2022
2.5 Liquidity risk
The Company monitors its cash flow from operations closely
and optimizes the working capital level of the individual
companies and the Company as a whole. The Company funds
are used for investment opportunities in the business,
scheduled repayments and repayments of debt and to general
working capital purposes.
 
The Company seeks to fix the majority of its fleet on long-
term contracts. Vessels not fixed on long-term contracts are
typically exposed to the volatility in the short- to medium term-
market.
The Company will from time to time require additional
capital to take advantage of business opportunities.
Historically the Company has managed to obtain necessary
financing in a timely manner at acceptable terms when
needed.
 
The Company's secured debt was restructured in
2021, with amended repayment terms and cash sweep
mechanisms. See note 19 for further details.
 
The tables below summarize the maturity profile of the
Company’s financial liabilities including interest. Siem
Offshore has agreed restructured terms with the equitized
lenders. The restructured terms shall remain in force till 31
December 2024, corresponding to extended maturity of the
restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum book equity
ratio of Siem Offshore at 10%. Other terms relate to vessel
buy-out options, no-dividend clause, restrictions on
investments in assets, restrictions to acquisitions of shares and
business undertakings, negative pledge, restrictions to selling
or otherwise disposal of assets, no equitization of the Brazilian
facilities, financial indebtedness, change of control clause,
PIK-interest arrangements and three cash sweep mechanisms;
one facility cash sweep, one SAP (Siem ATHS Pool AS) cash
sweep and one company cash sweep.
CONSOLIDATED
(Amounts in USD 1,000)
Less than 3
months
3 to 12
months
1 to 2
years
2 to 5
years
Thereafter
Total
31 December 2022
Interest-bearing loans and borrowings
13,859
45,119
274,175
127,259
108,560
568,972
Trade and other payables
37,603
18,727
698
-
13,875
70,903
Total
51,461
63,846
274,873
127,259
122,436
639,876
31 December 2021
Interest-bearing loans and borrowings
5,639
42,151
310,950
209,642
125,639
694,022
Trade and other payables
14,513
-
-
-
-
14,513
Total
20,152
42,151
310,950
209,642
125,639
708,535
PARENT COMPANY
(Amounts in USD 1,000)
Less than 3
months
3 to 12
months
1 to 2
years
2 to 5
years
Thereafter
Total
31 December 2022
Trade and other payables
63
1,196
-
-
-
1,259
Total
63
1,196
-
-
-
1,259
31 December 2021
Trade and other payables
36
1,965
-
-
-
2,001
Total
36
1,965
-
-
-
2,001
.
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2022
34
Note 3
Critical Accounting Estimates and Judgements
IFRS requires management to make estimates and judgments
that affect the reported amounts of assets and liabilities, as
well as revenues and expenses in the financial statements. The
final reported outcomes may deviate from the original
estimates.
Certain amounts included in, or that have an effect on, the
accounts and the associated notes require estimation, which
in turn entails that the Company must make assessments
related to values and circumstances that are not known at the
point in time when the accounts are being prepared.
A significant accounting estimate is an estimate that is
important to provide a complete picture of the Company’s
financial position, which at the same time is the result of
difficult, subjective and complex assessments performed by
the management. Such estimates are often uncertain by
nature.
Management evaluates such estimates continuously
based on historical data and experience, consultation with
external experts, trend analysis and other factors that are
relevant for the individual estimate, including expectations of
future events that are believed to be reasonable under the
circumstances.
Estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, as well as
judgments made by management, in the process of applying
the Company’s accounting policies, that have the most
significant effect on the amounts recognized in the financial
statements, are discussed below.
Vessel
Valuation of vessels
On the reporting date, the Company has assessed for its
vessels whether there are any indicators of impairment, or
indicators that past impairments should be reversed, Early
signals of improvement in vessel’s utilization and charter rates
could indicate that vessel values exceed book values for
vessels that were impaired in the past. Impairment indicators
include some vessels still being in lay-up, volatile charter rates
and utilization in some segments, and that the quoted market
value of the Company is below book value of equity. If such
indicators exist and the book value exceeds the recoverable
amount, the fixed asset’s residual value is the higher of net
selling price and value in use. Net selling price is normally
obtained by valuations from independent shipbrokers.
Brokers’ estimates assume the vessels are without charter
contracts, immediately available for sale in the market and that
a willing seller and a willing buyer exist. The Company has
made an accounting judgement that it will not rely on Brokers’
estimates as fair value, due to a limited number of arm’s length
transactions of comparable vessels in the market. The value in
use is calculated by discounting future cash flows to present
value at the balance sheet date.
In the value in use calculation, the first five years are
based on the Company’s market view. A terminal value is
calculated by assuming that the applicable market view for the
fifth year applies to the remaining years of the vessel’s lifetime.
The market for offshore service vessels is expected
to remain volatile for several years, despite some
improvements have been observed. For vessels fixed on firm
contracts with a duration in the period from 2023 through
2027, the assumption is that the firm contract remains
unchanged during the remaining contract period, and that the
rate levels will gradually improve towards 2027. Options for
extended charter periods are not considered in the value-in-
use calculations. However, if charter hire rates for optional
periods are expected to be lower than market rates for the
applicable period, this is considered in the value-in-use
calculation. Three scenarios, High, Base and Low, were
considered. The relative weights were estimated based on the
segments market outlook, current employment, and vessel
supply- demand balance. The High scenario was weighted
from 15% to 30%, the Base scenario was weighted from 50%
to 65% and the Low scenario was weighted from 20% to 30%.
The vessel charter rates, and utilization are the key driver in all
three scenarios and were estimated for each vessel for the
three scenarios.
In order to assess impairment, or reversal of past
impairments, estimates and assumptions regarding expected
cash flows are made which require considerable judgement.
These assumptions are among other based upon existing
contracts, commercial management judgment about future
charter revenue rates, historical performance, discount rates,
class renewal expenses, financial forecasts and industry
trends and conditions.
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
35
SIEM
Offshore
 
Inc. Annual Report 2022
Note 4
Segment Reporting
The Company identifies its reportable segments and disclose
segment information under IFRS8 Operating Segments which
requires Siem Offshore Inc to identify its segments according
to the organization and reporting structure used by
management. Operating Segments are components of a
business that are evaluated regularly by the chief operating
decision maker for the purpose of assessing performance and
allocating resources.
 
The Company’s chief operating decision maker is the
management board, comprised of the CEO, CFO, CCO, CHRO
and COO. Generally, financial information is required to be
disclosed on the same basis that is used by the chief operating
decision maker. The Company’s operating segments
represent separately managed business areas with unique
products serving different markets. The reportable segments
are PSV, OSCV and WIV, AHTS Vessels, Canadian fleet,
Scientific Core-Drilling and Brazilian Fleet.
The PSV segment includes six Platform Supply Vessels.
The OSCV and WIV segment includes four Offshore Subsea
Construction Vessels and two Well Intervention Vessels. The
ATHS segment includes eight Anchor Handling and Tug
Supply Vessels per year-end 2022. The Canadian fleet
Segment consisted of one offshore support vessel operating
offshore Canada at year-end 2022. The Segment of Brazilian
Fleet consists of two Oil-spill Recovery Vessels and three
smaller fast supply vessels and crew vessels. In addition, the
Company holds ownership at 41% of one vessel that is
reflected under the line "Result from associated companies",
and hence not included below. Scientific Core-Drilling is
comprised of the activity of one scientific drillship which
performs core-drilling. The number of vessels at year-end
2022 is the same as for year-end 2021.
 
Siem Offshore Inc uses two measures of segment results,
Operating Revenue and Operating Margin.
Intersegment sales and transfers reflect arm’s length
prices as if sold or transferred to third parties at the time of
inception of the internal contract, which may cover several
years. Transfers of business or fixed assets within or between
the segments are reported without recognizing gains or
losses. Results of activities not considered part of Siem
Offshore Inc.’s main operations as well as unallocated
revenues, expenses, liabilities and assets are reported
together with Other under the caption “Other and
eliminations”.
 
The following tables include information about the
Company’s operating segments.
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Operating revenue by segments
PSV
36,157
39,908
OSCV and WIV
126,864
111,718
AHTS Vessels
53,231
43,067
Brazilian Fleet
16,126
15,698
Canadian fleet
8,337
12,670
Scientific Core-Drilling
32,047
29,984
Other/Intercompany elimination
1,543
1,449
Total operating revenue
274,306
254,493
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment reporting
Note 4
SIEM
Offshore
 
Inc. Annual Report 2022
36
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Operating margin by segments
PSV
7,410
15,100
OSCV and WIV
72,667
64,387
AHTS Vessels
12,157
3,780
Brazilian Fleet
7,541
8,922
Canadian fleet
4,969
9,140
Scientific Core-Drilling
18,895
16,445
Other/Intercompany elimination
2,733
2,604
Administrative expenses
-22,596
-19,793
Total operating margin from segments
103,776
100,585
Depreciation and amortization by segments
PSV
9,330
9,755
OSCV and WIV
29,867
26,042
AHTS Vessels
14,448
15,554
Brazilian Fleet
2,883
3,334
Canadian fleet
1,987
2,244
Scientific Core-Drilling
4,417
4,417
Other/Intercompany elimination
1,374
2,193
Total depreciation by segments
64,305
63,539
Capital expenditures by business area for tangible assets
PSV
4,368
7,199
OSCV and WIV
12,362
13,261
AHTS Vessels
7,767
5,739
Brazilian Fleet
300
1,369
Canadian fleet
74
168
Scientific Core-Drilling
-
-
Other/Intercompany elimination
53
-
Total capital expenditures
24,923
27,736
Book value by business area for tangible assets
PSV
128,479
131,873
OSCV and WIV
460,753
478,884
AHTS Vessels
171,620
179,146
Brazilian Fleet
7,922
8,549
Canadian fleet
32,615
37,489
Scientific Core-Drilling
3,389
7,806
Other/Intercompany elimination
1,952
3,340
Total book value
806,730
847,085
.
Photo: Siem Offshore
 
SIOFF-2022-12-31-ENp38i0
 
 
 
 
Notes to the accounts
37
SIEM
Offshore
 
Inc. Annual Report 2022
Photo: Siem Offshore
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
38
Note 5
Vessels, Equipment and Capitalized Project Cost
Tangible assets
CONSOLIDATED
(Amounts in USD 1,000)
Land and
buildings
Vessels and
equipment
Dry-docking
Capitalized
project cost
Total
Purchase cost on 1 January 2021
3,501
2,283,986
40,496
11,431
2,339,414
Capital expenditure
 
-
19,100
8,636
-
27,736
Additions related to IFRS 16
139
-
-
-
139
The year's disposal at cost
-65
-165,435
-4,515
-2,827
-172,842
Effect of exchange rate differences
-69
-9,942
-359
-92
-10,462
Purchase cost on 31 December 2021
3,506
2,127,709
44,258
8,512
2,183,985
Accumulated depreciation on 1 January 2021
-1,652
-743,946
-15,895
-8,332
-769,826
Accumulated impairment on 1 January 2021
-
-629,500
-
-
-629,500
Movement between groups
 
-
-
-
-
0
The year's depreciation
-639
-54,884
-7,375
-640
-63,539
Impairment of vessel
-
-
-
-
0
The year's reversal of impairment
-
-
-
-
0
The year's disposal of accumulated depreciation
-
37,639
1,972
2,827
42,438
The year's disposal of accumulated impairment
-
79,274
-
-
79,274
Effect of exchange rate differences
35
3,918
232
67
4,252
Accumulated depreciation and impairment on 31
December 2021
-2,257
-1,307,499
-21,065
-6,079
-1,336,900
Net book value on 31 December 2021
1,249
820,211
23,193
2,433
847,085
Purchase cost on 1 January 2022
3,506
2,127,709
44,258
8,512
2,183,985
Capital expenditure
-
15,784
9,139
-
24,923
The year's disposal at cost
-
-1,476
-727
-
-2,203
Effect of exchange rate differences
54
-4,887
-25
-272
-5,130
Purchase cost on 31 December 2022
3,560
2,137,131
52,645
8,240
2,201,576
Accumulated depreciation on 1 January 2022
-2,257
-757,762
-21,065
-6,079
-787,163
Accumulated impairment on 1 January 2022
-
-549,737
-
-
-549,737
The year's depreciation
-527
-54,280
-8,929
-569
-64,305
The year's disposal of accumulated depreciation
-
1,208
727
-
1,934
Effect of exchange rate differences
-33
4,238
1
219
4,425
Accumulated depreciation and impairment on 31
December 2022
-2,818
-1,356,333
-29,267
-6,429
-1,394,846
Net book value on 31 December 2022
742
780,798
23,378
1,811
806,730
 
 
 
 
 
 
 
Notes to the accounts
39
SIEM
Offshore
 
Inc. Annual Report 2022
The balance of capitalized project costs relates to specific contracts. The costs are amortized over the term of the specific
charter contracts.
 
The vessels are divided into the following components and economical lives:
Component
Percentage of total
Economic life
Hull
27%
30 years
Cargo equipment
17%
30 years
Marine equipment
10%
15 years
Crew equipment
9%
15 years
Engine
18%
30 years
Engine system
6%
30 years
Combined sewerage system
 
13%
30 years
Docking
 
and class renewals
5 years
Equipment
3 years
Impairment vessels
The Book value of tangible and intangible assets with finite
lives is tested for impairment whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. If such indicators exist and the book value
exceeds the recoverable amount, the fixed asset’s residual
value is the higher of net selling price and value in use. Net
selling price is normally obtained by valuations from
independent shipbrokers.
 
Brokers’ estimates assume the
vessels are without charter contracts, immediately available
for sale in the market and that a willing seller and a willing
buyer exist. The value in use is calculated by discounting
future cash flows to present value at the balance sheet date.
Per 31 December 2022 calculation of value in use is used in the
impairment testing for all vessels. In addition to value in use
calculations, management has obtained brokers’ estimates for
all the group’s vessels from two independent and reputable
shipbrokers per 31 December 2022. The obtained broker
estimates were primarily used to compare and test the
reasonableness of management’s value in use calculations.
The Company concluded to base its vessel valuations on a
value in use model.
As of 31 December 2022 impairments indicators were
identified. Impairment indicators include some vessels still
being in lay-up, volatile charter rates and utilization, and that
the quoted market value of the Company was below book
value of equity. Based on such indicators, impairment tests
were performed for all OSV vessels. The Company concluded
not to recognize any impairment, nor any reversal of
impairment. The market outlook has slightly improved, and if
this trend continues it could trigger reversal of impairment for
certain vessels in the future.
The book value of the vessels does not reflect possible
impairment charges if a sale of assets is forced in today’s
market.
Value-in-use (VIU)
VIU is based on the present value of discounted cash flows for
each separate Cash Generating Unit (CGU). Remaining firm
charter hire periods are considered. The first five years are
based on the Company’s market view. A terminal value is
calculated by assuming that the applicable market view for the
fifth year applies to the remaining years of the vessel’s lifetime.
Three scenarios have been considered, and a weighted
average of the scenarios has been calculated.
Discount rate
The discount rate used in the value-in-use calculation is a
weighted average cost of capital (WACC) after tax ranging
from 9.17% - 11.58% (2021: 7.43% - 10.75%).
Operating expenses
Operational expenses that are directly attributable to the CGU
are based on budget and forecasts with an annual escalation
as applicable. Dry-docking cost related to class renewals and
periodic maintenance costs are included at estimated cost.
 
 
 
 
SIOFF-2022-12-31-ENp41i1
SIEM
Offshore
 
Inc. Annual Report 2022
40
Photo: Siem Offshore
Fair value less cost of disposal
FVLCOD (level 3) is the amount that would be obtained from a
sale of the asset in a regular market, less cost of sales, based
on the average of third-party valuation reports from two
independent ship brokers. The Company understands that
shipbrokers apply newbuilding price parity as basis for their
appraisals. Newbuilding prices have been adjusted for
building supervision costs and other additional costs, which
results in an estimated delivered cost of a newbuilding with
prompt delivery adjusted for age of each vessel.
Climate risk
Management has considered the potential impacts of climate
risk and whether this will have an adverse impact on the future
use of the Company’s vessels. The Company operates world-
wide within the offshore oil and gas sector and the offshore
renewable sector. It’s expected that demand for the Group’s
services could increase due to climate related opportunities.
Management does not consider there is a significant risk that
the Company’s vessels will become obsolete due to climate
considerations as they form a key part in the transition to the
provision of sustainable energy. The Company has assumed
that its vessels can be utilized in their assumed technical
lifetime. In a process of transition from oil and gas energy
sources, the Company assumes that these markets may
reduce its demand for the vessels owned and operated by the
Company. However, the Company assumes that a shortfall in
vessel demand from oil and gas related industries will be
 
adequately compensated by increase in demand from the
offshore renewable energy industry. This relates to vessel
utilization and vessels’ charter rates.
 
Sensitivities
The VIU calculation is mainly affected by changes in the
WACC and freight rate assumptions. As a majority of the
vessels have been impaired in past periods, variances in the
assumptions in the value in use model may have significant
effects on vessel valuation estimates. The WACC used for
vessels financed in USD was 9.17% (2021: 7.43%) and for the
vessels financed in NOK the WACC was 8.60% (2021: 7.82 %).
The WACC used for vessels financed in USD in Brazil was
11.58% (2021: 9.24%).
 
A reduction of freight rate assumption of USD 1,000 per day for
each vessel would reduce the value of the fleet by
approximately USD 63 million. An increase in freight rate
assumption of USD 1,000 per day would increase the value of
the fleet by approximately USD 63 million.
 
An increase in WACC of 0.5% would reduce the total value of
the fleet by approximately USD 29 million. A decrease in
WACC of 0.5% would increase the total value of the fleet by
approximately USD 31 million.
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
41
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 6
Investment in Subsidiaries
Company
Registered office
Ownership
and voting
share
Revenue
Net profit
 
(Amounts in USD 1,000)
Siem Offshore AS
Kristiansand, Norway
100%
10,948
-400
Siem Offshore Invest AS
Kristiansand, Norway
100%
13,886
10,621
Siem Offshore Rederi AS
Kristiansand, Norway
100%
127,783
15,243
Siem Offshore do Brasil SA
Rio de Janeiro, Brazil
100%
25,725
289
Siem AHTS Pool AS
Kristiansand, Norway
78%
27,731
-15,140
DSND Subsea Ltd
London, England
100%
-
-
Siem Offshore Management (US) Inc.
Texas, USA
100%
160
49
Siem Offshore US Holding AS
Kristiansand, Norway
100%
-
-6
ODL AS
Kristiansand, Norway
100%
32,058
15,760
Total value recorded in the statement of financial position of the Parent Company
The above companies are owned by the Parent. In addition, the subsidiaries own the following companies:
Company
Registered office
Share and voting rights
Consub Delaware LLC
Delaware, USA
100%
Aracaju Serviços Auxiliares Ltda
Rio de Janeiro, Brazil
100%
Siem Offshore Crewing AS
Kristiansand, Norway
100%
Siem Pilot DA
Kristiansand, Norway
100%
Siem Offshore Maritime Personnel AS
Kristiansand, Norway
100%
Overseas Drilling Ltd
Groningen, The Netherlands
100%
Siem Offshore Canada Inc
Halifax, Canada
100%
Siem Offshore Australia Pty Ltd
Perth, Australia
100%
Siem Real Estate GmbH
Leer, Germany
100%
Siem Offshore LLC
Delaware, USA
100%
Secunda Holdings SLH
Halifax, Canada
100%
Siem AHTS Pool Australia PTY LTD
Perth, Australia
100%
Siem Offshore Crewing Australia PTY Ltd
Perth, Australia
100%
Siem Offshore Servicos Maritimos Ltda
Rio de Janeiro, Brazil
100%
.
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
42
Share
capital
Book equity
Cost price
Book value
Minority
share of net
profit/(loss)
Minority share of
net equity
Impairments/
(reversal of
impairments) made
in 2022
35
7,430
16,194
11,494
-
-
-
898
143,539
98,369
98,369
-
-
-
6,175
127,131
382,191
126,798
-
-
16,000
83,838
-60,861
135,978
-
-
-
-
163
-19,315
451,728
-
-3,165
-3,703
-
-
-181
18,352
-
-
-
-
1
549
1
1
-
-
-
5
164
961
187
-
-
-
4
24,016
12,672
12,672
-
-
-
222,471
1,116,446
249,520
-3,165
-3,703
16,000
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
43
SIEM
Offshore
 
Inc. Annual Report 2022
Note 7
Investment in Associated Companies
Figures for associated companies included in the consolidated accounts based on the equity method of accounting.
31 December 2022
COMPANY NAME
PR Tracer
Offshore
ANS
KS Big
Orange
XVIII
Total
(Amounts in USD 1,000)
Income Statement
Operating revenues
4,508
381
4,889
Operating expenses
-3,931
-20
-3,951
Operating profit
577
361
938
Net financial items
123
21
144
Net profit
700
381
1,082
Result from associated companies
288
158
446
Statement of financial position
Current assets
541
-
541
Cash
3,778
1,510
5,288
Total assets
4,319
1,510
5,829
Equity
4,318
1,494
5,812
Current liabilities
2
15
17
Total equity and liabilities
4,319
1,510
5,829
Siem Offshore's share of booked equity
1,784
617
2,401
Added/reduced in the period
Adj. IFRS and fair value in excess of book value for vessel and goodwill as of 31
December
-
281
281
Book value as of 31 December
1,784
898
2,682
31 December 2022
COMPANY NAME
KS Big
Orange
XVIII
KS Big
Orange
XVIII
Total
(Amounts in USD 1,000)
Specification of changes net book value in Siem Offshore's accounts
Net book value as of 1 January
1,654
841
2,495
This year's share of net profit/(loss)
288
158
446
This year's share of other comprehensive income
-
-
-
Effect of exchange rate differences
-158
-101
-259
Net book value as of 31 December
1,784
898
2,682
Of which:
Amortisation of fair value in excess of book value for vessels and goodwill as of 1 January
-
314
-
Effect of exchange rate differences
-
-33
-33
 
Fair value in excess of book value for vessels and goodwill as of 31 December 2022
-
281
281
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
44
COMPANY NAME
Registered office
Consolidation
Owner
interest
Voting
 
rights
Paid in
capital
Issues, not
paid in capital
PR Tracer Offshore ANS
Kristiansand, Norway
Equity accounting
41.33%
41.33%
1,633
-
KS Big Orange XVIII
Kristiansand, Norway
Equity accounting
41.33%
41.33%
8
5
Total
1,640
5
Siem Offshore Ghana Ltd remained dormant in 2022 and has been excluded from the table. Assets and liabilities
 
are considered
immaterial to the Company's consolidated accounts.
31 December 2021
COMPANY NAME
PR Tracer
Offshore
ANS
KS Big
Orange
XVIII
Total
(Amounts in USD 1,000)
Income Statement
Operating revenue
5,211
424
5,635
Operating expenses
-5,523
-23
-5,546
Operating profit
-312
401
89
Net financial items
11
2
13
Net profit
-301
403
102
Result from associated companies
-124
166
42
Statement of financial position
Current assets
75
-
75
Cash
4,050
1,272
5,322
Total assets
4,125
1,272
5,396
Equity
4,022
1,255
5,277
Current liabilities
103
16
119
Total equity and liabilities
4,125
1,272
5,396
Siem Offshore's share of booked equity
1,662
519
2,181
Added/reduced in the period
Adj. IFRS and fair value in excess of book value for vessel and goodwill as of 31
December
-
314
314
Net book value in Siem Offshore as of 31 December
1,662
833
2,495
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
45
SIEM
Offshore
 
Inc. Annual Report 2022
31 December 2021
COMPANY NAME
PR Tracer
Offshore
ANS
KS Big
Orange
XVIII
Total
(Amounts in USD 1,000)
Specification of changes net book value in Siem Offshore's accounts
Net book value as of 1 January
1,830
692
2,522
This year's share of net profit/(loss)
-124
166
42
This year's share of other comprehensive income
-
-
-
Effect of exchange rate differences
-53
-16
-69
Net book value as of 31 December
1,654
841
2,495
Of which:
Amortisation of fair value in excess of book value
for vessels and goodwill
-
338
338
Effect of exchange rate differences
-
-24
-69
 
Fair value in excess of book value for vessels and goodwill as of 31 December 2022
-
314
314
COMPANY NAME
Registered office
Consolidation
Owner
interest
Voting
rights
Paid in
capital
Issues, not
paid in capital
PR Tracer Offshore ANS
Kristiansand, Norway
Equity accounting
41.33%
41.33%
1,633
-
KS Big Orange XVIII
Kristiansand, Norway
Equity accounting
41.33%
41.33%
8
5
Total
1,640
5
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
46
.
Note 8
Pension Costs and Obligations
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Pension cost recognized in the income statement
Present value of current years benefit earned
1,183
1,236
Interest expense
159
140
Expected return on plan assets
-134
-115
Administration cost
16
17
Social contribution
133
151
Impact of curtailment/settlement
 
-277
-209
Net periodic pension cost (see Note 17)
1,080
1,221
The development in the defined benefit obligation
At 1 January
8,364
8,231
Present value of current years benefit earned
1,183
1,236
Interest expense
159
140
Payroll tax of employer contribution, assets
-199
-188
Benefits paid
-88
-37
Remeasurements loss/(gain)
120
-736
Exchange differences
-1,004
-281
At 31 December
8,534
8,364
The development in the fair value of plan assets
At 1 January
7,350
7,130
Expected return on plan assets
134
115
Employer's contribution
1,614
1,523
Payroll tax of employer contribution, assets
-199
-188
Benefits paid
-88
-37
Remeasurements loss/(gain)
-378
-946
Exchange differences
-888
-246
At 31 December
7,545
7,350
Net pension liability
989
1,014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
47
SIEM
Offshore
 
Inc. Annual Report 2022
Pension liability
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Present value of funded obligations
8,534
8,364
Fair value of plan assets
-7,545
-7,350
Present value of funded obligations
989
1,014
Liability in the statement of financial position
989
1,014
Financial assumptions
Discount rate
3.00%
1.90%
Expected return on funds
3.00%
1.90%
Expected wage adjustment
3.50%
2.75%
Adjustment of the basic National Insurance amount
3.25%
2.50%
Expected pension increase
1.50%
- %
Number of employees in defined benefit scheme
61
57
Note 9
Receivables
 
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Long-term receivables
-
-
Deposit related to legal dispute in Brazil
 
2,282
2,857
10,397
-
Intercompany receivables
-
-
-
-
Receivable related to sale of Siem Marlin (1)
17,398
16,378
-
-
Prepaid guarantee commission (2)
9,589
11,357
2
3
Other long-term receivables
367
158
10,399
3
Total long-term receivables
29,636
30,749
12/31/2022
12/31/2021
Other short-term receivables
12/31/2022
12/31/2021
-
-
Prepaid expenses
5,780
6,149
-
-
Unbilled revenue
6,400
6,049
-
-
Outstanding insurance claims (3)
1,525
1,106
-
-
Prepaid income taxes and other taxes
1,469
1,052
-
-
VAT
 
5
-177
980
1,014
Intercompany receivables
-
-
-
-
Other short-term receivables
2,689
2,822
980
1,014
Total other short-term receivables
17,868
17,001
(1) Total receivables related to the sale of Siem Marlin in 2019 amounts to USD 31 million. Net book value is USD 17.4
 
million.
Subsequent to the balance sheet date the Company received USD 12 million as partial down-payment. The receivable
 
is secured
by mortgage in the vessel.
(2) Prepaid guarantee commission relates to Siem Helix vessels facilities.
(3) Outstanding insurance claims refer to vessel breakdown expenses qualifying for insurance reclaim. The amount is
 
net of own
deductibles.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
48
.
Note 10
Restricted Cash
 
USD 6.4 million of the Company's cash balance at year-end were restricted funds of which USD 1.4 million was for
 
tax
withholdings and USD 5.0 million represented deposits for bank guarantees and secured loans.
Note 11
Taxes
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Temporary differences
Deferred tax
Time frame
Participation in limited liability companies
Long
2,943
-1,868
Operating assets
Long
-4,636
-5,555
Pension funds/obligations
Long
-907
-1,064
Other short-term differences
-2,601
-8,487
Tax loss carried forward
-34,613
-32,172
Basis for deferred tax (tax asset)
-37,214
-40,659
Deferred tax (tax asset) Norway
-8,187
-8,945
Deferred tax (tax asset)
-8,187
-8,945
Deferred tax (asset) recognized in statement of financial
position as of 31 December
Deferred tax asset
 
8,636
8,945
Deferred tax liability in Parent and subsidiary
-449
-
Net deferred tax (tax asset) Norway
8,187
8,945
Deferred tax assets are recognized as non-current assets as it is probable through prospective earnings that it
 
can be utilized.
 
The Company is subject to taxes in several jurisdictions, where significant judgment is required in calculating the tax provision
 
for
the Company. There are several transactions for which the ultimate tax cost is uncertain and for which the Company
 
makes
provisions based on an assessment of internal estimates, tax treaties and tax regulations in countries of
 
operation and
appropriate external advice. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such difference will impact the tax charge in the period in which the outcome is determined.
 
The Company seeks to optimize its tax structure to minimize withholding taxes when operating vessels
 
abroad, avoiding double
taxation, and minimizing corporate tax paid by making optimal use of the shipping taxation rules
 
that apply. It is, however, a
challenging task to optimize taxation, and there is always a risk that the Company may end up paying more taxes than
 
the
theoretical minimum, which may in turn affect the financial results negatively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
49
SIEM
Offshore
 
Inc. Annual Report 2022
Total tax liabilities
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Non-current tax liabilities falling due after 1 year
698
421
Payable taxes falling due within 1 year
635
971
Tax liabilities
1,333
1,391
Tax expense
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Taxes payable
-786
1,069
Change in deferred tax asset /liability
536
-2,069
Total
-250
-1,000
There is no tax amount related to the items under Other Comprehensive Income.
Tax expense
PARENT COMPANY
(Amounts in USD 1,000)
2022
2021
Change in deferred tax asset/liabilities
1,075
1,292
Tax effect from group contribution
 
1,053
-
Tax expense on ordinary result
 
14
16
Total
2,142
1,308
Tax asset
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Non-current tax asset falling due after 1 year
-
767
Tax asset
-
767
Tax liability
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Non-current tax liabilities falling due after 1 year
309
-
Tax liabilities
309
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
50
.
Note 12
Borrowings
Carrying amount - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Secured
Current
Non-current
Total
Current
Non-current
Total
Fixed rates bank loans
22,706
196,348
219,054
18,989
225,393
244,383
Floating rates bank Loans
37,023
312,141
349,164
29,767
353,318
383,085
Total secured borrowings
59,730
508,489
568,218
48,756
578,711
627,467
Unsecured
Non-current
Total
Current
Non-current
Loans from related parties (1)
-
4,278
4,278
-
2,305
2,305
Total unsecured borrowings
-
4,278
4,278
-
2,305
2,305
Total borrowings
59,730
512,767
572,496
48,756
581,017
629,772
Fees and expenses
-752
-2,772
-3,524
-1,106
-4,420
-5,526
Total borrowings incl. fees
58,978
509,994
568,972
47,650
576,596
624,246
Fair value - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Secured
Current
Non-current
Total
Current
Non-current
Total
Fixed rates bank loans
22,706
182,555
205,261
18,989
227,899
246,888
Floating rates bank Loans
36,271
313,647
349,918
29,767
353,318
383,085
Total secured borrowings
58,978
496,201
555,179
48,756
581,217
629,973
Unsecured
Current
Non-current
Total
Current
Non-current
Total
Loans from related parties (1)
-
4,278
4,278
-
2,305
2,305
Total unsecured borrowings
-
4,278
4,278
-
2,305
2,305
Total borrowings
58,978
500,479
559,457
48,756
583,522
632,278
Fees and expenses
-752
-2,772
-3,524
-1,106
-4,420
-5,526
Total
58,226
497,707
555,933
47,650
579,102
626,752
The Parent holds no financial debt following the financial restructuring in 2021.
Siem Offshore has agreed restructured terms with the equitized lenders. The restructured terms shall remain in
 
force till 31
December 2024, corresponding to extended maturity of the restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum book equity ratio of Siem Offshore at 10%. Other terms relate to vessel buy-out
options, no-dividend clause, restrictions on investments in assets, restrictions to acquisitions of shares and business
undertakings, negative pledge, restrictions to selling or otherwise disposal of assets, no equitization of
 
the Brazilian facilities,
financial indebtedness, change of control clause, PIK-interest arrangements and three cash sweep mechanisms;
 
one facility cash
sweep, one Siem ATHS Pool AS cash sweep and one Company cash sweep.
The Company has a portfolio of bank loans secured with mortgage in vessels. The creditors and guarantors
 
are in general first-
class commercial banks and state-owned financial institutions with ratings on or above BBB- and AAA.
(1) At year-end 2022 the Company held a secured revolving credit facility with Siem Industries S.A. at USD 8
 
million. The credit
will be reduced by USD 2 million annually and will expire on 31.12.2026. The credit facility remained undrawn
 
at year-end
2022.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
51
SIEM
Offshore
 
Inc. Annual Report 2022
The non-controlling interest in Siem AHTS Pool AS has paid-in a subordinated shareholder's loan at USD4.3 million. Interests
 
are
accrued on a quarterly basis and added to the principal debt. Installments and interests will become payable
 
from 2025
contingent upon approval from mortgage debt lenders.
 
Instalments falling due over the next 5 years - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
Mortgage debt
Other interest
bearing debt
Total
2023
58,978
-
58,978
2024
274,175
-
274,175
2025
36,498
-
36,498
2026
45,047
428
45,475
2027
44,859
428
45,287
Thereafter
105,138
3,422
108,560
Total
564,694
4,278
568,972
In addition to fixed installments, contingent instalments from cash sweep mechanisms apply. There are fixed instalments
 
for
certain facilities, mainly related to the Siem Helix 1 and 2 and the Siem Symphony facilities.
The book value of mortgaged assets consists of non-current tangible assets and a portion of the accounts
 
receivables that
amounts to USD 873 million at year end.
 
The Company and the Parent Company are in compliance with their financial covenants on 31 December 2022.
 
PARENT COMPANY
CIRR arrangements
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
-
-
Total CIRR deposit
20,638
36,763
-
-
CIRR loan drawn
20,638
36,763
-
-
Net Commitment
-
-
Prior to ordering vessels from Norwegian yards, the Company applied for fixed 12-year interest rate options related to
 
the long-
term financing of such vessels.
 
The Company was granted such options for each of the relevant vessel by the Norwegian Export
Credit Agency. Long-term loans drawn from the Norwegian Export Credit Agency are placed as corresponding deposits
 
in the
Bank as financial security for the loans drawn.
Net debt
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Cash and cash equivalents
94,949
91,839
Borrowings, repayable within one year
-58,978
-47,650
Borrowings, repayable after one year
-509,994
-576,596
Net debt
-474,023
-532,408
Cash and cash equivalents
94,949
91,839
Gross debt - fixed interest rates
-219,054
-244,383
Gross debt - floating interest rates
-349,918
-379,864
Net debt
-474,023
-532,408
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
52
Borrowings
CONSOLIDATED
(Amounts in USD 1,000)
Borrowings as at 1 January 2021
1,030,787
Lease liability 1 January 2021
5,088
Lease payments
-1,927
Repayment of borrowings
-124,270
Drawn amount PIK interest and fees
17,085
Converted into equity
-278,906
New loans related parties
2,305
Related party converted into equity
-39,036
Accrued interest
-11,775
Foreign exchange adjustments
34,699
Other, amortization
 
-6,281
Borrowings and lease liability at 31 December 2021
627,769
Lease payments
-1,812
Repayment of borrowings
-54,963
Drawn amount PIK interest and fees
682
New loans related parties
1,973
Accrued interest
2,040
Foreign exchange adjustments
-3,597
Other, amortization
 
-1,110
Borrowings and lease liability at 31 December 2022
570,981
Borrowings and lease liability
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Borrowings repayable within one year
58,978
47,650
Borrowings repayable after one year
509,994
576,596
Lease liability repayable within one year
1,666
1,969
Lease liability repayable after one year
343
1,554
Total
570,981
627,769
Borrowings
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
Borrowings as at 1 January 2021
130,089
Cash flows
-6,216
Accrued interest
 
3,120
Revaluation derivative
-312
Converted to equity
-155,081
Foreign exchange adjustments
28,401
Borrowings at 31 December 2021
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
53
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 13
Other Current Liabilities and Other Current Provision
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
-
-
Social security tax, etc.
2,580
2,374
-
-
Unearned income
3,398
3,581
-
-
Other accrued cost, mainly regarding operating
expenses vessels
12,474
13,575
-
-
Current lease liability
1,666
1,969
138
1,172
Intercompany liabilities
-
-
1,058
793
Accrued salaries, holiday pay, payroll tax and other
6,282
5,272
1,196
1,965
Total other current liabilities
26,399
26,770
Other accrued cost includes accrued commission and accruals for purchase orders.
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
-
-
Provision for possible legal claims in Brazil
13,830
16,696
-
-
Accrual for recognized penalty claim in Brazil
 
4,262
-
-
-
Total other current provision
18,092
16,696
An accrual at USD 18 million has been recorded for possible and recognized legal claims related to charter
 
contracts and labour
cases in Brazil.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
54
Note 14
Related Party Transactions
The Company’s largest shareholder Siem Sustainable Energy S.à r.l., with a holding of 34 %, and its
 
parent company, Siem
Industries S.A., are defined as related parties. The Company is charged by Siem Industries S.A. for
 
an annual fee of USD 250 K for
2022 (2021: USD 250 K). The fee is the remuneration for the services provided by the Chairman of
 
the Board and cost related to
office and administration in the Cayman Islands.
Details related to transactions, loans and remuneration to the Executive Management and the Board of Directors are set
 
out in
Note 17. The Chairman Kristian Siem is also the Chairman of Siem Industries SA. Director Barry Ridings was
 
also previously a
Director of Siem Industries SA. For the Parent, all subsidiaries listed in Note 6 are also defined as related parties.
 
Director Christen Sveaas is the Chairman of Kistefos AS who holds a 78.8% interest in Viking Supply Ships
 
AB. Viking Supply
Ships AB owns and operates vessels that are competitors to some of the Company’s vessels.
For other related parties, the following transactions were carried out:
Sale of services
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Service to entity where director has ownership
26,829
26,738
Total
26,829
26,738
The service is provided to companies in which the Chairman has an interest. Kristian Siem is the Chairman
 
of and controls Siem
Industries S.A. Siem Industries holds an interest in Subsea 7 and Seaway7. Siem Offshore Rederi AS, 100% owned
 
by the
Company, Siem Offshore LLC, 100% owned by the Company and Siem AHTS Pool AS, 78% owned by the
 
Company, have
chartered vessels to Subsea 7 and Seaway 7 companies during 2022 and 2021.
 
The amounts for 2022 and 2021 also include management services and crew service to subsidiaries of
 
Siem Industries S.A. and to
Subsea 7 and Seaway 7 companies.
Purchase of service
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Service from entity where director has ownership
519
602
Total
519
602
Services purchased from related parties for 2022 were mainly cost for corporate management services and Board fees.
 
Service
from entity where director has ownership consist of Board fees from Siem Industries S.A., management fees from
 
Siem Capital UK
Ltd and Siem Kapital AS, all three 100% controlled by Siem Industries S.A.
 
These transactions were at arm’s length.
Balance sheet items following purchase and sale of service
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Accounts receivable
3,568
5,466
Accounts payable
1,033
537
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
55
SIEM
Offshore
 
Inc. Annual Report 2022
Non-current liability to related parties
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
At January 1
2,305
38,533
Drawings
1,791
2,288
Converted to shares
-
-39,036
Interest expenses
182
521
At December 31
4,278
2,305
Non-current liability
The Company holds a long-term credit facility in Siem AHTS Pool AS who has drawn a shareholder's loan from
 
its 22%
shareholder Singa Star PTE LTD. Interest charged has been added to the principal loan. Per agreement,
 
no instalments or interest
payments will fall due till 2025. The loan is unsecured and subordinated to bank debt. The liability is
 
at markets term of interest.
Sale of service
PARENT COMPANY
(Amounts in USD 1,000)
2022
2021
Service to subsidiaries
1,118
1,299
Total
1,118
1,299
Purchase of service
PARENT COMPANY
(Amounts in USD 1,000)
2022
2021
Service from subsidiaries
3,126
4,482
Service from associates
250
250
Total
3,376
4,732
Sales to subsidiaries and associates consists of guarantee commissions to Siem Offshore Rederi AS and Secunda Holdings
Canada LP.
Service purchased from subsidiaries consists of administrative and corporate services provided by Siem Offshore
 
AS. Service
purchased from associates consists of payment for annual fee for remuneration for the services of the Chairman
 
of the Board and
cost related to office and administration in the Cayman Islands.
All terms used for above transactions are at arm’s length.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
56
Year-end balance sheet items arising from sales and purchases
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Receivables from related parties
Subsidiaries
980
1,014
Total
980
1,014
Payables to related parties
Subsidiaries
138
1,172
Total
138
1,172
Non-current loan to subsidiaries
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
At 1 January
-
-
Drawings
6,409
109,834
Converted to shares
-
-175,902
Interest charged
4,519
3,614
Provision for bad debt
-526
62,423
Exchange rate variations
-5
32
At 31 December
10,397
-
The long-term loan to subsidiaries on 31 December 2022, is with Siem Offshore do Brasil SA and Siem AHTS Pool AS. A provision
for the outstanding amount for the long-term loan to Siem Offshore do Brasil SA (USD 24,511) and part of the outstanding
 
amount
to Siem AHTS Pool AS (USD 75,412) has been made and is reflected above.
 
In relation with conversion of shares in Siem AHTS
Pool AS made in May 2021, the provided amounts were reversed (USD 138,319) and at year-end 2021, a new provision
 
was made.
In December 2022, another provision of USD 526 was made. All loans are at market terms of interest.
Non-current liability to related parties
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2022
12/31/2021
At January 1
467
417
Interest charged
-
50
At December 31
467
467
A revolving credit facility of USD 12 million was provided by Siem Industries S.A. effective from 2021. The facility
 
will be reduced
by USD 2 million at the last business date of each year commencing 31 December 2021. As such,
 
the facility is USD 8 million at
year-end 2022 and is undrawn. The liability above reflects the accrued cost under a previous facility. The credit facility is
 
at
market terms of interest.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
57
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 15
Guarantees
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
-
-
Guarantees related to tax-disputes, Brazil
686
686
551,906
606,880
Guarantees for debt in subsidiaries
-
-
551,906
606,880
Total guarantees
686
686
Guarantees related to disputes and ongoing tax-cases have been raised per request from Brazilian tax-authorities.
Note 16
Operating Expenses
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
2022
2021
-
-
Vessel crew expenses
94,718
90,992
-
-
Other vessel operating expenses
53,216
43,123
4,404
5,271
General and administration
22,596
19,793
4,404
5,271
Total operating expenses
170,530
153,909
Note 17
Salaries and Wages, Number of Employees
Personnel expenses (1)
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Salaries and wages
85,750
74,980
Government grants - net wages arrangement in Norway
-3,671
-4,756
Payroll tax
8,131
7,372
Pension costs, see Note 8
1,080
1,221
Other benefit
8,279
6,570
Total personnel expenses
99,569
85,386
(1) Personnel expenses include vessel crew expenses and part of general and administrative expenses, see
 
Note 16.
 
Government grants is a special Norwegian seamen payroll and tax refund scheme given to Norwegian shipping
companies.
 
The average number of employees in the Company was 1,092 for 2022 (2021: 1,032), including onshore and
 
offshore
employees. There are no employees in the Parent.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
58
Payroll registered to the executive management
(Amounts in USD 1,000)
2022
2021
Salary and other short term compensation
1,535
1,864
Total
1,535
1,864
Employees included in the above payroll in 2022 were five (2021: six).
Corporate management salaries and other benefits
(Amounts in USD 1,000)
2022
Salary paid
Pension premium
Other benefits
Share options held
CEO Bernt Omdal
471
33
2
4,000
CFO Vidar Jerstad
314
28
2
-
COO Tore Lillestø
306
25
2
-
CCO Andreas Hageli
 
286
26
2
-
CHRO Tor Asbjørn Grændsen
11
26
-
-
Total
1,388
138
10
4,000
Tor Asbjørn Grændsen was employed from 1 December 2022.
Members of corporate management do not hold shares in the Company (2021: nil).
(Amounts in USD 1,000)
2021
Salary paid
Pension premium
Other benefits
Share options held
CEO Bernt Omdal
371
49
2
24,000
CFO Dagfinn B. Lie
237
41
2
-
CFO Vidar Jerstad
221
32
2
-
COO Tore Lillestø
253
37
2
-
CHRO Tore B. Johannessen
287
32
1
-
CCO Andreas Hageli
 
259
31
2
-
Total
1,629
222
13
24,000
With effect from 1 August 2021, Vidar Jerstad replaced Dagfinn B. Lie as CFO.
The Board of Directors of Siem Offshore Inc. has authorized the award of two programs of Share Options
 
to key employees of the
Company. The first option programs has expired in 2022 , the second option program will expire
 
in 2024. The total cost for the
two programs is zero for 2022 and 2021. See Note 27 for more information.
The Remuneration paid to the Board of Directors in 2022 was USD 448K (2021: USD 387K). The Chairman is
compensated by an annual fee at USD 250K to Siem Industries S.A. The fee includes the remuneration for the
 
services of the
Chairman and other cost related to office and administration in Cayman Islands. Each of the other
 
Directors are paid USD40K
annually, or pro rata in relation to service part of the year.
Directors and Officers Liability Insurance (DOLI) is for the fiscal year 2022 placed with RoyalStar
 
Assurance Ltd. The
DOLI insurance provides financial protection for the directors and officers of the Company in the event that they
 
are being sued in
conjunction with the performance of their duties as they relate to the Company. The insurance
 
coverage includes the directors’
and officers’ personal legal liabilities, including defense - and legal cost. The cover also includes employees in
 
managerial
positions.
 
Auditor's remuneration
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
2022
2021
87
111
Audit Fee
350
423
-
9
Audit Fee, Other
22
38
-
-
Tax and legal assistance
39
17
46
-
Other consultants, fees
179
45
133
120
Total auditor's remuneration
591
523
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
59
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 18
Leases
Siem Offshore has entered into various operating leases for office premises, office machines and communication
 
satellite
equipment for the vessels. The lease period for the lease agreements varies and most of the leases contain an option
 
for
extension. The interest rates in the calculation of net present values are in the range of 3%-13% depending on the base
 
currency,
the nature of the lease and the length of the leasing agreement.
 
Low value leases and leases with maturity of up to one year from inception are considered insignificant to the financial
statements.
There are no leases for the Parent Company.
Consolidated Statements of Financial Position:
(Amounts in USD 1,000)
CONSOLIDATED
Right of use assets at 01.01.2022
3,192
The year's depreciation
-1,503
Effect of exchange rate differences
24
Right of use assets at 31.12.2022
1,712
The balance sheet includes the following amounts relating to leases:
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Right of use assets*
Land and buildings
735
1,238
Vessels and equipment
977
1,954
Total Right of use assets
1,712
3,192
*included in the line item "Vessels and equipment" in the balance sheet.
(Amounts in USD 1,000)
CONSOLIDATED
Lease liability at 01.01.2022
3,518
Lease payments
-1,812
Interest cost
224
Effect of exchange rate differences
30
Lease liability at 31.12.2022
1,961
(Amounts in USD 1,000)
12/31/2022
12/31/2021
Lease liabilities**
Current
1,666
1,968
Non-Current
294
1,551
Total Lease liabilities
1,961
3,518
**included in the line item "other liabilities" in the balance sheet.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
60
Operating Leases as Lessor of vessels:
The total contract backlog as per 31 December 2022 amounts at USD442 million (2021: USD298 million). The amount for 2022
relates to in total 19 Time Charter contracts and 1 Bare Boat Contract. The contract backlog includes firm contracts
 
only, any
optional periods have been excluded. For the Time Charter contracts, the service element related to operations of
 
the vessels
(crewing, maintenance etc.) is also included in the amounts presented below.
There is no Contract Backlog for the Parent Company.
The contract backlog relates to fiscal years and per vessel segments:
12/31/2022
CONSOLIDATED
(Amounts in USD 1,000)
2023
2024
2025 onwards
Total
Vessel Segment
Platform Supply Vessels
32
14
8
55
Offshore Subsea Construction Vessels and WIV
110
85
93
287
Anchor Handling Tug Supply Vessels
3
-
-
3
Brazilian Fleet
13
8
6
27
Canadian Fleet
 
9
4
-
13
Scientific Core-Drilling Vessel
33
24
-
57
Total
201
134
107
442
12/31/2021
CONSOLIDATED
(Amounts in USD 1,000)
2022
2023
2024 onwards
Total
Vessel Segment
Platform Supply Vessels
14
7
14
35
Offshore Subsea Construction Vessels and WIV
91
51
4
146
Anchor Handling Tug Supply Vessels
5
-
-
5
Brazilian Fleet
14
7
2
23
Canadian Fleet
 
5
-
-
5
Scientific Core-Drilling Vessel
32
30
22
84
Total
161
95
42
298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
61
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 19
Financial Items
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
2022
2021
Financial income
12,652
5,332
Interest income
 
4,245
3,240
-
91,553
Restructuring effects
1)
-
91,553
-
-
Dividend
 
-
1,546
16,000
-
Reversal of impairment of shares from subsidiaries
-
-
14,387
12,511
Other financial income
54
388
43,039
109,396
Total financial income
4,300
96,727
Financial expenses
-5,017
-2,408
Interest expenses
-23,370
-24,187
-526
-70,910
Impairment of shares and receivables from subsidiaries
-
-
-16
-1,562
Other financial expenses
-1,005
-4,386
-5,559
-74,880
Total financial expenses
-24,375
-28,573
Other financial items
-
-
Hedge accounting recycling
 
-6,232
-
1,414
-862
Net currency gain/(loss)
13,968
-4,531
1,414
-862
Total currency gain/(loss)
7,736
-4,531
38,894
33,654
Net Financial Items
-12,340
63,623
1)
 
Gain related to debt converted to equity represents the difference between book value of loans
 
and obligations at 26 May 2021
that were converted to equity, and the fair value of shares issued used to settle these liabilities.
The weighted average cost of debt for the Company was approximately 5.8% (2021: 3.3%) at 31 December, including
 
the effect
of any fixed interest rate swap agreements.
Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged
 
or cancelled or expired. The
Company also derecognizes a financial liability when its terms are modified, and the cash flows
 
of the modified liability are
substantially different in which case a new financial liability based on the modified terms is recognized at fair value. The
 
difference
between the carrying amount of a financial liability (or part of a financial liability) extinguished or
 
transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit
 
or loss.
Restructured debt terms
The Company’s debt was restructured 26 May 2021, replacing a financial debt standstill agreement of April 2020.
 
Financial debt,
including bond loans, borrowings and financial derivatives at a total of USD 269 million was converted into 22,950,466,494
 
New
Shares at a conversion rate of NOK 0.10 per share. Following the debt-to-equity conversion the New Shares represented
 
around
96% of the Company’s shares.
 
In order to calculate the restructuring gain, the fair value of the shares issued had to be estimated. Of the total
 
debt of USD 269
million, USD 177.4 million (representing 65.962%) was reclassified into the Company’s equity accounts,
 
and USD 91.6 million was
recognized as financial income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
62
The Company has agreed restructured terms with the equitized lenders. The restructured terms shall remain in
 
force till 31
December 2024, corresponding to extended maturity of the restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum Book Equity Ratio of the Company at 10%. Other
 
terms relate to vessel buy-out
options, no-dividend clause, restrictions on investments in assets, restrictions to acquisitions of shares and business
undertakings, negative pledge, restrictions to selling or otherwise disposal of assets, no equitization of
 
the Brazilian facilities,
financial indebtedness, change of control clause, PIK-interest arrangements and three Cash Sweep Mechanisms:
 
One Facility
Cash Sweep, one SAP (Siem ATHS Pool AS) Cash Sweep and one Company Cash Sweep.
 
In the Facility Cash Sweep, each of the Facilities Agreements (other than the SAP Facilities Agreements) were
 
amended to
include a cash sweep mechanism where 100 % of the excess cash in respect of the vessel(s) financed by the
 
relevant Facilities
Agreement shall be applied towards payments under the relevant facilities. In the SAP Cash Sweep
 
Cash each of the SAP
Facilities Agreements were amended to include a cash sweep mechanism, where 100 % of the aggregate excess
 
cash in respect
of all the SAP vessels shall be applied towards payments under the relevant SAP facilities. In the Company
 
Cash Sweep, each of
the Facilities were amended to include a cash sweep mechanism where 100 % of the Company’s excess cash shall be
 
distributed
towards payments of the Standstill deferred amounts, thereafter on a pro rata basis between the relevant Facilities
 
Agreements.
There are mandatory prepayment clauses related to sale or loss of vessels. The Cash Sweeps shall not take the Company’s
 
cash
position below USD 60 million (compensated for budgeted vessel operational cost). The cash sweep
 
mechanisms apply bi-
annually. In 2022 the Company paid USD 26 million to the lenders from the Cash Sweep Mechanisms.
Note 20
Earnings/(loss) per Share
CONSOLIDATED
(Amounts in USD 1,000)
2022
2021
Weighted average number of shares outstanding (1,000)
238,852
147,050
Weighted average number of shares diluted (1,000)
238,852
147,050
Result attributable to shareholders
30,897
107,858
Earnings/(loss) per share attributable to equity shareholders
0.13
0.73
Earnings/(loss) per share diluted attributable to equity shareholders
0.13
0.73
Note 21
Other Gain/(Loss) on Sale of Assets
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
2022
2021
-
-
Gain/(loss) on sale of assets, net
-95
997
-
-
Total
-95
997
2022
The net loss for the Company on sale of assets of USD 0.1 million is mainly related to the sale of a FIFI
 
system related to one of the
AHTS-vessels and a settlement related to equipment on a Canadian vessel previously sold.
2021
The net gain for the Company on sale of assets of USD 0.997 million is from the sale of the AHTS
 
vessels "Siem Diamond " and
"Siem Garnet", and from the sale of the PSV "Siem Hanne".
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
63
SIEM
Offshore
 
Inc. Annual Report 2022
.
Note 22
Listing of the 20 Largest Shareholders
as of 31 December 2022
Shareholder
Number of shares
Owner interest
Siem Sustainable Energy S.à r.l.
80,260,604
33.60%
Kistefos AS
79,585,160
33.32%
Songa Capital AS
13,994,889
5.86%
Magnus Leonard Roth
7,305,863
3.06%
Caceis Bank
6,375,112
2.67%
MP Pensjon PK
4,474,274
1.87%
Torstein Tvenge
4,030,000
1.69%
Holmen Spesialfond
3,000,000
1.26%
Midelfart Capital AS
2,956,316
1.24%
Banque Pictet & Cie SA
2,249,390
0.94%
J.P. Morgan SE
1,448,160
0.61%
Six Sis AG
1,326,716
0.56%
Nordnet Livsforsikring AS
1,274,854
0.53%
Siem Foundation
1,065,475
0.45%
Stratos Investments Ltd.
981,658
0.41%
Ace Crown International Limited
955,654
0.40%
Merrill Lynch Prof. Clearing Corp.
935,607
0.39%
Tejø Invest AS
786,571
0.33%
J.P.Morgan Securities Plc
691,670
0.29%
Titas Eiendom AS
500,000
0.21%
Total 20 largest shareholders
214,197,973
89.68%
Other shareholders
24,654,079
10.32%
Total number of outstanding shares
238,852,052
100.00%
Siem Sustainable Energy S.à r.l. is the main shareholder of Siem Offshore Inc and is controlled by Mr Kristian Siem,
 
who is the
Chairman of the Company and is also the Chairman of Siem Industries S.A., the ultimate parent company of
 
Siem Sustainable
Energy S.à r.l.
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
64
Note 23
Subsequent Events
January 2023:
•
Awarded a contract extension of 7 months firm for the
OSCV “Siem Barracuda” on the Hywind Tampen offshore
wind farm project for client Equinor.
March 2023:
 
•
Awarded a contract for the AHTS "Siem Topaz" for a
contract in Taiwan, commencing in March 2023 for a firm
period reaching into Q4 2023, also for the offshore wind
industry.
 
•
Received USD 12 million as down-payment on a seller’s
credit and other receivables related to the 2019 sale of
“Siem Marlin”.
Note 24
Gain/(Loss) on Currency Derivative Contracts
PARENT COMPANY
CONSOLIDATED
2022
2021
(Amounts in USD 1,000)
2022
2021
-
-
Realized gain/(loss)
-
204
-
-
Total
-
204
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
65
SIEM
Offshore
 
Inc. Annual Report 2022
Note 25
Financial Instruments by Category
Below is a comparison by category for carrying amounts and fair values of all of the Company’s financial instruments.
31 Dec 2022
(Amounts in USD 1,000)
Financial assets at
 
amortized cost
Total
Assets as per statement of financial position
Accounts receivable
33,416
33,416
Other short term receivables
4,219
4,219
CIRR Loan deposits
20,638
20,638
Long term receivables
20,047
20,047
Cash and cash equivalents
94,949
94,949
Total
173,270
173,270
Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD 23.2 million. Also see Note 9.
31 Dec 2022
CONSOLIDATED
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
11,203
11,203
Borrowings
568,972
568,972
CIRR Loans
20,638
20,638
Other non-current liabilities
 
12,887
12,887
Other current liabilities
26,399
26,399
Other current provision
18,092
18,092
Tax liabilities
698
698
Pension liabilities
989
989
Tax payable
 
635
635
Adjustments for liabilities that do not qualify as a financial instrument (1)
-32,790
-32,790
Total
627,723
627,723
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 32,790 consisting of USD 698 in Tax liabilities, USD 989 in Pension Liability, USD
 
2,580 in Social Security Payable,
USD 635 in Tax payable, USD 3,398 in Unearned Income, USD 6,399 in Accrued Interest and USD
 
18,092 in provision for potential
legal claims.
 
See Note 13 for information about Social Security Payable and Unearned Income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
66
31 Dec 2021
CONSOLIDATED
(Amounts in USD 1,000)
Financial assets
 
at amortized cost
Total
Assets as per statement of financial position
Accounts receivable
34,097
34,097
Other short term receivables
3,751
3,751
CIRR Loan deposits
36,763
36,763
Long term receivables
19,393
19,393
Cash and cash equivalents
91,839
91,839
Total
185,842
185,842
Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD 24.6 million, see Note 9.
31 Dec 2021
CONSOLIDATED
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
13,542
13,542
Borrowings
624,246
624,246
CIRR Loans
36,763
36,763
Other non-current liabilities
 
12,776
12,776
Other current provision
16,696
16,696
Other current liabilities
26,770
26,770
Adjustments for liabilities that do not qualify as a financial instrument (1)
-12,719
-12,719
Total
718,075
718,075
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 12,719 consisting of USD 421 in Tax liability, USD 1,014 in Pension Liability, USD 2,374 in Social
 
Security Payable,
USD 971 in Tax payable, USD 3,581 in Unearned Income and USD 4,360 in Accrued Interest.
 
See Note 13 for information about
Social Security Payable and Unearned Income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
67
SIEM
Offshore
 
Inc. Annual Report 2022
31 Dec 2022
PARENT COMPANY
(Amounts in USD 1,000)
Financial assets
at amortized cost
Total
Assets as per statement of financial position
Trade and other instruments (1)
10,399
10,399
Cash and cash equivalents
31,394
31,394
Total
41,794
41,794
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD zero. See Note 9.
31 Dec 2022
PARENT COMPANY
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
63
63
Adjustments for liabilities that do not qualify as a financial instrument (1)
-1,319
-1,319
Other current liabilities
1,196
1,196
Total
-60
-60
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 1,319 consisting of USD 466 in Accrued Interest and USD 852 in provision.
31 Dec 2021
PARENT COMPANY
(Amounts in USD 1,000)
Financial assets
at amortized cost
Total
Assets as per statement of financial position
Trade and other instruments (1)
3
3
Cash and cash equivalents
33,362
33,362
Total
33,365
33,365
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD zero. See Note 9.
31 Dec 2021
PARENT COMPANY
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
36
36
Adjustments for liabilities that do not qualify as a financial instrument (1)
-727
-727
Other current liabilities
1,965
1,965
Total
1,274
1,274
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 727 consisting of USD466 in Accrued Interest and USD260 in provision.
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
68
.
Note 26
Inventories
PARENT COMPANY
CONSOLIDATED
12/31/2022
12/31/2021
(Amounts in USD 1,000)
12/31/2022
12/31/2021
-
-
Fuel
3,282
2,041
-
-
Spareparts
6,439
6,426
-
-
Obsolescence provision
-4,386
-3,942
-
-
Total inventories
5,335
4,524
Note 27
Share-based Payments
The Company has entered into two Share option agreements with selected key employees, at 13 January
 
2013 and 2 April 2014.
 
The exercise period shall in no event be later than the date falling 10 years after the award dates.
 
The 2013 Option program has
now expired.
In 2022 and 2021, no cost was recognized under Retained earnings related to value of employee services,
 
as the vesting period
for both option programs ended in 2018 and 2019. In 2021 a reversal of employers contribution
 
expenses of USD 22k was
recognized in the income statement for share options granted to certain employees.
 
No options have been exercised since the start of the option agreements. The Company has no legal or
 
constructive obligation to
repurchase or settle the options in cash.
 
Since the share option programs were awarded, seven members of the option programs have left the Company.
 
As per 31
December 2022, 4,000 share options are outstanding at an average exercise price of NOK 907, from the 2014 option program.
 
Options outstanding and exercise price have been adjusted for the 100:1 reverse split from 2021
 
in order to present comparable
figures.
 
 
 
 
 
 
 
 
69
SIEM
Offshore
 
Inc. Annual Report 2022
Corporate Governance
Statement of Policy on Corporate Governance
The principles for corporate governance adopted by the Company
 
are based
on the “Norwegian Recommendation for Corporate Governance”
 
issued on
the 14 October 2021.
As a company incorporated in the Cayman Islands, Siem
 
Offshore Inc. is an exempted company duly incorporated
under the laws of the Cayman Islands and subject to Cayman
Islands’ laws and regulations with respect to corporate
governance. Cayman Islands corporate law is to a great extent
based on English Law. In addition, due to the Company’s
listing on the Oslo Stock Exchange, certain aspects of
Norwegian Securities Law apply to the Company and there is
a requirement to adhere to the Norwegian Code of Practice for
Corporate Governance. The Norwegian Code of Practice for
Corporate Governance is publicly available at www.nues.no in
both Norwegian and English languages. Due to new provisions
implemented in the Norwegian Accounting Act, compliance
with the regulations for Corporate Governance reporting is
now a legal requirement provided that it does not conflict with
the Cayman Islands laws and regulations. The Company
endeavours to maintain high standards of corporate
governance and is committed to ensuring that all shareholders
of the Company are treated equally, and the same information
is communicated to all shareholders at the same time.
Corporate Governance is subject to annual assessment
and review by the Board of Directors.
 
The Board of Directors has reviewed this statement. It is
the opinion of the Board of Directors that the Company
complies with the Norwegian Code of Practice for Corporate
Governance.
 
This statement is structured in accordance with The
Norwegian Code of Practice for Corporate Governance.
 
Business
Cayman Islands laws and regulation do not require the objects
clause of the Companies Memorandum and Articles of
Association to be clearly defined. The Company has, however,
adopted clear objectives and strategies for its business.
 
Siem Offshore aims to grow the company within offshore
support vessels, both organically and through combination
with other operators, in order to achieve economies of scale
and a stronger presence in the market.
 
Siem Offshore aims to become a preferred supplier
of marine services to the offshore energy industry and in the
offshore renewable energy sector, based on quality and
reliability, and to provide cost-efficient solutions to its
customers by understanding their operations and by applying
technology and experience.
The Company builds its business around a motivated
and skilled workforce with the appropriate technical solutions.
This creates sustainable value for all shareholders. Reference
is made to the Board of Directors report for detailed
information.
Equity and Dividends
 
The priorities for the use of Company funds are determined by
the Board of Directors and with recommendations from the
Management, considering existing conditions. At present,
priorities for the use of funds in order of importance are vessels
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
70
operations and maintenance, repayment of debt, investment
opportunities in the business and the return of capital to the
shareholders in form of share buy-back or dividends.
The Board’s mandate to increase the Company’s
share capital is limited only to the extent of the authorized
share capital of the Company with certain pre-emption rights
for shareholders and in accordance with the Company’s
Memorandum and Articles of Association which complies with
Cayman Islands Law.
 
Under the Articles of Association, the Board can
issue new shares, convertible bonds or warrants at any time
within the limits of the authorized capital without the consent
of the General Meeting, but with pre-emption rights for
shareholders. A General Meeting has further authorized the
Board to issue new shares without pre-emption rights to all
shareholders up to a limit of 50% of Siem Offshore’ shares at
the time the authorization was given. The authority gives the
Board flexibility to finance investments, acquisitions, and other
business combinations on short notice through the issue of
shares or certain other equity instruments in the Company.
Furthermore, the Board considers the granting of a new
standing authority at the time of holding an Annual General
Meeting rather than convening an Extraordinary General
Meeting at some future time to be in the best interests of the
Company, as this will result in cost savings and more effective
time management for both the Company’s senior management
and its Shareholders.
At the Annual General Meeting held on 29 April 2021
it was resolved to increase the authorised share capital of the
Company from USD15,000,000 divided into 1,500,000,000
Common Shares of par value USD0.01 each to
USD300,000,000 divided into 30,000,000,000 Common
Shares of par value USD0.01 each, by the creation of an
additional 28,500,000,000 Common Shares of par value
USD0.01 each which shall rank pari passu in all respect with
the existing Common Shares.
On 31 May 2021 a reverse split 100:1 was
implemented. The Company’s authorized capital following the
reverse split, is USD300,000,000 divided on 300,000,000
shares, each with a nominal value of USD 1.00. The Company
has issued 238,852,052 shares. There are 61,147,948
authorized, but unissued shares that can be issued by the
Board.
Equal Treatment of Shareholders, Freely Tradable
Shares and Transactions with Related Parties
The Company is committed to ensuring that all shareholders of
the Company are treated equally and all the issued shares in
Siem Offshore, at nominal value USD1.00 each, are freely
tradable and carry equal rights with no restrictions on voting.
Siem Sustainable Energy S.a r.l, which owns 33.6%
of the Company, is represented by its ultimate owner Siem
Industries S.A by its Chairman Kristian Siem on the Board of
Directors. The Company pays an annual fee to Siem Industries
S.A. as compensation for directorships, provision of an office
and presence in the Cayman Islands and other services. The
fee is adopted by the Annual General Meeting based on a
recommendation from the independent Board Members.
Related party transactions are disclosed in the notes to the
accounts.
Freely Negotiable Shares
All the shares in the Company carry equal rights and are freely
negotiable. The shares are traded according to normal market
practice and no special limitations on transactions have been
laid down in the Articles of Association.
General Meetings
The Annual General Meeting of the Company will be held at
the registered office of Siem Capital UK Limited, 40 Brighton
Road, Sutton, SM2 5BN, England on 10 May 2023, at 01:00 PM
UK local time and Shareholders can be represented by proxy.
Notices of general meetings and related documents are made
available to shareholders at the latest 17 days prior to meeting
date. Notice of attendance by proxy is to be provided to the
offices of Siem Offshore AS at Nodeviga 14, P.O. Box 425,
Kristiansand 4664, Norway, email: info@siemoffshore.com, not
less than 24 hours prior to the stated time of the Annual
General Meeting. Shareholders are given the opportunity to
vote on the election of board members.
Nomination Committee
The appointment of a nomination committee is not a
requirement under Cayman Islands Law. However, the Board
did in 2021 appoint a Nomination Committee, represented by
three Board members.
Board of Directors; Composition and
Independence
In the nominations to the Board of Directors, the Board
consults with the Company’s major shareholders and ensures
that the Board is constituted by Directors with the necessary
 
 
 
 
 
71
SIEM
Offshore
 
Inc. Annual Report 2022
expertise and capacity. There is no requirement under
Cayman Islands Law for the Company to establish a corporate
assembly.
Each Board member is elected for a term of two
years, or such shorter term as shall be specified in the ordinary
resolution pursuant to which the Director shall be appointed.
Representatives of the Executive Management are not
members of the Company’s Board of Directors.
The Board of Directors as a group has extensive
experience in areas which are important to Siem Offshore,
including offshore services, international shipping, ship
broking, finance and corporate governance and restructuring.
Work of the Board of Directors
The Board monitors the performance of management
through regular meetings and reporting. The Company has a
Compensation Committee, a Nomination Committee,
 
and an
Audit Committee.
The Compensation Committee consists of three Directors.
The mandate of the committee is to review and approve the
compensation of the CEO and any bonuses to all executive
personnel. Reference is also made to Note 17 to the Accounts,
Remuneration of the Executive Management.
 
The Nomination Committee consists of two Directors. The
Nomination Committee shall actively be seeking and
evaluating individuals qualified to become Directors of the
Company and nominate candidates to the Board of Directors.
The Audit Committee consists of two Directors. The
composition of the committee meets the requirements of the
Norwegian Code of Practice for Corporate Governance as
regards independence. The committee’s mandate can be
summarized as follows:
 
●
Ascertain that the internal and external accounting reporting
process are organized appropriately and carried out
efficiently and are of high professional quality.
●
Monitor and assess the quality of the statutory audit of the
Company’s financial statements.
●
Ensure the independence of the external auditor, including
any additional services provided by the external auditor.
Risk Management and Internal Control
Internal control
A prerequisite for the Company’s system of decentralized
responsibility is that the activities in every part of the Company
meet general financial and non-financial requirements and are
carried out in accordance with the Company’s common norms
and values. The executive management of each subsidiary is
responsible for risk management and internal control in the
subsidiary with a view to ensuring 1) optimizing of business
opportunities, 2) targeted, safe, high-quality and cost-
effective operations, 3) reliable financial reporting, 4)
compliance with current legislation and regulations and 5)
operations in accordance with the Company’s governing
documents, including ethical, environmental and social
responsibility standards. The Company’s risk management
system is fundamental to the achievement of these goals.
Financial reporting process
The Company prepares and presents its financial statements
in accordance with current IAS/IFRS rules. Financial
information from subsidiaries is received each month in a
reporting package in standard format accommodated
necessary information for preparing the consolidated financial
statement for the Company. The reporting from the
subsidiaries is extended at the year-end reporting process to
meet various requirements for supplementary information.
There are established routines to check the financial data in
the received reporting packages to ensure the best quality for
the consolidated figures for the Company.
Training and further development of accounting
experience within the Company is provided locally by
participating on various external courses on a regular basis.
Remuneration of the Board of Directors
The remuneration of the Board members reflects their
experience and responsibilities and is adopted by the Annual
General Meeting based on the recommendation from the
Board. The Board members do not have share options or
profit-based remuneration.
The responsibility statement of the Board of Directors
in this report and the notes to the accounts include information
about the remuneration of the Board of Directors.
Remuneration of the Executive Management
 
The Company has a Compensation Committee, which reviews
and approves the compensation of the CEO and the bonuses
to all executive personnel. The Articles of Association of the
Company permit the Board to approve the granting of share
options to employees. A long-term share option program for
eight key employees of the Company was introduced in Q1
2013. An additional share option program was implemented in
Q2 2014 for ten key employees of the Company. The 2013
program has expired, and no options were declared. The
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
72
remuneration of the CEO and the share option scheme are
disclosed in the notes to the accounts.
 
Information and Communications
The Company has a policy of treating all its shareholders and
other market participants equally, and communicates relevant
and objective information on significant developments which
impact the Company in a timely manner.
 
The Company also seeks to ensure that its
accounting and financial reporting are to the standards of our
investors, and the Company presents its financial statements
in accordance with the International Financial Reporting
Standards (IFRS). The Audit Committee of the Board of
Directors monitors the Company’s reporting on behalf of the
Board.
 
Notices to the Oslo Stock Exchange and placements
of notices and other information, including quarterly and
annual reports, can be found on the Company’s website
(www.siemoffshore.com). The financial calendar for 2023 is
presented on the Company’s website under “Investors”.
Take-overs
 
The shares in the Company are freely tradable and the Articles
of Association of the Company does not hold specific defense
mechanisms against take-over situations. In a take-over
situation, the Board of Directors will comply with relevant
legislation.
Auditor
The Auditor of the Company is elected at the Annual General
Meeting, which also approves its remuneration. Details of the
Company’s remuneration of the external auditor are given in
the notes to the accounts.
 
The Auditor reports to the Audit Committee twice a
year at a minimum, but more often if necessary. During the
second half of the year, the external auditor presents to the
Audit Committee his assessment of risks, internal controls, risk
areas and improvement potential in control systems and his
audit plan for the following year. The second report to the
Audit Committee is the presentation of the Year-End Audit.
The external auditor presents a summary of the audit process,
including comments on audited internal control procedures
and key issues in the financial reporting.
 
The Audit Committee also receives an annual
independence reporting from the external auditor, confirming
the external auditor’s independence with respect to the
Company, within the meaning of the Norwegian Act on
Auditing and Auditors. The confirmation also includes services
delivered to the Company other than mandatory audit.
 
SIOFF-2022-12-31-ENp74i0
 
73
SIEM
Offshore
 
Inc. Annual Report 2022
Environmental, Social and Governance (ESG)
A separate ESG-report for 2022 has been published to
document Siem Offshore’s focus on Environmental, Social and
Governance (ESG), and to present our development and
performance within sustainable vessel operations and related
activities as achieved throughout the year.
Our vision “To be a leading vessel provider and the most
attractive employer within our business”, together with our
values “Caring - Committed - Competitive” are the
fundaments for our daily work including setting the bar for
sustainable and environmentally friendly solutions.
The ESG-report covers following main chapters:
•
 
Double Materiality Assessment - giving guidance on
the most important and relevant ESG-topics for Siem Offshore.
•
 
GHG Emission and Energy Management - with focus
on both the reduction in direct emissions and reduction in
energy consumption. The new Carbon Intensity Indicator (CII)
will be an important KPI on this matter going forward.
•
 
Ecological Impact - with focus on Ballast Water
Treatment, Waste Handling and Ship Recycling.
•
 
Employee Health and Safety – addressing the
importance of a safe workplace for all parties.
•
 
Labor Practices in Supply Chain – here the new
Transparency Act will require us to map and disclose any
negative impact on human rights from our global operations
and supply chain.
•
 
Equality, Diversity and Inclusion – setting new targets
on gender diversity, both offshore and onshore.
•
 
Anti-corruption, Anti-bribery and Sanction – here the
Siem Offshore ‘Code of Conduct’ shows its importance listing
requirements to awareness and training for all employees
including assessment of our value chain.
The outlook for 2023 summaries these topics and sets the
scene for the new regulations the coming years, such as EU
CSRD climate reporting regime and EU Taxonomy assessing
how sustainable the business activities are.
The full ESG-report for 2022 can be found here:
 
A separate report related to the Norwegian Transparency Act
will be published on the Company’s website
 
 
on or about 30 June 2023.
 
 
SIOFF-2022-12-31-ENp75i0
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Offshore
 
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Offshore
 
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Offshore
 
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Offshore
 
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Offshore
 
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SIOFF-2022-12-31-ENp80i8 SIOFF-2022-12-31-ENp80i6 SIOFF-2022-12-31-ENp80i2 SIOFF-2022-12-31-ENp80i0 SIOFF-2022-12-31-ENp80i11 SIOFF-2022-12-31-ENp80i10 SIOFF-2022-12-31-ENp80i7 SIOFF-2022-12-31-ENp80i3 SIOFF-2022-12-31-ENp80i1 SIOFF-2022-12-31-ENp80i12 SIOFF-2022-12-31-ENp80i9 SIOFF-2022-12-31-ENp80i5 SIOFF-2022-12-31-ENp80i4
Vessels in the fleet
79
SIEM
Offshore
 
Inc. Annual Report 2022
Platform Supply Vessels (PSV)
Siem Pride
Siem Symphony
Siem Atlas
Siem Giant
Built
 
2015
2014
2013
2014
Design
 
VS 4411 DF
VS 4411 DF
STX PSV 4700
STX PSV 4700
Dp Class
 
2
2
2
2
LOA
 
89.20 m
89.20 m
 
87.90 m
87.90 m
Breadth
 
19.00 m
19.00 m
19.00 m
19.00 m
Draught
 
7.40 m
7.40 m
 
6.60m
6.60 m
Dwt
 
5,500 t
5,500 t
 
4700 T
4,700 T
Accommodation
 
28
25
34
34
Cargo Deck Area
 
825 m2
900 m2
1000 m2 usable
1000 m2 usable
Ownership
100%
100%
 
100%
100%
Anchor Handling Tug Supply Vessels (AHTS)
 
 
 
Siem Amethyst
Siem Opal
Siem Emerald
Siem Sapphire
Siem Aquamarine
Built
 
2011
2011
2009
2010
2010
Design
 
VS 491 CD
VS 491 CD
VS 491 CD
VS 491 CD
VS 491 CD
Dp Class
 
2
2
2
2
2
LOA
 
91.00 m
91.00 m
91.00 m
91.00 m
91.00 m
Breadth
 
22.00 m
22.00 m
22.00 m
22.00 m
22.00 m
Draught
 
7.95 m
7.95 m
7.95 m
7.95 m
7.95 m
Dwt
 
3800 T
3800 T
3800 T
3800 T
3800 T
Accommodation
 
60
60
60
60
60
Cargo Deck Area
 
800 m2
800 m2
800 m
2
800 m2
800 m2
BHP
 
28000
28000
28000
28000
28000
Bollard Pull
297 Te
305 Te
281 Te
301 Te
284 Te
Ownership
78,16%
78,16%
78,16%
78,16%
78,16%
Offshore Subsea Construction Vessel (OSCV) & Multipurpose
 
field & ROV Support Vessel (MRSV)
Siem Dorado
Siem Barracuda
Siem Spearfish
Siem Stingray
Built
 
2009
2013
2014
2014
Design
 
MT 6017 MK II
STX OSCV 11L
STX OSCV 03
STX OSCV 03
Dp Class
 
2
2
2
2
LOA
 
93.60 m
120.80 m
120.80 m
120.80 m
Breadth
 
19.70 m
22.00 m
23.00 m
23.00 m
Draught
 
6.30 m
6.60 m
6.60 m
6.60 m
Dwt
 
4.500 t
5.000 t
5.000 t
5.000 t
Accommodation
 
68
110
110
110
Cargo Deck Area
 
1046 m2
1300 m2
1,300 m2
1,300 m2
Crane
100 t Offshore/Subsea crane
250 t Offshore/Subsea crane
1 X 250 t AHC, 3,000 m
1 X 250 t AHC, 3,000 m
ROV Moonpool
-
7.2 X 7.2
 
7.2 X 7.2 m
7.2 X 7.2 m
Ownership
100%
100%
100%
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIOFF-2022-12-31-ENp81i8 SIOFF-2022-12-31-ENp81i6 SIOFF-2022-12-31-ENp81i4 SIOFF-2022-12-31-ENp81i2 SIOFF-2022-12-31-ENp81i0 SIOFF-2022-12-31-ENp81i9 SIOFF-2022-12-31-ENp81i7 SIOFF-2022-12-31-ENp81i5 SIOFF-2022-12-31-ENp81i3 SIOFF-2022-12-31-ENp81i1 SIOFF-2022-12-31-ENp81i10
SIEM
Offshore
 
Inc. Annual Report 2022
80
Siem Pilot
Siem Thiima
Built
 
2010
2016
Design
VS 485
VS 4411 DF
Dp Class
2
2
LOA
88.3 m
89.2 m
Breadth
20.00 m
19.00 m
Draught
7.19 m
7.40 m
Dwt
5000 T
5500 T
Accommodation
64
25
Cargo Deck Area
927 m
2
usable
900 m
2
Ownership
100%
100%
Siem Topaz
Siem Ruby
Siem Pearl
Built
 
2010
2010
2009
Design
 
VS 491 CD
VS 490 CD
VS 491 CD
Dp Class
 
2
2
2
LOA
 
91.00 m
91.00 m
91.00 m
Breadth
 
22.00 m
22.00 m
22.00 m
Draught
 
7.95 m
7.95 m
7.95 m
Dwt
 
3800 T
3800 T
3800 T
Accommodation
 
60
60
60
Cargo Deck Area
 
800 m
2
800 m
2
800 m
2
BHP
28000
28000
28000
Bollard Pull
306 Te
310 Te
285 Te
Ownership
78,16%
78,16%
78,16%
Other
Well Intervention Vessels (WIV)
Brazil – Fleet of 5 vessels
Avalon Sea - Canada
Siem Helix 1
Siem Helix 2
Type
OSRV/FCS/FSV
AHTS
Built
2016
2016
Ownership
100%
100%
Design
Salt 307 WIV
Salt 307 WIV
Dp Class
3
3
LOA
158.65 m
157.60 m
Breadth
31.00 m
31.00 m
Draught
8.50 m
8.50 m
Dwt
12500 t
12500 t
Joides Resolution
Big Orange XVIII
Accommodation
150
150
Type
Scientific Core Drilling Vessel (SCDV)
Well Stimulation Vessel (WSV)
BHP
36000
35000
Ownership
100%
41.3%
Ownership
100%
100%
SIOFF-2022-12-31-ENp82i0
 
 
Local presence in key markets
81
SIEM
Offshore
 
Inc. Annual Report 2022
Geographical
footprint
Siem Offshore offices
●
Kristiansand (Norway)
●
Rio de Janeiro, Macaé, Aracaju (Brazil)
●
Houston (USA)
●
Perth (Australia)
●
St. John´s, Halifax (Canada)
●
Accra (Ghana)
SIOFF-2022-12-31-ENp82i0
SIEM
Offshore
 
Inc. Annual Report 2022
82
Total employees
1,179
Vessels in operations
28
PSVs:
6
WIVs:
2
AHTS’:
8
OSCVs:
4
Canadian Fleet:
1
Other vessels:
7
SIOFF-2022-12-31-ENp84i0
 
 
83
SIEM
Offshore
 
Inc. Annual Report 2022
Siem Offshore owns and
operates one of the
world’s most modern
fleets of offshore support
vessels, equipped to meet
demands from clients and
the harshest
environments.
Siem Offshore had 28 vessels in operation at year-end 2022. By
end March 2023, the total fleet comprised of 28 vessels, including
the following owned vessels, six Platform Supply Vessels (PSVs),
four Offshore Subsea Construction Vessels (OSCVs), eight
Anchor Handling, Tug and Supply vessels (AHTS), two Well-
Intervention Vessels (WIVs), five smaller Brazilian flagged vessels,
one Scientific Core Drilling vessel and one Canadian flagged
vessel (an AHTS vessel). The fleet provides a broad spectrum of
services offered by a highly experienced and competent crew
with a strong focus on Health, Safety, Environment and Quality
within offshore oil and gas and the offshore renewable energy
sector.
The Company’s vision is to become the leading provider and
the most attractive employer offering marine services to the
offshore energy service industry. The Company shall deliver
quality, safe and reliable services in a timely manner by executing
cost-efficient and environmentally friendly solutions developed in
active collaboration and cooperation with our customers.
Siem Offshore commenced operations with effect from 1 July
2005.
 
The Company is registered in the Cayman Islands and is
listed on the Oslo Stock Exchange (OSE Symbol: SIOFF). The
Company’s headquarter is located in Kristiansand, Norway and
additional subsidiary offices are located in Brazil, Canada,
Cayman Islands, Australia, USA and Ghana. The Company is tax
resident in Norway.
Siem
 
Offshore
 
Inc.
at
a glance
Photo: Siem Offshore
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
84
274306
254493
244843
292530
307736
2022
2021
2020
2019
2018
Amounts in USD 1,000
Revenue
103776
100585
82259
109744
115056
2022
2021
2020
2019
2018
Amounts in USD 1,000
Operating Margin
1179
1021
1042
1102
1335
2022
2021
2020
2019
2018
Employees
 
per 31.12.2022
Our Values
We continuously work to make the values a
part of the daily life of the Company, in
particular in training of leaders throughout the
organization. The values are established to
support our present and future business.
Caring
We encourage team spirit and knowledge
sharing. We strive to perform our daily work
correctly, safely and without causing damage
to people, environment and equipment.
Competitive
We behave in a pro-active manner and we are
innovative in our way of thinking. Continuous
improvement is our key to success.
Committed
We are driven by integrity. We step up and
take charge to fulfil given promises.
 
85
SIEM
Offshore
 
Inc. Annual Report 2022
Responsibility Statement
We confirm, to the best of our knowledge that the financial
statements for the period 1 January to 31 December 2022 have
been prepared in accordance with current applicable
accounting standards, and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
entity and the group taken as a whole. We also confirm that the
Board of Directors’ Report includes a true and fair review of the
development and performance of the business and the
position of the entity and the group, together with a
description of the principal risks and uncertainties facing the
entity and the group.
21 April 2023
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Celina Midelfart
 
Director
(Sign.)
Christen Sveaas
Director
(Sign.)
 
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
86
B
oard of Directors
The Company has a Board of four Directors. Members of the
Company’s management are not members of the Board,
 
but the
Company’s management does attend Board meetings.
Kristian Siem (born 1949), Chairman
 
Mr. Siem brings an extensive knowledge of the offshore oil and
gas service industry worldwide from previous senior executive
and non-executive roles combined with long-standing
experience as chairman of public companies listed in the USA,
UK and Norway. Mr. Siem is the founder of the Siem Industries
Group and has been Director and Chairman of Siem Industries
since 1982. He is also Chairman of Subsea 7 S.A. Mr. Siem has
held positions at Kvaerner ASA as CEO and director,
Transocean Inc. as Chairman and director and Norwegian
Cruise Line as Chairman. He holds a degree in Business
Economics. Mr. Siem is a Norwegian citizen.
Barry W. Ridings (born 1952), Board Member
Mr. Ridings recently retired from Lazard Freres & Co. LLC after
24 years at the firm where he was Vice Chairman of US
Investment Banking and Co-Head of its Restructuring advisory
practice. He is also a Board Member of Safehold, Inc (a US
based REIT) and Republic Airlines (a region airline and code
share partner of United, American and Delta). He was formerly
a member of the Board of Directors of Siem Industries, the
American Stock Exchange and a member of the NASDAQ
Listing and Hearing Review Council. Mr. Ridings has a M.B.A.
in Finance from Cornell University and a B.A. in Religion from
Colgate University. Mr. Ridings is a US citizen.
Celina Midelfart (born 1973), Board Member
Ms. Midelfart is a private investor, owner and executive
chairman of Midelfart Capital AS. In her early career she was
the third generation CEO of the family business Midelfart AS.
She was previously a partner at Magnipartners Ltd, working
actively in the offshore drilling and LNG space. She has since
2015 held larger shareholding positions in various listed
offshore oil, service and supply companies. She is currently a
board member and 10% owner of the Swedish Consumer
Finance Bank, Avida AB, and a member of the Board of
Trustees at Oslo International School. She previously served
on the board of the world largest fish farming company, Mowi
AS, and the Swedish health and beauty care company,
Midsona AB. She holds a degree in economics and finance
from London School of Economics, and Stern School of
Business NY. Ms. Midelfart is a Norwegian citizen.
Christen Sveaas (born 1956), Board Member
Mr. Sveaas is Executive Chairman and owner of Kistefos AS, a
leading Norwegian investment company with a large and
diversified investment portfolio. He has held several board
positions including Treschow-Fritzøe AS, Stolt-Nielsen SA,
Orkla ASA, SkipsKredittforeningen AS, Vestenfjelske Bykreditt
AS, Tschudi & Eitzen Shipping AS, Scorpion Drilling Ltd.,
Southwestern Offshore Corp. and he has served as senior
advisor to EQT, Sweden. Mr. Sveaas is the Founder of the
Kistefos Museum, and a named benefactor of the Metropolitan
Museum of Art as well as a founding member of its
International Council, and member of the museum’s European
Visiting Committee.
 
Mr. Sveaas holds his Lic. Oec. HSG
degree from the University of St. Gallen, Switzerland. Mr.
Sveaas is a Norwegian citizen.
 
 
 
 
SIOFF-2022-12-31-ENp88i0
 
87
SIEM
Offshore
 
Inc. Annual Report 2022
Financial Calendar 2023
Siem Offshore Inc. will release financial figures on the following dates in 2023:
Q1 2023
Thursday 11 May
Q2 2023
Friday 25 August
Q3 2023
Tuesday 31 October
The Annual General Meeting of the Company will be held on Wednesday 10 May 2023.
Photo: Siem Offshore
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2022
88
Alternative Performance Measurement (APM) and other
definitions
The Company has identified APMs that are consistently
applied for the reporting periods. The APMs are
supplementary to the Financial Statements that are disclosed
in compliance with IFRS. The APMs are disclosed to give a
broader understanding of the operations and associated risk
of the Company.
Operating margin
- Operating margin is the net of operating
revenue and operating expenses. For 2022 operating
revenues USD274,306 less operating expenses at
USD170,530 equals operating margin at USD103,776. The
Company considers the operating margin to be a key number
when analyzing the fleets operating performance and the
margin that can be applied to the finance of capital
expenditures, debt service and other cash disbursements.
 
Operating margin percentage
 
– Operating Margin, % is the
nominal operating margin calculated as a percentage of
operating revenue. For 2022 the operating margin at
USD103,776 equals 38% of the operating revenue at
USD274,306. The operating margin percentage is used to
compare, period by period, the development in relative margin
from operations. The operating margin, % is also used for
comparing segments’ relative performance.
OTHER DEFINTIONS:
Contract backlog
 
- the total, nominal value of future revenues
from firm contracts, excluding optional periods. The contract
backlog is categorized per year, and reflects coming years’
operating revenues that are considered firm following
contracts agreed with clients.
Utilization
 
– vessels’ effective time on-hire relative to total
time available in the reporting period, excluding vessels time in
lay-up. The relative utilization is reflecting the time that a
vessel, or the fleet, has been on hire with clients. Zero
utilization is reported when a vessel is off-hire caused by
technical issues or when idle, awaiting employment.
Capital expenditure
– gross capital expenditure related to
tangible assets at acquisitions, upgrades, class renewals (dry-
docking) and major periodic maintenance.
Earnings per share
- Result attributable to the shareholders
divided by weighted average number of shares.
Comprehensive income per share
- Comprehensive income
for the period for the Group divided by weighted average
number of shares at the end of the reporting period.
Interest-bearing debt
- Current and long-term interest-
bearing debt.
Net interest-bearing debt
- Interest-bearing debt less cash
and cash equivalents.
 
 
SIOFF-2022-12-31-ENp90i1 SIOFF-2022-12-31-ENp90i0
89
SIEM
Offshore
 
Inc. Annual Report 2022
Siem Offshore Inc
c/o Siem Offshore AS
Nodeviga 14
4610 Kristiansand
Norway
 
POSTAL ADDRESS
P.O. Box 425
N-4664 Kristiansand S, Norway
TELEPHONE
+47 38 60 04 00
E-MAIL
info@siemoffshore.com
 
@siemoffshore
Mandatory ESEF concepts:
Name of reporting entity:
Siem Offshore Inc.
Domicile of entity:
Cayman Islands
Legal form of entity:
Inc.
Country of incorporation:
Cayman Islands
Address of entity's registered office:
P.O. Box 425, N-4664 Kristiansand S, Norway
Principal place of business:
Norway
Description of nature of entity's operations and principal activities:
Siem Offshore Inc is an industrial investment company within
the marine sector of the oil service business.
Name of parent entity:
Siem Offshore Inc.
Name of ultimate parent of group:
Siem Offshore Inc.