Annual report 2011

The company’s 147th financial year presented many challenges. The European financial and currency markets were subject to a deep crisis of confidence and many countries experienced budgetary problems. Along with security policy events, this affected both individual business opportunities and overall conditions such as exchange rates and oil prices.

Despite the prevailing recession, the company was able to achieve an acceptable profit, even if the profit reported was SEK 39 million lower than the year before. The reduction in profit on the previous year is explained by a capital loss on the vessels sold M/T Red Teal and M/T Alice.

In addition to the above vessel sales, the 15-year-old M/T Gute Ann-Marie was also sold. The company took delivery of the product tanker M/T Wisby Teak and also acquired four small fast service vessels with the focus on the offshore wind power sector. These service vessels are chartered on a bareboat basis by Northern Offshore Services A/S (NOS) and are employed in the wind power industry in several Northern European countries. Offshore wind power is a growing sector in the hunt for renewable energy and this is one of the few segments in the shipping industry that has shown growth in recent years. We have a positive view of the partnership with NOS.

The product tanker market continued to be weak during the year, with a cautious trend towards recovery. To meet oil companies’ stricter requirements for product tankers and their age structure, the Board of Directors decided to change the depreciation period for the product tanker fleet from 20 years to 15 years with 10% residual value. The change means that annual depreciation increases from 5% to 6% and reduces the company’s risk exposure.

For the Gotland service, 2011 was a year in which twelve record years in terms of the number of passengers were reversed to a slight decline of 2.6% fewer than the previous year. However, we continue to believe strongly in Gotland’s attractiveness. During the first few months of 2012, we decided to invest in a new hotel complex in GotlandsResor AB. During the year, a short-term agreement was signed with the Swedish Transport Administration to extend Destination Gotland’s assignment as operator of the Gotland service for another two years up to the end of January 2017.

The redemption programme implemented during the year was popular and the number of notifications of interest exceeded the offer decided on of a maximum of 10% of the company’s shares. SEK 700 was paid out for shares redeemed and the total amount paid out was SEK 188,829,200.

At the end of the year, Håkan Johansson was appointed President of the company. He took up his position on 1 January 2012. Håkan has been the CFO since 2008 and showed great potential for further promotion. At the same time, Jan-Eric Nilsson resumed his duties as Chairman of the Board of Directors. Björn Wolrath, who acted as Chairman of the Board of Directors in 1997-2002 and 2010-2011, took over the position of Vice-chairman from Ann-Marie Åström, who continues to be a member of the company’s Board of Directors.
In summary, it was a successful financial year despite the lower profit reported. The company’s strategy to strive for low risk and good liquidity contributed to this development despite the prevailing recession.

Thank you very much to all employees for your hard work.