A challenging year
Each year, when we publish our Annual Report,
our CEO sums up the year that has passed. This is our 2020.
From our CEO
2020 was a challenging year for our business and the world as a whole. It presented us with many challenges that we overcame thanks to our teams’ extraordinary efforts. It showed that robust and resilient foundations coupled with brilliant and talented teams are the best line of defence towards any unexpected black swan event. Our organisation’s handling of the pandemic makes us confident that we can overcome any new challenges in the future. On the basis of this commitment, innovation, and professionalism of our organisation, we are now well set to take advantage of the improving markets in 2021.
The Covid-19 pandemic has had an immense impact on society and individuals, and it’s lasting effects are still impossible to comprehend. But for some, the loss of loved ones, of their job or home, will forever mark this difficult period. These are unprecedented times, and we shall find a path through them – one step at a time.
CEO Grieg Maritime Group
For the Grieg Maritime Group, the global lock-down meant significant obstacles in our usual way of doing business. We have been used to travel around the world to visit ships, attend dry dockings or IHM inspections, and meet teams from our global offices. Overnight, we had to find alternative ways of conducting business.
The way our teams have handled this is nothing short of impressive. Still, we are grateful that our previous years’ strategy had been completed. Implementing new digital tools during the last months of 2019 provided our business exactly what we needed when the local lock-downs required us to work from home. More so, we see that the pandemic has accelerated our digital transformation.
A larger problem is how many countries have treated seafarers during this pandemic. All the countries in the world are relying on getting food, medicines, and equipment. Still, they have denied those who sail the ships carrying these goods to travel to and from their ship and denying them shore access for medical reasons. These are breaches of human rights. The result is seafarers stuck onboard for up to 13 months and others not being able to support their family because they are not allowed to work. This January, we signed the Neptune Declaration on Seafarer Wellbeing and Crew Change. We hope this initiative will move all countries worldwide to accept seafarers as essential workers.
Due to the reduced economic activity following the pandemic, we see a drop in GHG emissions worldwide. But we know this is not the new normal, and we still have work to do to reach the UN Sustainable Development Goals. As a signatory of the UN Global Compact since 2008, we still stand by the principles. We base our strategy on the Sustainable Development Goals, and we believe it is possible to do so and yet build thriving businesses.
And as an example of that, 2020 saw us establish a new subsidiary: Grieg Edge. Their goal is to identify and develop new business opportunities within shipping and related maritime segments – always with sustainability as a requirement. The team has developed several exciting projects throughout the year, despite the hindrances of the pandemic. And at the end of the year, Grieg Edge received significant project funding from the Norwegian scheme, Pilot E. They confirmed they would support a project to develop an ammonia fuelled ammonia tanker, the MS Green Ammonia.
Financially, 2020 will end as an uncommon year. Despite the pandemic, we almost maintain our revenues from 2019. Both open hatch and conventional bulk have done better than we feared when the pandemic started.
The value of our open hatch fleet has been a discussion point internally for some years. We purchased parts of the fleet at a very high price point in the shipping cycle. We have decided to normalise these values in our books. For our annual accounts, that means a write-down of 83.3 million USD. We find it prudent to mention that this paper write down does not affect our group liquidity, nor does it impact our financial obligations. It should be noted that in the first months of 2021 we are very pleased to see a significant market improvement, and in that regard, it is feasible that a portion of the write-down will need to be reversed in the next accounting year. The Grieg Maritime Group is living its values: Solid, Open, Proud and Committed.
Matt Duke, CEO