Exceptional performance
during uncertain times
Each year, when we publish our Annual Report,
our CEO sums up the year that has passed. This is our 2022.
From our CEO
As we laid the final touches of last year’s Annual Report, the Russian invasion of Ukraine had shaken us out of retrospecting, and it was difficult to see anything but the present.
A year later, the world has been witness to the pain and suffering every war brings. We dearly hope that lasting peace can be found. The Ukraine conflict has also served to amplify the discord between China and the USA, with differing views becoming even more pronounced.
Robust leadership in uncertain times is essential. Our philosophy is to be proactive and to consider different scenarios and mitigation planning. We feel a degree of ballast has been achieved by working through the Covid-19 pandemic. Yet it is challenging for the world to deliver on the global cooperation needed to solve climate change when polarisation, popularism and conflict work to make more barriers between people.
Matt Duke
CEO Grieg Maritime Group
In times of war and uncertainty, we have found that focusing on our work and solving the issues we are responsible for is a welcome distraction from world events. Similarly, the charity Grieg Foundation owns 25% of Grieg Maritime Group, and we are extremely grateful for the foundation’s work to provide aid to the children affected by the conflict.
Based on the experience from 2021, we planned for another year with reasonable shipping rates. We expected 2022 to be a solid year that would continue the trend from 2021 for stable markets. Instead, the dry bulk market peaked. We hit a period of imbalance in supply and demand, and the resulting utilisation rates of the global bulk fleet led to record earnings. 2022 would be our strongest performance on record, with a profit before tax of MUSD 155,6. A strong year has provided precisely the financial security we need to reinvest into our business, essentially making up the gap in losses we ensured before 2021.
Our performance in 2022 would not have been possible without the extraordinary efforts of our people and partners. I am extremely proud of the teams working in Grieg Maritime Group and our joint venture G2 Ocean.
Our commercial teams in G2 Ocean delivered record-breaking performance, and it was exceptionally pleasing to see Ship Management and our seafarers rise to the challenge. Despite ongoing complexities related to Covid-19, geopolitical tensions and a busy market, we delivered safe, predictable operations. Grieg Star reported their lowest ever unplanned offhire rates, and we embarked on the most extensive dry docking program in our history, delivering on time and on budget. Safety is our top priority, and we had a very strong safety performance, but we always strive to be better and will continue that trend of continual improvement in 2023.
We are acutely aware of our challenges and responsibilities. In 2008, we committed to the UN Global Compact’s principles, and we stay committed to those and to the Sustainable Development Goals. Our underlying challenge is that our deep sea fleet still runs on carbon-based fuels.
Throughout 2022, our team has worked alone and with partners to find decarbonisation solutions. In this, we have the perfect partners in G2 Ocean and Gearbulk, sharing knowledge and resources to reduce the carbon emissions from our current fleet. Through the Norwegian Shipping Programme, we have been given a chance to look at ammonia as a possible fuel in a retrofit of our L-class. We are truly grateful for the cooperation with the over 20 entities supporting us in the GSP ammonia pilot in 2022.
Though we do not know for sure what the future fuels will be, there will be a global need for greatly scaled-up renewal energy to produce them. With more available energy as a pre-requisite, we strongly believe in ammonia as one of the viable alternatives that are worth deeper study and pilot testing. In Grieg Edge, we continued working on the MS Green Ammonia and developing ammonia production facilities through our joint venture with Arendals Fossekompani, called North Ammonia.
Our 2022 addition to the Grieg Edge portfolio is Skarv Shipping Solutions, a joint venture with the Peak Group. Skarv is looking to develop carbon-free shipping solutions for the short-sea segment. It also gives deep-sea shipping significant knowledge and a vital testing arena.
We continue our philosophy of strengthening and building the strongest possible core whilst using our Edge as a place to test ideas and new business ventures that can provide new additional, profitable and sustainable business segments for Grieg in the future. The overall aims are to balance the cyclical nature of our core deep-sea business and provide a positive contribution towards the development of new technologies.
We believe circularity in the shipping industry is far more than only the recycling phase, and we are developing Grieg Green with the wider market in mind.
I am deeply impressed by the dedication and efforts of our people. We must provide them with the best opportunities to thrive in a high-performance environment. Organisational and personal development has been a critical focus area for us. The previous twelve months have been very much dedicated to developing our employees and leaders. We believe this to be one of the very best investments we can make and will continue the same into 2023.
Our focus on the people aspect of business has not gone unnoticed. We are very grateful to have received two international awards in 2022.: The Youngship “Young Corporation Award” and the Wista “Corporate Diversity Award”. This recognition gives our team a boost and hunger to continue delivering on our strategy related to equality, diversity, and inclusion.
I would like to end this year’s CEO message by thanking our dedicated, loyal and resourceful employees and seafarers. In turbulent times your performance and dedication are something we are incredibly proud of.
Thank you all.