Statement of Financial Position − Directional
|
in millions of US$ |
2020 |
2019 |
|---|---|---|
|
Total equity |
858 |
1,179 |
|
Net debt1 |
4,093 |
3,460 |
|
Net cash |
383 |
458 |
|
Total assets |
7,894 |
7,414 |
|
Solvency ratio2 |
34.0 |
35.7 |
- 1 Net debt is calculated as total borrowings (including lease liabilities) less cash and cash equivalents.
- 2 Solvency ratio is calculated in accordance with the definition provided in section 4.3.24 Covenants
Shareholders’ equity decreased by US$321 million from US$1,179 million at year-end 2019 to US$858 million at year-end 2020, mostly due to the following items:
- Completion of the EUR150 million (US$165 million) share repurchase program executed between February 13, 2020 and April 3, 2020;
- Dividend distributed to the shareholders for US$150 million;
- Decrease of the hedging reserves by US$58 million; and
- Positive net result of US$39 million in 2020.
The movement in hedging reserve is mainly caused by the decrease of the marked-to-market value of the interest rate swaps due to declining market interest rates during the year. This was partially offset by the increased marked-to-market value of forward currency contracts mainly driven by the depreciation of the US$ exchange rate versus the hedged currencies (especially EUR).
Net debt increased by US$633 million to US$4,093 million at year-end 2020. While the Lease and Operate segment continues to generate strong operating cash flow, the Company drew under the project loan facilities of Liza Destiny (FPSO) and Liza Unity (FPSO) as well as under the bridge loan secured for FPSO Sepetiba to fund continued investment in growth.
The majority of the Company’s debt as of December 31, 2020 consisted of non-recourse project financing (US$3.1 billion) in special purpose investees. The remainder (US$1.3 billion) comprised of borrowings to support the construction of Liza Unity (FPSO) and FPSO Sepetiba and the loan related to the DSCV SBM Installer. The Company’s Revolving Credit Facility (RCF) was undrawn at year-end and the net cash balance stood at US$383 million (December 31, 2019: US$458 million). Lease liabilities totaled US$71 million (December 31, 2019: US$173 million).
Total assets increased to US$7.9 billion as of December 31, 2020, compared with US$7.4 billion at year-end 2019 with the investments in property, plant and equipment (mainly Liza Unity (FPSO), Prosperity (FPSO) and FPSO Sepetiba) and in Multi-purpose hulls presented within the inventories of the Company.
The relevant covenants (solvency ratio and interest cover ratio) applicable for the Company’s RCF, undrawn as at year-end 2020, were all met at December 31, 2020. In line with previous years, the Company had no off-balance sheet financing.
The Company’s financial position has remained strong as a result of the cash flow generated by the fleet and the succesful adaptation of the Turnkey segment to a more competitive and unpredictable market.