Board of directors report

Profit developement 2011-2016 (mill. NOK). Profit before taxes

Dividend per share 2011-2016

The result for 2016 shows a distinct decline from 2015, where the biggest factor is impairment of vessel values, followed by significantly poorer LPG and ammonia market for Solvang's largest vessels. It was expected that the LPG market would get a correction in 2016, but the drop came earlier and fell more quickly than expected. A combination of high number of newbuilds, along with no arbitration between West and East, pushed the market from two sides. Solvang had a large part of the fleet covered on contracts, thus avoiding the same earnings drop as the market, but ships on floating contracts, and some new contracts, reflects a significantly weaker market, with rates down to operating cost levels.

The Group recorded a profit before tax of NOK 108.2 million against NOK 171.6 million in 2015. Positive cash flow was NOK 3.9 million compared to NOK 38.4 million in 2015. Tax expense was NOK 2.0 million, and the Group had a profit after tax of NOK 106.2 million against NOK 168.9 million in 2015.

The board of directors proposes not to pay dividends for 2016 on the basis of market uncertainties, committed capital expenditures, and the possibilities for new counter cyclical investment opportunities.