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Financial instruments

12 Months Ended

Dec. 31, 2024

Note 8 – Financial instruments

Categories of financial instruments

(Dollars in thousands)	Carrying amount
Financial assets	2024		2023
Cash and cash equivalents ^{1, 2}	$	78,143	$	74,738
Accounts receivable and accrued revenues ¹		53,715		75,848
Total financial assets	$	131,858	$	150,586

Financial liabilities
Accounts payables and accrued expenses ¹	$	23,436	$	20,493
Current portion long term debt ¹		78,649		30,300
Long term debt ¹		330,775		398,425
Total financial liabilities	$	432,861	$	449,219

¹	Amounts carried at amortized cost.

²	Cash and cash equivalents include $339 thousand in restricted cash in 2024 and $370 thousand in restricted cash in 2023, including employee withholding tax.

Fair value of non-derivative financial instruments

It is assumed that fair value of non-derivative financial instruments is equal to the nominal amount for all financial assets and liabilities. With regards to trade receivables, the credit risk is not viewed as significant. With regards to the credit facilities, these are floating rate with terms and conditions considered to be according to market terms and no material change in credit risk; consequently, it is assumed that carrying value has no material deviation from fair value.

Fair value of derivative financial instruments

Each derivative was initially recognized at fair value at the date the derivative contract was entered into and was subsequently re-measured to their fair value at each reporting date. Any resulting gain or loss has been recognized in fair value gain/(loss) on derivative financial liabilities. The interest rate swaps did not qualify for hedge accounting. The fair value gain/(loss) on derivative financial liabilities represented a non-cash loss of $0.5 million in 2023 and a non-cash gain of $15.0 million in 2022. The Company fully settled the interest swaps in 2023.

Interest-bearing debt

			Remaining		Carrying amount
(Dollars in thousands)	Interest	Maturity	notional		2024		2023
Credit Agricole Credit Facility	SOFR + 2.05%	2028	$	32,500	$	31,834	$	34,097
Danish Ship Finance Credit Facility	SOFR + 2.00%	2025		26,693		26,635		28,982
Nordea Credit Facility	SOFR + CAS¹ + 1.90%	2027		93,521		91,735		90,594
ING Credit Facility	SOFR + 1.90%	2029		221,150		218,311		231,258
ING Credit Facility	SOFR + 1.80%	2029		41,250		40,910		43,794
Total carrying amount			$	415,114	$	409,424	$	428,726

¹	Credit Adjustment Spread (CAS) of 0.26%.

The difference between the remaining notional and carrying amount for each of the credit facilities is the capitalized borrowing cost.

As of December 31, 2024, $139.4 million was undrawn under the Nordea Credit Facility and $40.1 million was undrawn under the ING Credit Facility.

Interest on all our credit facilities is payable quarterly in arrears, except the Danish Ship Finance Credit Facility which has interest payable semi-annually in arrears. The credit facilities are principally secured by the first-priority mortgages on the vessels financed by the credit facility, assignments of earnings, pledge of shares in the borrower, insurance and the borrowers’ rights under charters for the vessels, if any, as well as a pledge of the borrowers’ bank account balances.

Reconciliation of liabilities arising from financing activities

The table below details changes in liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Company’s consolidated statement of cash flows as cash flows from financing activities.

						Non-cash changes

(Dollars in thousands)	As of January 1, 2024		Financing cash flows ¹			Amortization		Other changes ²			As of December 31, 2024
Bank loans ³	$	428,726	$	(21,929	)	$	2,628	$	-		$	409,424
Office leases ⁴		5,849		(1,390	)		-		(298	)		4,160
Total	$	434,574	$	(23,320	)	$	2,628	$	(298	)	$	413,584

						Non-cash changes

(Dollars in thousands)	As of January 1, 2023		Financing cash flows ¹			Amortization		Other changes ²			As of December 31, 2023
Bank loans ³	$	396,696	$	29,731		$	2,972	$	(673	)	$	428,726
Office leases ⁴		3,938		(1,424	)		-		3,334			5,849
Total	$	400,634	$	28,307		$	2,972	$	2,661		$	434,574

¹	The cash flows from bank loans make up the net amount of issuance of long-term debt and repayment of long-term debt in the statement of cash flows.

Other changes related to bank loans for the years 2023 represent gains on modification of debt which includes previously capitalized fees. Other changes related to office leases for the year 2024 represent lease modification and foreign exchange effects during the year related to IFRS 16. Other changes related to office leases for 2023 represent lease modification and foreign exchange effects during the year related to IFRS 16.

³	As of December 31, 2024, bank loans consist of current portion long-term debt of $78,649 thousand and long-term debt of $330,775 thousand. As of December 31, 2023, bank loans consist of current portion long-term debt of $30,300 thousand and long-term debt of $398,425 thousand.

⁴

As of December 31, 2024, office leases consist of $1,389 thousand of current liabilities and $2,771 thousand of non-current liabilities. As of December 31, 2023, office leases consist of $1,418 thousand of current liabilities and $4,431 thousand of non-current liabilities. The remaining balance of non-current liabilities consists of pensions, deferred tax liability, and restoration cost related to office rental.