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Intangible assets
 12 Months Ended
Dec. 31, 2022
Disclosure of detailed information about intangible assets [abstract]  
Intangible assets
6
Intangible assets
 

Cost:

   
Balance at
January 1,
2022
    
Additions
    
Effect of
movements
in exchange
rates
    
Balance at
December 31,
2022
  
 
 
   
US $ in millions
  
Goodwill
    
6.3
      
4.0
      
(0.7
)
    
9.6
  
Software (mostly development costs)
    
211.6
      
27.3
      
(0.1
)
    
238.8
  
Other intangible assets
    
4.5
                      
4.5
  
Total
    
222.4
      
31.3
      
(0.8
)
    
252.9
  
 
Amortization and impairment losses:
              
                         
   
Balance at
January 1,
2022
    
Amortization
    
Effect of
movements
in exchange
rates
    
Balance at
December 31,
2022
  
 
 
   
US $ in millions
  
Goodwill
                        
Software (mostly development costs)
    
145.6
      
10.4
      
(0.1
)
    
155.9
  
Other intangible assets
    
3.0
      
1.1
              
4.1
  
Total
    
148.6
      
11.5
      
(0.1
)
    
160.0
  
 
Net carrying amounts:
                        
   
Balance at
January 1,
2022
                
Balance at
December 31,
2022
  
             
             
   
US $ in millions
                
US $ in millions
  
                         
Goodwill
    
6.3
                      
9.6
  
Software (mostly development costs)
    
66.0
                      
82.9
  
Other intangible assets
    
1.5
                      
0.4
  
Total
    
73.8
                      
92.9
  
 

 

Cost:
                              
   
Balance at
January 1,
2021
    
Additions
    
Disposals
    
Effect of
movements
in exchange
rates
    
Balance at
December 31,
2021
  
 
 
   
US $ in millions
  
Goodwill
    
7.6
                  
(1.3
)
    
6.3
  
Software (mostly development costs)
    
194.5
      
17.1
                    
211.6
  
Dry docking
    
4.5
              
(4.5
)
                
Other intangible assets
    
3.4
      
1.1
                      
4.5
  
Total
    
210.0
      
18.2
      
(4.5
)
    
(1.3
)
    
222.4
  
 
Amortization and impairment losses:
                    
                               
   
Balance at
January 1,
2021
    
Amortization
    
Disposals
    
Effect of
movements
in exchange
rates
    
Balance at
December 31,
2021
  
 
 
   
US $ in millions
  
Goodwill
                              
Software (mostly development costs)
    
136.3
      
9.3
                  
145.6
  
Dry docking
    
4.5
              
(4.5
)
                
Other intangible assets
    
2.7
      
0.3
                      
3.0
  
Total
    
143.5
      
9.6
      
(4.5
)
            
148.6
  
 
Net carrying amounts:
                              
   
Balance at
January 1,
2021
                      
Balance at
December 31,
2021
  
                   
                   
   
US $in millions
                      
US $in millions
  
                               
Goodwill
    
7.6
                              
6.3
  
Software (mostly development costs)
    
58.2
                              
66.0
  
Dry docking
                                        
Other intangible assets
    
0.7
                              
1.5
  
Total
    
66.5
                              
73.8
  

?

Impairment test
 
Further to the continuing volatility in the shipping industry as discussed in Note 1(b), as well as a decrease in its market capitalization value, the Company tested its assets for impairment, as of December 31, 2022. For the purpose of IAS 36, the Company, which operates an integrated liner network, has one cash-generating unit (hereinafter: CGU), which consists of all of its operating assets. The Company estimated its recoverable amount on the basis of its value-in-use, using the discounted cash flow (DCF) method.
 
The Company’s assumptions were made for a period of five years (2023-2027) and a representative terminal year intended to reflect a long-term steady state. The key assumptions are set forth below:
 
  •
A detailed cash flow for the abovementioned period, based upon the Company’s business plan.
 
  •
Freight rates: expected to decrease in 2023 and to be further affected by industry’s supply and demand dynamics, as well as by macroeconomic trends and uncertainties.
 
  •
Carried volume (TEUs): expected to increase over the projected period, in accordance with the Company’s fleet structure and business plan.
 
  •
Bunkering costs: according to the future price curves of fuel and liquefied natural gas (LNG).
 
  •
Charter hire rates: according to contractual rates in effect as of December 31, 2022, and estimated market rates for future renewals.
 
  •
Post tax discount rate of 11.5%.
 
  •
Long-term nominal growth rate of 2.5%.
 
  •
Payment of tax at the Company’s corporate tax rate of 23%.
 
The impairment test resulted with a recoverable amount exceeding the carrying amount of the CGU, therefore, no impairment was recognized.
 
The Company believes that the assumptions used in its analysis are reasonable and appropriate, considering past experience and current market trends and expectations. However, such assumptions are highly subjective and there can be no assurance that the Company’s assumptions will materialize, or whether freight rates, charter rates and bunker costs will increase or decrease by any significant degree.
 
Change by 100 bps in the following assumptions will result in an increase (decrease) in the recoverable amount of the CGU, as follows:
 
   
Increase
    
Decrease
  
   
By 100 bps
  
   
US $ in millions
  
Discount rate
    
(625
)
    
766
  
Terminal growth rate
    
512
      
(406
)