ANNUAL REPORT
2023
Pioneer Property Group ASA
3
Board of directors’ report
Notes to the consolidated statements
10
Consolidated statement of Comprehensive Income
46
Alternative Performance Measures (APMs)
11
Consolidated statement of Financial Position - Assets
47
Annual report Pioneer Property Group ASA (parent)
12
Consolidated statement of Financial Position - Equity
and Liabilities
59
Auditors report
13
Consolidated statement of Change in Equity
14
Consolidated statement of Cash Flow
Contents
3
PIONEER PROPERTY GROUP ASA
The board of directors’ report for Pioneer Property Group ASA
(PPG) 2023
Highlights of the report
Contractual revenue for 2023 was MNOK 108.2 compared to
MNOK 76.2 in 2022, an increase of 42%. The increase in rental
income is mostly explained by the acquisitions in 2022, which
increased lease income for 2023. In addition to the acquisitions,
the rent is also CPI-adjusted, which was 6.5% for 2023.
Total revenue for 2023 was MNOK 126.2 (MNOK 77.3 in 2022).
Pre-tax profit for 2023 was MNOK 26.6 compared to MNOK 76.6
for 2022.
PPG acquired one development property over the period and
acquired 50% ownership in three hotels in Sweden. PPG sold
50% of the shares in two hotels in Sweden.
PPG paid four quarterly dividends to the holders of preference
shares in total NOK 10 per preference share and additional
dividends of 18.069 per share held by Eidissen Consult AS and
Grafo AS.
Operations and strategy
. PPG is a
, the
Company's registered office is Rådhusgata 23, 0158
,
. PPG has since the beginning of 2020 expanded its real
estate activities into new area s. The current portfolio contains
different segments, PPG reports based on the characteristics of
the properties and hence report on the following segments:
1.
Preschools
2.
Hotel Properties
3.
Retail Properties
4.
Property Development
5.
Office Properties
The focus area for PPG will be to continue to invest in real estate
within these segments and seek to enter into long-term triple-
net leases with leading operators. The market conditions for
2023 has been demanding for real estate on a general basis with
increasing interest rates, resulting in less net cash flow from the
investment portfolio. The general conditions for the real estate
market are viewed as stable. The cash flows and result going
forward are impacted by the uncertainty related to the interest
rate levels.
On the other hand, other factors such as higher estimated CPI
adjustments and market rent expectations is positive factors for
real estate investments. The board expects an increase in rent
levels for 2024 for the investment properties.
PPG's real estate portfolio per year-end 2023 consisted of three
properties in the Preschools segment, seven properties in the
Retail properties segment, four properties in the Hotel
properties segment, one office property in addition to six
properties in the Property development segment.
Key material events during 2023
During 2023, PPG has declared quarterly dividends to the
holders of preference shares in total NOK 10.00 per preference
share. As per the articles of association §5, the annual preferred
dividend to the holders of preference share increased by NOK 1
per preference share from 01. July 2022 to 2.500 per quarter.
Furthermore PPG paid additional dividends of NOK 18.069 per
share held by Eidissen Consult AS and Grafo AS.
In 2023, PPG has increased the real estate income due to the
acquisitions made in 2022 and early 2023. PPG has increased its
investments within the hotel segment, entering into a joint
venture with Västerkulla Hotell Holding AB of owning three
hotels located in Eksilstuna, Helsingborg and Jönköping in
Sweden. This investment was made through the joint venture
company JV Västerkulla Fastighet AB and is recognized
according to the equity method.
The purchase price for the shares was MSEK 64.8, net of bank
debt and other adjustments, based on a property value of MSEK
270.0 on a 100% basis.
The second largest transaction was the sale of 50% of the shares
in two hotels, located respectively in Strand and Köping in
Sweden. The sale generated a profit of MNOK 12.7.
Further, PPG increased its holdings in the real estate company
Norlandia Holding AS from an ownership of 23.58% to an
ownership of 47.80%.
PPG added one development property (combined office and
warehouse) in Mo i Rana over the period, due to the acquisition
of additional shares in BM3 Eiendom AS which is now regarded
as a subsidiary. The transaction was made based on a property
value of MNOK 26.0.
Additionally, PPG acquired development rights related to 51 500
m2 plot together with local partners in close proximity to Evenes
Airport.
ANNUAL REPORT 2023
4
Preschool (NOKt)
2023
2022
Total Income
6 719
1 912
Fair value adjustment on investment properties
-9 500
797
Operating profit/loss (EBIT)
-3 436
2 308
Investment properties
106 500
116 000
Cash and cash equivalents
6 852
7 414
Retail Properties (NOKt)
2023
2022
Total Income
33 327
29 414
Fair value adjustment on investment properties
-25 370
-30 064
Operating profit/loss (EBIT)
502
-7 529
Investment properties
438 000
461 000
Cash and cash equivalents
8 105
19 037
Hotel Properties (NOKt)
2023
2022
Total Income
70 426
42 582
Fair value adjustment on investment properties
-60 404
-11 701
Operating profit/loss (EBIT)
-5 236
19 165
Investment properties
766 000
924 029
Cash and cash equivalents
23 953
48 580
Office Properties (NOKt)
2023
2022
Total Income
3 774
1 616
Fair value adjustment on investment properties
-9 760
26 468
Operating profit/loss (EBIT)
-6 966
26 909
0
Investment properties
61 000
70 000
Cash and cash equivalents
354
142
Property Development (NOKt)
2023
2022
Total Income
11 891
1 740
Fair value adjustment on investment properties
58 471
30 767
Operating profit/loss (EBIT)
65 467
30 078
Investment properties
385 756
227 681
Cash and cash equivalents
30 737
65 366
Preschools
The Preschool segment consists of three preschool properties
owned by PPG as of 31.12.2023. Total lease income for the
Preschool segment amounted to MNOK 6.7 in 2023, compared
to MNOK 1.9 in 2022, with a fair property value based on third
party valuation of the properties owned by PPG per 31.12.23 of
MNOK 106.5.
Retail Properties
Pioneer Retail Properties AS was established to procure and
build facilities for retail business, mainly for the Ferda group all
over Norway. The Retail Properties segment consists of 7
properties owned by PPG. The building of premises for Ferda in
Rana and Balsfjord was completed in February 2022 and
October 2022 respectively, and has had full effect on the lease
income for 2023. Currently, two additional properties are under
construction at Evenes, Bare house lease contracts with Tesla
and Ferda have been signed for these properties. Ferda Evenes
will be completed in Q2 2024, and is regarded as Retail
Properties in 2023. Tesla Evenes will be completed in Q1 2025
and is regarded as project in progress for year end 2023.
Total lease income for 2023 for the retail properties segment
amounted to MNOK 33.3, with a fair property value based on
third party valuations per 31.12.23 of MNOK 438.
Hotel Properties
Pioneer Hotel Properties AS was established to acquire hotel
properties through the downturn following the Covid-19
pandemic across the Nordics and Europe. The Hotel Properties
segment consist of four hotel properties owned by PPG. During
2023, two hotels in Sweden was sold to partner, entering into a
Joint Venture agreement. These two, in addition to four other
hotel properties are owned in joint venture with local partners,
and regarded as Joint Ventures in the financial statement. Total
income for 2023 for the Hotel Properties segment amounted to
MNOK 70.4 (MNOK 42.6 in 2022) of which contractual lease
income was MNOK 52.5. The increase in total income for this
segment was mainly due to profit of MNOK 12.7 from the sale of
two hotels in Sweden and other income of MNOK 5.3. The fair
property value for the hotel segment based on third party
valuations per 31.12.23 amounted to MNOK 766.
Office Properties
The first office property was acquired in March 2022, a seven
stories tall building in Bodø. PPG has an ownership of 52 % in
the property, controlling the acquired subsidiary that owns the
property
Total lease income for 2023 for the office properties segment
amounted to MNOK 3.8 with a fair property value based on
third party valuations per 31.12.23 of MNOK 61.
Property Development
Through Pioneer Property Development AS, PPG develop
properties within general commercial real estate and housing.
The segment consists of 6 development properties and the lease
income income for the segment is related to parking and
tenants in properties that can be developed long term. PPG
added one development property (combined office and
warehouse) in Mo i Rana with lease income of MNOK 2.2 The
main asset is Evenes Holding AS, which holds two properties in
Evenes in close proximity to Evenes Airport. In 2023, PPG
acquired the development rights related to the plot closest to
the airport.
In addition, PPG currently holds two plots together with local
partners, treated as associate company in the accounts. One is
located at Ramstadsletta in Bærum. The other is located in Mo i
Rana with a potential of 400 residential units.
5
PIONEER PROPERTY GROUP ASA
Subsequent events since the end of 2023
There has not been any signifcant material subsequent events
since the end of 2023.
Overview of the financial accounts for 2023
Total revenue was MNOK 126.2 in 2023, compared to MNOK
77.3 in 2022. Revenues consisted of rental income of MNOK
108.2 (MNOK 76.2 in 2022) and other income of 18.0 (MNOK 1.1
in 2022). Approximately 90% of rental income origins from
investment properties in Norway. The increase in revenues is
mainly explained by rental income from acquisitions made in
2022, with the first whole year of rental income being 2023. The
increase in other income is due to sale of to hotels in Sweden,
generating a profit of MNOK 12.7.
Operating profit (EBIT) for 2023 amounted to MNOK 46.6,
compared to MNOK 69.8 in 2022. The difference can primarily
be explained by a larger positive fair value revision of MNOK
16.7 in 2022, versus a negative adjustement of MNOK 46.6 in
2023, as interest rates increased, affecting the yields on the
properties.
In 2023, a gain of MNOK 49.1 from joint ventures and associated
companies was recognised. MNOK 34.0 was related to a sale of
land in Ramstadsletta and the MNOK 11.6 was recognized due
to a value increase of the properties acquired together with
Västerkulla in Sweden. In 2022, a loss off MNOK 1.6 from joint
ventures and associated companies was recognised mainly due
to share of loss in Kongsparken in Mo i Rana of MNOK 2.6.
Norlandia Holding contributed with a positive share of profit of
MNOK 1.1.
Net financial expense for the year was MNOK 20.0 compared to
a net financial income of MNOK 6.8 in 2022, where the gain
recognized from joint ventures and associates was offset by
increasing interest rates. Income taxes decreased from MNOK
11.8 to 1.6.
There have not been any discontinued operations in 2023 or
2022.
This year’s net profit for the group was MNOK 25.0, compared
to MNOK 64.8 in 2022.
Total equity amounted to MNOK 1,283.5 (1,360.6), the
difference being explained by the profit for 2023, and the
dividends on the ordinary and preference shares paid during the
year.
The Group had total assets of MNOK 2,573.8 (2,459.6 in 2022).
where MNOK 2,165.4 (1,905.8 in 2022) were related to
investment property and shares in associated companies. The
additions in investment property and associated company has
increased non-current borrowings in PPG. Further PPG had a
cash balance of MNOK 112.3 (265.2 in 2022) and MNOK 117.6
(118.9 in 2022) in other short-term investments related to
bonds and high yield funds held by PPG.
Net cash flows from operating activities were MNOK 7.7 (MNOK
34.8 in 2022). The reduction is explained by a decrease in
working capital, an increase in paid interest, but offset to some
extent by an increase in lease income.
Net cash flows used in investing activities were MNOK 247.6
(MNOK 133.2 in 2022). Most of the cash flow is related to the
purchase of additional shares In Norlandia, JV Nordväst
Fastighet AB and Evenes Utvikling.
Net cash flows from financing activities were MNOK 87.0 (MNOK
133.2 in 2022).
The net change in cash and cash equivalents was MNOK -152.9
(146.9 in 2022).
The annual report gives an accurate overview of the Group’s
financial development throughout the year. There have not
been any events after the end of the fiscal year 2023 which have
had any material impact on the financial status of the Group.
Work Environment, Equal opportunities and Discrimination
There was at year end 5 employees in Pioneer Property Group
ASA, all men. The sick absence rate in PPG was approx imately
1%. There are no employees in any other Group -companies. PPG
had no reported incidents of discrimination in 2023. The Board
of Directors consists of three women and two men.
PPG strive for a safe work environment, both for our employees
and for our properties and construction projects.
The Company works systematically with corporate social
responsibility within the areas human rights, employee rights,
environment, anti-corruption and social responsibility and
integrates these in its business strategy and daily operations
through including these considerations into its decision-making
process. To ensure human rights and decent working conditions
in its operations PPG has developed guidelines and policies.
Managers’ remuneration
The board of directors has prepared a declaration on salary and
other remuneration for the Company's executive management
ANNUAL REPORT 2023
6
pursuant to Section 6-16a of the Norwegian Public Limited
Liability Companies Act. The declaration is based on the
guidelines for the determination of salaries and other remuneration
of leading personnel in the Company. The guidelines include the
policies which the Company will use for the determination of
salary and other remuneration to its executive management in
the calendar year 2024. The declaration of salary and the
guidelines guidelines for the determination of salaries and other
remuneration of leading personnel are made available at the
Group's webpage
www.pioneerproperty.no
External Environment
The Group’s operation consists of investing in and providing
high-quality properties and is considered to have limited
environmental impact. The company focuses on making
investment and operational decisions that are in line with
sustainable environmental practices.
Risks related to nature
Risks related to nature are becoming more relevant and will be
monitored closely for our properties. In general, many areas
could be affected: from impairment testing, to provisions to fair
value measurement.
The location of PPG’s properties is on a
general level not seen as particularly exposed to flooding.
However, the property in Voss has experienced flood, and
regarding the development and the refurbishment of the
property, the management is considering, together with the
local authorities, measurements to reduce the risk and potential
damage from flooding.
Storms and floods are long-term risks, with potential to
physically damage to property values could be severe. Damage
to third party equipment and installations may lead to increased
insurance cost and/or reduced customer satisfaction. On a
general basis, we observe increased premium on insurance due
to cost of the incidents and the number of incidents due to
extreme weather conditions.
With respect to our portfolio of investment property, PPG
actively work to reduce the CO2 consumption together with the
tenants, especially within the area of energy efficiency. During
2023 a number of activities was carried out, such as installation
of systems of ventilation and warming of the buildings that
maintains a healthy and comfortable indoor climate while
improving energy efficiency and reducing energy costs.
Reduction of energy consumption per square meter is a goal the
management is working towards. In addition, bank and lending
instutions are providing green financing which has lower interest
rates than traditional financing.
Going concern
The financial statements have been prepared based on the
going concern assumption, and the Board confirms that this
assumption is valid.
Corporate Governance
Pioneer Property Group AS has prepared a report on Corporate
Governance in accordance with the Norwegian Accounting Act
Section 3-3b and the Norwegian Code of Practice for Corporate
Governance dated 17 October 2018, and a report on Corporate
Social Responsibility in accordance with the Norwegian
Accounting Act Section 3-3c, both of which are made available
at the Group's webpage
www.pioneerproperty.no .
The Transparency Act has been incorporated in PPG and the
company is reporting on the Transparency Act for 2023. The
report will be available on the company’s webpage
www.pioneerproperty.no. The report will be published 30
th
2024.
Financial Risks
The Company is exposed towards various financial risks, yet the
Board of Directors view the total exposure to be at a
manageable level. Some of the most important risk factors are:
The market risk of a general increase in interest rate levels.
Increasing interest rates will reduce the cashflow from the
properties, as lease income is not adjusted for increasing
interest rate. PPG is exposed to variable interest rates for its
borrowings linked to the different investment properties.
The risk relating to banks or other financial institutions’
willingness to lend money, which may restrict the Company’s
ability to take up new loans in the future.
Credit risk, the risk that one party to a financial instrument will
cause a loss for the other party by failing to pay for its
obligation.
Liquidity risk in the case of unforeseen delay of cash payments
on income and/or unexpected costs.
Changes in valuation of financial assets that is owned to meet
future cash needs. When managing the capital, PPG will take
into account the need for sufficient liquidity reserves to meet
PPG's financial obligations. These assets are subject to financial
risk as price of the assets may vary.
The Board of Directors and management performs continuous
assessments of the most important financial risk factors and
evaluates the necessity of implementing specific measures.
7
PIONEER PROPERTY GROUP ASA
Specific measures are evaluated considering the Company’s
total financing risk exposure. PPG has a financing policy that
secures a diversified debt maturity profile.
The board of directors
The Articles of Association provide that the Board of Directors
shall consist of 3 to 7 board members elected by the general
meeting.
Name
Position
Served
since
Term
expires
Roger Adolfsen
Chairperson
2015
2025
Sandra Henriette
Riise
Board member
2015
2025
Geir Hjorth
Board member
2015
2025
Ane Nordahl Carlsen
Board member
2023
2025
Nina Torp
Høisæther
Board member
2015
2025
The directors Sandra Henriette Riise and Ane Nordahl Carlsen
are independent of the majority shareholder of the Company,
Hospitality Invest AS, and all board members are independent of
the Management. All board members attended all board
meetings. The composition of the Board of Directors is in
compliance with the independence requirements of the
Corporate Governance Code. Effective from June 1
st
directors and officers are covered by a liability insurance
covering personal liabilities caused by performing their duties
for the group.
Brief description of the board of directors
Roger Adolfsen, Chairperson
Roger Adolfsen has broad experience from serving on various
boards. Currently, he holds various board positions and has
more than 30 years of experience from business and real estate
development. Adolfsen is a business graduate from BI
Norwegian Business School. He also holds a Master in Business
and Administration (MBA) from the University of Wisconsin.
Sandra Henriette Riise, Board member
Sandra H. Riise serves as chair on the Norwegian Better
Regulation Council. Riise is educated as public accountant and is
former Chief Executive Officer of Accounting Norway, the
Norwegian Association of Authorized Accountants, and has held
the position of Chief Municipal Executive (
Nw.
Kommunedirektør
) of Andøya municipality. Riise is educated
from BI Norwegian School of Management
Geir Hjorth, Board member
Geir Hjorth currently serves on the board of directors of several
different companies (including several chairperson positions).
He has extensive experience from the hotel industry and has
participated in several courses pertaining to marketing and
human resource management.
Ane Nordahl Carlsen, Board member
Carlsen is a partner in the investment company Arctic
Investment Group AS and the CEO of Grafo AS which owns 1 642
024 ordinary shares in Pioneer Property Group ASA. She has
experience from various commercial positions for Philip Morris
International. Carlsen has held various board positions in private
companies and is currently a board member in, among others,
Otiga Group AS.
Carlsen has a MSc in Economics and Business administration, an
Executive MBA from the Stockholm School of Economics and has
extensive experience from early- stage investing.
Nina H. Torp Høisæther, Board member
Nina H.T. Høisæter has held various board positions within the
Confederation of Norwegian Enterprises ("NHO") (Nw:
Næringslivets Hovedorganisasjon) and various CEO roles within
the Norlandia sphere. She is currently working with business
development in Norlandia Health and Care Group AS. Høisæther
is educated within nursing from the University of Stavanger and
University of Oslo.
ANNUAL REPORT 2023
8
Oslo, 21 March 2024
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Ane Nordahl Carlsen
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
9
PIONEER PROPERTY GROUP ASA
Responsibility Statement
We confirm to the best of our knowledge, that the set of Financial statements for the financial year ending 31. December 2023 have
been prepared in accordance with IFRS and gives a fair view of the Group’s assets, liabilities, financial position and profit or loss.
We also confirm to the best of our knowledge, that the management report includes a fair review of important events that have
occurred during the financial period and their impact on the set of financial statements, a description of the principal risks and
uncertainties, and major related parties’ transactions
Oslo, 21 March 2024
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Ane Nordahl Carlsen
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
ANNUAL REPORT 2023
10
PIONEER PROPERTY GROUP - CONSOLIDATED
Consolidated Statement of Comprehensive Income
NOK thousand
Note
2023
2022
Contractual rental income
5, 13
Other operating income
5, 8
Total income
Operating expenses
Employee expenses
14
Property expenses
Other operating expenses
15
Total operating expenses
Fair value adjustments on investment properties
5, 6
-46 563
Operating profit (EBIT)
Share of profit (loss) of joint ventures and associates
8
-1 647
Interest income
9
Interest expense
11
Other financial gains/losses (-)
9, 16
-18 255
Net Finance income (+) /expenses (-)
-19 999
Profit before tax
Income taxes
17
Profit
Profit/(loss) attributable to
Shareholders of the parent
Non-controlling interest
Profit/(loss) for the period
Other comprehensive income
Items to be reclassified to P&L in subsequent periods:
Exchange differences, from translation of foreign operations
-4 186
Other comprehensive income
-4 186
Total comprehensive income
Comprehensive income attributable to
Shareholders of the parent
Non-controlling interests
Comprehensive income
Earnings per share (NOK):
Basic earnings per ordinary share
18
-1,99
Diluted earnings per share (NOK):
Diltuted earnings per ordinary share
18
-1,99
11
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP
Consolidated Statement of Financial Position
NOK thousands
Note
2023
2022
ASSETS
Investment properties
6
Project in progress, investment property
7
Other interest in property
Other investment
9
Associated companies and joint ventures
8
Loan to associated companies and joint ventures
9, 20
Loan to other companies
9
TOTAL NON-CURRENT ASSETS
Trade and other receivables
9
Other short-term investments
9
Cash and cash equivalents
10
TOTAL CURRENT ASSETS
TOTAL ASSETS
ANNUAL REPORT 2023
12
PIONEER PROPERTY GROUP
Consolidated Statement of Financial Position
NOK thousands
Note
2023
2022
EQUITY AND LIABILITIES
Share capital
21
Treasury shares
21
-988
-988
Share premium
21
Other reserve and retained earnings
Non controlling interest
TOTAL EQUITY
LIABILITIES
Non-current borrowings
11
Other non-current liabilities
Deferred tax
17
TOTAL NON-CURRENT LIABILITIES
Current borrowings
11
Current tax payable
17
Other current liabilities
12
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
13
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP - CONSOLIDATED
Statement of Changes in Equity
Attributable to owners of the parent
NOK thousands
Notes
Share
capital
Treasury
shares
Share
premium
Curr.
Trans.
Diff.*
Retained
earnings
Total
Non-
contr.
Interest
Total Equity
Balance at 1 January 2022
-988
-257
Profit/(loss) for the period
Exchange diff. from foreign operations
-4 186
-4 186
-4 186
Total comprehensive
Income for the period
-4 186
Transactions with non-
controlling interests
21
-2 701
Dividends on preference
shares and ordinary shares
21
-78 128
-78 128
-78 128
Balance at 31 December
2022
-988
-4 443
Profit/(loss) for the period
Exchange diff. from foreign operations
Total comprehensive
Income for the period
Capital reduction
-1 185
-1 185
-1 185
Transaction with non-
controlling interests
20
-7 087
-7 087
-117
-7 204
Dividends on ordinary shares
and preference shares
21
-98 146
-98 146
-98 146
Balance at 31 December
2023
-988
*) Other reserves
ANNUAL REPORT 2023
14
PIONEER PROPERTY GROUP - CONSOLIDATED
Statement of Cash Flow
NOK thousands
Note
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Fair value adjustments on investment property
6
-16 267
Fair value adjustments on financial instruments
9
-10 718
Other adjustments
Share of profit (loss) of joint ventures and associates
8
-49 224
Interest net
Taxes paid
-7 359
-22 229
Exchange gains/(losses)
-2 552
Gain on sale bonds/shares
-14 653
-28 477
Changes in working capital
Trade receivables
4
-4 112
-3 529
Trade payables
12
Other accruals
-20 790
CASH GENERATED FROM OPERATIONS
Interest received
Interest paid
-64 097
-27 707
NET CASH FLOW FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES
Proceeds from sale of shares
9
Proceeds from sale of bonds and funds
9
Proceeds from loan to other companies
11
Loans to other companies
11
-4 213
-12 000
Purchase/sale of subsidiaries / properties
19
-200 968
-284 976
Purchase of shares
9
-30 741
Purchase of shares in associated companies
8
-163 047
-93 879
Purchase of bond
9
-222 990
Purchase of funds
9
-9 071
Proceeds from sale of properties
9
Net purchase of receivables/debt
-43 535
Loans to associated companies
9, 20
-2 400
Received dividend/repaid paid-in capital other shares
9
Purchase of other items
4
-2 826
NET CASH USED IN INVESTING ACTIVITIES
-247 627
-21 812
FINANCING ACTIVITIES
Proceeds from debt to financial institutions
11
Repayments of debt to financial institutions
11
-189 202
-194 873
Repayments other debt
11
-42 855
Loans from other companies
11
Dividends on ordinary shares
20
-39 881
-35 251
Dividends on preference shares
20
-38 806
-37 351
NET CASH (USED IN) / FROM FINANCING ACTIVITES
Net increase in cash and cash equivalents
-152 896
Cash and cash equivalents at beginning of year
Exchange (losses)/gains on cash and cash equivalents
-259
CASH AND CASH EQUIVALENTS AT END OF YEAR
15
PIONEER PROPERTY GROUP ASA
1. About the business
Pioneer Property Group ASA (the 'Company') and its subsidiaries (together, the 'Group') invests mainly in a broad range of
properties including retail properties; hotel properties; preschool properties, office properties and property development
within commercial and residential real estate (currently under development). The Group leases out the investment properties
on long-term leases. The current real estate portfolio is situated in Norway and Sweden.
Pioneer Property Group ASA is a public limited company incorporated and
. The address of the Company's
registered office is
.
The consolidated annual financial statements cover the period from
.
These consolidated financial statements are approved by the Board of Directors 21. March 2024.
2. Key transactions and events in 2023
In 2023, PPG has increased the real estate income due to the acquisitions made in 2022 and early 2023. PPG has increased its
investments within the hotel segment, entering into a joint venture with Västerkulla Hotell Holding AB of owning three hotels located
in Eksilstuna, Helsingborg and Jönköping. This investment was made through the joint venture company JV Västerkulla Fastighet AB
and is regarded as an joint venture company.
The purchase price for the shares was MSEK 64, net of bank debt and other adjustments, based on a property value of MSEK 270 on a
100% basis..
The second largest transaction was the sale of 50% of the shares in two hotels to partner. These investemtns is now regarded as
investment in joint venture. The hotels is located respectively in Strand and Köping in Sweden. Refer to note 5, note 6 and note 8 for
additional information.
Further, PPG increased its holdings in the real estate company Norlandia Holding through purchase of shares received as payment in
kind for the transaction mentioned above. Refer to note 8 for additional information
PPG added one office property (combined office and warehouse) in Mo i Rana over the period due to the acquisition of additional
shares in BM3 Eiendom which is now regarded as a subsidiary. Refer to note 5 and note 6 for additional information.
Additionally, PPG acquired development rights related to 51 500 m2 plot together with local partners in close proximity to Evenes
Airport. Refer to note 5 and note 6 for additional information.
.
3. General Accounting Principles
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with IFRS® Accounting standards and
interpretations by the IFRS Interpretations Committee (IFRIC) as adopted by the EU. The consolidated financial statements
have been prepared under the historical cost convention, except for fair value adjustments of bonds, funds, shares and
investment properties.
The preparation of financial statements in conformity with IFRS® requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are related to valuation of investment properties as described in note 6 and the valuation of
financial instruments measured at fair value as described in note 9.
The statement of cash flow has been prepared using the indirect method.
.
ANNUAL REPORT 2023
16
Consolidation
Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
comprehensive income, statement of changes in equity and balance sheet, respectively.
Foreign currency translation.
Transactions in foreign currencies are initially recognised in the functional currency at the exchange rate at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency using
the exchange rate at the reporting date. All exchange differences are recognised in the consolidated income statement.
Dividend
Pioneer Property Group ASA has two classes of shares, ordinary shares and preference shares. The preference shares are
entitled to annual dividend payments amounting to NOK 10.00 per preference share , in accordance with the company’s
Articles of Association. The board of directors approves payment of dividends based on an authorisation from the Annual
General Meeting. The dividend payments have been made quarterly with NOK 2.50 over the course of 2023. The Preference
shares are currently redeemable at a price of NOK 100 per share, which was valid from 1 July 2020, when it was stepped down
from NOK 130 per preference share. The coupon for the preference share has reached its maximum coupon, which is set to
NOK 10 per share.
Dividend distribution to Ordinary shares and Preference Shares is recognised as a liability in the Group's financial statement in
the period in which the dividend is approved by the Board of Directors based on the authorisation given by the Company's
shareholders in the General Assembly.
The use of estimates and assessment of accounting policies when preparing the annual accounts
Estimates and assumptions
Estimated and assumptions are used by the management to asses that the value of investment property and financial
instruments. These estimates may have affected assets, liabilities, revenues, expenses and information on potential liabilities.
Future events may lead to these estimates being changed. Estimates and their underlying assumptions are reviewed on a
regular basis and are based on best estimates and historical experience. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Judgements
Management has, when preparing the financial statements; made certain significant assessments based on critical judgment
when it comes to application of the accounting principles.
Material exercise of judgment and estimates relate to the following matters:
●
Investment properties, note 6
●
Financial instruments, note 9
4. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including fair value interest rate risk and cash flow
interest rate risk), credit risk, currency risk and liquidity risk. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance.
Risk management is carried out by management under guidance by the Board of Directors. Management identifies, evaluates
and act upon financial risks.
a) Market risk
17
PIONEER PROPERTY GROUP ASA
Market risk for the Group is the risk that future cash flows in the form of interest payments change as a result of changes in
market interest rates in addition to fluctuations in currencies. The level of interest rate exposure and currency risk exposure
are determined based on an assessment by management and the Board of Directors of existing cash flows, general assessment
of financial condition and available liquidity.
(i) Fair value interest rate risk
The Group holds interest bearing assets in terms for cash deposits and bonds. Fluctuations in interest rates would yield a
higher or lower interest income. At the current level of cash deposits, a change in interest rate of +/- 1 % will not be material
for the financial statements. Further, a change in interest levels may cause changes in the fair value of the real estate portfolio
in addition to the performance of the bonds and bond funds held on PPG's balance sheet.
(ii) Cash flow interest rate risk
Exposure to cash flow interest rate risk is assessed when necessary. As of 31.12.2023, the Group is exposed to variable interest
rates for its borrowings linked to the different investment properties. The Group also holds borrowings with fixed interest
rates. See note 11 for further details.
The need for a fixed rate is periodically assessed, depending on the effects of adverse fluctuations in interest payment cash
flows due to higher interest rates. Management's assessment is that the Group's current financial position does not indicate a
further need for fixed interest rates.
The following table summarises how the profit or loss, before tax, and equity in the 2023 reporting period would have been
affected by changes in the interest rate that Management considers are reasonably possible:
Interest rate sensitivity for reporting year 2023
(in TNOK)
-0,50 %
-0,25 %
0,25 %
0,50 %
Change P&L/Equity
2 651.3
-2 651.3
-5 302.7
Interest rate sensitivity or reporting year 2022
(in TNOK)
-0,50 %
-0,25 %
0,25 %
0,50 %
Change P&L/Equity
4173.2
2 086.6
-2 086.6
-4 173.2
(iii) Currency risk
Currency risk is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base
currency of the company. Currency risk also exists when the foreign subsidiary of a firm maintains financial statements in a
currency other than the reporting currency of the consolidated entity. The risk is that there may be an adverse movement in
the exchange rate of the denomination currency in relation to the base currency before the date when the transaction is
completed.
Monetary assets and liabilities are sensitive to movements in foreign exchange rates. As the operations of the Group are
located in Norway and only joint venture operations are carried out in NOK, and all financing activities are denominated in
NOK (see note 11), Management considers that the exposure to foreign exchange risk is low, as all loans are nominated in NOK
and the consolidated cash funds in Swedish Krona at year end was MSEK 0.
For its operating activities in Sweden, the Group manages its foreign currency risk by maintaining a policy to hold the foreign
currency received to meet its future obligations in foreign currency, such as refurbishment needs.
b) Credit risk
Credit risk is the loss that the Group would suffer if a counterparty fails to perform its financial obligations. Credit risk is
managed on Group basis. Credit risk arises from cash and cash equivalents; loans granted and trade receivables, including
committed transactions. The Group assess the expected credit losses in relation to its financial assets taking into account its
past experience and also taking into account forwards looking information
ANNUAL REPORT 2023
18
Management assesses the credit quality of the customer, taking into account its financial position, past experience and other
factors. Management does not expect any losses from non-performance by the contractual counterparties. The impairment
analysis on trade receivables is performed at each reporting period based on a provision matrix, grouping its receivables in the
number of days past due. As of the end of the 2023 and 202 2 reporting periods, there has not been recorded any loss and
there are no significant amount of trade receivables past due at the date of the approval of the financial statements.
Receivables due
Total
Not due
between 1 and 60 days overdue
more than 60 days
overdue
Trade Receivables
1 311
2 393
Other Receivables
41 658
-
As per 31.12.2023
2 393
Total
Not due
between 1 and 60 days overdue
more than 60 days
overdue
Trade Receivables
Other Receivables
-
As per 31.12.2022
-
The credit quality of the issuer is also taken into consideration when acquiring bonds.
With respect to the loans to associates and other parties, the Groups applies general approach to assess the impairment of
financial assets measured at amortised cost. Loans to associates are closely monitored by Management, and concludes that
the credit risk, including the probability of default within the next 12 months is very low. There has not been a significant
increase in the credit risk since the initial recognition.
c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its obligations at maturity without incurring a significant
increase in finance cost or not being able to meet its obligations at all. The risk also includes that the Group must forfeit
investment opportunities. Cash flow forecasting is performed at Group level.
Group management monitors the Group's liquidity requirements to ensure that it has sufficient cash to meet operational
needs while maintaining sufficient headroom to pay out quarterly dividends to holders of preference shares. The monitoring
takes into account the possibility to raise external debt, as the Group keeps unleveraged assets and properties. The Group also
keeps its liquid funds in cash and cash equivalents, and in high yield funds with high liquidity.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows:
Maturity of financial liabilities at the end of the 2023 reporting period:
31.12.2023
NOK thousand
<1y
1y-2y
2y-5y
>5y
Total
Borrowings
223 195
48 431
507 923
354 347
1 133 896
Interest on borrowings
78 196
65 390
135 903
155 090
434 578
Other current liabilities
78 679
Total
380 070
113 821
643 826
509 437
During 2023, the Group became the counterparty to a number of loan agreements, mostly in connections with its acquisitions
of investment properties. See Note 11 for further details.
19
PIONEER PROPERTY GROUP ASA
As of the end of the 2023 reporting period, Management considers it highly likely that the Group will enter into refinancing
agreement for one of the loans maturing in less than 12 months, with an amortised cost value of MNOK 134.5. The new
agreement is expected to be paid in periodic payments over a term of 5 years. However, since at the end of the 2023 reporting
period the Group has not completed the agreement (i.e. no unconditional right to defer settlement for at least 12 months
after the reporting period), the loan is presented as current liabilities.
Maturity of financial liabilities at the end of the 2022 reporting period:
31.12.2022
NOK thousand
<1y
1y-2y
2y-5y
>5y
Total
Borrowings
137 087
244 667
375 310
207 650
964 713
Interest on borrowings
50 110
41 027
84 259
106 550
281 947
Other current liabilities
51 412
Interest on other current liabilities
Total
Capital management
The group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern; to maintain
an optimal capital structure to reduce the cost of capital; and to comply with all covenants agreed with the lenders to the
Group. Compliance with covenants is further described in note 11.
When managing the capital, PPG will take into account the need for sufficient liquidity reserves to meet PPG's financial
obligations.
Management determines that the current liquidity in the Group and the current liquidity forecasts as of 31.12.23 grants the
Group enough resources to meets its obligations and continue with its current investment plan. Management continues to
monitor the optimal capital structure going forward, depending on operational needs. In order to maintain or adjust the capital
structure, the Group may return capital to shareholders, issue new shares or sell assets to repay debt.
5. Segments
Accounting principles
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses. Furthermore, the entity’s component’s operating results are regularly reviewed by the entity’s chief operating
decision maker to make decisions about resources to be allocated to the segment and to assess its performance, and thus
separate financial information is available. The company has determined that the Board of Directors is collectively the chief
operating decision maker.
Description
During 2023, the Group has increased its investments across a broad range of properties, both in Norway and Sweden. As of
the end of the reporting period, the Group’s real estate portfolio was comprised of retail properties; hotel properties;
preschool properties; office properties and development properties with both commercial and residential use. The Office
properties segment was a new segment in 2022, as a consequence of the acquisition of an office property in Bodø (see Note 6
for further information).
Management has therefore identified five different segments, all of them held with a view to enter into lease agreements
where the Group acts as a lessor.
Preschools
The Preschool segment consists of three preschool properties owned by PPG, located in Bergen and Oslo. Two preschools
were acquired in September 2022 from Hi Capital AS and Hospitality Invest AS. Total lease income for the Preschool segment
amounted to MNOK 1.9 in 2022 and increased to MNOK 6.7 in 2023 due to the full effect of the acquisitions. The fair property
value based on third party valuation of the property owned by PPG per 31.12.23 was MNOK 106,5.
ANNUAL REPORT 2023
20
Retail Properties
The retail property segment constitutes of properties owned by the subsidiary Pioneer Retail Properties AS, which was
established to procure and build facilities for retail properties, mainly for the Ferda group all over Norway. The segment
consists currently of 7 retail properties owned by PPG. Total lease income for 2023 for the retail properties segment amounted
to MNOK 33.3 with a fair property value based on third party valuations per 31.12.23 of MNOK 438.
Property Development
Pioneer Property Development AS develop general commercial real estate and housing. The segment consists of 6
development projects at the end of 2023.
Currently, the Group has two building projects with new premises for Ferda and Tesla in Evenes under construction. The
premises consist of two buildings of 1 200 m
2
and 2 000 m
2
lease agreements. Annual lease when finished is expected to be MNOK 8 combined for the two new properties. The building of
Ferda Evenes was initialized autumn 2022 and is expected to be completed by the end of spring 2024. The building of new
premises for Tesla commenced in late 2023, and is expected to open in Q1 2025.
The existing development project in Evenes, Nordland of 400 000 m
2
airport in Northern Norway was expanded with an additional plot of 51 500 m
2
, mainly used for parking, in November 2022. In
January 2023, the Group also acquired the development rights for the additional plot. For 2023, the parking activity generated
an income of MNOK 10. Total lease income for 2023 for the development properties segment amounted to MNOK 11.9 with a
fair property value based on third party valuations per 31.12.23 of MNOK 385.8.
Hotel Properties
The hotel properties segment included four hotels in Norway and two hotels in Sweden in the beginning of 2023. In December
2023, 50% of the shares in the two hotels in Sweden were of sold in the end of 2023, generating a profit of MNOK 12.7. The
hotels in this segment are rented out to Norlandia Hotel Group AS and Up North Hospitality AS, who has a management
agreement with Norlandia Hotel Group, or directly to Norlandia Hotel Group. Norlandia Hotel Group operates the hotels on
franchise agreements with leading hotel brands. Norlandia Hotel Group is owned by Hospitality Invest AS.
The properties are owned by subsidiaries of Pioneer Hotel Properties AS, which was established to acquire hotel properties
through the downturn following the Covid-19 pandemic across the Nordics and Europe. The Hotel Properties segment consists
of four hotel properties owned by PPG. Total lease income for 2023 for the Hotel Properties segment amounted to MNOK 52.5
with a fair property value based on third party valuations per 31.12.23 of MNOK 766. Other income related to this segment
were MNOK 18.0, mainly related to the profit from sale of the two hotels in Sweden.
In relation to the creation of the Hotel Properties segment, PPG also established Up North Property AS, which is 90.1% owned
by Pioneer Hotel Properties and 9.9% indirectly owned by Svein Arild Mevold, who was the previous CEO of Scandic Norway.
Up North Property’s strategy is to acquire hotel properties in the Nordics and Europe, where there is an opportunity to change
the hotel’s market position through reconfigurations and renovations of the hotel to adapt it to a changed hotel market.
Currently, the hotels in Stavanger and Gardermoen are undergoing renovations. When completed, the minimum rent and the
expected rent will both be increased.
Office Properties
The first office property was acquired in March 2022, a seven stories tall building in Bodø. PPG has an ownership of 52 % in the
property, controlling the acquired subsidiary that owns the property. Total lease income for 2023 for the Office Properties
segment amounted to MNOK 3.8 with a fair property value based on third party valuations per 31.12.23 of MNOK 61.
21
PIONEER PROPERTY GROUP ASA
Other
“Other” includes activities and revenue in the parent company PPG that does not fall into the other categories.
The information provided to the chief operating decision maker during 2023 includes:
NOK thousand
Properties
Properties
Properties
Properties
Properties
Group
Contractual rental income
Other income
5 287
5 287
Profit/loss (-) sale of property
12 668
12 668
Fair value adjustment
on investment properties
Operating profit/loss (EBIT)
46 585
Investment properties
Cash and cash equivalents
.
NOK thousand
Properties
Properties
Properties
Properties
Properties
Group
Contractual rental income
29 414
1 740
42 582
1 616
0
77 264
Fair value adjustment
on investment properties
-30 064
30 767
-11 701
26 468
0
16 267
Operating profit/loss
(EBIT)
30 078
19 165
26 909
-1 151
69 781
Investment properties
461 000
227 681
924 029
70 000
1 798 709
Cash and cash equivalents
65 366
48 580
142
124 688
265 226
.
.
6. Investment properties
Accounting principles
Property held with the purpose of achieving rental income, increase in value or both are classified as investment property.
Investment property also include property under development for future use as investment property. Investment property is
initially recognised at cost including transaction costs.
After initial recognition the investment property is subsequently recognised at fair value. Changes in fair value are presented in
the consolidated statement of comprehensive income in the reporting period when change occurs.
Subsequent costs relating to investment property are included in the carrying amount if it is probable that they will result in
future economic benefits for the investment property and the costs can be measured reliably. Expenses relating to operations
and maintenance of the investment property are charged to the income statement during the financial period in which they
are incurred.
Investment properties are derecognised when they are sold or are permanently out of operations and have no expected
future economic benefit. All gains or losses relating to sales or disposal are presented as “other operating income” in the
statement of comprehensive income the same year as disposal.
ANNUAL REPORT 2023
22
Critical accounting estimates
The investment properties are valued in accordance with the fair value method and all have been valued in accordance with
valuation Level 3 in the fair value hierarchy (Level 3 - where inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs)), see also note 9.
The yield level of the property has been determined on the basis of the unique risk and transactions based on the respective
locations.
At the end of the year, the Group commissioned external cash -flow valuations for the properties from an independent valuer,
except some properties that are under development or immaterial. For these properties, the Management has estimated the
property value. The property value is estimated on an individual basis using a combination of discounted cash-flow analysis
and property yield level. When estimating the value, key metrics, such as price per sqm and rent levels, together with market
transactions is used as reference points. The level of transactions thus influences the level of uncertainty in the assumptions
used in the valuation.
The discounted cash flow method involves discounting future cash flows over a specified period using an estimated discount
rate and then adding a residual value at the end of the period. Future cash flows are calculated on the basis of cash flows from
signed leases, as well as estimated future cash flows based on an expected market rent at the end of the lease terms. The fair
value of investment properties is therefore mainly affected by expected market rents, discount rates, inflation, and capex.
Individual factors for the properties such as relevant country, the property's location in relation to a major city, net-population
change, size of the property, year of build and whether the property is on leased land (Norwegian: festetomt) were applied to
assess the yield for the respective property/location.
PPG provides comprehensive details on the properties, lease contracts, floor space, built year and details of any vacant
premises, and up-to-date and comprehensive information about all ongoing and planned projects.
The external valuer has set the following net yields and market rent per square meter in their valuation report:
Preschool
Properties
Retail
Properties
Development
Properties*
Hotel
Properties
Office
Properties
Total
Net yield
6.2%
7.6%
8.1%
6.0%
6.4%
6.8%
Market rent in NOK per sqm
3 214
1 215
n/a
2 211
2 102
1 872
*For the development property segment, the only property included is the property in Evenes which generates lease income
from parking for the net yield calculation. The market rent per square meter is not relevant for this segment as most of the
value is related to larger plots without buildings or rental income.
As of the end of the 2023 reporting period, the following gross yield for the investment properties is observed for the
properties and the valuation of the properties implies the following gross yields:
Preschool
Properties
Retail
Properties
Development
Properties
Hotel
Properties
Office
Properties
Total
Gross yield range 2023
4.8% - 6.7%
7.3% - 8.5%
n/a
6.0% - 8.5%
7.2% - 7.2%
4.8% - 8.5%
Weighted average gross yield 2023
6.4%
7.9%
n/a
7.0%
7.2%
7.2%
Gross yield range 2022
3.7% - 5.6%
6.5% - 7.7%
n/a
5.4% - 8.1%
6.2% - 6.2%
3.7% - 8.1%
Weighted average gross yield 2022
5.3%
7.1%
n/a
6.7%
6.2%
6.5%
The calculated weighted average gross yield is based on annual contractual lease income of 2024 of MNOK 99.3 after
refurbishment of Forum and Voss and is based on an CPI-adjustment of contractual lease of 4.8%.
Description
As of 31.12.23 the Groups investment property portfolio consists of three preschool properties, seven retail properties, four
hotels in Norway, one office property, one large parking lot and a warehouse, and land in Oslo, Rana, Evenes and Indre
Østfold. The Group owns and manages a total area of approximately 60.500 square meters, not including associated
companies and development properties.
Overview of account movements 2023
23
PIONEER PROPERTY GROUP ASA
NOK thousand
Preschool
Properties
Retail
Properties
Development
Properties
Hotel
Properties
Office
Properties
Group
Fair value in the beginning of the
year
116 000
461 000
227 681
924 029
70 000
1 798 710
Investment in subsidiaries
/properties
2 370
115 516
51 693
760
170 338
Effect of curr. exch. differences in
foreign operations
11 653
11 653
Sale of operations
-15 912
-160 970
-176 882
Fair value adjustments on
investment properties
-46 563
Fair value in the end of the year
1 757 256
Net change in unrealized gain
-9 500
-22 000
-60 404
The segment of hotel properties represented the biggest share of value of properties in the Group at year end of 2023. The
largest acquisitions in 2023 were purchase of development rights related to additional land close to Evenes. The investments is
also related to groundworks at Evenes. During 2023, it was also sold real estate/housing for a value of MNOK 15.9.
For Hotel Properties, the investments in 2023 is mainly related to the renovation of Forum Hotell, which will be completed in
Q1 2024.
With respect to the retail properties, the additions made during 2023 is related to the additional investments in the existing
buildings, such as improvement of technical installations.
In summary the total Group’s portfolio as of 31 December 2023 was valued to MNOK 1 757.2 MNOK, a decrease from MNOK
1 798.7 from year-end 2022.
Overview of account movements 2022
As of 31.12.22 the Groups investment property portfolio consisted of three preschool properties, seven retail properties, four
hotels in Norway, two in Sweden, and land in Rana and Evenes.
NOK thousand
Preschool
Properties
Retail
Properties
Development
Properties
Hotel
Properties
Office
Properties
Group
Fair value in the beginning of the
year
11 500
428 070
37 500
915 971
-
1 393 041
Completed project in progress,
transferred to Investment Property
44 882
44 882
Investment in subsidiaries
/properties
103 703
18 112
159 414
24 372
43 532
349 134
Effect of currency exchange
differences in foreign operations
-4 614
-4 614
Fair value adjustments on
investment properties
797
-30 064
30 767
-11 701
26 468
16 267
Fair value in the end of the year
116 000
461 000
227 681
924 029
70 000
1 798 709
Net change in unrealized gain
797
-30 064
30 767
-11 701
26 468
16 267
Commitments
As of the end of the 2023, there were refurbishments ongoing in Forum Hotel and Guard Hotel, and the planned renovation of
Park Hotel Vossevangen . During renovation, it is limited rent income contributions from the propert ies as the rent is based on
a lower percentage of the hotel turnover in the renovation period, agreed with its tenants. When renovation is completed, the
annual minimum rent will increase, as well the turnover -based rent.
The Group had similar commitments of this type at the end of the 2022 reporting period, with both Park Hotel Vossevangen,
Guard Hotel and Forum Hotel under renovation.
Total property operating expenses
ANNUAL REPORT 2023
24
The Group did not incur any direct operating expenses (including repairs and maintenance) in any investment property that
did not generate rental income during the 2023 and 2022 reporting periods. As for the investment properties that did
generate rental income during the 2023 and 2022 reporting periods, there were no material direct operating expenses
incurred during the period, as most of the contracts are triple net (i.e. net of insurance, taxes and maintenance).
Climate related matters
Storms and floods are long-term risks, with potential to inflict physical damage to properties, something that could severely
reduce property value. However, all properties are insured. In general, extreme weather, flood and drought are potential risks
to our business. In 2022, a flood in Voss caused damage on some equipment and installations, however all costs have been
covered by the insurance company. However, climate change and extreme weather lead to increased insurance cost . We have
not experienced similar matters in 2023.
Sensitivity analysis
A property analysis is an estimate of the value that an investor is willing to pay for the property at a given time. The valuation
is made on the basis of generally accepted models and certain assumptions on different parameters.
The tables below give an indication of the effects on the value of the property portfolio if yield levels change with 0.5% or
rental income change with 5% NOI is defined as net operating income, meaning all revenue from properties minus all
reasonable operating expenses.
Preschool properties
As of 31 December 2023, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
Preschool properties - Comparative period 2022
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
-0,5%
0,0%
0,5%
NOI sensitivity
-5 %
0 %
5 %
Retail properties
As of 31 December 2023, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
Retail properties - Comparative period 2022
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
25
PIONEER PROPERTY GROUP ASA
NOI sensitivity
-5 %
0 %
5 %
Development properties
The fair value of the properties classified as property development use the same significant unobservable inputs as the other
categories presented. However, for this segment, most of the properties does not generate lease income. The valuation of the
properties in this segment is not to the same extent as the other segments yield based valuations. Hence, sensitivity regards
change in yield and NOI is not considered relevant .
Hotel properties
As of 31 December 2023, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
Hotel Properties - Comparative period 2022
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
Office properties
As of 31 December 2023, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
As of 31 December 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
.
ANNUAL REPORT 2023
26
.
7. Projects in progress, investment properties
Accounting principles
The Group measures its investment properties under development (“project in progress, investment properties”) following the
same fair value model as for the investment property. There have been no adjustments to the fair value in 2023 and
management anticipates that historical cost reflects the fair value of the projects in progress. For the current projects in
progress, the cost is mainly related to groundworks and engineering in Evenes and Brennemoen, costs that are likely to be
compensated with approximately the same amount as the historical cost of the ground works.
Description
Project in progress, investment properties
NOK in thousand
2023
2022
Cost 1 January
739
45 383
Additions
34 774
238
Completed projects, transferred to investment properties
-44 882
Depreciation
Exchange differences
Carrying value 31 December
35 513
739
The project in progress is mainly related to groundworks and construction of additional 550 parking lots in Evenes, and the
Studio City Project in Brennemoen, Indre Østfold.
8. Associated companies and joint ventures
Accounting principles
Associated companies are all entities over which the company has significant influence, but not control or joint control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee, but without the
ability to have control over those policies.
Joint ventures are those companies that are jointly controlled by the Group and another party.
Investments in associates and joint ventures are accounted for using the equity method of accounting, after initially being
recognized at cost.
Description
Kongsparken AS - joint venture
Kongsparken AS was established 11 September 2020 by Eiendomsselskapet Ranheim AS and the Group. Both owns 50% of the
company and contributed each with kroner 50.000. Kongsparken AS have acquired an old closed school, which shall be
demolished and replaced by approximately 400 apartments.
The Group is controlling 50 of the votes in the Board of Directors. The project management and daily operations are
performed by Eiendomsselskapet Ranheim AS, thus it is PPG consideration that the group does not have control in
Kongsparken.
Forus Holdco AS - joint venture
Forus Holdco AS was established by Vico Eiendom AS and Up North Property AS to acquire 100 % of the shares in Forusveien
31 - Hotell AS from Vico Eiendom AS. Forusveien 31 - Hotell AS owns Scandic Forus Hotel in Stavanger municipality. The hotel
is let out to Scandic Hotels AS The owners of Vico Eiendom AS is Hauglandgruppen, a family office located in Bergen.
The Group is controlling 50 % of the votes in the Board of Directors. Project management and daily operations are performed
by Hauglandgruppen. It is the Group’s evaluation that PPG does not have control in Forus Holdco AS and is regarded as an
associated company. Forus Holdco AS was acquired on 29.12.2021.
27
PIONEER PROPERTY GROUP ASA
Ramstadsletta Utvikling AS – associated company
During the first half of 2021 PPG, through Pioneer Development AS, acquired a 49 000 m2 plot together with local partners at
Ramstadsletta in Bærum, Norway. The plot has an expected potential to develop around 70 000 m2 of residential and
commercial real estate, and PPG has an ownership in the project of 40.08% as of 31.12.2023. Daily operations is carried out by
ORO Eiendom as business manager, which also holds a 10% share of the company. PPG Is represented in the board, wich
consists of four members. It is the Group’s evaluation that PPG does not have control in Ramstadsletta Utvikling AS and is
treated as an associated company .
Norlandia Holding AS – associated company
In September 2022 PPG acquired 23,58% of the shares in Norlandia Holding AS. In December 2023 PPG acquired additional
24.22% increasing its holdings to 47,80%. Norlandia Holding is an investment company within hotels and development
properties. Through its subsidiaries the company owns 21 properties and has 9 associated companies. The net profit in the
company was MNOK 9.8 and the total book value of equity was MNOK 393.3. The company is treated as an associated
company.
Vossevangen utvikling AS – associated company
In July 2023, PPG acquired 41,49% of the shares in Vossevangen Utvikling. The company owns three properties in Voss which
shall be developed to residentials. The company has four board members, where PPG has one representative in the board. It is
the Group’s evaluation that PPG does not have control in Vossevangen Utvikling and the company is regarded as an associated
company.
JV Nordväst Fastighet AB - joint venture
In July 2023 PPG acquired 50,00% of the shares in JV Norväst AB. JV Nordväst AB was established together with the Swedish
property company Västerkulla Hotell Holding AB, and has acquired three hotels in Jönköping, Eskilstuna and Helsingborg, a
total of 319 hotel rooms and 13.551 sqm. The net profit in the company was MSEK 24.1 and the total book value of equity was
MSEK 154.6.
The Group is controlling 50 % of the votes in the Board of Directors. Project management and daily operations are performed
by Västerkulla Hotell Holding AB. It is the Group’s evaluation that PPG does not have control in JV Nordväst Fastighet AB and is
regarded as an associated company.
Strand Hotell Borgholm AB - joint venture
PPG sold 50% of the shares in Strand Hotell Borgholm to Norlandia Fastighet AB in December 2023. For the accounts of 2022,
the company was regarded as a subsidiary. The sale of the 50% share and reclassification in the accounts to joint venture
company was made in December 2023. The sale of the 50% share generated a profit, refer to table below.
The company owns a hotel property in Sweden. The net profit in the company was MSEK 2.1 and the total book value of equity
was MSEK 4.6. The Group is controlling 50 % of the votes in the Board of Directors. Project management and daily operations
are performed by Norlandia Fastighet AB. It is the Group’s evaluation that PPG does not have control in Strand Hotell
Borgholm AB and the company is regarded as an associated company.
Köping Hotellfastighet AB - joint venture
PPG sold 50% of the shares in Köping Hotellfastighet AB to Norlandia Fastighet AB in December 2023. For the accounts of
2022, the company was regarded as a subsidiary. The sale of the 50% share and reclassification in the accounts to joint venture
company was made in December 2023. The sale of the 50% share generated a profit, refer to table below.
The company owns a hotel property in Sweden. The net profit in the company was MNOK 0.9 and the total book value of
equity was MSEK 6.2. The Group is controlling 50 % of the votes in the Board of Directors. Project management and daily
operations are performed by Norlandia Fastighet AB. It is the Group’s evaluation that PPG does not have control in Köping
Hotellfastighet AB and the company is regarded as an associated company.
The effects from sale/derecgnition of subisiary to joint venture is shown in the table below
NOK thousand
Köping hotellfastighet
AB
Strand Hotell
Borgholm AB
Total
Investment property
ANNUAL REPORT 2023
28
55.0
105.6
Trade and other receivables
0.4
4.8
Cash and cash equivalents
5.3
0.4
Deferred tax
-2.1
-4.1
Loan to group companies
-13.3
-38.5
Other current liabilities
-0.9
-3.6
Net assets
44.5
65.0
Exit value (100% basis)
46.7
75.4
Gain recognized from sale of 50% of shares
2.2
10.4
12.6
As of year end, the Group’s shares of the financial positions in the companies owned is shown below:
NOK thousand
31.12.2023
31.12.2022
Goodwill
Deferred tax
-63 195
Licenses, patents, rights
19 047
Investment properties
783 910
Other non-current loans
157 702
Other non-current assets
318 841
Cash
21 160
Other current assets
38 889
Borrowings (current and non-current)
-835 964
Other current liabilities
-19 142
Net assets
421 249
Share of ownership
107 100
Distribution of loss unevenly between share classes
Carrying amount (at percentage of part. by the Group)
372 663
107 100
Changes in the Group’s carrying amount in the periods:
NOK thousand
2023
2022
Carrying amount at 01.01
Invested capital in Norlandia Holding AS
Invested/repaid (-) capital in Ramstadsletta Utvikling AS
-2 695
Interest free loan to Ramstadsletta Utvikling AS (refer to note 20)
-1 811
Invested capital in Forus Holdco AS
Invested capital Bm3 Eiendom AS /change to subsidiary
-3 377
Invested capital in Vossevangen Utvikling AS
9 921
Invested capital in JV Nordväst Fastighet AB
62 903
Invested capital in Köping Hotellfastighet AB
21 619
Invested capital in Strand Hotell Borgholm AB
36 895
Share of gain in joint ventures and associated companies
-1 647
Carrying amount at 31.12
The share of profit (loss) is calculated in the following table, showing the breakdown by Joint Ventures (JV) and associated
companies and its contribution to the current year consolidated income statement of the Group, for the year 2023:
29
PIONEER PROPERTY GROUP ASA
JV
JV
JV
JV
JV
NOK
thousand
Kongsparken
AS
JV Nordväst
Fastighet AB
Forus Holdco
AS
Köping Hotellfastighet
AB
Strand Hotell
Borgholm AB
Net income
3 174
23 132
5 798
The Group' share of ownership
50,00 %
50,00 %
50,00 %
50,00 %
50,00 %
Share of profit or loss in the
owner period
-1 587
11 566
2 899
Associates
Associates
Associates
Associates
NOK
thousand
Ramstadsletta
Utvikling AS
Vossevangen
Utvikling AS
Bm3
Eiendom AS
Norlandia
Holding AS
Total
Net income
84 754
146
10 083
The Group' share of ownership
40,08 %
41,49 %
30,71
48,10 %
Share of profit or loss in the
owner period
33 969
45
2 332
49 147
Share of profit (loss) is calculated in the following table, showing the breakdown by joint venture and associates and its
contribution to the current year consolidated income statement of the Group, for the year 2022 is calculated as:
.
JV
Associates
JV
Associates
Associates
NOK
thousand
Kongsparken
AS
Ramstadsletta
Utvikling AS
Forus Holdco
AS
Norlandia
Holding AS
Bm3 Eiendom
AS
Total
Net income
-5 145
-53
-430
4 795
103
-730
The Group' share
of ownership
50,00 %
40,08 %
50,00 %
23,58 %
30,71 %
Share of profit or
loss in the owner
period
-2 573
-21
-215
1 131
32
-1 647
.
9. Financial Instruments
Accounting principles
A financial instrument is a contract that gives rise to both a financial asset for one entity and a financial liability or equity
instrument for another entity. Financial instruments are generally recognized as soon as the group becomes a party to the
terms of the financial instrument.
Financial assets
Financial assets include cash and cash equivalents, trade receivables and other loans and receivables. Financial instrument
classification is based on the business model in which the instruments are held as well as the structure of the contractual cash
flows.
Financial assets measured at amortized cost
ANNUAL REPORT 2023
30
Financial assets measured at amortized cost in the Group consist of loans and receivables, trade receivables or cash and cash
equivalents.
After initial recognition, these financial assets are measured at amortized cost using the effective interest method less
impairment.
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss, comprise financial assets whose cash flows do not relate solely to
payments of interest and repayments of principal on the outstanding nominal amount. Gains or losses on these financial
assets are recognized through profit or loss.
Financial liabilities
Financial liabilities regularly give rise to a redemption obligation in cash or another financial asset. These include in particular
bonds and other securitized liabilities, trade payables, liabilities to banks, liabilities to affiliated companies and derivatives
designated as hedges. Financial liabilities are classified into the following categories:
• Financial liabilities measured at fair value through profit or loss, and
• Financial liabilities measured at amortized cost.
Upon initial recognition, all financial liabilities are measured at fair value. Trade payables and other non-derivative financial
liabilities are generally measured at amortized cost using the effective interest method.
Fair Value
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Financial instruments and investment properties that are measured at fair value in the financial statements require disclosure
of fair value measurements by level based on the following fair value measurement hierarchy:
●
Level 1 – quoted prices (unadjusted) in active markets for identical assets and liabilities;
●
Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either
directly (that is, as prices) or indirectly (that is, derived from prices); and
●
Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Critical accounting estimates
For the shares in Pancom, the estimated value is based on assumptions of future cash flow in the companies and its
subsidiaries. Pancom is an investment company within the real estate and construction sector and key metrics such as yield,
future cash flow and EBITDA-multiples are assessed to estimate the value of the investment. For Hospitality Invest, the same
type of estimates are made, with the book value of equity of the company as reference point, of which the financial
statements have been prepared in accordance with International Financial Reporting Standards.
Specification of financial assets and liabilities:
The Group holds the following financial assets and liabilities:
NOK thousand
31.12.2023
Financial assets at amortised cost
Loan to associated companies
Loan to other companies
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through profit or loss
Other investments
1)
Other Shares
2)
44 391
48 953
Sum
411 956
531 401
31
PIONEER PROPERTY GROUP ASA
Financial liabilities at amortised cost
Borrowings
1 149 120
Other current liabilities
75 492
Sum
1)
Other investments are measured at fair value as level 1 in the fair value hierarchy in accordance with quoted prices
2)
Other Shares included other investments in shares where the company have no significant influence or control, which is measured
according to level 3 in the hierarchy.
Specification of investments measured at fair value held as of 31 December 2023:
1) Bonds are measured at fair value as level 2 in the fair value hierarchy in accordance with observed prices.
2) Funds are measured at fair value as level 1 in the fair value hierarchy in accordance with quoted prices.
3) Investments in shares where the company have no significant influence or control, is measured according to level 3 in the
hierarchy. The shares are not traded, not quoted.
NOK
thousand
1) Bonds
2) Funds
3) Hospitality
Invest AS
3)Pancom AS
Total
Fair value in the beginning of the year
56 954
18 212
30 741
167 907
Purchase in 2023
Sold in 2023
Fair value adjustments
620
1 946
-4 562
-1 996
Fair value in the end of the year
13 650
Specification of investments measured at fair value held as of 31 December 2022:
NOK
thousand
1) Bonds
2) Funds
3)
Odin
Bidco
AS
3)Hospitality
Invest AS
3)Pancom AS
Total
Fair value in the beginning of the year
104 600
357
900
7 541
519 666
Purchase in 2022
222 990
-
30 741
Sold in 2022
-210 615
-346
368
Repaid capital
-11
532
-
-11 532
Fair value adjustments
47
10 670
10 718
Fair value in the end of the year
56 954
0
18 210
30 741
167 907
NOK thousand
31.12.2023
.
10. Cash and cash equivalents
Accounting principles
Cash comprises demand deposits. Cash equivalents are short-term, highly liquid investments that are convertible to cash in
three months or less to known amounts of cash and which are subject to an insignificant risk of changes in value.
The Group
had no cash equivalents as of the end of the periods presented.
ANNUAL REPORT 2023
32
Description
Cash and cash equivalents include bank deposits:
NOK in thousand
31.12.2023
31.12.2022
Bank deposits
112 231
Total
All interest income relates to interest on bank deposits.
The bank deposits include restricted cash related to tax withholding account of TNOK 241 per 31 December 2023 (TNOK 224
per 31 December 2022).
11. Borrowings
Accounting principles
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost using the effective interest method.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
Description
Borrowings and available cash and cash equivalents constitute the capital of the Group. The Group's main source of financing
are bank loans and trade credit.
The Group had the following borrowing as of 31 December 2023:
NOK thousand
31.12.2023
31.12.2022
Non-current
Commercial bank loans
736 761
Other loans
98 107
Total
834 869
NOK thousand
31.12.2023
31.12.2022
Current
Commercial bank loans
84 248
Other loans
52 838
Total
137 087
NOK thousand
31.12.2023
31.12.2022
Total non-current and current
Commercial bank loans
821 010
Other loans
150 946
Total
971 955
The borrowings the Group holds as of the end of 2023 and 2022 are linked to the investment properties owned by the Group.
The following assets have been pledged as security for liabilities:
NOK thousand
31.12.2023
31.12.2022
Investment property
1 637 880
Total pledged assets
For the properties that are pledged as security for liabilities, the amount pledged corresponds to the fair value of the
investment properties. (see note 6 for further information).
33
PIONEER PROPERTY GROUP ASA
Relevant terms and conditions
Out of the total amortised cost value of all borrowings held as of 31.12.2023, MNOK 88,5 have a fixed annual interest rate that
ranges from 1 to 4%. The rest of the borrowings are subject to an interest rate structure that is comprised of a variable interest
rate based on the 3-month NIBOR plus a margin that typically approximates 2-3% annually. On average, the annual average
interest rates realised for 2023 has been 7,62%. All loans are denominated in NOK.
See note 4 for the maturity of financial liabilities at the end of the period, and for a description of the financial risks arising
from changes in the interest rates.
Compliance with covenants
The borrowing agreements typically include covenants that the Group must fulfil. The nature and characteristics of the
covenants vary from agreement to agreement, but the typical financial covenants are loan-to-value ratios ranging from 60 to
70%; and minimum liquidity requirements in the subsidiary that is the counterparty to the borrowing agreement with the
lender.
Management has determined that, as of the end of the 2023 reporting period, the Group is in compliance with all the
covenants required by the lender.
Changes in borrowings from financing activities:
NOK thousand
Non-current borrowings
Current borrowings
At 1 January 2023
Cash flows
Cash flow received
Repayments
Non-cash:
Reclassification from 2022 to 2023
-14 060
Borrowing classified as non-current at 31 December
2022 becoming current during 2023
-221 869
221 869
Purchase of operations
Interest
At 31 December 2023
925 924
223 195
1 149 120
At 1 January 2022
Cash flows
Cash flow received
Repayments
Non-cash:
Borrowing classified as non-current at 31 December 2021
becoming current during 2022
Purchase of operations
Interest
At 31 December 2022
.
12. Other current liabilities
NOK in thousand
31.12.2023
31.12.2022
Trade payable
Government taxes
ANNUAL REPORT 2023
34
Accrued interest
Dividend
Accrued cost, Prepaid revenues
Other current liabilities
Total other current liabilities
Dividend relates to Q4 2023 dividend approved by the board 12. October 2023, with payment date in January 2024.
13. Rental income
Accounting principles
The Group enters into lease agreements where it acts as a lessor. This constitutes the Group’s main source of income. See
note 13 for the description of the Group’s accounting policies on Rental Income. The Group enters into lease agreements
where it acts as a lessor. This constitutes the Group’s main source of income. All leases held by the Group are considered
operating leases. This is the case because, even though lease agreements have a typical duration of several years, the lease
term is substantially shorter than the asset’s economic life, and the minimum lease payments does not amount to
substantially all of the fair value of the investment property. Management has not identified any other indications that the
Group has transferred substantially all of the risks and rewards incidental to ownership of its investment properties.
Revenue consists of rental income, which is typically recognised on a straight -line basis over the period of the lease
agreements with its lessees (see note 3 for further information). Revenues are presented net of VAT, discounts, and rebates.
Service charge expenses are charged to tenants and recognised in the balance sheet together with payments on account of
tenants, and therefore does not affect the result beyond an administrative premium recognised under revenue.
Description
The group is the lessor of investment properties. The group’s contractual rental income is distributed as follows, where the
numbers are adjusted annually to reflect the change in CPI. The rent in the table below are adjusted with an annual CPI-
adjustment of 2%:
.
NOK in thousand
31.12.2023
31.12.2022
Within 1 year
Year 2
Year 3
104 491
83 585
Year 4
101 520
80 648
Year 5
98 709
77 442
After 5 years
Total
The Group typically rents out the investment properties to tenants on long term triple-net contracts where the operator has
the main responsibility for annual maintenance, insurance, and other directly related property. All agreements are fully
adjusted annually to reflect the change in CPI. However, the hotel investment properties typically have the characteristic that
rental income is subject to certain positive variables over an agreed minimum lease payment: lease payments are based on the
highest of a minimum rent and a percentage of the hotel’s turnover.
All revenue during 2023 and 2022 has been originated in Norway and Sweden.
14. Employee expenses and management remuneration
NOK
2023
2022
Salary
6 091 596
3 620 160
Payroll tax
967 781
583 585
35
PIONEER PROPERTY GROUP ASA
Pension benefits
Other benefits
104 016
Total salary and pension costs
7 257 505
4 300 638
Average Employees
4
3
The remuneration to the management in 2023:
NOK
Salary
Other
benefits
Bonus
Pension benefits
Total compensation
John Ivar Busklein (CEO)
Øystein B. Grini (CFO)
Total management remuneration
The remuneration to the management in 2022:
NOK
Salary
Other
benefits
Bonus
Pension benefits
Total compensation
John Ivar Busklein (CEO)
Øystein B. Grini (CFO)
4 392
Total management remuneration
4 392
John Ivar Busklein has been CEO of Pioneer Property Group ASA in a part time position at 28,4%. Øystein Grini was appointed
as new CFO of the Group as of 1. September 2021.
No member of the management has in their agreement that they will get any right to compensation after termination of
employment. No loans or guarantees have been given to any members of the management, the Board of directors or other
corporate bodies.
The board of directors of PPG has prepared a determination of salary and other remuneration to the executive management,
in accordance with applicable law. The declaration includes the policies which PPG uses for the determination of salary and
other remuneration to its executive management in the calendar year 2023 as published on the company's web page
pioneerproperty.no.
The remuneration to the Board of Directors:
NOK
2023
2022
Roger Adolfsen (Charirman of the board)
120 000
130 000
Geir Hjorth (board member)
130 000
130 000
Sandra Riise (board member)
130 000
130 000
Even Carlsen (board member)
110 000
130 000
Nina Høisæter (board member)
130 000
130 000
Total remuneration
620 000
650 000
.:
15. Other operating expenses
NOK in thousand
2023
2022
Accounting fees, auditing, legal expenses and other fees
ANNUAL REPORT 2023
36
Other operating expenses
Total other operating expenses
.
Fees from the auditor:
Fees from the auditor
NOK in thousand
2022
2022
Auditing fees
Other fees from the auditor
Total auditing fees
.
16. Other financial gains (losses)
NOK thousand
2023
2022
Currency gain/loss
2 227
Gain on sale shares
-
Gain on sale bonds
Loss on sale funds
Loss on sale of properties
- 61
Changes in fair value (see note 9)
- 1 996
Other adjustments
-22 609
Other financial income
456
Other financial expenses
0
Sum
The gain on sale of bonds is related to the sale of the shares in Holberg Kreditt .
Other adjustments are related to reduced value of the option to buy additional land in Brennemoen.
Gain form sale of subsidiary is related to sale of 50% of the shares in Strand Hotell Borgholm AB and Köping Hotellfastighet AB,
which is recognized as associated company as of year end.
The change in fair value is mainly related to the shares in Hospitality Invest AS.
17. Income taxes
Accounting principles
The tax expense for the period comprises current and deferred tax.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet
date in the countries where the company and its subsidiaries operate and generate taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements.
The Group has applied the main rule for recognition of deferred tax in connection with the purchase of shares in property
companies that are not acquired through a business combination. This means that deferred tax is recognised as the difference
between the tax value and accounting value of investment property in the subsidiary, and value changes of the investment
property. Not recognised deferred tax linked to initial recognition exemption for investment properties per 31 December 2023
is MNOK 155.5 (MNOK 175.1 in 2022).
Changes in deferred tax liabilities:
NOK in thousand
Investment property
Other items
Total
01.01.2022
37
PIONEER PROPERTY GROUP ASA
Recognized deferred tax
31.12.2022
Recognized deferred tax
-3 630
-2 549
-6 179
Loss of control in subsidiary
-5 722
-5 722
31.12.2023
46 437
Income tax expense:
NOK in thousand
2023
2022
Tax payable
4 471
Change in deferred tax
Changes related to loss of control in subsidiary
1 690
Changes related to currency translation
Other changes
Income tax expense
11 795
.
Reconciliation of tax expense:
NOK in thousand
2023
2022
Profit before income tax
Tax expense based on standard rate of
Norwegian (22%)
Adjustments for:
Effect of tax rates outside Norway
Changes related to currency translation
Permanent differences
Other differences
-218
Income tax expense for the period
11 795
.
18. Earnings per share
Accounting principles
The Group's preference shares are entitled to a fixed dividend of NOK 10.00 per annum from 01 July 2022, if the General
Assembly approves payment of dividends. To calculate the earnings per share the entitled dividend to the preference shares is
deducted from comprehensive income for the period. The earnings per ordinary share is the remaining comprehensive income
deducted the preference share dividend divided by the weighted average number of shares in issue during the period.
Earnings per share from total operations.
NOK
31.12.2023
31.12.2022
Profit/(loss) attributable to shareholders of parent
19 238 251
38 778 290
Less pref share dividends
-38 805 870
-37 835 722
Profit attributable to ord shares
-9 567 619
942 568
Weighted average ordinary shares
9 814 470
9 814 470
EPS to ordinary shares
-1,99
0,10
ANNUAL REPORT 2023
38
Diluted
As per 31 December 2023 no rights are issued which would cause diluted earnings per share to be different to basic earnings
per share. Refer to note 21 for information related to the classes of shares.
19. Group structure and acquisition of companies
Accounting Principles
Acquisition of subsidiaries not viewed as a business combination
Upon purchase of property management assess whether the purchase constitute purchase of a business or purchase of an
asset in accordance with IFRS 3. The Group assesses whether companies acquired constitute a business, which is when the
acquired set of activities and assets include an input and a substantive process that together significantly contribute to the
ability to create outputs.
An acquisition of entities not comprising any business activities is viewed as a purchase of assets. The acquisition cost is
allocated to the acquired assets and no deferred tax is calculated for temporary differences that arise at their initial
recognition. Acquisition related costs are capitalized with the asset.
All acquisition of subsidiaries made by the Group were classified as purchase of assets, as no substantive processes have been
identified.
Acquisition of companies regarded as asset purchase:
Within the property development segment, PPG increased its ownership to 88% in BM3 Eiendom AS.
The non-controlling interest in PPG is related to the shares in Park Hotel Holdco, Evenes Tomteselskap AS, T10 Holdco AS and
BM3 Eiendom AS. For 2023, the transactions with non-controlling interest have been purchase of additional shares in Bm3 AS.
NOK in thousand
2023
2022
Purchase of subsidiaries/Properties -cash
Cash acquired companies
Debt acquired companies
Sale of subsidiaries/Properties -cash
-52 853
Companies bought or incorporated in 2023:
Company
Location
Share of
Share of
Name
ownership
voting rights
BM3 Eiendom AS
Norway
88%
88%
Evenes Utvikling AS
Norway
100%
100%
Companies sold in 2023:
Köping Hotellfastighet AB
Sweden
50%
50%
Strand Hotell Borgholm Fastighets AB
Sweden
50%
50%
PPG Hylle 2 AS
Norway
100%
100%
39
PIONEER PROPERTY GROUP ASA
Companies bought or incorporated in 2022:
Company
Location
Share of
Share of
Name
ownership
voting rights
T10 Holdco AS
Norway
52%
52%
Norway
100%
100%
ET Nord AS
Norway
100%
100%
ET Midt AS
Norway
100%
100%
ET Øst N AS
Norway
100%
100%
ET Øst S AS
Norway
100%
100%
ET Vest N AS
Norway
100%
100%
ET Vest S AS
Norway
100%
100%
PPG Hylle 1 AS
Sweden
100%
100%
PPG Hylle 2 AS
Norway
100%
100%
PPG Hylle 3 AS
Norway
100%
100%
Gaustadskogen Eiendom AS
Norway
100%
100%
Tjuvholmen Eiendom AS
Norway
100%
100%
Norab Eiendom Vest AS
Norway
100%
100%
Neptun Eiendom Invest AS
Norway
100%
100%
Steinbekkhaugen AS
Norway
100%
100%
Brennemoen Eiendom AS
Norway
100%
100%
The Group consists of the following subsidiaries per 31 December 2023:
Company
Location
Share of
Share of
Name
ownership
voting rights
Pioneer Property Group International AS
Norway
100%
100%
Pioneer Preschools AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Pioneer Retail Properties AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Pioneer Property Development AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
53%
53%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
ANNUAL REPORT 2023
40
Norway
100%
100%
Norway
85%
85%
Pioneer Hotel Properties AS
Norway
100%
100%
Norway
90%
90%
Norway
100%
100%
Norway
100%
100%
Norway
50%
50%
Norway
50%
50%
Norway
100%
100%
Norway
100%
100%
PPG Hylle 3 AS
Norway
100%
100%
T10 Holdco AS
Norway
52%
52%
Norway
100%
100%
The Group consists of the following subsidiaries per 31 December 2022:
Company
Location
Share of
Share of
Name
ownership
voting rights
Pioneer Property Group International AS
Norway
100%
100%
Pioneer Preschools AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Pioneer Retail Properties AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Pioneer Property Development AS
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
53%
53%
Norway
85%
85%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Norway
100%
100%
Pioneer Hotel Properties AS
Norway
100%
100%
Norway
90%
90%
Norway
100%
100%
Norway
100%
100%
Norway
50%
50%
Norway
50%
50%
Norway
100%
100%
Norway
100%
100%
41
PIONEER PROPERTY GROUP ASA
Norway
100%
100%
Sweden
100%
100%
Sweden
100%
100%
PPG Hylle 2 AS
Norway
100%
100%
PPG Hylle 3 AS
Norway
100%
100%
T10 Holdco AS
Norway
52%
52%
Norway
100%
100%
.
20. Related party transactions
Balances and transactions between the company and its subsidiaries, which are related parties to the company, have been
eliminated on consolidation and are not disclosed in this note.
The Group has the following related parties as of 31.12.2023:
Related party
Relation to the Group
Roger Adolfsen
Chairman of the Board and owner of Mecca Invest AS
Sandra Henriette Riise
Board member
Geir Hjort
Board member
Ane Nordahl Carlsen
Board member and owner of Grafo AS
Nina Hjørdis Torp Høisæter
Board member
John Ivar Busklein
Chief Executive Officer
Øystein Grini
Chief Financial Officer
Hospitality Invest AS
Substantial shareholder
Grafo AS
Substantial shareholder
Klevenstern AS
Substantial shareholder
Mecca Invest AS
Substantial shareholder
Norlandia Health & Care Group AS
Controlled by substantial shareholders, refer to note 21
Norlandia Holding AS
Controlled by substantial shareholders, refer to note 21
Kara Invest AS
Controlled by substantial shareholders, refer to note 21
Ferda Norge AS
Controlled by substantial shareholders, refer to note 21
Acea Invest AS
Controlled by substantial shareholders, refer to note 21
Kidprop AS
Controlled by substantial shareholders, refer to note 21
Caravan Eiendom AS
Controlled by substantial shareholders, refer to note 21
Norlandia Hotel Group
Controlled by substantial shareholders, refer to note 21
Up North Hospitality AS
Controlled by substantial shareholders, refer to note 21
Kongsparken AS
Associated company
Forus Holdco AS
Associated company
Ramstadsletta Utvikling AS
Associated company
The Group had the following related parties as of 31.12.2022:
Related party
Relation to the Group
Roger Adolfsen
Chairman of the Board and owner of Mecca Invest AS
Sandra Henriette Riise
Board member
Geir Hjort
Board member
Even Carlsen
Board member and owner of Grafo AS
Nina Hjørdis Torp Høisæter
Board member
John Ivar Busklein
Chief Executive Officer
Øystein Grini
Chief Financial Officer
Hospitality Invest AS
Substantial shareholder
Grafo AS
Substantial shareholder
Klevenstern AS
Substantial shareholder
ANNUAL REPORT 2023
42
Mecca Invest AS
Substantial shareholder
Norlandia Health & Care Group AS
Controlled by substantial shareholders, refer to note 21
Norlandia Holding AS
Controlled by substantial shareholders, refer to note 21
Kara Invest AS
Controlled by substantial shareholders, refer to note 21
Ferda Norge AS
Controlled by substantial shareholders, refer to note 21
Acea Invest AS
Controlled by substantial shareholders, refer to note 21
Kidprop AS
Controlled by substantial shareholders, refer to note 21
Caravan Eiendom AS
Controlled by substantial shareholders, refer to note 21
Norlandia Hotel Group
Controlled by substantial shareholders, refer to note 21
Up North Hospitality AS
Controlled by substantial shareholders, refer to note 21
Kongsparken AS
Associated company
Forus Holdco AS
Associated company
Ramstadsletta Utvikling AS
Associated company
Indirect ownership of shares by board member per the balance sheet date:
2023
Ord. Shares
Pref. shares
Ord. Shares
Pref. shares
Roger Adolfsen
-
Ane Nordahl Carlsen
-
0
The Group had the following material transactions with related parties:
NOK in thousand
2023
2022
Rent revenue from Norlandia Health & Care Group AS including subsidiaries
1 912
Rent revenue from Ferda Norge AS
29 414
Rent revenue from Norlandia Hotel group
42 582
Management fee from Up North Hospitality AS
1 875
Management fee from Oslo Corporate Holding AS
423
M&A services and Management fee to Hospitality Invest AS
2 877
Interest income from associated companies
2 300
Sale of bonds to related parties
153 500
Sale of receivables to related parties
-
Purchase of shares and properties from related parties
194 498
Transactions made between the related parties are made on terms equivalent to those that prevail in the market at arm’s
length.
Receivables from related parties
NOK in thousand
31.12.2023
31.12.2022
Norlandia companies
9 260
Kongsparken AS
Ramstadsletta Utvikling AS
Smedplassen Eiendom AS
HI Capital AS
Wayfare Invest AS
Liabilities to related parties
NOK in thousand
31.12.2023
31.12.2021
Norlandia companies
For compensation to key management personnel, see note 14.
Loans to associate entities
43
PIONEER PROPERTY GROUP ASA
During the 2023 reporting period, the Group lent its associates funds in the form of loans to finance its investments, in
agreement with the other shareholders of the associates.
The loan to its associate Ramstadsletta Utvikling AS has a nominal amount of MNOK 12.0 The contract does not contemplate
the payment of interests. As a consequence, the amount of the loan has been re -calculated to reflect the present value of all
future cash receipts discounted using an interest rate similar to the ones beared by the Group (see note 11 for further
information), resulting in an amortised cost value of MNOK 10.8. As the contributions from the other shareholders were of a
different nature and amount, the difference between the increase in net assets for the Group, and the contribution made has
been considered a financial expense in the consolidated income statement. For 2022, this amounted to MNOK 7.1, for 2023
the amount is MNOK 1.2 As there were a downpayment of MNOK 36.0 in 2023, the amortised cost value has changed, the
contribution made has been considered a financial gain for an amount of MNOK 5.9 for 2023.
21. Share capital and shareholder information
The Company have two classes of shares, ordinary shares and preference shares. As of 31 December 2023, Pioneer Property
Group ASA had a share capital of NOK 14,683,023, divided into 9,814,470 ordinary shares and 4,868,553 preference shares
with a nominal value of NOK 1 per share for both categories.
The differences between the share classes are differing voting rights and differing rights to the Company’s profit. The
regulations on voting rights and dividends are decided upon by the Shareholders’ Meeting and can be found in the Articles of
Association.
The ordinary share
The Company's ordinary share confers one vote unlike the preference shares that confer one-tenth of a vote.
The preference shares
The Company’s preference shares confer a preferential right over ordinary shares to an annual dividend of NOK 10.00 per
preference share per annum. Dividend payments are made quarterly with NOK 2.500 per preference share, if approved by the
Board of Directors based on the authorisation given by the General Assembly. The preference share does not otherwise confer
a right to dividend. If the general meeting decided not to pay dividends or to pay dividends that fall below NOK 2.500 per
preference share during a quarter, the difference between paid dividends and NOK 2.500 per preference share shall be
accumulated and adjusted upwards with an annual interest rate of 5 per cent until full dividends have been distributed. No
dividends may be distributed to the ordinary shareholders until the preference shareholders have received full dividends
including the withheld amount.
Share value in NOK
Number of
shares
Ordinary
shares
Preference
shares
Share premium
Treasury
shares
Total
At 1 January 2022
Capital reduction
Payment premiums 2022
Acquisition of treasury shares
At 31 December 2023
Capital reduction
Payment premiums 2023
Acquisition of treasury shares
At 31 December 2023
PPG holds 987,966 preference shares in PPG at purchased a price of NOK 102.00 per preference share. This equals
approximately 6.73% of the share capital, which represents 0.96% of the votes. Detailed information regarding dividends,
issues and redemption can be found in the Company's Articles of Association, available in the prospectus at the Company's
website.
ANNUAL REPORT 2023
44
During 2023, PPG has declared quarterly dividends to the holders of preference shares, in total MNOK 38.8. Furthermore PPG paid
dividends to holders of the ordinary shares of MNOK 59.3.
10 largest shareholders registered in VPS as of 31 December 2023:
Ordinary
shares
Preference
shares
Voting
share
Hospitality Invest AS
32,62%
0,00%
31,08%
Eidissen Consult AS
16,73%
0,00%
15,94%
Grafo AS
16,73%
0,00%
15,94%
Mecca Invest AS
15,78%
0,00%
15,04%
Klevenstern AS
15,78%
0,00%
15,04%
HI Capital AS
2,34%
0,00%
2,23%
Skandinaviska Enskilda Banken AB
0,00%
12,88%
0,61%
Nordnet Bank AB
0,00%
9,85%
0,47%
Avanza Bank AB
0,00%
9,54%
0,45%
The Bank of New York Mellon
0,00%
7,54%
0,36%
Other Shareholders
0,00%
60,18%
2,84%
Total
100 %
100 %
100%
10 largest shareholders registered in VPS as of 31 December 2022:
Ordinary
shares
Preference
shares
Voting
share
Hospitality Invest AS
32,62%
0,00%
31,08%
Eidissen Consult AS
16,73%
0,00%
15,94%
Grafo AS
16,73%
0,00%
15,94%
Mecca Invest AS
15,78%
0,00%
15,04%
Klevenstern AS
15,78%
0,00%
15,04%
HI Capital AS
2,34%
0,00%
2,23%
Skandinaviska Enskilda Banken AB
0,00%
12,88%
0,61%
Avanza Bank AB
0,00%
10,25%
0,48%
Nordnet Bank AB
0,00%
8,44%
0,40%
The Bank of New York Mellon
0,00%
7,54%
0,36%
Other Shareholders
0,00%
60,88%
2,88%
Total
100 %
100 %
100%
.
22. Contingent liabilities
The group has not been involved in any legal or financial disputes in the period covered by these consolidated financial
statements, where an adverse outcome is considered more likely than remote.
24. Subsequent events
No significant subsequent events has occurred in 2024.
45
PIONEER PROPERTY GROUP ASA
Alternative Performance Measures
Pioneer Property Group ASA reports Alternative Performance Measures (APMs) as a supplement, but not as a substitute, to the
financial statements prepared in accordance with IFRS. Financial APMs are intended to enhance comparability of the results and cash
flows from period to period. The financial APMs reported by PPG are the APMs that, in management’s view, provide relevant
supplemental information of the company’s financial position and performance. Operational measures such as, but not limited to,
occupancy and WAULT are not defined as financial APMs according to ESMA’s guidelines.
The company reports the following alternative performance measures (APMs):
APM
amounts in NOK thousand
Explanation
2023
2022
2021
EBIT
Earnings before interest and taxes
46 586
23 750
251 535
Weighted average
gross yield
The weighted average gross yield on
estimated rent calculated by adjusting
for property value. Gross yield for a
property or portfolio of properties is
calculated as contractual annualised
rental income for the upcoming
financial year divided by the market
value as of balance sheet date.
Preschool
Hotel
Retail
Office
6.4%
7.2%
7.9%
7.2%
5.3%
6.8%
7.1%
6.2%
3.4%
6.2%
6.1%
n/a
NOI
Net Operating Income, meaning all revenue from
properties minus all reasonable direct property
related expenses.
118 766
69 974
41 256
Market value of the
property portfolio
The market value of the Groups investment
properties
1 757 256
1 798 709
1 393 041
Effective leverage
Total interest bearing debt divided by total assets
44.6%
39.5%
31.9%
ANNUAL REPORT 2023
46
ANNUAL REPORT
(PARENT COMPANY)
2023
PIONEER PROPERTY GROUP ASA
47
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP ASA
STATEMENT OF INCOME
Note
2023
2022
OPERATING REVENUE AND EXPENSE
Revenue
1
12 092 860
9 689 910
TOTAL OPERATING REVENUE
12 092 860
9 689 910
Employee benefits expense
2
7 191 448
4 752 215
Depreciation and amortisation expense
3
27 572
12
Other operating expenses
2
8 592 853
6 802 962
TOTAL OPERATING EXPENSES
15 811 873
11 567 456
OPERATING PROFIT OR LOSS
-3 719 013
-1 877 546
FINACIAL INCOME AND EXPENSES
Financial income
Changes in market value of fin. cur. assets
4,5
2 565 674
47 160
Income from subsidiaries
5
1 726 910
1 692 676
Interest received from group companies
1,5
16 554 489
34 561 471
Other interest
5
14 715 353
10 276 108
Other financial income
5
2 426 274
83 542 310
Total financial income
37 988 700
130 119 724
Financial expenses
Changes in market value of fin. cur. assets
4,5
-
-
Interest paid to group companies
1,5
528 229
391 355
Other interest
5
261 721
43 578
Other financial expense
5
325 460
609 227
Total financial expenses
1 115 410
1 044 160
NET FINANCE
36 873 289
129 075 565
ORDINARY RESULT BEFORE TAX
33 154 276
127 198 019
Tax on ordinary result
6
7 291 088
13 545 387
PROFIT
25 863 188
113 652 632
ATTRIBUTABLE TO
To additional dividends payable
98 146 187
78 127 825
Given intra-group contribution
11 637 716
35 524 807
To other equity
-83 920 715
-
Net brought forward
25 863 187
113 652 631
ANNUAL REPORT 2023
48
PIONEER PROPERTY GROUP ASA
Balance sheet pr. 31.12.2022
Note
2023
2022
ASSETS
Fixed assets
Tangible assets
Fixtures and fittings, office machinery etc.
3
41 431
51 793
Total tangible assets
41 431
51 793
Financial fixed assets
Investments in subsidiaries
7
636 059 247
585 011 829
Loans to group companies
1
252 316 976
321 152 191
Investments in associates
7
87 782 718
87 782 718
Investments in shares or units
38 282 669
38 282 669
Total financial fixed assets
1 014 441 610
1 032 229 407
TOTAL FIXED ASSETS
1 014 483 041
1 032 281 200
CURRENT ASSETS
Receivables
Receivables on group companies
1
18 110 418
2 299 170
Other short-term receivables
2 615 318
9 202 846
Total receivables
20 725 736
11 502 016
Investments
Quoted bonds
4
62 620 000
62 000 000
Other financial Instruments
4
54 956 108
56 953 866
Total receivables
117 576 108
118 953 866
Cash and bank deposits
8
42 280 425
124 545 576
TOTAL CURRENT ASSETS
180 582 269
255 001 458
TOTAL ASSETS
1 195 065 310
1 287 282 658
49
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP ASA
Balance sheet pr. 31.12.2021
Note
2023
2022
EQUITY AND LIABILITIES
Equity
EQUITY AND LIABILITIES
Share capital
9,10
14 683 023
14 683 023
Treasury shares
9
-987 966
-987 966
Share premium reserve
9
555 636 899
555 636 899
TOTAL PAID -IN EQUITY
569 331 956
569 331 956
Other equity
9
550 061 290
622 344 289
TOTAL EQUITY
1 119 393 245
1 191 676 245
Liabilities
Provision
Deferred tax
6
846 055
283 680
Total provisions
846 055
283 680
Other non-current liabilities
Liabilities to group companies
1
9 332 054
9 136 724
Total other non-current liabilities
9 332 054
9 136 724
TOTAL NON-CURRENT LIABILITIES
10 178 109
9 420 404
Current liabilities
Accounts payable
3 137 398
3 912 344
Income tax payable
6
4 168 415
6 961 967
Public duties payable
411 373
94 621
Dividends payable
34 200 466
14 742 481
Liabilities to group companies
1
11 637 716
28 637 189
Other current liabilities
11 938 588
31 837 408
TOTAL SHORT-TERM LIABILITIES
65 493 955
86 186 010
TOTAL LIABILITIES
75 672 064
95 606 414
TOTAL EQUITY AND LIABILITIES
1 195 065 310
1 287 282 658
Oslo, 21 March 2024
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Ane
Member of the Board
Nina Hjørdis Torp Høisæter
Member of the Board
Geir Hjorth
Member of the Board
John Ivar Busklein
Chief Executive Officer
ANNUAL REPORT 2023
50
PIONEER PROPERTY GROUP ASA
Statement of Cash Flow
Note
2023
2022
Cash flows from operating activities
Profit before tax
33 154 276
127 198 018
Taxes paid
-6 961 967
-18 905 888
Gains and losses on sale bonds
4
-1 985 076
-3 385 000
Gains and losses on sale funds
4
-
609 227
Depreciation
3
27 572
12 279
Gains and losses on sale shares
-
-80 157 310
Group contributions
1
-1 726 910
-1 692 676
Exchange gains/(losses)
211 497
-
Fair value adjustmenst on quoted bonds
4
-2 565 674
-47 160
Trade receivables
-15 970 711
933 756
Trade payables
-774 946
2 892 666
Other accruals
-13 013 933
1 699 835
Net cash flow from operating activities
-9 605 872
29 157 747
Cash flows from investing activities
Payments for purchase of shares
-42 000 000
-650 140 606
Payments for purchase of other investments
3
-17 209
-43 972
Payments from other loans
-
30 741 488
Proceeds from loan to group companies
1
69 030 545
350 798 408
Proceeds from sale of shares
30 000
383 631 273
Proceeds from sale of funds
4
15 000 000
49 816 734
Proceeds from sale of bonds
4
-
214 000 000
Payments to buy other investments
-9 071 492
-2 758 056
Payments for purchase of quoted bonds
-
-222 990 000
Net cash flow from investments activities
32 971 844
153 055 269
Cash flow from financing activities
Payments for purchase of own shares
-
-
Dividends paid
-78 686 610
-72 601 738
Repayment of share premium reserve
-
-
Group contributions paid
-28 637 189
-35 770 318
Group contributions received
1 692 676
994 910
Received share premium
-
-
Net cash flow from financing activities
-105 631 123
-107 377 146
Net change in cash and cash equivalents
-82 265 151
74 835 869
Cash and cash equivalents at the beginning of the period
124 545 576
49 709 708
Cash and cash equivalents at the end of the period
42 280 425
124 545 576
51
PIONEER PROPERTY GROUP ASA
Notes to the financial statements 2023
Accounting Principles:
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in
Norway. The Company's financial statements are prepared on a going concern basis.
Sales revenue
Revenue is recognized from the sale of goods at the time of delivery. Services are recognized
as revenue as they are delivered.
Balance sheet classification
Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other
balance sheet items are classified as fixed assets / long term liabilities.
Current assets are valued at the lower of cost and fair value. Short term liabilities are recognized at nominal value.
Fixed assets are valued at cost, less depreciation and impairment losses. Long term liabilities are recognized at nominal value.
Subsidiaries and investment in associates
Subsidiaries and investments in associates are valued at cost in the company accounts. The investment is valued as cost of the shares in the
subsidiary, less any impairment losses An impairment loss is recognized if the impairment is not considered temporary, in accordance with
generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a lather period.
Dividends, group contributions and other distributions from subsidiaries are recognized in the same year as they are recognized in the financial
statement of the provider. If dividends / group contribution exceeds withheld profits after the acquisition date, the excess amount represents
repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet for the
parent company.
Accounts receivable and other receivables
Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts.
Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general
provision is estimated based on expected loss.
Income tax
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the
book value and tax value of assets and liabilities. Deferred tax is calculated as 22 percent of temporary differences and the tax effect of tax losses
carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilized. Taxes
payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transactions
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss comprise financial assets whose cash flows do not relate solely to payments of
interest and repayments of principal on the outstanding nominal amount. Gains or losses on these financial assets are recognized through
profit or loss.
Foreign currency translation
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated
into NOK using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical price
expressed in a foreign currency are translated into NOK using the exchange rate applicable on the transaction date. Non-monetary items that are
measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date.
Changes to exchange rates are recognised in the income statement as they occur during the accounting period.
Cash
The cash flow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short term,
highly liquid investments with maturities of three months or less.
ANNUAL REPORT 2023
52
Note 1 - Liabilities to/receivables from group companies
Interest received from group companies is NOK 16 554 489 and interest paid to group companies is NOK 528 299. Total income on
management fee to group companies is NOK 12 092 860. Management fee income from Swedish subsidiaries is NOK 958 763, and
management fee income from Norwegian subsidiaries is NOK 11 134 097.
Receivables
2023
2022
Accounts receivable
15 970 711
0
Group contributions
1 726 910
1 692 676
Other short term receivables
412 797
606 494
Loans to group companies
252 316 976
321 152 191
Total receivables
276 282 283
323 451 361
Liabilities
Group contributions
11 637 716
28 637 189
Other liabilities
9 332 054
9 136 724
Total Liabilities
20 969 770
37 773 913
Note 2 - Management and auditor compensation
The company's auditor expenses (VAT included) :
2023
2022
Statutory audit
749 666
610 940
Other services
9 090
0
Total
758 756
610 940
2023
2022
Payroll
6 091 596
4 070 852
Payroll expenses (employer tax)
967 781
583 585
Pension cost
94 012
61 149
Other payments
38 060
36 629
Total
7 191 448
4 752 215
It's been paid remuneration for directors with NOK 620 000.
Roger Adolfsen (Chairman of the board)
120 000
Geir Hjorth (board member)
130 000
Sandra Riise (board member)
130 000
Even Carlsen (board member)
110 000
Nina Høisæter (board member)
130 000
The company has five employees, four in full time positions and one employee in part time position (28.4%) and is regulated under the Act on
Mandatory occupational pensions act, and the company has established mandatory occupational pensions and contribution pension for the
employees.
53
PIONEER PROPERTY GROUP ASA
NOK
Salary
Bonus
Other benefits
Pension cost
Total Compensation
Øystein B. Grini (CFO)
1 416 000
4 392
26 312
1 572 794
John Ivar Busklein (CEO)
(28,4% part time position)
560 048
734 919
Total
1 976 048
2 307 623
John Ivar Busklein (CEO) and Øystein Grini (CFO) received a bonus of NOK 166 667 and NOK 126 000 respectively for their performance in
Pioneer Property Group ASA. Both bonuses were paid in first quarter of 2024.
No member of the management have in their agreement that they will get any right to compensation after termination of employment.
No loans or guarantees have been given to any members of the management, the Board of directors or other corporate bodies.
The board of directors of PPG has prepared guidelines for a determination of salary and other remuneration to the executive management, in
accordance with applicable law. The guidelines include the policies which PPG uses for the determination of salary and other remuneration to its
executive management. The guidelines are published on the company’s web page pioneerproperty.no.
Note 3 - Fixtures and fittings, office machinery etc.
Fixtures and fittings, office
machinery
etc.
Acquisition cost as at. 1/1 69 815
+ Additions 17 209
Acquisition cost as at. 31/12 87 024
Accumulated depreciation 1/1
18 021
+ Depreciation for the year
27 572
Accumulated depreciation 31/12
45 594
Net Value 31/12 41 431
Depreciation percentage / estimated useful life 33% - 3 years
Assets are depreciated on a straight line basis
ANNUAL REPORT 2023
54
Note 4 - Quoted bonds
Financial instruments have been assessed at fair value.
The fair value has been set in accordance with the value observable in the market at the balance sheet date.
Quoted bonds:
Acquisition cost
Change in
value
Market Value
Hospitality Invest AS
62 000 000
62 620 000
Total
62 000 000
62 620 000
Funds:
Acquisition cost
This year change
in value
Market Value
Holberg Kreditt Fond
46 729 328
Valmue Private Debt
5 000 000
5 501 307
Total
54 956 108
Funds purchased/redeemed in 2023:
Purchase
Holberg Kreditt
4 071 492
1 985 075
Valmue
5 000 000
Total
9 071 492
Note 5 - Financial income and expenses
2023
2022
Financial income:
Change in market value of financial current assets
2 565 674
47 160
Group contribution
1 726 910
1 692 676
Interest received from group companies
16 554 489
34 561 471
Other interest
14 715 353
10 276 108
Currency gain
15 485
0
Other financial income
425 714
0
Gain on sale quoted bonds
1 985 075
83 542 310
Total financial income
37 988 700
130 119 725
Financial expenses:
Interest paid to group companies
528 229
391 355
Other interest
261 721
43 579
Currency loss
325 460
0
Loss on sale of shares
0
609 277
Total financial expenses
1 115 410
1 044 161
Note 6 - Tax
55
PIONEER PROPERTY GROUP ASA
Calculation of this years tax basis:
Net profit/loss before tax expense
33 154 276
+ Permanent differences
-2 578 593
+ Changes in temporary differences
9 376
+ Received group contributions
1 692 676
- Paid group contributions
-11 637 716
= Income
18 947 342
This years income tax expense consist of:
Estimated tax of net profit
6 728 713
= Tax payable
6 728 713
+/- Change in deferred tax
562 375
= Total tax expense
7 291 088
Tax rate
22%
Current tax liability:
Tax payable
6 348 792
+/- Effect on tax of group contributions
-2 180 378
= Tax payable
4 168 415
Temporary differences :
2023
2022
Change
Fixed assets
- 1 027
8 349
9 376
Quoted bonds and other financial instruments
3 846 730
1 281 106
-2 565 624
Sum temporary differences
3 845 704
1 289 455
-2 556 249
Deferred tax
846 055
283 680
-562 375
ANNUAL REPORT 2023
56
Note 7 - Investments in subsidiaries
Subsidiaries are valued at cost in the company’s accounts.
The company has shares in the following subsidiaries:
Subsidiary, office location:
Owner-
ship %
Voting
rights %
Net profit
2023
Equity
2023
Pioneer Preschools AS, Oslo
100,00 %
100,00 %
-2 546 676
48 411 193
Pioneer Property Group International AS, Oslo
100,00 %
100,00 %
370 943
8 865 765
Pioneer Hotel Properties AS, Oslo
100,00 %
100,00 %
18 839 304
337 701 969
Pioneer Retail Properties AS, Oslo
100,00 %
100,00 %
4 012 088
75 769 518
Pioneer Property Development AS, Oslo
100,00 %
100,00 %
1 686 375
154 982 317
T10 Holdco AS
52,00 %
52,00 %
- 515 569
9 815 747
PPG Hylle 3 AS
100,00 %
100,00 %
0
24 000
Owner-
ship %
Voting
rights %
Net profit 2023
Equity 2023
23,58 %
23,58 %
9 761 640
393 256 938
The company has shares in the following associates:
Norlandia Holding AS
Note 8 - Bank deposits
Employees tax deduction, deposited in a separate bank account with total amount 31.12.23 NOK 241 259.
Note 9 - Other equity
Share capital
Own Shares
Share premium
reserve
Other equity
Total equity
Per 1.1
14 683 023
-987 966
555 636 899
622 344 289
1 191 676 245
Ordinary result
25 863 188
25 863 188
Dividends
-98 146 187
-98 146 187
Per 31.12
14 683 023
-987 966
555 636 899
550 061 290
1 119 393 245
Note 10 - Share capital
The company have 14 683 023 shares with a book value NOK 1 per share, and total share capital is NOK 14 683 023.
The company have two classes of shares, ordinary shares and preference shares:
Class of shares
shares
Total
value
Voting rights
Ordinary shares
9 814 470
9 814 470
Each share has 1 vote
Preference shares
4 868 553
4 868 553
Each share has 0,1 vote
Total
14 683 023
14 683 023
The company's shareholders ordinary shares:
57
PIONEER PROPERTY GROUP ASA
Shareholders
Ord. shares
Hospitality Invest AS
3 201 926
Eidissen Consult AS
1 642 024
Grafo AS
1 642 024
Klevenstern AS
1 549 214
Mecca Invest AS
1 549 219
Hi Capital AS
230 068
The company's largest shareholders pref.shares (>1%) :
Shareholders:
Pref.Shares
Pioneer Property Group ASA
-987 966
Skandinaviska Enskilda Banken AB
500 000
Nordnet Bank AB
382 109
Avanza Bank AB
370 110
The Bank of New York Mellon
292 714
Union Bancaire Privee
141 304
Danske Bank A/S
124 040
SIX SIS AG
113 000
Skandinaviska Enskilda Banken AB – Lux Branch
96 138
The Bank of New York Mellon
68 307
Nordnet Livsforsikring
63 767
Swedbank AB
59 667
Indirectly owned shares of executives in the company:
Ordinary shares
Pref. shares
Roger Adolfsen (Chairman)
3 160 192
0
Ane Nordahl Carlsen (Board member)
0
Note 11 - Transactions with related parties
The company has various transactions with associated companies. All the transactions have been carried out as part of the ordinary operations and
at arm’s length prices. The most significant transactions are as follows:
Hospitality Invest AS, management fee NOK 4 138 945
Hospitality Invest AS, Other short-term receivables NOK 285 990
GROUP WEB PAGES
PARENT & SUBSIDIARIES
Pioneer Property Group ASA
www.pioneerproperty.no
PIONEER PROPERTY GROUP ASA
RÅDHUSGATA 23
0158 OSLO
NORWAY
WEB:
WWW.PIONEERPROPERTY.NO