XOAS:PPG ESEF Annual Report
PIONEER PROPERTY GROUP ASA (XOAS:PPG)
ESEF Annual Report
2023-05-09
For: 2022-12-31
View Original
Added on
September 21, 2026
ANNUAL REPORT
2022
Pioneer Property Group ASA
3
Board of directors’ report
Notes to the consolidated statements
9
Consolidated statement of Comprehensive Income
45
Alternative Performance Measures (APMs)
11
Consolidated statement of Financial Position - Assets
46
Annual report Pioneer Property Group ASA (parent)
13
Consolidated statement of Change in Equity
14
Consolidated statement of Cash Flow
Contents
3
PIONEER PROPERTY GROUP ASA
Highlights of the report
Total revenue for 2022 was MNOK 77.2 compared to MNOK
45.5 in 2021.
Pre-tax profit for 2022 was MNOK 76.6 compared to MNOK
300.7 for 2021.
PPG acquired four development properties, two preschools, and
one office property over the period and sold all of the shares in
Odin Bidco AS to existing shareholders in Odin Bidco.
The building of two retail properties were completed, increasing
the retail property count to six.
PPG paid four quarterly dividends to the holders of preference
shares in total NOK 9.75 per preference share and additional
dividends of 5.939 per share held by Eidissen Consult AS and
Grafo AS, and 5.164 per share held by Klevenstern AS and Mecca
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 areas and the current portfolio is
contain different segments than only preschool, therefore, PPG
now 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
PPG acquired its first office property in March 2022, Office
Properties is a new segment for the 2022-reporting period.
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. PPG's real estate portfolio per
year-end 2022 consisted of three propert ies in the Preschools
segment, six properties in Retail properties segment, six
properties in the Hotel properties segment, one office property
in addition to four properties in the Property development
segment.
Key material events during 2022
COVID-19 represented an extraordinary situation in the
beginning of 2022, and all restrictions are now lifted. The
pandemic has impacted PPG directly in the two first months of
2022, as lease income from hotel properties were lower as lease
payments are made based on a percentage of the hotels
turnover. Hotel revenue and lease income recovered from
march and by year end 2022, lease income normalized. Lease
agreements on other segments are triple-net and not linked to
operational utilisation of any kind.
During 2022, PPG has declared quarterly dividends to the
holders of preference shares in total NOK 9.75 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 5.939 per
share held by Eidissen Consult AS and Grafo AS, and NOK 5.164
per share held by Klevenstern AS and Mecca AS.
In 2022, PPG has increased the real estate portfolio and its
investment activity, especially within the development property
segment.
The largest single transaction was carried out in May 2022,
when PPG sold its 8.2 % stake in Odin Bidco AS, which owns a
real estate portfolio of ~256 preschools at mainly long-term
triple-net contracts primarily in the Nordics. Pioneer Property
Group ASA entered into an agreement regarding the sale of all
the shares owned by PPG in Odin Bidco AS to the existing
shareholders in Odin Bidco AS. Closing of the transaction took
place on June 6th. The agreed purchase price for the Shares was
MNOK 372.1 generating a profit of MNOK 25.7.
The second largest transaction was the purchase of properties
and shares from Hospitality Invest AS' direct and indirect
subsidiaries.
-
Gaustadskogen Eiendom AS (77%),
-
Tjuvholmen Eiendom AS (100%)
-
Norab Eiendom Vest AS (100%),
All companies are single purpose companies with tenants
owned by Norlandia Health & Care Group AS. In addition, the
transaction also included 23.6% of the shares in Norlandia
Holding AS which owns certain hotels operated by Norlandia
Hotel Group AS,
The board of directors’ report for Pioneer Property Group ASA
(PPG) 2022
ANNUAL REPORT 2022
4
Preschool (NOKt)
2022
2021
Total Income
1 912
371
Fair value adjustment on investment properties
797
0
Operating profit/loss (EBIT)
2 308
268
Investment properties
116 000
11 500
Cash and cash equivalents
7 414
251
Retail Properties (NOKt)
2022
2021
Total Income
29 414
17 725
Fair value adjustment on investment properties
-30 064
117 437
Operating profit/loss (EBIT)
-7 405
130 209
Investment properties
461 000
428 070
Cash and cash equivalents
19 037
21 892
Hotel Properties (NOKt)
2022
2021
Total Income
42 582
26 960
Fair value adjustment on investment properties
-11 701
105 068
Operating profit/loss (EBIT)
13 546
129 863
Investment properties
924 029
915 971
Cash and cash equivalents
48 580
45 414
Office Properties (NOKt)
2022
2021
Total Income
1 616
0
Fair value adjustment on investment properties
26 468
0
Operating profit/loss (EBIT)
26 908
0
0
Investment properties
70 000
0
Cash and cash equivalents
142
0
Property Development (NOKt)
2022
2021
Total Income
Fair value adjustment on investment properties
31 230
-2 043
Operating profit/loss (EBIT)
30 028
-4 494
Investment properties
227 681
37 500
Cash and cash equivalents
65 366
1 994
The total consideration payable by PPG was approximately
MNOK 153.
In terms of other financial investments, PPG increased its bond
holdings in Hospitality Invest bonds (HOIN02, Hospitality Invest
AS 17/22) in first half of 2022. These bonds were later sold as
payment in kind for the transaction mentioned above. PPG
holds per 31.12.22 bonds in Hospitality Invest AS (HOIN02
22/25) with a par value of MNOK 62, and high yield funds with a
market value of MNOK 56.
In total, PPG has acquired investment property with a total
property value of MNOK 331.
Preschools
The Preschool segment consists of three preschool properties
owned by PPG as of 31.12.2022. Total lease income for the
Preschool segment amounted to MNOK 1.9 in 2022 and MNOK
0.4 2021, with a fair property value based on third party
valuation of the properties owned by PPG per 31.12.22 of MNOK
116.
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 6
retailproperties owned by PPG.The building of premises for
Ferda in Rana and Balsfjord, recognised as Project in Progress
for the 2021 Financial Statement, was completed in February
2022 and October 2022 respectively, with a fair value upon
completion of MNOK 63.
Total lease income for 2022 for the retail properties segment
amounted to MNOK 29.2 with a fair property value based on
third party valuations per 31.12.22 of MNOK 461.
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 consists of six hotel properties owned by PPG. Total
lease income for 2021 for the Hotel Properties segment
amounted to MNOK 51 (two hotels under refurbishment) with a
fair property value based on third party valuations per 31.12.22
of MNOK 924.
Office Properties
The first office property was acquired in march 2022, a seven
stories tall building in Bodø,. PPG acquired Terminalveien 10 in
Bodø based on a property value of MNOK 45 together with local
investors. PPG has an ownership of 52 % in the property,
controlling the acquired subsidiary that owns the property. The
transaction was completed March 8, 2022. The property
consideration has been paid in cash and the Group has incurred
in a loan of MNOK 33. The expected annual lease income of
2023 is approx. MNOK 4.
Property Development
Through Pioneer Property Development AS, PPG develop
properties within general commercial real estate and housing.
The segment consists of 6 development projects and the lease
income income for the segment is related to parking and
tenants in residentals that can be developed long term. The
main asset is Evenes Holding AS, which holds two properties in
Evenes in close proximity to Evenes 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 2022
PPG acquired the development rights related to the property in
Evenes Airport in January 2023, through Evenes Holding, a
company owned together with local partners. The purchase
price of MNOK 45 was settled partially with cash and partially
with sellers credit.
Overview of the financial accounts for 2022
Total revenues were MNOK 76.2 in 2022 compared to MNOK
45.1 in 2021. Revenues consisted mostly of rental revenues from
investment properties in Norway.
Operating profit (EBIT) for 2022 amounted to MNOK 69.8,
compared to MNOK 251.5 in 2021. The difference can primarily
be explained by a larger positive fair value revision of MNOK
220.5 in 2021, when the transaction market was really strong,
versus MNOK 16.7 in 2022 as interest rates increased, affecting
the yields on the properties.
In 2022, a loss off MNOK 1.6 from associated companies was
recognised. In 2021, a loss off MNOK 4.1 from associated
companies was recognised from Ramstadsletta and
Kongsparken.
Net financial income for the year was MNOK 6.8 compared to
MNOK 49.2 in 2021, with the majority of the gain recognized
from the sale of Odin Bidco. The sale generated at net gain of
MNOK 25.7. Income taxes decreased from MNOK 72.4 to 11.8.
There have not been any discontinued operations in 2022 or
2021.
This year’s net profit for the group was MNOK 64.8, compared
to MNOK 228.3 in 2021.
The Group had total assets of MNOK 2,459.6 (2,186.6 in 2021).
where MNOK 1,905.8 (1,407.9 in 2021) 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 226.2 (119.4 in 2021) and MNOK 118.9
(154.2 in 2021) in other short-term investments related to
bonds and high yield funds held by PPG.
Total equity amounted to MNOK 1,360.6 (1,377.4) with the
majority of the difference being explained by the profit for 2022,
and the dividends on the ordinary and preference shares paid
during the year.
The annual report gives an accurate overview of the Group’s
financial development throughout the year. There have been no
events after the end of the fiscal year 2022 which have had any
material impact on the financial status of the Group.
Research and Development
The group is not involved in any R&D activities.
Work Environment, Equal opportunities and Discrimination
There was at year end 4 employees in Pioneer Property Group
ASA. There are no employees in any other Group-companies.
The Board of Directors consists of two women and three men.
Managers’ remuneration
The board of directors has prepared a declaration on salary and
other remuneration for the Company's executive management
pursuant to Section 6-16a of the Norwegian Public Limited
Liability Companies Act. The declaration includes the policies
which the Company will use for the determination of salary and
other remuneration to its executive management in the
calendar year 2022. The declaration is made available at the
Group's webpage
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.
Climate risk
Climate related risks 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.
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.
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
.
ANNUAL REPORT 2022
6
The Transparency Act has been incorporated in PPG and the
company is reporting on the Transparency Act for 2022 and the
report will published on the companys webpage
www.pioneerproperty.no.
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.
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 securities that is owned
through optimising capital management. When managing the
capital, PPG will take into account the need for sufficient
liquidity reserves to meet PPG's financial obligations.
The Board of Directors and management performs continuous
assessments of the most important financial risk factors and
evaluates the necessity of implementing specific measures.
Specific measures are evaluated considering the Company’s
total financing risk exposure.
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
2023
Sandra Henriette
Riise
Board member
2015
2023
Geir Hjorth
Board member
2015
2023
Name
Position
Served
since
Term
expires
Even Carlsen
Board member
2015
2023
Nina Torp
Høisæther
Board member
2015
2023
The directors Sandra Henriette Riise and Even 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 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. Ms. 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. Ms. Riise is educated
from BI Norwegian School of Management
Geir Hjorth, Board member
Geir Hjorth currently serves on the board of directors of 20
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.
Even Carlsen, Board member
7
PIONEER PROPERTY GROUP ASA
Even Carlsen has served on the board of directors of Private
Barnehagers Landsforbund (
En. the Private Kindergartens
National Association
), which he also participated in the start-up
of. He has held various board positions in private companies.
Mr. Carlsen is the co-founder of Tromsø Barnehagedrift AS,
which was later merged into Acea AS, and he served as the Chief
Executive Officer of the company from 2003 until 2008.
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, and is
Chaiman of the board at The Service office at Confederation of
Norwegian Enterprises Service, (Nw: Servicekontoret i NHO
Service). Ms. Høisæther is educated within nursing from the
University of Stavanger and University of Oslo.
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even 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 2022
8
We confirm to the best of our knowledge, that the set of Financial statements for the financial year ending 31. December 2022 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, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even 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
Responsibility Statement
9
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP - CONSOLIDATED
Consolidated Statement of Comprehensive Income
NOK thousand
Note
2022
2021
Contractual rental income
13
Other operating income
Total income
Operating expenses
Employee expenses
14
Property expenses
Other operating expenses
15
Total operating expenses
Fair value adjustments on investment properties
6
Operating profit (EBIT)
Gain/Loss from associated companies
8
-1,647
-4,106
Interest income
9
Interest expense
11
Other financial gains/losses (-)
16
Net Finance income (+) /expenses (-)
Profit before tax
Income taxes
17
Profit
Profit/(loss) attributable to
Shareholders of the parent
Non-controlling interest
Profit/(loss) for the period
Profit/(loss) comprehensive income
Other comprehensive income
Items to be reclassified to P&L in subsequent periods:
Exchange differences, from translation of foreign operations
-4,186
-257
Other comprehensive income
-4,186
-257
Total comprehensive income
Comprehensive income attributable to
Shareholders of the parent
Non-controlling interests
Comprehensive income
ANNUAL REPORT 2022
10
Earnings per share (NOK):
Basic earnings per ordinary share
18
Diluted earnings per share (NOK):
Diltuted earnings per ordinary share
18
Weighted average ordinary shares
18
9,814,470
9,814,470
11
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP
Consolidated Statement of Financial Position
NOK thousands
Note
2022
2021
ASSETS
Investment properties
6
Project in progress, investment property
7
Other interest in property
Other investment
9
Associated company
8
Loan to associated company
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 2022
12
PIONEER PROPERTY GROUP
Consolidated Statement of Financial Position
NOK thousands
Note
2022
2021
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
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even 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
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 2021
-988
Profit/(loss) for the period
Exchange diff. from foreign operations
-257
-257
-257
Total comprehensive
Income for the period
-257
Transactions with non-
controlling interests
21
-2,196
-2,196
-744
-2,940
Dividends on preference
shares and ordinary shares
21
-79,727
-79,727
-79,727
Balance at 31 December
2021
-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
Capital reduction
Transaction with non-
controlling interests
20
-2,701
Dividends on ordinary shares
and preference shares
21
-78,128
-78,128
-78,128
Balance at 31 December
2022
-988
-4,443
*) Other reserves
ANNUAL REPORT 2022
14
PIONEER PROPERTY GROUP - CONSOLIDATED
Statement of Cash Flow
NOK thousands
Note
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustments for:
Fair value adjustments on investment property
6
-16,267
-220,462
Fair value adjustments on financial instruments
9
-10,718
Other adjustments
Profit from associated companies
8
Interest net
Taxes paid
-22,229
-6,655
Exchange gains/(losses)
Gain on sale bonds/shares
-28,477
-93,489
Changes in working capital
Trade receivables
4
-3,529
Trade payables
12
-16,770
Other accruals
-1,598
CASH GENERATED FROM OPERATIONS
Interest received
Interest paid
-27,707
-12,917
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
-12,000
Purchase of subsidiaries / properties
19
-284,976
-741,546
Purchase of shares
9
-30,741
Purcase of shares in assosiated companies
8
-93,879
Purchase of bond
9
-222,990
Purchase of funds
9
-3,120
Net purchase of receivables/debt
-43,535
-15,596
Loans to associated companies
9, 20
-2,400
-57,700
Received dividend/repaid paid-in capital other shares
9
NET CASH USED IN INVESTING ACTIVITIES
-21,812
-450,541
FINANCING ACTIVITIES
Proceeds from debt to financial institutions
11
Repayments of debt to financial institutions
11
-194,873
-178,128
Repayments other debt
11
-1,151
Loans from other companies
11
Dividends on ordinary shares
20
-35,251
-44,802
Dividends on preference shares
20
-37,351
-33,955
NET CASH (USED IN) / FROM FINANCING ACTIVITES
Net increase in cash and cash equivalents
-266,875
Cash and cash equivalents at beginning of year
Exchange (losses)/gains on cash and cash equivalents
-259
-1
CASH AND CASH EQUIVALENTS AT END OF YEAR
1. About the business
15
PIONEER PROPERTY GROUP ASA
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.
. 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 30. March 2023.
2. Key transactions and events in 2022
The largest single transaction was carried out in May 2022 when PPG sold its 8.2 % stake in Odin Bidco AS, which owns a real estate
portfolio of ~256 preschools at mainly long-term triple-net contracts primarily in the Nordics. Pioneer Property Group ASA entered
into an agreement regarding the sale of all the shares owned by PPG in Odin Bidco AS to the existing shareholders in Odin Bidco AS.
Closing of the transaction took place on June 6th. The agreed price for the Shares was MNOK 372.1 generating a profit of MNOK 25.7.
The second largest transaction was the purchase of properties and shares from Hospitality Invest AS' in September 2022. The
transaction consisted of majority of the shares in the following direct and indirect subsidiaries: Gaustadskogen Eiendom AS (77%);
Tjuvholmen Eiendom AS (100%) and Norab Eiendom Vest AS (100%). All property companies with tenants owned by the Norlandia
Health & Care Group AS. In addition the transaction also included 23.6% of the shares in Norlandia Holding AS, a company which
owns hotels mainly operated by Norlandia Hotel Group AS.
In October, PPG acquired the remaining 23% of the shares in Gaustadskogen Eiendom AS based on a property value of 78MNOK,
identical to the property value for purchase of 77% of the shares.
Other investments were a 7.500 sqm plot in Mo i Rana, a 51.500 sqm parking area in close proximity to Evenes Airport, and a 44.600
sqm plot situated next to Brennemoen Hotel in Indre Østfold municipality.
PPG continued to grow its diversity within the real estate portfolio with the acquisition of T10 Eiendom AS, a company owning a
seven story large office building in Bodø.
In total, PPG has acquired investment property with a total property value of MNOK 331. See Notes 6 and 19 for further information
on the acquisitions of companies regarded as asset purchases.
.
3. General Accounting Principles
Basis of preparation
Standards (IFRS) 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 2022
16
Consolidation
Subsidiaries are all entities (including structured 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.
Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated.
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit
or loss, statement of comprehensive income, statement of changes in equity and balance sheet, respectively.
Transactions with non-controlling interests in subsidiaries are treated as equity transactions. If shares are acquired from a non-
controlling interest, the difference between the payment and the proportion of the carrying amount of the subsidiary’s net
assets attributable to the shares is recognized in the equity of the parent company’s owners. Gains and losses arising from the
sale of shares to non-controlling interests are recognized in equity.
Foreign currency translation.
The Group’s presentation currency is NOK, which is also the parent company’s functional currency.
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.
The Group has foreign entities with functional currency other than NOK. At the reporting date, the assets and liabilities of
foreign entities with functional currencies other than NOK are translated into NOK at the rate of exchange at the reporting
date and their income statements are translated at the average exchange rates for the year. The translation differences arising
from the translation are recognized in other comprehensive income and accumulated at currency translation as part of other
reserves. On disposal reserves related to actual disposal are transferred to the consolidated statement of comprehensive
income as part of profit or loss on disposal.
Dividend
Pioneer Property Group ASA has two classes of shares, ordinary shares and preference shares. The preference shares were
entitled to annual dividend payments amounting to NOK 9.50 per preference share until the end of June2022. This was
stepped up to NOK 10.00 per preference share from 01 July 2022, 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 2.375 per preference share in first half of 2022, and NOK 2.500 over
the second half of 2022. 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.
Leasing
The Group as a lessee
Leases are recognized as a right -of-use asset and a corresponding liability at the date at which the leased asset is available for
use by the Group (the commencement date). Each lease payment is allocated between the liability and finance cost. The right-
of-use asset is depreciated over the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially
measured on a present value basis. The lease payments are discounted using the interest rate implicit in the lease, if that rate
can be determined, or the lessee’s incremental borrowing rate.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an
expense in the statement of the comprehensive income. Short-term leases are leases with a lease term of 12 months or less.
The Group has only short-term leases.
The Group as a lessor
17
PIONEER PROPERTY GROUP ASA
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 use of estimates and assessment of accounting policies when preparing the annual accounts
Estimates and assumptions
Management has used estimates and assumptions that 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
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 31.12.2022, 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 2022 reporting period would have been
affected by changes in the interest rate that Management considers are reasonably possible:
Interest rate sensitivity
(in TNOK)
-0,50 %
-0,25 %
0,25 %
0,50 %
ANNUAL REPORT 2022
18
Change P&L/Equity
-4173.2
-2086.6
2086.6
4173.2
(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 most the operations of the Group are
located in Norway, 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 cash funds in Swedish Krona at year end
was MSEK 6.8
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
Management assesses the credit quality of the customer, taking into account its financial position, past experience and other
factors. The Group places credit limits on its customers. No credit limits were exceeded during the reporting period, and
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 2022 and 2021 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
Other Receivables
As per 31.12.2022
Total
Not due
between 1 and 60 days overdue
more than 60 days overdue
Trade Receivables
Other Receivables
As per 31.12.2021
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.
19
PIONEER PROPERTY GROUP ASA
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 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
During 2022, 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.
As of the end of the 2022 reporting period, Management considers 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 84. The new
agreement is expected to be paid in periodic payments over a term of 5 years. However, since at the end of the 2022 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 2021 reporting period:
31.12.2021
NOK thousand
<1y
1y-2y
2y-5y
>5y
Total
Borrowings
176 854
107 409
362 741
49 577
696 582
Interest on borrowings
23 573
18 150
25 260
16 099
83 082
Other current liabilities
26 525
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 31.12.22 grants the
Group with 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
ANNUAL REPORT 2022
20
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 2022, the Group has made different investments across a broad range of properties, mainly in Norway and in Sweden
to a more limited extent. 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 is a new one for 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 to with a view to enter into lease agreements
where the Group acts as a lessor.
Preschools
The Preschool segment consists of three preschool property 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 MNOK 0.4 in 2021, with a fair property value based on third party valuation of the
property owned by PPG per 31.12.21 of MNOK 116.
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 6 retail properties owned by PPG. Total lease income for 2022 for the retail properties segment
amounted to MNOK 29.4 with a fair property value based on third party valuations per 31.12.22 of MNOK 461.
Over the period PPG's subsidiary Pioneer Retail Properties has completed two building projects with new premises for Ferda in
Balsfjord and in Mo i Rana. The premises consist of 1200 m
2
Annual lease for 2023 is expected to be MNOK 4.7 MNOK combined for the two new properties.
Property Development
Pioneer Property Development AS develop general commercial real estate and housing. The segment consists of 3
development projects at the end of 2022.
During 2022, the construction of two new retail properties in Balsfjord and Mo i Rana was completed, previously recognized as
Project in progress, investment properties. At year end of 2022, the two properties is recognized as investment properties in
the retail property segment. Please refer to note 6 for further details. In autumn 2022, the building of Ferda Evenes was
initialized, expected to be completed by the spring of 2024.
The existing development project in Evenes, Nordland of 400 000 m
2
airport in Northern Norway was expanded with av additional plot of 51 500 m
2
2
building and a parking lot, with net rental income estimated to 7 MNOK annually. The purchase price for the plot was NOK 74
MNOK.
Hotel Properties
The hotel properties segment includes hotels in both Norway and Sweden, rented out to 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.
21
PIONEER PROPERTY GROUP ASA
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 six hotel properties owned by PPG. Total lease income for 2022 for the Hotel Properties segment amounted to MNOK 42.6
with a fair property value based on third party valuations per 31.12.22 of MNOK 924.
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 hotels market position through reconfigurations and renovations for the hotel to adapt to a changed hotel market.
Currently, the hotels in Forum and Gardermoen is undergoing renovations. When completed, the minimum rent and the
expected rent will be increased.
Office properties
The first office property was acquired in March 2022, a seven stories tall building in Bodø. PPG's has acquired Terminalveien 10
in Bodø based on a property value of MNOK 45 together with local investors. PPG has an ownership of 52 % in the property,
controlling the acquired subsidiary that owns the property. The transaction was completed March 8 2022. The property
consideration was settled with cash and bank debt.
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 2022 includes:
.
NOK thousand
Properties
Properties
Properties
Properties
Properties
Group
Total 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
The comparative period for 2021 is stated below:
NOK thousand
Properties
Properties
Properties
Properties
Properties
Total Income
17 725
0
26 960
461
Fair value adjustment on
investment properties
117 437
-2 043
105 068
Operating profit/loss (EBIT)
130 209
-4 494
129 863
-4 311
Investment properties
428 070
37 500
915 971
Cash and cash equivalents
21 892
1 994
45 414
49 832
..
ANNUAL REPORT 2022
22
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. Cost includes the amount of cash consideration paid and the fair value
of other consideration given.
Transaction costs include stamp duty, lawyer's fees and commission to bring the property to the condition that is necessary to
put the property into operation. Recognised value also includes replacement cost for parts of the existing investment property
at the time when the cost is incurred and the terms for recognition has been met.
After initial recognition the investment property is subsequently recognised at fair value. Changes in fair value are presented in
the 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 in the statement of comprehensive
income the same year as disposal. Gains or losses from disposal of investment property is the difference between net selling
price and the carrying amount of the asset.
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 that are not under
development, from an independent valuer. The independent valuer has in these reports valuated the properties on an
individual basis using a combination of discounted cash-flow analysis and property yield level. 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 or not the property is on leased land (Norwegian: festetomt) were applied to assess the
yield for the respective property/location.
As of the end of the 2022 reporting period, the following gross yield for the investment properties is observed for the
properties and the valuation of the properties implies the following yields:
Preschool
Properties
Retail
Properties
Development
Properties
Hotel
Properties
Office
Properties
Total
Gross yield range 2022
Weighted average gross yield 2022
Gross yield range 2021
Weighted average gross yield 2021
The calculated weighted average gross yield is based on annual contractual lease income of 2023 of MNOK 105.7 after
refurbishment of Forum and Voss and is based on an expected annual inflation of 6.8% and market rent at the end of lease
period.
Description
23
PIONEER PROPERTY GROUP ASA
As of 31.12.22 the Groups investment property portfolio consists of three preschool properties, six retail properties, four
hotels in Norway, two hotels in Sweden and land in Oslo, Rana, Evenes and Indre Østfold. The Group owns and manages a
total area of approximately 75.500 square meters, not including associated companies and development properties.
Overview of account movements 2022
NOK thousand
Preschool
Properties
Retail
Properties
Development
Properties
Hotel
Properties
Office
Properties
Other
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
Sale of operations
-
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
The segment of hotel properties represented the biggest share of value of properties in the Group at year end of 2022. The
largest acquisitions in 2022 were purchase of additional land close to Evenes, within development properties, and the
purchase of two preschools in Oslo. In addition an office property in Bodø was acquired based on a property value of MNOK
45.
With respect to the retail properties, the additions made during 2022 is related to the completion of properties located in Mo i
Rana and in Balsfjord, recognized as
project in progress, investment property in
2021.
In summary the total Group’s portfolio as of 31 December 2022 was valued to MNOK 1 798.7 MNOK, an increase from MNOK
1 393 from year-end 2021.
Overview of account movements 2021
As of 31.12.21 the Groups investment property portfolio consisted of one preschool property, six retail property and one plot
near Evenes, all located in Norway.
NOK thousand
Preschool
Properties
Retail Properties
Development
Properties
Hotel
Properties
Group
Fair value in the beginning of the year
Investment in subsidiaries /properties
Effect of currency exchange differences in
foreign operations
Fair value adjustments on investment
properties
Fair value in the end of the year
Net change in unrealized gain
Commitments
ANNUAL REPORT 2022
24
As of the end of the 2022, the undergoing refurbishment of Forum Hotel and the planned renovation of Park Hotel
Vossevangen with limited rent income contributions from the property over the renovation period 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. During 2022, a renovation budget of 20 MNOK was agreed
with the tenant in Guard Hotel, increasing the minimum rent to 19,1 MNOK.
The Group had similar commitments of this type at the end of the 2021 reporting period, with both Park Hotel Vossevangen
and Forum Hotel under renovation.
Total property operating expenses
The Group did not incur any direct operating expenses (including repairs and maintenance) in investment property that did not
generate rental income during the 2022 and 2021 reporting periods. As for the investment properties that did generate rental
income during the 2022 and 2021 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, and potential physical damage to properties could be severe. However, all properties
are insured. In November 2022, a flood in Voss caused damages on some equipment and installations, however all costs has
been recovered by the insurance company. On long term, such events may lead to increased insurance cost, but this has not
yet been observed.
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 2022, 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 2021
As of 31 December 2021, 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 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
25
PIONEER PROPERTY GROUP ASA
0 %
5 %
Retail properties - Comparative period 2021
As of 31 December 2021, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
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, as no change in significant unobservable inputs would cause a change in fair value that would
significantly affect the results of the Group .
Hotel properties
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 %
Hotel Properties - Comparative period 2021
As of 31 December 2021, 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 2022, the Group had the following sensitivity to changes in these identified significant inputs:
NOK million
Yield sensitivity
NOI sensitivity
-5 %
0 %
5 %
.
.
7. Projects in progress, investment properties
ANNUAL REPORT 2022
26
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.
Description
Project in progress, investment properties
Cost 1 January 2022
45 383
Additions
238
Additions from acquisition of companies
Realisations
Completed projects, transferred to investment properties
-44 882
Depreciation
Exchange differences
Carrying value 31 December 2022
739
Bobil Eiendom Balsfjord AS and Bobil Eiendom Rana AS completed the construction of premises of approx. 1 250 sqm each,
2.500 sqm in total, for sale and rental of caravans and motorhomes in Rana and Balsfjord in Northern Norway in Q1 2022 and
Q3 2022 respectively. For the year end reporting of 2022, the two properties are now recognised as investment properties.
For 2022, the project in progress is mainly related to building of new premises in Evenes.
8. Associated companies
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. This is generally the case where the group holds between 20% and 50% of the voting
rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at
cost.
Under the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize
the group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s share of movements
in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from
associates and joint ventures are recognized as a reduction in the carrying amount of the investment. When the group’s share
of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-
term receivables, the group does not recognize further losses, unless it has incurred obligations or made payments on behalf
of the other entity. Unrealized gains on transactions between the group and its associates are eliminated to the extent of the
group’s interest in these entities. Unrealized losses are also eliminated, unless the transaction provides evidence of an
impairment of the asset transferred.
Description
Kongsparken AS
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 newbuild 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
27
PIONEER PROPERTY GROUP ASA
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.
Ramstadsletta Utvikling AS
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 31.12.2022. The company is treated as an
associated company.
Norlandia Holding AS
In September 2022 PPG acquired 23,58% of the shares in Norlandia Holding AS. Norlandia Holding is an investment company
within hotel properties and development properties. Through its subsidiaries the company owns 21 properties and has 9
associated companies. The net profit in the company was MNOK 20.1 and the total book value of equity was MNOK 383.5. The
company is treated as an associated company.
The Group’s shares of the financial positions in the companies owned per year end 2022 and 2021:
NOK thousand
31.12.2022
31.12.2021
Goodwill
Deferred tax
886
Licenses, patents, rights
21 120
Investment properties
5 617
Other non-current loans
93 114
Other non-current assets
232 879
Cash
4 590
Other current assets
30
Borrowings (current and non-current)
-324 091
Other non-current liabilities
-
Other current liabilities
-2 970
Net assets
31 174
Share of ownership
14 868
Distribution of loss uneavenly between share classes
Carrying amount (at percentage of part. by the Group)
107 100
14 868
Changes in the Group’s carrying amount in the periods:
NOK thousand
2022
2021
Carrying amount at 01.01
Invested capital in Norlandia Holding AS
Invested capital in Ramstadsletta Utvikling AS
Invested capital in Forus Holdco AS
Invested capital Bm3 Eiendom AS
Interest-free loan to Ramstadsletta AS (Note 20)
Share of gain in the associated companies
Carrying amount at 31.12
ANNUAL REPORT 2022
28
The share of profit (loss) is calculated in the following table, showing the breakdown by associate and its contribution to the
current year consolidated income statement of the Group, for the year 2022:
NOK
thousand
Kongsparken AS
Ramstadsletta
Utvikling AS
Holdco AS
Norlandia
Holding AS
Bm3
Eiendom AS
Total
Net income
103
The Group' share of ownership
50,00 %
40,08 %
50,00 %
23,58 %
30,71 %
Share of loss in the owner
period
32
Share of profit (loss) is calculated in the following table, showing the breakdown by associate and its contribution to the
current year consolidated income statement of the Group, for the year 2021 is calculated as:
NOK
thousand
Kongsparken AS
Ramstadsletta
utvikling AS
Net income
The Group' share of ownership as of 31.12
50 %
40 %
50 %
Share of loss in the owner period
.
.
.
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
Financial assets measured at amortized cost are non-derivative financial assets with contractual payments that consist
exclusively of payments of interest and principal on the outstanding nominal amount and are held with the objective of
collecting the contractually agreed cash flows, such as loans and receivables, trade receivables or cash and cash equivalents
(the “hold” business model).
After initial recognition, these financial assets are measured at amortized cost using the effective interest method less
impairment. Gains and losses are recognized in profit or loss when the loans and receivables are impaired or derecognized.
Interest effects from the application of the effective interest method and effects from currency translation are also recognised
through profit or loss.
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.
29
PIONEER PROPERTY GROUP ASA
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, financial liabilities are measured at fair value. The transaction costs directly attributable to the
acquisition are also recognized for all financial liabilities that are subsequently measured at fair value not through profit or
loss. Trade payables and other non-derivative financial liabilities are generally measured at amortized cost using the effective
interest method. A financial liability is derecognized when the obligation underlying the liability is discharged, cancelled, or
expires.
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. This applies regardless of whether the price is directly observable or estimated
using a valuation method.
The fair value is not always available as a market price but must be calculated on the basis of a range of valuation parameters.
For this purpose, various categories are established in which, depending on the availability of observable parameters and the
significance of these parameters for determining the fair value as a whole, the following levels apply:
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
The shares in Odin Bidco AS was sold in May 2022. Until the moment of their disposal, the shares have been measured by an
independent valuation expert. Odin Bidco AS owns preschool properties in Norway, Sweden, Finland and Netherlands.
For the estimate of 2021, revenue was based on rental agreements adjusted for the consumer price index and it was assumed
that the contracts are renewed at expire. The rental agreements are triple net contracts where the operator has the main
responsibility for annual maintenance, insurance, and other directly related property. Average EBITDA-margin was estimated
to 96.80%. Finance expense is based on the current borrowing structure. In addition, growth based on future acquisitions are
included. The equity discount rate applied in 2021 was 9.80%.
The most sensitive assumption is the discount rate. If the discount rate were reduced or increased with 0.25%, the
corresponding value of the Group’s share of Odin would have increase/decrease with approximately 4.5% in 2021.
.
Specification of financial assets and liabilities:
The Group holds the following financial assets and liabilities:
NOK thousand
31.12.2022
31.12.2021
Financial assets at amortised cost
Loan to associated companies
Loan to other companies
Cash and cash equivalents
119 383
Trade and other receivables
ANNUAL REPORT 2022
30
Financial assets at fair value through profit or loss
Other investments 1)
Other Shares 2)
Sum
531 401
733 321
Financial liabilities at amortised cost
Borrowings
Other current liabilities
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 the ownership share in Odin Bidco AS in 2021 and 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 2022:
1) Bonds and funds are measured at fair value as level 1 in the fair value hierarchy in accordance with quoted prices.
2) 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.
Specification of investments measured at fair value held as of 31 December 2021:
NOK
thousand
1) Bonds
1) Funds
2) Odin
Bidco AS
2) Hospitality
Invest AS
2)Pancom AS
Total
Fair value in the beginning of the year
Purchase in 2022
Sold in 2022
Repaid capital
Currency adjustments
Fair value adjustments
Fair value in the end of the year
.
10. Cash and cash equivalents
Accounting principles
Cash comprises cash on hand and 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.
Description
Cash and cash equivalents include bank deposits:
NOK in thousand
31.12.2022
31.12.2021
Bank deposits
Total
31
PIONEER PROPERTY GROUP ASA
All interest income relates to interest on bank deposits.
The bank deposits include restricted cash related to tax withholding account of TNOK 223.6 per 31 December 2022 (TNOK 140
per 31 December 2021).
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. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the income statement over the duration of the borrowings.
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 2022:
NOK thousand
31.12.2022
31.12.2021
Non-current
Commercial bank loans
Other loans
Total
NOK thousand
31.12.2022
31.12.2021
Current
Commercial bank loans
Other loans
Total
NOK thousand
31.12.2022
31.12.2021
Total non-current and current
Commercial bank loans
Other loans
Total
The borrowings the Group holds as of the end of 2022 and 2021 are linked to the investment properties owned by the Group.
The following assets have been pledged as security for liabilities:
NOK thousand
31.12.2022
31.12.2021
Investment property
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).
Relevant terms and conditions
ANNUAL REPORT 2022
32
Out of the total amortised cost value of all borrowings held as of 31.12.2022, MNOK 109,5 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 2022 has been 5,07%. 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 65 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 2022 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 2022
Cash flows
Cash flow received
Repayments
Non-cash:
Borrowing classified as non-current at 31 Desember 2021
becoming current during 2022
Purchase of operations
Interest
At 31 December 2022
At 1 January 2021
Cash flows
Cash flow received
Repayments
Non-cash:
Purchase of operations
Interest
At 31 December 2021
.
12. Other current liabilities
NOK in thousand
31.12.2022
31.12.2021
Trade payable
Government taxes
Accrued interest
Dividend
Accrued cost, Prepaid revenues
Other current liabilities
Total other current liabilities
33
PIONEER PROPERTY GROUP ASA
Dividend relates to Q4 2022 dividend approved by the board 13. October 2022, with payment date in January 2023.
13. Rental income
Accounting principles
Revenue is recognised when it is probable that transactions will generate future economic benefits that will flow to the
company and the amount can be reliably estimated. Revenues are presented net of value added tax and discounts.
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
31.12.2022
31.12.2021
Within 1 year
Between 1 and 5 years
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 2022 and 2021 has been originated in Norway and Sweden.
Government grants related to income
The Group received Government grants during 2021 for an amount of MNOK 2.05, as a compensation from the local
municipality in Sweden, to partially compensate its loss in revenue due to the COVID restrictions. This grant related to income
has been presented as part of the consolidated income statement, under the line item “rental income”, as it is the loss of
rental income that the grant compensated. No compensation has been granted for 2022.
14. Employee expenses and management remuneration
NOK in thousand
2022
2021
Salary
3 620 160
2 412 319
Payroll tax
583 585
374 396
Pension benefits
Other benefits
Total salary and pension costs
4 300 638
2 855 925
Average Employees
3
2
ANNUAL REPORT 2022
34
The remuneration to the management in 2022:
NOK
Salary
Bonus
Other benefits
Pension benefits
John Ivar Busklein (CEO)
Øystein B. Grini (CFO)
Total management remuneration
The remuneration to the management in 2021:
NOK
Salary
Bonus
Pension benefits
Total compensation
John Ivar Busklein (CEO)
521 320
Øystein B. Grini (CFO)
416 369
Ole-Kristofer Bragnes (former CFO)
575 040
Total management remuneration
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. Ole-Kristofer Bragnes held the position as CFO from 24 October 2019 until
31. August 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 will use for the determination of salary and
other remuneration to its executive management in the calendar year 2022 as published on the company's web page
pioneerproperty.no. These policies shall be subject to an advisory vote by the general meeting.
The remuneration to the Board of Directors:
NOK
2022
2021
Roger Adolfsen (Charirman of the board)
130 000
110 000
Geir Hjorth (board member)
130 000
110 000
Sandra Riise (board member)
130 000
110 000
Even Carlsen (board member)
130 000
100 000
Nina Høisæter (board member)
130 000
110 000
Total remuneration
650 000
540 000
.:
15. Other operating expenses
NOK in thousand
2022
2021
Accounting fees, auditing, legal expenses and other fees
Other operating expenses
Total other operating expenses
.
Fees from the auditor:
35
PIONEER PROPERTY GROUP ASA
Fees from the auditor
NOK in thousand
2022
2021
Auditing fees
Other fees from the auditor
Total auditing fees
..
.
16. Other financial gains (losses)
NOK thousand
2022
2021
Currency gain/loss
Gain on sale shares
Gain on sale bonds
Loss on sale funds
Changes in fair value (see note 9)
Other adjustments
Other financial income
Other financial expenses
Sum
The gains on sale of bonds listed under 2022 is related to the sale of Hospitality Invest AS (HOIN02) bonds and the sale of First
High Yield Fund with a value of MNOK 50. The gains on sale of shares are related to the sale of the shares in Odin Bidco.
The changes 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. Tax is recognised in the income statement, except when
related to items recognised in other comprehensive income or directly in equity. In such cases, the tax amount is also
recognised in other comprehensive income or directly in equity.
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. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
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. Deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
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 2022
is MNOK 175.1 (MNOK 151.5 in 2021).
ANNUAL REPORT 2022
36
Changes in deferred tax liabilities:
NOK in thousand
Investment property
Other items
Total
01.01.2021
Recognized deferred tax
31.12.2021
Recognized deferred tax
31.12.2022
Income tax expense:
NOK in thousand
2022
2021
Tax payable
Change in deferred tax
Changes related to currency translation
Other changes
Income tax expense
.
Reconciliation of tax expense:
NOK in thousand
2022
2021
Profit before income tax
Tax expense based on standard rate of
Norwegian (22%)
Adjustments for:
Effect of tax rates outside Norway
Tax effect not taken into account at acquisition
Changes related to currency translation
Permanent differences
Other differences
Income tax expense for the period
.
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
31.12.2022
31.12.2021
Net profit continuing operation
64 775 432
228 300 631
Less pref share dividends
-37 835 722
-34 925 280
Profit attributable to ord shares
26 939 710
193 375 351
Weighted avg ord shares
9 814 470
9 814 470
EPS to ord shares
2,74
19,70
37
PIONEER PROPERTY GROUP ASA
Diluted
As per 31 December 2022 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
Business combinations:
The acquisition method of accounting is used to account for business combinations by the group. The consideration
transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, liabilities incurred to the
former owners of the acquired business, equity interests issued by the Group, fair value of any asset or liability resulting from
a contingent consideration arrangement and fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value, or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
Acquisition of subsidiaries not viewed as a business combination
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.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with
the Group’s accounting policies
Upon purchase of property management assess whether the purchase constitute purchase of a business or purchase of an
asset in accordance with IFRS 3.
Acquisition of companies regarded as asset purchase:
In March 2022, Terminalveien 10 in Bodø was acquired together with local partners, holding 52% of the shares in T10 Holdco.
The largest tenants is Haneseth Bodø, Haneseth VVS and Bodø Kontorsenter AS.
Within the property development segment, PPG increased its ownership to 85% in Evenes Tomteselskap AS indirectly with
additionally ~24% of the shares in Evenes Tomteselskap AS through an 53% owned SPV. Further, the development the
acquisition of Steinbekkhaugen AS, a 7,5 acre large development plot.
Two preschools was acquired during 2022, owned by the SPV’s Gaustadskogen Eiendom AS and Tjuvholmen Eiendom AS. The
property value was MNOK 105 and the annual lease income is estimated to MNOK 5.8. The preschools are located in Oslo.
The non-controlling interest in PPG is related to the shares in Park Hotel Holdco, Evenes Tomteselskap AS and T10 Holdco AS.
For 2022, the transactions with non-controlling interest has been purchase of additional shares in Evenes Tomteselskap AS,
and the establishment of T10 Holdco AS together with local partners who acquired 48% of T10 Holdco AS.
NOK in thousand
2022
2021
Purchase of subsidiaries/Properties -cash
Cash acquired companies
ANNUAL REPORT 2022
38
Debt acquired companies
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%
Companies bought or incorporated in 2021:
Company
Location
Share of
Share of
Name
ownership
voting rights
Pioneer Hotel Properties AS
Norway
100 %
100%
Up North Property AS
Norway
90 %
90%
Forum Holdco AS
Norway
100 %
100%
Forum Hotellbygg AS
Norway
100 %
100%
Park Hotel Holdco AS
Norway
50 %
50%
Park Hotel Eiendom AS
Norway
50 %
50%
Brennemoen Hotel Eiendom AS
Norway
100 %
100%
Guard Hotel AS
Norway
100 %
100%
Guard Hotel II AS
Norway
100 %
100%
Köping Hotellfastighet AB
Sweden
100 %
100%
Strand Hotell Borgholm Fastighets AB
Sweden
100 %
100%
Ås Næring AS
Norway
100 %
100%
Askjem Eiendom AS
Norway
100 %
100%
Caravan Eiendom Grimstad AS
Norway
100 %
100%
Bobil Eiendom Grimstad AS
Norway
100 %
100%
Bobil Eiendom Fauske AS
Norway
100 %
100%
Bobil Eiendom Balsfjord AS
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%
39
PIONEER PROPERTY GROUP ASA
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%
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%
The Group consists of the following subsidiaries per 31 December 2021:
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%
Pioneer Retail Properties AS
Norway
100 %
100%
Norway
100 %
100%
Norway
100 %
100%
Norway
100 %
100%
ANNUAL REPORT 2022
40
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
53 %
53%
Norway
66 %
66%
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%
Norway
100 %
100%
Sweden
100 %
100%
Sweden
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 31.12.2022:
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
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 31.12.2021:
41
PIONEER PROPERTY GROUP ASA
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
Mecca Invest AS
Substantial shareholder
Norlandia Health & Care Group 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
Ramstadsletta Utvikling AS
Associated company
Indirect ownership of shares by board member per the balance sheet date:
2022
Ord. Shares
Pref. shares
Ord. Shares
Pref. shares
Roger Adolfsen
-
Even Carlsen
-
The Group had the following material transactions with related parties:
NOK in thousand
2022
2021
Rent revenue from Norlandia Health & Care Group AS including subsidiaries
Rent revenue from Ferda Norge AS
Rent revenue from Norlandia Hotel group
Management fee from Up North Hospitality AS
Management fee from Oslo Corporate Holding AS
M&A services and Management fee to Hospitality Invest AS
Interest income from associated companies
Sale of bonds to related parties
Sale of receivables to related parties
Purchase of shares and properties from related parties
Purchase of receivables from related parties
Purchase of shares and properties from related parties
Transactions made between the related parties are made on terms equivalent to those that prevail in the market at arm
length.
Receivables from related parties
ANNUAL REPORT 2022
42
NOK in thousand
31.12.2022
31.12.2021
Norlandia companies
Kongsparken AS
Ramstadsletta Utvikling AS
Smedplassen Eiendom AS
Ferda Norge
Wayfare Invest AS
Acea Invest AS
Liabilities to related parties
NOK in thousand
31.12.2022
31.12.2021
Norlandia companies
Kidprop AS
Ferda Norge
For compensation to key management personnel, see note 14.
Loans to associate entities
During the 2022 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 48. 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 38. 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 an amount of MNOK 2.1.
21. Share capital and shareholder information
The Company have two classes of shares, ordinary shares and preference shares. As of 31 December 2022, 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 9.50 per
preference share per annum which stepped up to NOK 10.00 on 01 July 2022. Dividend payments are made quarterly with
NOK 2.375 per preference share (NOK 2.500 after 01 of July), 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 2.375 per preference share (NOK 2.500 after 01. of July)
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
43
PIONEER PROPERTY GROUP ASA
Number of
shares
Ordinary
shares
Preference
shares
Share premium
Treasury
shares
Total
At 1 January 2021
Capital reduction
Payment premiums 2021
Acquisition of treasury shares
At 31 December 2022
Capital reduction
Payment premiums 2022
Acquisition of treasury shares
At 31 December 2022
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.
During 2022, PPG has declared quarterly dividends to the holders of preference shares, in total MNOK 37.4. Furthermore PPG paid
dividends to holders of the ordinary shares of MNOK 35.3.
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%
10 largest shareholders registered in VPS as of 31 December 2021:
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%
10,27%
0,49%
Nordnet Bank AB
0,00%
7,56%
0,36%
Avanza Bank AB
0,00%
7,52%
0,36%
The Bank of New York Mellon
0,00%
6,90%
0,33%
Other Shareholders
0,00%
67,75%
3,20%
Total
100 %
100 %
100%
ANNUAL REPORT 2022
44
.
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.
23. New standards not yet adopted
There are no new or amended standards that affect the Group as of the year 2022.
There are a number of standards, amendments to standards, and interpretations which have been issued by the International
Accounting Standards Board (IASB) that are effective in future accounting periods that the Group has decided not to adopt early.
None of these would be expected to have a material impact on the entity in the future reporting periods and on foreseeable
future transactions.
24. Subsequent events
PPG acquired the development rights related to the property in Evenes Airport. Owned together with local partners. The purchase
price of MNOK 45 was settled partially with cash and partially with seller’s credit.
45
PIONEER PROPERTY GROUP ASA
Alternative Performance Measures
The company reports the following alternative performance measures (APMs):
APM
amounts in NOK million
Explanation
2022
2021
EBIT
Earnings before interest and taxes
76 571
300 710
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
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.
69 974
41 526
ANNUAL REPORT 2022
46
ANNUAL REPORT
(PARENT COMPANY)
2022
PIONEER PROPERTY GROUP ASA
47
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP ASA
STATEMENT OF INCOME
Note
2022
2021
OPERATING REVENUE AND EXPENSE
Revenue
1
9,689,910
4,124,453
TOTAL OPERATING REVENUE
9,689,910
4,124,453
Employee benefits expense
2
4,752,215
2,844,664
Depreciation and amortisation expense
3
12,279
6
Other operating expenses
2
6,802,962
5,982,633
TOTAL OPERATING EXPENSES
11,567,456
8,833,040
OPERATING PROFIT OR LOSS
-1,877,546
-4,708,587
FINACIAL INCOME AND EXPENSES
Financial income
Changes in market value of fin. cur. assets
4.5
47,160
11,301,327
Income from subsidiaries
5
1,692,676
994,910
Interest received from group companies
1.5
34,561,471
23,141,361
Other interest
5
10,276,108
13,136,938
Other financial income
5
83,542,310
98,289,996
Total financial income
130,119,725
146,864,531
Financial expenses
Changes in market value of fin. cur. assets
4.5
-
78,878,891
Interest paid to group companies
1.5
391,355
360,651
Other interest
5
43,579
-
Other financial expense
5
609,227
8,791,528
Total financial expenses
1,044,161
88,031,070
NET FINANCE
129,075,564
58,833,461
ORDINARY RESULT BEFORE TAX
127,198,018
54,124,873
Tax on ordinary result
6
13,545,387
26,775,800
PROFIT
113,652,631
27,349,073
ATTRIBUTABLE TO
To additional dividends payable
78,127,825
43,953,128
Given intra-group contribution
35,524,807
-
To other equity
-
-16,604,053
Net brought forward
113,652,631
27,349,074
ANNUAL REPORT 2022
48
PIONEER PROPERTY GROUP ASA
Balance sheet pr. 31.12.2022
Note
2022
2021
ASSETS
Fixed assets
Tangible assets
Fixtures and fittings, office machinery etc.
3
51,793
20,100
Total tangible assets
51,793
20,100
Financial fixed assets
Investments in subsidiaries
7
585,011,829
31,088,422
Loans to group companies
1
321,152,191
671,831,771
Investments in associates
6
87,782,718
-
Investments in shares or units
38,282,669
310,985,144
Total financial fixed assets
1,032,229,407
1,013,905,337
TOTAL FIXED ASSETS
1,032,281,200
1,013,925,437
CURRENT ASSETS
Receivables
Receivables on group companies
1
2,299,170
1,928,666
Other short-term receivables
9,202,846
11,368,909
Total receivables
11,502,016
13,297,575
Investments
Quoted bonds
4
62,000,000
49,625,000
Other financial Instruments
4
56,953,866
104,600,066
Total receivables
118,953,866
154,225,066
Cash and bank deposits
8
124,545,576
49,709,708
TOTAL CURRENT ASSETS
255,001,458
217,232,349
TOTAL ASSETS
1,287,282,658
1,231,157,786
49
PIONEER PROPERTY GROUP ASA
PIONEER PROPERTY GROUP ASA
Balance sheet pr. 31.12.2021
Note
2022
2021
EQUITY AND LIABILITIES
Equity
EQUITY AND LIABILITIES
Share capital
9,10,11
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
622,344,289
586,819,482
TOTAL EQUITY
1,191,676,244
1,156,151,438
Liabilities
Provision
Deferred tax
6
283,680
442
Total provisions
283,680
442
Other non-current liabilities
Liabilities to group companies
1
9,136,724
9,017,897
Total other non-current liabilities
9,136,724
9,017,897
TOTAL NON-CURRENT LIABILITIES
9,420,404
9,018,339
Current liabilities
Accounts payable
3,912,344
1,019,678
Income tax payable
6
6,961,967
18,905,888
Dividends payable
14,742,481
9,216,394
Liabilities to group companies
1
28,637,189
35,770,318
Other current liabilities
31,837,408
870,166
TOTAL SHORT-TERM LIABILITIES
86,186,009
65,988,009
TOTAL LIABILITIES
95,606,413
75,006,348
TOTAL EQUITY AND LIABILITIES
1,287,282,658
1,231,157,785
Oslo, 30 March 2023
Board of Directors of Pioneer Property Group ASA
Roger Adolfsen
Chairman of the Board
Sandra Henriette Riise
Member of the Board
Even 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 2022
50
PIONEER PROPERTY GROUP ASA
Statement of Cash Flow
Note
2022
2021
Cash flows from operating activities
Profit before tax
127,198,018
54,124,874
Taxes paid
-18,905,888
-6,655,427
Gains and losses on sale bonds
4
-3,385,000
-93,488,770
Gains and losses on sale funds
4
609,227
-
Depreciation
3
12,279
-5,743
Gains and losses on sale shares
-80,157,310
5,744
Group contributions
1
-1,692,676
-994,910
Exchange gains/(losses)
-
7,105,053
Fair value adjustmenst on quoted bonds
4
-47,160
67,577,564
Trade receivables
933,756
-933,756
Trade payables
2,892,666
621,914
Other accruals
1,699,835
-2,700,857
Net cash flow from operating activities
29,157,747
24,655,686
Cash flows from investing activities
Payments for purchase of shares
-650,140,606
-13,622,637
Payments for purchase of other investments
3
-43,972
-25,843
Payments of loan to group companies
1
-644,473,553
Payments from other loans
30,741,488
-
Proceeds from loan to group companies
1
350,798,408
-
Proceeds from sale of shares
383,631,273
23,045,624
Proceeds from issuance of long term debt
-
-
Proceeds from sale of funds
4
49,816,734
-
Proceeds from sale of bonds
4
214,000,000
358,960,824
Payments to buy other investments
-2,758,056
-3,120,495
Payments for purchase of quoted bonds
-222,990,000
-
Net cash flow from investments activities
153,055,269
-279,236,080
Cash flow from financing activities
Payments for purchase of own shares
-
-
Dividends paid
-72,601,738
-78,756,725
Repayment of share premium reserve
-
-
Group contributions paid
-35,770,318
-318,379
Group contributions received
994,910
3,591,379
Received share premium
-
-
Net cash flow from financing activities
-107,377,146
-75,483,725
Net change in cash and cash equivalents
74,835,869
-330,064,119
Cash and cash equivalents at the beginning of the period
49,709,708
379,773,825
Cash and cash equivalents at the end of the period
124,545,576
49,709,708
51
PIONEER PROPERTY GROUP ASA
Notes to the financial statements 2022
Accounting Principles:
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in
Norway.
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 recognised 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 recognised in the same year as they are recognised in the financial
statement of the provider. If dividends / group contribution exceed 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 recognised 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,
ANNUAL REPORT 2022
52
highly liquid investments with maturities of three months or less.
Note 1 - Liabilities to/receivables from group companies
Interest received from group companies is NOK 34 561 471 and interest paid to group companies is NOK 391 355. Total income on
management fee to group companies is NOK 9 685 809, included in this amount is accrued income with NOK 7 185 479.
Receivables
Per 31.12.
Per 01.01.
Accounts receivable
0
933 756
Group contributions
1 692 676
994 910
Other short term receivables
606 494
0
Loans to group companies
321 152 191
671 831 771
Total receivables
323 451 361
673 760 437
Liabilities
Group contributions
28 637 189
35 770 318
Other liabilities
9 136 724
9 017 897
Total Liabilities
37 773 913
44 788 215
Note 2 - Management and auditor compensation
The company's auditor expenses (VAT included) :
2022
2021
Statutory audit
610 940
609 227
Other services
0
115 607
Total
610 940
724 833
2022
2021
Payroll
4 070 852
2 614 263
Payroll expenses (employer tax)
583 585
374 396
Pension cost
61 149
37 002
Other payments
36 629
-180 997
Total
4 752 215
2 844 664
It's been paid remuneration for directors with NOK 650 000.
Roger Adolfsen (Chairman of the board)
130 000
Geir Hjorth (board member)
130 000
Sandra Riise (board member)
130 000
Even Carlsen (board member)
130 000
Nina Høisæter (board member)
130 000
The company has four employees, three in 100% and one 28.4% position and fall under the Act on Mandatory occupational pensions act, and
they have established mandatory occupational pensions for the employees.
53
PIONEER PROPERTY GROUP ASA
NOK
Salary
Bonus
Other benefits
Pension cost
Total Compensation
Øystein B. Grini (CFO)
1 282 000
4 392
24 757
1 461 149
John Ivar Busklein (CEO)
(28,4% part time position)
525 713
683 012
Total
1 807 713
2 144 161
John Ivar Busklein (CEO) and Øystein Grini received a bonus of NOK 150 000 each, paid in first quarter of 2023 for their performance in Pioneer
Property Group ASA.
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 a determination of salary and other remuneration to the executive management, in accordance with
applicable law. The declaration includes the policies which PPG will use 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. These policies shall be subject to an
advisory vote by the general meeting.
Note 3 - Fixtures and fittings, office machinery etc.
Fixtures and fittings, office
machinery
etc.
Acquisition cost as at. 1/1 25 843
+ Additions 43 972
Acquisition cost as at. 31/12 69 815
Accumulated depreciation 1/1 5 743
+ Depreciation for the year
12 279
Accumulated depreciation 31/12
18 021
Net Value 31/12 51 794
Percentage depreciation 33
ANNUAL REPORT 2022
54
Note 4 - Quoted bonds
Financial instruments has 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
62 000 000
Total
62 000 000
62 000 000
Funds:
Acquisition cost
This year change
in value
Market Value
Holberg Kreditt A Fond
55 672 760
56 953 866
Total
Quoted bonds sold/redeemed in 2022:
Acquisition
cost
Change in
value previous
years
Change
in value
this
year
Gain
HOIN 17/12 FRN
198 490 000
0
3 385 000
First Fondene AS
50 180 336
245 625
609 226
Total
265 754 861
245 625
Note 5 - Financial income and expenses
2022
2021
Financial income:
Change in marked value of fin.cur.assets
47 160
11 301 327
Group contribution
0
994 910
Gain on sale of subsidiaries
0
0
Interest received from group companies
34 561 471
23 141 361
Other interest
10 276 108
13 136 938
Currency gain
0
1 680 731
Other financial income
1 692 676
3 120 495
Gain on sale quoted bonds
83 542 310
93 488 770
Total financial income
130 119 725
146 864 532
Financial expenses:
Change in marked value of fin.cur.assets
0
78 878 891
Interest paid to group companies
391 355
360 661
Other interest
43 579
0
Currency loss
0
8 785 784
Loss on sale of shares
609 277
5 744
Total financial expenses
1 044 161
88 031 069
55
PIONEER PROPERTY GROUP ASA
Note 6 - Tax
Calculation of this years tax basis:
Net profit/loss before tax expense
127 198 018
+ Permanent differences
-68 601 863
+ Changes in temporary differences
-6 339
+ Received group contributions
1 692 676
- Paid group contributions
-28 637 189
= Income
31 645 302
This years income tax expense consist of:
Estimated tax of net profit
13 262 149
= Tax payable
13 262 149
+/- Change in deferred tax
283 238
= Total tax expense
13 545 387
Tax rate
22%
current tax liability:
Tax payable
13 262 149
+/- Effect on tax of group contributions
-6 300 182
= Tax payable
6 961 967
ANNUAL REPORT 2022
56
Note 7 - Investments in subsidiaries
Subsidiaries are valued at cost in the companys accounts.
The company has shares in the following subsidiary:
Subsidiary, office location:
Owner-
ship %
Voting
rights %
Net profit last
year
Equity
last year
Pioneer Preschools AS, Oslo
100,00 %
100,00 %
-1 060 626
6 194 525
Pioneer Property Group International AS, Oslo
100,00 %
100,00 %
259 661
8 865 765
Pioneer Hotel Properties AS, Oslo
100,00 %
100,00 %
-8 512 974
299 355 616
Pioneer Retail Properties AS, Oslo
100,00 %
100,00 %
-3 360 940
68 417 787
Pioneer Property Development AS, Oslo
100,00 %
100,00 %
-1 810 844
150 030 001
T10 Holdco AS
52,00 %
52,00 %
-264 339
10 331 316
PPG Hylle 2 AS
100,00 %
100,00 %
0
PPG Hylle 3 AS
100,00 %
100,00 %
0
Owner-
ship %
Voting
rights %
Net profit 2022
Equity 2022
23,58 %
23,58 %
20 146 437
383 495 298
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 31.12.22 NOK 223 683.
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
586 819 482
1 156 151 438
Ordinary result
113 652 631
113 652 631
Dividends
-78 127 825
-78 127 825
Per 31.12
14 683 023
-987 966
555 636 899
622 344 289
1 191 676 245
Other changes:
Group contributions
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
57
PIONEER PROPERTY GROUP ASA
The company's shareholders ordinary shares:
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 5 largest shareholders pref.shares :
Shareholders:
Pref.Shares
Pioneer Property Group ASA
-987 966
Skandinaviska Enskilda Banken AB
500 000
Avanza Bank AB
397 705
Nordnet Bank AB
327 649
The Bank of New York Mellon
292 714
Indirectly owned shares of executives in the company:
Ordinary shares
Pref. shares
Roger Adolfsen (Chairman)
3 160 192
0
Even Carlsen (Board member)
1 642 024
0
Note 11 - Transactions with related parties
The Group has various transactions with associated companies. All the transactions have been carried out as part of the ordinary operations and at
arms -length prices. The most significant transactions are as follows:
Hospitality Invest AS, purchase of assets NOK 153 000 000
Grafo AS, purchase of assets NOK 6 192 891
Eidissen Consult AS, purchase of assets NOK 6 192 891
Hospitality Invest AS, management fee NOK 2 723 012
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
Munkedamsveien 45
PO Box 1704 Vika
0121 Oslo
Norway
www.bdo.no
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Independent Auditor's Report
To the Annual Shareholders meeting of Pioneer Property Group ASA
Opinion
We have audited the financial statements of Pioneer Property Group ASA.
The financial statements comprise:
The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2022, income
statement, and cash flows for the year
then ended, and notes to the financial
statements, including a summary of
significant accounting policies, and
The financial statements of the group,
which comprise the consolidated
statement of financial position as at 31
December 2022, and consolidated
statement of comprehensive income,
consolidated statement of changes in
equity and consolidated statement of
cash flows for the year then ended,
and notes to the financial statements,
including a summary of significant
accounting policies.
In our opinion:
The financial statements comply with
applicable statutory requirements.
The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
the Norwegian Accounting Act and
accounting standards and practices
generally accepted in Norway.
The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional
report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and
the Group as required by relevant laws and regulations in Norway and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of Pioneer Property Group ASA for 8 years from the election by the
general meeting of the shareholders on April 16
th
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Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Description of the key audit matter
How the key audit matter was addressed in
the audit
Valuation of investment properties
The Group’s value of investment properties in
the financial statements amounts to TNOK
1 798 709 equivalent to 73,1 % of the group’s
total assets. The valuation of the properties is
performed by an external independent party
and is described in note 6 in the financial
statements. The amount and the complexity
and judgements involved in the valuation, lead
us to identify this as a risk area in our audit.
Our audit procedures included, among others,
involving our internal valuation specialists to
assist us in evaluating the assumptions and
methodologies used by the independent party,
in particular those relating to the discounted
cash flow model and marked based yield for
the rental properties. We also focused on the
adequacy of the Group’s disclosures about
those assumptions to which the outcome of the
valuation is most sensitive, i.e., those that
have the most significant effect on the
determination of the value of the properties.
We have also evaluated the independent
party’s competence and independence in
performing the valuation of the investment
properties.
Other information
The Board of Directors and the Managing Director (management) are responsible for the other
information. The other information comprises the Board of Directors’ report. Our opinion on the
financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Opinion on the Board of Directors’ report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
is consistent with the financial statements and
contains the information required by applicable statutory requirements.
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Our opinion on the Board of Director’s report applies correspondingly for the statements on
Corporate Governance and Corporate Social Responsibility.
Responsibilities of the Board of Directors and the Managing Director for the Financial
Statements
Management is responsible for the preparation of financial statements that give a true and fair
view, for in accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway, and for the preparation and fair presentation of the financial
statements of the group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern.
The financial statements of the Company use the going concern basis of accounting insofar as it is
not likely that the enterprise will cease operations. The financial statements of the Group use the
going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements
reference is made to:
https://revisorforeningen.no/revisjonsberetninger
Report on compliance with Regulation on European Single Electronic Format
(ESEF)
Opinion
As part of the audit of the financial statements of Pioneer Property Group ASA we have performed
an assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with file name 5967007LIEEXZXJ3BC22-2022-12-31-en, have been
prepared, in all material respects, in compliance with the requirements of the Commission
Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and
regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of
the consolidated financial statements.
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
Regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
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Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, April 3
rd
BDO AS
Sven Mozart Aarvold
State Authorised Public Accountant
(This document is signed electronically)