Board of Directors Report

Höegh Autoliners is a leading global provider of transportation services within the Roll-on Roll-off (RoRo) segment. Höegh Autoliners has its headquarters in Oslo, Norway, and a regional operating headquarters in Manila, the Philippines.

2023 was an extraordinary year for Höegh Autoliners, both financially and operationally.

On the capacity side, we took advantage of the strong market and sold Höegh Bangkok in October, with a gain of USD 35 million. During 2023, the Company has purchased Höegh Berlin, Höegh Tracer and Höegh Trapper, allowing the Company to release the additional value gains from the lease purchase options and to have better capacity cost control in an overheated charter market. Höegh Tracer and Höegh Trapper are both Horizon class vessels and among the largest and most environmentally friendly PCTC in the market and are an important part of the Company’s ambitious path to zero emissions future by 2040. The ownership of Höegh Tracer and Höegh Trapper was transferred to Höegh Autoliners in March and June 2023. The Company’s deep sea network is now fully covered by owned vessels or long term charters with attractive purchase options, supplemented by a limited use of space charters.

Building of the Aurora Class, China Merchants Heavy Industries shipyard.
Höegh Tracer, Bremerhaven.

The newbuilding program continued to make significant progress, surpassing construction milestones well ahead of the original schedule. In July 2023, the Company exercised the option to build another four Aurora Class vessels (9-12). This brings the number of total vessels under the newbuilding program to twelve (12) vessels. The Company has an option to build another four vessels (vessels 13-16), as well as slot reservations for additional four vessels (vessels 17-20). The first two Aurora Class vessels are now scheduled to be delivered in August and September 2024. The delivery of the newbuilds will solidify Höegh Autoliners’ leading role in reducing our own, as well as our customers’ carbon footprint by providing our customers the opportunities to transport their cargo on the newest, most carbon-efficient car carriers ever built.

2023 was a year with record high freight rates which contributed to strong financial results for Höegh Autoliners. All sailings were full and the net rate reached USD 83.4/CBM in Q4 as a result of successful repricing of contracts and a strong spot market. The Company secured several long-term contracts with customers during the year at average net rates above USD 100/CBM and average duration of 4.3 years.

Operational-wise, under uncertain conditions, Höegh Autoliners continued to navigate challenge with resilience. Following the escalation of the Houthi group’s attack in the Red Sea area, we decided to temporarily reroute all sailings with Suez transits via the Cape of Good Hope. The safety of our crew, cargo, and vessels remains Höegh Autoliners’ top priority.

In September 2023, Höegh Autoliners was included in the OBX index on the Oslo Stock Exchange which confirms the position as one of the top companies trading on the Oslo Stock Exchange, all within two years since the admission to trade on Euronext Growth.

During 2023, a total of USD 241 million was paid out as cash dividend to the shareholders, according to the dividend policy of paying out 30-50% of adjusted net profit. In February 2024, the dividend policy was changed and the Company targets to distribute quarterly dividends to shareholders of around 100% of cash generation after amortisation of debt facilities, capital expenditure and payable taxes.

Market developments*

2023 global light vehicle demand posted a provisional 86.4 million units, marking a 9.4% increase y-y. The rise in auto demand was driven by ongoing output gains and the restocking of inventories as supply chains continued to normalise. Benchmarked against the pre-COVID-2019 performance, the market was still down 4%. In 2024, the light vehicle output recovery should further stimulate inventory restocking efforts across many regions. With the supply brakes off, vehicle demand is expected to continue to recover, albeit at a slower rate as lingering pent-up demand plays out. There remains room for caution, with consumer demand challenged by elevated vehicle pricing alongside poorer credit and lending conditions.

Total light vehicle shipments in Höegh Autoliners’ relevant trade lanes increased by an estimated 14%, a result of the strong, supply-unconstrained sales growth across all HA markets. Particularly, shipments from Asia to all HA destinations were strong, up 16%. Shipments from Asia to N. America were up an estimated 17% y-y.

Global shipments of core H&H equipment reflected continuous strong demand recovery in 2023, up 18% y-y. The increase was mainly driven by growing global investments in green infrastructure. Shipments from China, Japan and South Korea, combined, were up 21% y-y driven by booming shipments to both USA (up 29% y-y) and to Europe (up 3% y-y).

The global PCTC fleet trading in the deep sea trades totalled 687 vessels (4.02m CEU capacity) by mid-February 2024. One vessel over 2 000 CEU was recycled during 2023. The global order book counted 187 vessels, of which 41 vessels are scheduled for delivery in 2024, 67 vessels in 2025, 60 vessels in 2026 and 19 vessels in 2027. The capacity on order is equal to 36% of the total fleet.

* Sources: FNLV sales and shipment forecast data is based on the latest available S&P IHS sales and production forecasts (Jan/Feb 2024). H&H shipment data is based on customs statistics extracted from S&P Global Trade Atlas. PCTC fleet data is based on Clarksons Platou data 10 February 2024 (vessels over 2 000 CEU capacity). 


Result 2023

Höegh Autoliners (Group)

The Group reported an increase in operating profit (EBITDA) from USD 447 million in 2022 to USD 736 million in 2023. The main reasons for the increase are higher net rates in a strong spot market and successful repricing of contracts.

The net profit after tax amounted to USD 590 million (USD 299 million in 2022), following strong operating results through the year.

Total revenues in 2023 amounted to USD 1 446 million, which is up 14% from 2022. The increase in revenues is mainly a result of higher net rates and better utilisation as the volumes have been quite stable, and repricing of contracts has contributed to the increase in revenues. Bunker expenses decreased by USD 72 million (23%) from 2022 to 2023 due lower bunker prices. Voyage expenses decreased with USD 30 million (8%), due to less vessels in operations and fewer port calls. Charter hire expenses decreased with USD 12 million as fewer short time vessels have been hired in and there was less use of space charters in 2023 compared to 2022. Running expenses for the vessels are in line with 2022, while the administrative expenses have increased with USD 2 million from 2022, mainly due to more office employees hired during the year.

In March, the vessel Höegh Berlin was purchased for USD 34.25 million, and the Company took delivery of Höegh Tracer, after declaring purchase option in 2022. Purchase price for Höegh Tracer was USD 53.2 million. In June, Höegh Trapper was purchased for USD 53.2 million, after declaring purchase option in 2022. Höegh Bangkok was sold in October, resulting in a gain of USD 35 million. Purchase option for Höegh Jacksonville was exercised in October.

Interest expenses are slightly higher in 2023 than in 2022, mainly due to higher interest rates. Of the total interest expenses of USD 33 million in 2023, USD 15 million is related to leased assets.

Financial position

Höegh Autoliners (Group)

Gross interest-bearing mortgage debt increased from USD 265 million in 2022 to USD 346 million at year-end 2023, mainly due to the drawdown of USD 130 million used for the purchase of three vessels. Net interest-bearing debt was reduced from USD 379 million in 2022 to USD 52 million in 2023. For more information on the interest-bearing debt, see Note 18 in the consolidated accounts.

The cash balance at the end of the year was USD 458 million, which was up from USD 184 million at the end of 2022. The strong financial results through 2023 have enabled the Group to maintain a strong cash position at year-end 2023, even after distributing dividends to shareholders of USD 241 million.

The book equity totalled USD 1 412 million in 2023, an increase from USD 1 063 million in 2022. Book equity represented 69% of total equity and liabilities on 31 December 2023. The Group’s covenants relating to the USD 810 million loan facility are related to a minimum book equity ratio, working capital and a minimum liquidity. The Group complied with these requirements at year-end 2023.

Net cash flow from operating, investing and financing activities was positive with USD 275 million (2022: negative with USD 37 million). The net cash flows from operations amounted to USD 746 million (2022: USD 405 million). Cash flows used in investing activities were negative with USD 103 million (2022: negative USD 99 million). The increase from 2022 is mainly due to the newbuilding instalments for Aurora vessels of USD 124.3 million and net proceeds of USD 62 million from sale of vessels. Net cash flow used in financing activities was negative with USD 369 million (2022: negative USD 344 million), whereof USD 241 million was related to dividend payments to shareholders, USD 161 million (2022: USD 116 million) was related to payment of lease liabilities. The mortgage debt payments in 2023 amounted to USD 51 million (2022: USD 153 million). The mortgage debt payments for 2022 included USD 82 million relating to a down payment in connection with the refinancing in June 2022.


Höegh Autoliners ASA (Company)

The net profit for 2023 amounted to USD 33 million (USD 15 million in 2022). The Company has a total equity of USD 876 million and an equity ratio of 54%. The Company has during 2023 distributed cash dividends to the shareholders of USD 241 million. On 31 December 2023, USD 360 million in dividend paid in March 2024 has been recorded as current liability. The Board of Directors has proposed that the net profit for 2023 is transferred to retained earnings. Dividends will be distributed regularly in 2024 following an authorisation given to the Board of Directors.

In accordance with the Norwegian Accounting Act § 3-3a, it is confirmed that the Company has prepared the financial statements based on the going concern assumption, and the Company met the conditions to make that assumption. The Board of Directors is of the opinion that the accounts give an accurate picture of the Company’s financial operations.

Financial risks

Interest rate risk

The interest rate risk can be reduced through interest rate swaps. The Group currently evaluates the exposure to interest rate risk as limited, and at year-end 2023, the Group did not have any interest rate swaps.

Foreign exchange rate risk

The Group is only to a limited extent exposed to currency fluctuations as the majority of its income and expenses are in USD. The largest non-USD costs are in EUR and relate to port and cargo operations. Fluctuations in EUR constitute a smaller risk, however; this is partly balanced, as parts of the Group’s costs and revenues are both Euro-denominated. The Group has no currency hedges at the end of 2023 (no currency hedges at end of 2022). See note 14 for more details.

Bunker price risk

The Group has Bunker Adjustment Factor (BAF) clauses in most commercial contracts, designed to adjust for changes in bunker prices. Due to time lag, the Group will not be fully compensated in periods of rapidly changing prices, but the BAF will give reasonable compensation in most periods. The Group has no bunker derivatives at year-end 2023.


The risk of losses on receivables is considered to be low. The Group has not experienced any significant losses on receivables in recent years.

The Group has a cash balance of USD 458 million at the end of 2023, increased from USD 184 million at the end of 2022. A drawdown of USD 130 million on Facility C in 2023 has been used for the purchase of three vessels. In 2023, the first instalment for four new Aurora class vessels (9-12) was paid to the yard, amounting to a total of USD 63 million. In addition, a total of USD 60 million has been paid in milestone instalment for the first four Aurora class vessels. The total commitment for the newbuilding program is USD 1.2 billion, of which USD 943 million is financed by loans and leases, and the remaining USD 284 million from equity. Of the equity part, USD 234 million has been paid. Further instalments will be paid based on certain milestones in the period up to the delivery of the last two vessels in 2027. Dividends of USD 241 million have been paid out during the year. The strong operating results during 2023 is the main contributor to the cash balance at year-end.

For more information on financial risks, see Note 14 in the consolidated accounts.

Over 80% of world trade is currently transported by sea, and the maritime industry is a significant contributor to greenhouse gases, with deep sea shipping responsible for 90%. In the coming decades the shipping industry will need to undergo a radical transformation if it is to meet challenging targets to cut greenhouse emissions and to comply with future emission and environmental regulations.

As a global shipping company, Höegh Autoliners acknowledge that climate change, including the actions and measures taken by regulatory institutions and industry participants may impose a significant financial impact on our business. The year 2023 showed that extreme weather conditions could impact global logistics, where the drought in the Panama Canal served as a key example, forcing several shipping companies to alter their sailing patterns. The future emission and environmental regulations are necessary for the maritime industry to reduce its carbon footprint. Non-compliance with these regulations may lead to fines or even non-approval of documentation of compliance. While there are still uncertainties around future environmental regulations, carbon taxes for shipping within the EU have been implemented, as shipping was phased into the EU Emission Trading System (EU ETS) from 2024. This will increase operational cost for Höegh Autoliners if the Company fails to recoup the cost from its customers.

In order to meet IMO’s 2030 carbon intensity target, Höegh Autoliners’ annual operational carbon intensity indicator (CII) targets and the coming FuelEU Maritime regulations, and improved energy efficiency will be important. Höegh Autoliners can comply with these regulations by either running on low/zero-carbon fuels, reduce operational speed, implement fuel saving measures or renew its fleet. Reaching the Group’s net-zero target by 2040 implies a significant transition of the current fleet, including additions of zero-carbon ready vessels, and disposal of legacy tonnage. With the delivery of the new Aurora Class vessels, with its cutting edge design, Höegh’s fleet will be in a very good position to meet the above mentioned regulations.

During 2023, the Group has continued the efforts towards improving efficiency of the fleet through the use of different fuel saving technologies. Höegh Autoliners’ vessels are now regularly powered by advanced biofuels.

The Group seeks to maximise each vessels value across its operational life. Given the climate change transition risks, it is assessed that the useful lives of property, plant and equipment, including vessels, are appropriate given the potential physical and obsolescence risks associated with climate change and the actions the Group is taking to mitigate against those risks.


We believe that most of our risks come with a corresponding opportunity ready to be capitalised upon if we take the right actions. Amongst our most important opportunities identified are the increase of the fleet’s energy efficiency through an ambitious decarbonisation strategy, with the possibility to assist in the decarbonisation of customers’ supply chains. Another important opportunity is the increase in electrical vehicles being shipped. The global market for electrical vehicles is continuing to grow, with a forecasted growth of 27% in 2024 (Global EV Outlook 2024). The change from fossil fuels to electric cars will likely generate opportunities and increased volumes for Höegh Autoliners and the Aurora Class is designed to carry the heavier electrical vehicles on all cargo decks. Most of the large customers say that sustainability is one of the selection criteria in tender processes.

The transition to a carbon neutral maritime industry will affect all shipping companies. Transition risks and opportunities are deemed to be the most important aspects to consider when assessing what might be the significant drivers for our business. Being smaller and agile may become an advantage in this transition. The biggest risk is related to whether we are able to decarbonise our operations at a pace that corresponds to customers’, investors’, regulators’ and other external stakeholders’ expectations. This is closely linked to the technology risks arising from the fuel technology chosen for our fleet transition program, and to the market risk related to the commercial availability and economic viability of green fuels and the customers willingness to take part in the green transition.

For more information on climate related risks and opportunities, see the section on Sustainability in this annual report.

Climate related financial disclosures

Höegh Autoliners acknowledges the potentially significant financial implications of climate change.

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Höegh Autoliners had at the end of the year 410 land-based employees from 24 different nations. The average age of shore-based staff was 41 years at the end of the year, and the average service in the Group was 8 years.

Höegh Autoliners operates an “equal opportunities policy” in all locations and encourages continual learning and development for all employees. In 2023, females made up 50% of the Board of Directors and 47% of the global land-based organisation. The Group had 1 168 seafarers employed by the end of 2023, of which, 2.7% were females. 67% of the seafarers are from the Philippines and 33% are from China. We actively seek to even out the gender gap within the Company in employment processes, and we offer equal opportunities and wages irrespective of gender. More information on Höegh Autoliners’ work and policies regarding social responsibility, including diversity, equality, discrimination, human rights, and anti-corruption can be found in the section on Sustainability in this Annual report. See also our report on Equality and discrimination published on our website.

Absence through illness continues to be low and well below industry average. In 2023, the number of days registered as “absence due to illness” represented 0.5% for employees in Norway. Global turnover in 2023 was 11% (11% in 2022).

In 2023, the Group experienced 10 LTIs (Lost Time Incidents). A Lost Time Incident is an injury to crew member, which affects the ability to work the subsequent shift on board. The frequency of such injuries per million working hours, LTIF (Lost Time Incident Frequency), is 1.66 in 2023, which is higher than the target of 0.7, whereas on target industrial standard is 1.0. The incidents in 2023 were all except one categorised as minor.

The Group continues to work for an injury-free workplace and its aspirational goal is zero harm to people.

Directors and officers’ liability insurance

Höegh Autoliners has a directors’ and officers’ liability insurance. It applies globally for any past, present or future director or officer in the Group. The directors’ and officers’ liability insurance is designed to provide financial protection to directors and officers for claims made against them in respect of acts committed (or alleged to have been committed) in their capacity as such and as a result of an alleged error, omission, or breach of duty.

Board of Directors

The Board of Directors has the ultimate responsibility for the management of the Company and must ensure that the activities are organised in a prudent manner.

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Sustainable development

The Group aims to contribute to sustainable development by acting as a socially responsible shipping company. To do this, the Group actively integrates social and environmental concerns in the running business operations. The Group works to find a sound balance between the need for operational efficiency and the interests of non-financial stakeholders.

Höegh Autoliners is deeply committed to compliance and to create an ethical mindset guiding the Company’s decisions. That commitment is reflected in continuous improvement of the compliance program and learning in areas including anti-corruption, competition and anti-trust, applicable sanctions and export control and data privacy, including GDPR. In 2011, the Group was one of the founding members of MACN (Maritime Anti-Corruption Network). Since then, the Group has been an active member and has headed a collective action in the Suez Canal, combatting illegal facilitation payment demands by pilots and others during transit, which has had a demonstrated positive effect. The Group has also been involved in the Norwegian working group on commissions. Höegh Autoliners has an internal learning program developed to help employees take a stand against corruption in general and facilitation payments in particular. Most of the Group’s employees have completed various e-learning programs on compliance, and the Group also has a gamified compliance training for all employees. Compliance Ambassadors are appointed in all major offices.

Sanctions and export control compliance is a constant focus area due to the ever-changing regulatory landscape. In 2023, the Group has focused on updating specific parts of its sanctions and export control program. There is also an emphasis on data privacy and particularly transfers to countries outside the EU.

The requirements set out in the Norwegian Transparency Act regarding reporting on human rights due diligence are covered in a separate Transparency Act report published on our website.

The maritime industry is continuing its work to reduce its environmental footprint. Höegh Autoliners has an ambitious target to become carbon neutral by 2040. This will be achieved through green fleet renewal, improved energy efficiency and use of low carbon fuels.

The average preliminary 2023 fleet carbon intensity (cgDIST) encompassing all vessels under our ownership and/or technical management, was 5.15 g CO2/GT*Nm and between 2008 and 2023, the Company has around 38% reduction in fleet carbon intensity, close to IMO’s target of 40% by 2030. Our Horizon class vessels are 40% more emission efficient compared to a standard PCTC vessel. Our Aurora Class vessels will enable fuel flexibility with ammonia ready multi-fuel engines and will be the most environmentally friendly PCTC vessels.

Höegh Autoliners purchased about 303 000 tons of very low sulphur fuel oil, 44 000 tons of distillates and 10 300 tons of biofuels in 2023.

Höegh Autoliners has high sustainability ambitions and is on a clear path to zero. After successfully completing its first carbon neutral voyage from Europe to South Africa in 2021, Höegh Autoliners’ vessels are now regularly powered by advanced biofuels, meeting the highest industry standards for sustainability. Höegh Autoliners is offering its customers carbon-neutral operations to reduce the overall environmental impact. The Group continues the work on optimising the fleet to improve the Carbon Intensity Indicator (CII) score.

The Group executes disposal of old vessels in a manner that is safe to both humans and the environment. All obsolete vessels, sailing and declared total loss, are recycled based on the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. Vessels are dismantled under strict requirements in approved shipyard facilities. Since committing its first vessel to green recycling in 2009, the Group has only disposed of ships through green recycling.

Höegh Autoliners joined Marine CleanTech in February 2023, a maritime partnership working to develop energy-efficient and sustainable technologies for the maritime sector. This partnership will accelerate the shift towards a sustainable future by creating possibilities for collaboration with organisations that share our vision and leveraging cutting-edge green technologies.

In the second quarter of 2023, we joined Maersk Mc-Kinney Møller Center for Zero Carbon Shipping as Mission Ambassador. The Center works dedicated to accelerating the decarbonisation of the global maritime industry. This complex challenge requires unprecedented collaboration across sectors, industries and geographies. The partnership will accelerate our transition towards a more sustainable future by allowing us to collaborate with like-minded organisations and leverage the Center’s unique ability to develop and implement cutting-edge decarbonisation projects.

In December 2023, we formalised a partnership with Sumitomo Corporation to collaborate on the supply and delivery of clean ammonia as a next-generation sustainable maritime fuel for Höegh Autoliners’ Aurora Class vessels. The focus will be the two strategic global bunkering ports of Singapore and Jacksonville (USA) and is another strategic move in our efforts to offer our customers net-zero transportation globally. In the same month, we also announced a strategic partnership with the leading global provider of ocean transportation solutions, VARO, aimed at advancing the decarbonisation of maritime sectors. The collaboration with VARO focuses on supplying 100% advanced biofuels for deep sea transportation from Europe and marks another significant step in reducing our environmental footprint.

For further details on sustainability, see the section on Sustainability in this Annual report.

Höegh Autoliners works closely with a set of public institutions and private organisations in the industry and through local organisations and groups. The cooperation with stakeholders is vital to meet the aspirations of sustainable business conduct and a positive relationship is a prerequisite for success.

The global car carrier anti-trust investigation in the PCTC industry, which was initiated in 2012, has been finalised in most of the relevant jurisdictions, notably Japan, China, EU and the U.S. The Group pleaded guilty to one offence in the U.S., which entailed a fine. The administrative council for economic defence (CADE) in Brazil initiated cartel investigations against the Group in 2016 regarding breach of anti-trust regulations. In March 2022, CADE issued a fine of approximately BRL 26 million (USD 5.5 million) to Höegh Autoliners for alleged breaches of anti-trust relations dating back to 2000-2012. Höegh Autoliners disagrees with the CADE’s decision and will appeal. See note 22 in the consolidated accounts for more information. In addition, the Republic of South Africa (the RSA) initiated cartel investigations against the Group in 2013 with seven alleged incidents regarding breach of anti-trust regulations. The Group has had no interaction with the Tribunal or the Competition Commission since October 2020. As before, the Group continues to cooperate fully with all relevant agencies. It is expected that the few remaining investigations and related matters may continue for another few years.

Höegh Autoliners believes that good corporate governance involves transparent and effective cooperation between all parties involved with the Group and its business. This includes the Company’s shareholders, board of directors and the Group’s executive management team, employees, customers, suppliers, and other business partners, as well as public authorities and society at large.

The Company complies with the Norwegian legal framework applicable to companies trading on the Oslo Stock Exchange, and the Company endorses the Norwegian Code of Practice for Corporate Governance (Nw.: Norsk anbefaling for eierstyring og selskapsledelse), issued by the Norwegian Corporate Governance Board, and most recently revised as of 14 October 2021 (the “Code”). For more details on Corporate Governance, reference is made to the Corporate Governance statement in this Annual Report and on the Company’s website

Events after the balance sheet date


On 7 February 2024, the Board of Directors resolved to distribute a cash dividend of USD 1.887 per share. The dividend was paid out in March 2024.

From Q1 2024, the Company’s target is to distribute quarterly dividends to shareholders of around 100% of quarterly cash generation after amortisation of debt facilities, capital expenditure and payable taxes. Any declaration of dividends will be at the discretion of the Board of Directors considering also the outlook and the Company’s financial position. Dividends will be declared in USD and paid in NOK.


Fleet update

On 27 February 2024, the Company, through its subsidiary Höegh Autoliners Shipping AS, announced an agreement for the sale of the owned vessel Höegh Chiba (IMO 9303558) for a price of USD 61 million. Höegh Chiba (6 000 CEU) was built at DSME shipyard in 2006. She is sailing under the NIS flag and is expected to be debt-free at the time of delivery. The vessel will be delivered to the new owner by August 2024.

On 27 February 2024, the Company, through its subsidiary Höegh Autoliners Shipping AS, also announced that it had declared an option to purchase the vessel Höegh Jeddah (IMO 9673381) from Ocean Yield for a purchase price of USD 43.2 million. The average market value of the vessel is USD 91 million (per 31 December 2023). Höegh Jeddah was built in 2014 with a capacity of 6 500 CEU. The transaction will be completed in September 2024, and the Company intends to finance the purchase price fully by mortgage debt through its fleet credit facility.



Höegh Autoliners entered into two new credit facilities in March 2024; a USD 720 million credit facility for the purpose of refinancing the existing USD 810 million Credit Facility, and a new USD 200 million Revolving Credit Facility for general corporate purposes. The refinancing included extended maturity until March 2030, reduced annual amortisations, reduced interest rate and reduced the amount of pledged vessels. The new USD 200 million Revolving Credit Facility is non-amortising with maturity in 2028. The facility is currently undrawn and will serve as an additional liquidity reserve and provide flexibility for future capital allocation.

Looking forward

The Company has taken steps in 2023 to position itself as an attractive long-term partner for customers and other stakeholders. The fleet renewal continued with ordering of another 4 Aurora class vessels taking the newbuild program to 12. The two first vessels will be delivered in Q3 2024, and we will then be able to offer our customers the biggest and most carbon efficient RoRO vessels on water. During 2023 around 1/3 of the contract portfolio has been renewed at considerably higher rates than outgoing contracts. Most of the renewed contracts have a duration of 3-5 years securing volumes at attractive price points for the near-term future. The general market fundamentals are strong, and rates are firm, giving a good basis for further contract renewals in 2024. Financially the Company is strong and robust with all 12 newbuilds financed at attractive terms and most of the equity already paid in. The recent refinancing of the fleet, running into 2030, leaving 24 out of 30 vessels debt free and with lower and flexible amortisation schedule adds to the flexibility and reduces cash capacity cost.

The decision not to transit Red Sea led to short term disturbances in scheduling of vessels and consequently lost operating days and increased costs. As we adjust schedules and recalibrate the network, the financial effect is mainly coming from longer voyages and lower volumes transported by reduced capacity (as long as we continue to sail around Cape of Good Hope). We are in the process of implementing surcharges and repricing cargo wherever we have the possibility to do so. If the situation persists for a longer period, the expectation is that the situation will add to the industry capacity shortage we have experienced in recent years.

We are closely monitoring the geopolitical and global macro situation and the potential impact on our business.

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