Maritime Investment Fund II K/S

Ledelsesberetning

Financial highlights are defined and calculated in accordance with the current version of "Recommendations & Ratios" issued by the CFA Society Denmark.Gross margin (%):Gross profit/loss * 100RevenueNet margin(%):Profit/loss for the year* 100RevenueReturn on equity (%) Profit/loss for the year * 100 Average equityEquity ratio (%) : Equity excl. minority interests * 100 Balance sheet totalDevelopment in activities and financesThe profit for the year 2023 was USD 4m against 30m in 2022. The profit for the year was positively impacted by “Other operating income” of USD 2m against USD 17m in 2022. In 2022, this was primarily related to gains from divestment of vessels whereas no vessels were divested in 2023. Management considers the result for the year to be satisfactory and in line with the expectations given in the 2022 annual report. MIF II completed the investment period at the end of Q3 2023, having invested in 23 vessels of which three have been divested in 2021 and 2022. Of the 23 vessels five are newbuild offshore wind vessels through the subsidiary Norwind Shipholding AS (Norwind) with delivery in 2023 and 2024 and six are newbuild container fee der vessels through the Schoeller Holding LTD joint venture with delivery in 2023 and 2024. In 2023, MIF II acquired three RoRo vessels from DFDS. The fund also took delivery of two newbuild offshore vessels (CSOVs) through Norwind and three newbuild container feeder vessels through the joint venture with Schoeller Holdings. In 2024, MIF II expects to take delivery of the remaining three CSOV vessels and three container feeder vessels. The development in the financial year’s activities was in line with the business strategy. The ongoing conflict between Ukraine and Russia in 2023 and the Gaza conflict resulted in higher volatility in the financial markets and commodity prices. The conflict did not impact the fund negatively. Profit/loss for the year in relation to expected developmentsThe profit/loss for the year was as expected.OutlookFor 2024, management expects a positive revenue in the range of USD 125-135m and a profit in the range of USD 50-65m. Management expectations include the effect of a full-year result from investments made in 2023 and vessels delivered during 2023 as well as the effect of the planned delivery of three newbuild offshore wind support vessels (CSOVs) and three container feeder vessels during 2024. Material assumptions and uncertaintiesThe Group’s expectations depend on the earnings in group enterprises, the developments in the fair market value of maritime assets and the development of the exchange rate between USD and NOK due to the significant Norwegian activities.Statutory report on corporate social responsibilityNavigare Capital and MIF II perceive a systematic integration of ESG in the entire investment process and working towards ensuring high ESG standards as prerequisites for mitigating risk, seizing opportunities, and delivering returns to investors. As such, Navigare Capital and MIF II align their approach to ESG with their fiduciary duty to act in the best interests of their Limited Partners by ensuring a balanced view of ESG opportunities and risks that may impact long-term returns. Implementation and Achievements in 2023Overall, Navigare Capital remains a signatory to Principles for Responsible Investments (“PRI”), a UN-supported network of investors, working to promote sustainable investment by integrating environmental, social and governance principles. During 2023, Navigare Capital updated and expanded its Responsible Investment policy, its policy on Integration of Sustainability Risks and the subsequent handling procedures to further strengthen its own and MIF II’s adherence to responsible investment. Navigare Capital is also scheduling to publish its third sustainability report in April 2024, covering its own and its funds' performance in 2023. Environment and climate: In 2023, Navigare Capital and MIF II focused on implementing new regulations coming in place from the IMO, among others the CII. The CII is a carbon intensity indicator measuring a ship’s energy efficiency, given in grams of CO2 emitted per cargo-carrying capacity and nautical mile. The CII requires vessels to calculate their carbon intensity, based on which they are graded from A to E, where A is best. If a vessel is ranked D for three consecutive years or E for one year, the Ship Energy Efficiency Management Plan (“SEEMP”) must be updated with a corrective action plan to reach the reference line, C, and verified before the statement of compliance can be issued and operation can continue. Looking ahead to 2024, Navigare Capital and subsequently MIF II will work on putting more formal processes in place for not only the surveillance of the CII of its vessels, but also compliance with the EU ETS (emission trading scheme), which came into place in January 2024. From a more technical perspective, Navigare Capital along with MIF II will also initiate investigations into underwater noise issues to determine strategies for mitigating impacts on marine species in coastal areas in particular. Social and employee matters: Navigare Capital and MIF II maintain a firm commitment to the safety of seafarers onboard its vessels, striving to exceed regulatory standards and operate in line with best industry practices. But, supporting seafarers’ wellbeing extends beyond the tracking of safety metrics; it also means implementing policies and procedures that benefit their quality of life. For instance, as seafarers often spend long stretches far from land and away from friends and family while employed on vessels. Therefore, one of the most important elements for supporting seafarers’ well-being is ensuring reliable internet access onboard vessels, so that they can communicate with their loved ones onshore. Secure internet access improves the quality of life for seafarers by allowing them to communicate with loved ones and access online entertainment options. Thus, in 2023, Navigare Capital and MIF II began installing the newly available Starlink network on its vessels to provide robust internet access options on its vessels to give seafarers the best possible internet connection, which in turn supports higher seafarer retention rates. In 2024, MIF II will continue its effort of providing better connectivity onboard its remaining vessels, while continuing its strong focus on ensuring high safety standards and employee wellbeing. Human rights: In 2023, Navigare Capital and subsequently MIF II had a third party sustainability consultancy company review its policies, handling procedures and subsequent task lists in connection with yards audits. Consequently, these were extended to align with the guidelines recommended by Eksfin, thus also complying with the minimum safeguards set out in the EU taxonomy. In 2024, Navigare Capital will focus on expanding its human rights due diligence and setting more formal process in place. Anti-corruption: The shipping industry is highly exposed to corruption due to its international nature and interactions with authorities at various levels in ports around the world. Corruption in the shipping industry is mainly a case of requests for bribes and facilitation payments, typically in the form of demands for small cash payments or low-cost items such as alcohol or cigarettes. However, as the occurrence of corruption of any size threatens the institutional integrity and functioning of global trade, Navigare Capital has a zero-tolerance policy any kind of corruption, bribery and facilitation payments. Thus, Navigare Capital continued to support the work of Maritime Anti-Corruption Network (“MACN”),, which in 2023 expanded its help desk concept in India. When operating in high-risk areas, Navigare Capital also employed onshore Protection & Indemnity Club representatives for additional support when necessary. In 2024, Navigare Capital will continue its efforts to expand the awareness of its anti-corruption policies and actively work to implement the recommendations of MACN. To describe MIF II’s performance within the above key areas, the ESG performance data overview tables below displays the impacts generated by the underlying assets in MIF II. Navigare Capital reports on KPIs related to its most material topics and, therefore, tracks the progress towards its ESG commitments, e.g., mitigating its impact on the climate and ecosystems, maintaining a safe working environment onboard its vessels, and combating maritime corruption. The increase in Scope 1 emissions was the result of taking delivery of eight vessels- including a newbuild CSOV vessel with hybrid battery propulsion and three highly fuel-efficient newbuild container vessels. While the investments in newbuildings themselves resulted in emissions captured from capital goods purchased, the fuel efficiency of these new vessels resulted in a reduction of carbon intensity measured through the alignment to the IMO’s targeted trajectory. MIF II continued to have no incidents of bribery or facilitation payment requests on its vessels, a result of its continued collaboration with the Maritime Anti-Corruption Network (MACN). There was, however, one lost-time incident resulting from a crew member injuring his hand while conducting an inspection onboard a vessel, resulting in several fractures. This incident led to the implementation of new procedures and requirements for protective equipment to prevent the reoccurrence of injuries during that procedure. The number of deficiencies per port state control was 0.70, but no vessels were detained. Supplementary reportsPeriodic disclosure for Article 8 financial products Please refer to page 46 for Maritime Investment Fund II K/S' periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph of Regulation (EU) 2020/852 for the period 01.01.2023-31.12.2023.

Beskrivelse af virksomhedens væsentligste aktiviteter

Primary activitiesMaritime Investment Fund II K/S (MIF II) is an alternative investment fund managed by Navigare Capital Partners A/S (Navigare Capital), which is an authorised alternative investment fund manager (AIFM). MIF II is incorporated in Denmark, and the fund is set up and structured in a fully transparent and market conform K/S structure. For investors in MIF II, the strategy offers the opportunity to make long-term investments in a diversified portfolio of shipping assets benefitting from the inherent low correlation between the segments driven by diverse underlying demand drivers. The fund targets an attractive return, with the majority of the investment return derived from a predictable operating cash yield, paid out quarterly. The fund's ability to deliver a predictable operating cash yield is based on the strategy of investing across segments, ensuring fixed employment contracts through multiple counterparties and having conservative financing. In the end of Q3 2023, MIF II was fully invested, having invested in 23 commercial vessels across six shipping segments: container vessels, tankers, dry cargo vessels, gas carriers, offshore wind vessels and RoRo vessels.