Monjasa A/S

Description of significant activities of entity

Primary activitiesThe main activity of the Company comprises sale, purchase, and transportation of oil products primarily for the maritime industry. Monjasa focuses on providing value-added services such as in-depth product knowledge, geographical knowledge, granting of fuel credit and issuing technical and commercial advice.

Description of any uncertainty connected with recognition or measurement

Uncertainty relating to recognition and measurementTrade receivables are recognized at amortized cost less provisions for bad and doubtful debts. The receivables in the balance sheet are not insured in full and residual risk hence exists.
Management assesses that there are no further items in the financial statements which are subject to uncertainty that may have significant impact on results, and therefore, on the true and fair view.

Description of any unusual circumstances affecting recognition or measurement

Unusual circumstances affecting recognition and measurementThe Company’s financial position at 31 December 2023 as well as the results of the Company’s operations for the financial year 2023 are not affected by any significant unusual circumstances.

Description of development in activities and financial affairs

Development in activities and financesMonjasa operating profit reached USD 13m in 2023 (2022: USD 35m). The Company experienced continued demand for maritime services and products.

Description of significant events occurring after end of reporting period

Events after the balance sheet dateAs of the date of signing this annual report, Management is not aware of any material changes in the business.
Management acknowledges increased uncertainty related to the geopolitical situation arising from the ongoing Russian/Ukrainian war, the Red Sea situation, continued global trade volumes, flows and supplies, which may affect our activity level as the situation develops. Furthermore, we have not seen any material negative development in our customers’ ability to pay or changes to our financing.

Description of expected development

OutlookBy using our experience in matching supply and demand at any volatility and oil price levels, we expect another
strong year for Monjasa with a positive financial result in the range of USD 0-10m.
The 2024 expectations on financial performance are naturally subject to uncertainty and in particular in regard to the development in global shipping markets, including geopolitical turmoil, the world economy, exchange rates, oil prices and freight levels.
Mitigating oil price risks
At Monjasa, we take a structured approach in hedging the exposure towards oil price volatility while
allowing adequate operational flexibility to service our customers efficiently.
Exposure arises when the buying and selling prices are not fixed at the same time. This is the case for a
part of our physical activities and a limited part of our reselling business. Hedging is done using financial
instruments negatively correlating the value of the risk.
We have a dedicated department in place with advanced systems allowing them to continuously forecast, monitor and report the exposure from each business unit. This allows us to ensure consistent compliance with the Oil Price Risk Management Policy approved by the Board of Directors of Monjasa Holding. Hedging is performed in our sister company in Dubai, Monjasa DMCC, for the entire group, and the hedging in Monjasa A/S is therefore intercompany hedging made towards Monjasa DMCC.