Hello, everyone, and good morning. Welcome to this presentation of ACRE's 4th Quarter Results for 2020. We will start today's presentation with Aker's President and CEO, Ewen Elligsen. He will walk you through the highlights in the quarter and our industrial Holdings Portfolio's Development. Aker's CFO, Sveinost Gascocnes, We'll then go through the financial investments portfolio, and the 4th quarter accounts in more detail.
We will follow the presentation with a Q and A session, and you can submit your questions via the chat functions in the webcast. And with that, I hand it over to Eivind.
So good morning, everyone, and welcome to this presentation of Aker's 4th Quarter 2020 Results. It's been another busy and exciting quarter at Akhir. As you can see from the list of highlights, there has been no shortage of activities in the last few months, especially in our software and new renewables portfolios. We're now looking at a solid and prosperous industrial foundation, which resulted in the largest quarterly value increase ever recorded. But before we get into development in the portfolio, let's take a look at how ARKES net asset value development was in the quarter.
In the Q4, Aker's net asset value increased by a record 22,400,000,000 kroner to 53,400,000,000 or 7.18 kroner per share. The underlying results paint the picture. Aker Solutions and Aker BP were hard hit by the pandemic and the oil price collapse, but relentless work to protect jobs and ensure strong operations through volatile times paid off. In the 4th quarters, the company's value contribution to ARkit increased nearly 78% and 50% respectively. Simultaneously our new renewables investment platform Akir Horizons contributed 7,600,000,000 kronor to Akers net asset value from its establishment to year end and is today Aker's 2nd largest asset.
In addition, the value of our shareholding in Cognite increased to NOK 2,800,000,000, justified by the transaction with Accel. In other words, organic growth combined with M and A continues to be our recipe for creating value to shareholders in all parts of Aker. The Aker share price increased to or by 42% adjusted for dividend and to 560 kroner by the end of the Q4. This compares to a 14% increase in the Oslo Stock Exchange Benchmark Index. Shortly After the end of the quarter, the stock price hit an all time high.
Aker's value adjusted equity ratio as per the end of Q4 was 83% 89% of our gross values were in our Industrial Holdings portfolio. Our liquidity reserves stood at NOK4.3 billion of which cash amounted to 1,300,000,000 With the addition of Aker Horizons and the merger between Aker Solutions and Kranit, Aker's industrial holdings portfolio now consists of 8 assets. Note that in this overview Aker Horizon's portfolio mainly consists of Aker Carbon Capture and Aker Offshore Wind, both listed on Euronext Growth and Aker Horizons was therefore counted as a listed asset at year end. The company carried out its own IPO after the quarter end being listed on Euronext Growth as per February 1st. Aker Energy and Cognite are currently Aker's only remaining assets in the industrial holdings portfolio that are not listed And at quarter end, 87% of the gross asset value was in listed entities, The largest segment in our portfolio is still E and P, followed by the rapidly growing investments in renewables and green technologies.
We'll now take a closer look at the portfolio. The actions taken the last few months have positioned Aker with growth platform in multiple global trajectories. While oil and gas related industries still make up the majority of our industrial holdings, We are simultaneously pivoting to diversify our portfolio primarily by allocating more resources to renewables, green technology and industrial software. Aker BP remains Aker's largest asset. As an EMP company, it's faced with the challenge of bridging continued demand for its product with a world in a climate crisis.
ArchibbP is rising to the occasion. Its future oriented strategy has it producing smarter, more efficiently and more sustainably than ever before. It's leveraging partnerships and deploying technology to understand how to reduce the footprint of its product and its industry. Strong organic growth at low cost and low emissions, coupled with a strong upstream cash contribution of nearly SEK 1,600,000,000 to Aker in 2020 means Aker BP remains an important value and liquid investment in Aker's portfolio as we carve out the path forward in the energy transition. As proven in the last few months The ability to continuously adapt is in Aker's DNA.
Coupled with our portfolio companies' ability to leverage the deep domain expertise across the Aker ecosystem, we are now looking at the most solid foundation in our industrial history. Just 7 months ago, we made a step change in our portfolio, diversifying and claiming a position in Renewable Energy and green technology, digitalization and other global megatrends that have seen an accelerated flow of resources and capital. You have probably heard us say that we build on the shoulders of existing capabilities. The establishment of Akko Horizons exemplifies this strategy. Capabilities and opportunities identified in AKKO Solutions From the first two building blocks with AKI Carbon Capture and AKI Offshore Wind, companies that have seen a significant value increase since their listing.
During the quarter, Aker Solutions completed its merger with Clariant. Looking ahead, Aker Solutions sees opportunities from the accelerating pace of the energy transition. The targets are to have 1 third of its revenue come from renewable projects by the end of 2025 and 2 thirds by the end of 2,030. Now let's take a closer look at Aker Horizon's development during the quarter and into the new year Aker Horizons, Aker's investment platform within renewables and green technology, has been capturing opportunities and headlines in the last few months. The portfolio composition Coupled with active deployment of industrial software and technology, it's what sets Aker Horizons apart.
It started with Aker Cargo Capture and Aker Offshore Wind. And a few weeks ago Aker Horizons entered into an agreement to acquire 75 percent of mainstream renewable power, a pioneer in renewable energy markets for onshore and offshore wind and solar, and a company that emulates the same kind of entrepreneurial spirit that has brought AQ to where AQ is today. Mainstream further accelerates agroverizon's ambition to position itself within the growing market for hybrid projects with different renewable technologies like wind, solar, hydropower and hydrogen are combined. Such hybrid projects are becoming increasingly commercialized as there is a growing need to stabilize the grid for reliable and continuous electricity supply around the world The appeal is that compared to standalone renewable projects, hybrid solutions offer better use of transmission, more flexibility, improved demand matching and reduced costs. AQHY Horizons recently announced its entry into hydropower with the acquisition of the Norwegian company Rainpower as an entry point.
Aker's history in hydropower traces back to the very start of the industry when Aker and Triani developed the first ever Norwegian turbine and formed the basis for an entire Norwegian supplier industry, including RAINpower. Fast forward to 2021 and the story comes full circle. Aker Horizons will use Rainpower as a platform to build a next generation technology company to optimize hydropower developments and operations. In true Aker spirit, we are identifying opportunities to build on our track record and capabilities to drive value creation. Another significant another signifier of being a part of the Aker family is Aker Horizons having actively worked to identify strong partnerships for growth.
Partnerships are already an integral part of the way we do business. For decades, We have leveraged from a combination of transactions and strategically collaborative efforts to grow and create value. Shortly after the end of the quarter, Aquarizons announced a collaboration with Norwegian industry heavy hitter, Statkraft, the biggest renewable energy company in Europe and a company that has been making clean energy possible for over a century. Together with Aker Offshore Wind, Aker Horizons will collaborate with Statcraft for offshore wind projects in Norway, where coupling Europe's largest renewable energy producer with Aker's 180 year track record and industrial experience, especially on the Norwegian continental shelf has the potential to redefine Norway as and Energy Nation. Norway's leading offshore industry, including a strong supplier industry, means we have already have the building blocks and capabilities in place to be at the forefront of the offshore wind industry in Norway.
Later this week, We will also be sharing news on Aqua Horizon's news portfolio company, Arctic Clean Hydrogen. We hope you will join us for our presentation this coming Friday when we share more about the hydrogen emissions going forward. Now over to our portfolio on non listed industrial holdings, Starting with Cognite. In just 4 years, Cognite has assembled a world class team that has worked feverishly to create, test and verify the Cognite diffusion or CDF technology. Despite all the challenges last year, Cognite grew both its revenue and workforce by more than 60%, and the company is expanding rapidly into new geographies and industries.
During the Q4, Cognite started its partnership with Microsoft to further catalyze the full scale digital transformation of industries. A very exciting partnership, a natural fit of the 2 companies with a shared mission. Secondly, Cognite announced an important partnership with Accel, a leading global venture capital firm with deep domain expertise and experience in building world class software companies. Aksel became minority shareholder in Cognite a Series A round investment. The investment round, which brings Cognite's post money valuation to USD 550,000,000 marked its 1st round of external growth financing.
The timing has been right to bring in a partner that can help scale and further commercialize CDF and excels insight and expertise in scaling best in class software companies globally, marries perfectly with AKI's deep industrial knowledge. Our other software company, ACE, was established following Aker Solutions shift to a pure play supplier role and the sale of its own software house IX3. IX3 formed the basis for ACE, which was established to leverage the competency and experience in digitalizing in the EPC value chain. ACE specializes on application development for asset intensive industries using Cognite's CDF technology. ACE software applications operate on top of CDF to integrate and manage information related to projects and operations.
EIS now counts 120 employees and has Just as Cognite and Aker BP have worked together to create 2 best in class companies. Cognite and ACE will We are working closely with and create a competitive advantage for the Aker Horizons companies, both in project development and in the operations phase. And lastly, Aker Energy. Following the initial postponement due to COVID-nineteen, Aker Energy has matured a simplified solution to develop resources in its contract area. The company is now in dialogue with potential partners and Ghanaian government authorities about next steps.
This year marks AKO's 180th year of building industrial front runners. Through the years we have secured an industrial edge through alliances on technology, products and project management. We have identified operational and technical synergies from the Aker Square to create a strong and capable ecosystem. The numbers speak for themselves. Aker has delivered over 26% annual return to shareholders since its listing in 2004.
Behind these results are decades of dedicated organizations, strong management teams, and a relentless drive to improve. Our newest listing, Aker Horizons, will be no different. It will draw on the collective capabilities of the group, securing an industrial edge for its entire portfolio of renewables and green technology players. So to sum it up in the midst of a pandemic and an industrial energy transition where the world is moving towards more sustainable energy production. Aker is continuing its commitment to create shareholder value by taking part in a more sustainable and prosperous future.
Now I hand the word over to our CFO, Sven Dusgaard, who will take you through the Q4 financials in an a greater level of details.
Thank you, Eivind, and good morning. I will start out spending a few minutes on Aker's financial investments before I go through the Q4 results in some more detail. The financial portfolio accounted for 11% of Aker's total assets or SEK 7,200,000,000, which is up SEK 1,200,000,000 from the previous quarter. This was mainly due to the value increase of the REC Silicon Investment and increased receivables towards portfolio companies, partly offset by a reduction of our cash holdings. As before, the main components under financial investments are cash, listed financial investments, real estate investments and interest bearing receivables, all of which I will now go through in some more detail.
Then starting with cash. Our cash holdings represented 2% of Aker's gross asset value or 1 point 3,000,000,000. This is down 1,100,000,000 from the previous quarter. The main cash inflows were dividends from Aker BP, Aker Property Group, Ocean Yield and American Shipping Company of the equivalent to kroner 580,000,000 and debt repayments received from mainly Aker Property Group of 215,000,000 in total. The main cash outflows in the quarter were the dividend payment of $873,000,000 to Aker's shareholders, EUR248,000,000 in an increased receivable position mainly towards Aker Horizons.
Payments for operating expenses and net interest were EUR 122,000,000 in the quarter. And our liquidity reserve was $4,300,000,000 including undrawn credit facilities of DKK 3,000,000,000. Listed investments included in our financial portfolio represented about 4% of Aker's total assets at the end of the quarter or NOK 2,400,000,000. In the 4th quarter, REC Silicon announced 2 important partnership agreements and the restart of its plant in Moses Lake. The company also completed a private placement of approximately SEK 1,000,000,000 in which Aker participated with SEK 300,000,000.
Including this equity participation, the value of our investment increased by NOK 1,200,000,000 in the 4th quarter, and in January the investment was transferred to Aker Horizons. Solstad Offshore completed the financial restructuring of the company during the Q4. This included a reduced debt burden of approximately SEK 11,000,000,000. Debt facilities combined into a fleet loan with harmonized terms and financing of additional liquidity. The industrial shareholders, which includes Aker, injected approximately SEK 70,000,000 in new equity capital.
In addition, the corporate structure was streamlined significantly reducing complexity and costs. Including the equity participation and a share purchase, the value of Aker's investment increased by NOK 150,000,000. The value of the investment in Philly Shipyard decreased by NOK 52,000,000 in the quarter. The construction of the 2 vessels awarded in the Q2 last year is progressing in accordance with plan. And subsequent to the quarter, options for an additional 2 vessels were exercised and the contract includes an option for 1 vessel in addition to the 2 already under construction and the 2 recently exercised.
Next, Real Estate and Other Financial Investments. Combined, the 2 represented 5% of Aker's gross asset value or $3,500,000,000 in total. In the quarter, Aker Property Group divested its residential real estate investment at Fornebu in Norway, freeing up NOK 530,000,000 to the company. Of this, NOK 244,000,000 were distributed to Aker as dividend, while $213,000,000 was distributed as repayment of debt and accrued interest to Aker. In the quarter, the ownership in Aker Carbon Capture and Aker Offshore Wind was reorganized fully under Aker Horizons, And Aker also provided ongoing funding to Aker Horizons and the reorganization and funding increased Aker's receivable towards ARCO Horizon's with EUR 1,200,000,000 in the quarter.
Then let's move to the Q4 financial highlights for Aker ASA and Holding Companies. Let me start with the balance sheet. Please note that the figures on this slide are after a dividend allocation of 11.75 kronor per share. The book value for investments increased by $2,600,000,000 in the quarter and this is explained mainly by reversed impairments. For Aker Solutions, Akastor and Ocean Yield and the increased investments in REC Silicon and Aker Solutions.
In addition, there were positive book value effects from the transfer at fair value of ownership in Aker Carbon capture and Aker Offshore Wind into Aker Horizons. The total book value of our assets was $28,800,000,000 and in our accounts we use the lowest of historic cost and market values. The fair value adjustments, showed in gray color on this slide, increased by €19,500,000,000 in the quarter to €35,200,000,000 This is mainly explained by the value increases of the investments in Aker BP, Aker Horizons, Aker BioMarine and REC Silicon. In addition, we have reflected our investment in Cognite at the value observed in the transaction with Axcel in Q4. And this increased the net asset value of Cognite by $2,800,000,000 The gross asset value stood at $63,900,000,000 at the end of the quarter, up from $42,200,000,000 at the end of the 3rd quarter.
Aker's liabilities mainly consisted of bond debt of SEK 4,500,000,000, a U. S. Dollar denominated bank loan of 3,800,000,000 kronor, a Norwegian kronor denominated bank loan of 1,000,000,000 and a NOK 1,000,000,000 denominated loan. The liabilities at year end also included an NOK 873,000,000 dividend allocation for 2020, representing NOK 11.75 per share. The board of directors also proposes that the annual general meeting authorizes the board to pay a potential additional cash dividend during 2021 based on the 2020 annual accounts, in line with the practice established last year.
The book equity was €17,300,000,000 up €2,900,000,000 explained by the profit before tax in the quarter, partly offset by the $873,000,000 distributed as dividend in November and the $873,000,000 dividend allocation at year end. If we adjust for fair value of our listed assets and Cognite, we get our net asset value of 52 point €5,000,000,000 at the end of the 4th quarter, up €21,500,000,000 from the 3rd quarter after allocation of dividend. The net asset value per share was NOK707 after dividend and the value adjusted equity ratio increased to 82%. Our total interest bearing debt was €10,400,000,000 which is slightly down from the previous quarter due to foreign exchange effects. The average debt maturity at the end of the quarter was 2.7 years, and we still have significant headroom with regards to our debt covenants.
Then finally to the income statement. The operating expenses for the 4th quarter were kEUR80 1,000,000. The net value change in the quarter was positive 3,100,000,000 €1,000,000 mainly explained by dividend income of ks 580,000,000 and foreign exchange adjustments, And the profit before tax was then €3,800,000,000 in the quarter. Thank you. That was the end of today's presentation, and we will now move on to Q and A.
Thank you, Svenn Oscar. We have received a few questions on the web chat. The first one is about Cognite. It says quite a step change in Cognite's revenues for the quarter. How should we think about this going forward?
Does Q4 market run rate level for 2021 or should we expect further growth?
We should definitely expect Cognite to continue to grow. The quarterly growth is hard to predict because due to timing of contracts, but the trajectory is crystal clear. So this year, we expect revenue growth, which exceeds the growth last year.
Thank you. That was from Hakan Amundsen, and he has another question. In light of the oil price recovering to the mid-60s. Where does this put Aker Energy and the Ghana development on the map? As far as I can recall, the breakeven on that project was in the mid-30s, he writes.
Sure. Of course, the increased oil price is beneficial, but even more importantly is investment and the breakeven oil price because what we have learned the hard way is the importance of low cost and low emission in order to prepare our E and P businesses for an oil price volatility. And if memory serves me correctly and the pecan development was ranked by Goldman Sachs as top 12 months, which has simplified the concept and reduced the cost and it's fair to indicate that the project is even more attractive today.
Thank you. The next question is from Sindre Hambag. He Asks what can you say about REC and the developments there?
Well, as you probably saw, our main shareholder took the role as The Chairman a few days ago and he did that because we would like to be deeply involved in the strategic development of REC going forward. Both REC's existing business segment, but potentially also of new attractive business segments in the fast moving and the transition like batteries.
Okay. The next question is from Marius Renwick. He asks, will you be looking into the shipping side of offshore wind and renewables, for example, wind turbine installation vessels,
Sure. We are, as you know, already a shareholder in Solstad. And Solstad operates in an offshore wind installation and as we speak. And my expectation is that and up horizons growth into offshore wind should also create more opportunities for Solstad and for the group and the installation space. How we can structure that is an ongoing dialogue.
So it's too early to announce any change, but at least Solstad will continue to operate in the offshore wind installation business segment going forward and see a growth potential and partly due to the market and partly due to Aker in that particular space.
Thank you. The next question is from Martin Carlson. Will clean hydrogen come from Aker Solutions like Aker
No, Aker Solutions does not have an existing hydrogen business like carbon capture offshore wind. So this will be a startup rather than a spin off.
And then a question from Frederik Lunde. Could you offer some insight on the size of XL's investment in Cognite?
I think we made an announcement, Sandoz, can you help me about that?
What we have said is the investment by XL prices the company at $550,000,000 post money. So we have not been explicit as relates to the actual amount injected by Axcel and the ownership percentage that we will end up with following the injection of capital by AXA. But I think it's going to be evident from the next quarter's financial statements, what the end shareholders are going to be.
Okay. The next question is from Jonas Schum. Operating expenses in Aker ASA was DKK 80,000,000 this quarter, somewhat higher than levels seen historically. Is this a new applicable run rate or will it normalize to levels more in line with historical levels?
The OpEx last quarter was in the high end simply due to the high level activity and reflected in the value creation. And so hopefully we can create a lot of value going forward and we will not impose cost limitations in order to do that. But my expectation is that The €80,000,000 is in the high end and that the normalized OpEx will be lower.
And there are no further questions on the web.