In spite of these challenges, we are pleased to report we achieved several key milestones in 2022, as summarised below.

▪Re-entered the Saudi Arabian market, securing a direct Tubular Running Services (TRS) contract with Saudi Aramco

▪Several other TRS contract awards in Norway, Malaysia, UK and Netherlands

▪Delivered a world first, running different sizes of our patented DrillRDillo’s in tandem for ADNOC in Abu Dhabi

▪Achieved our highest level of DefuseTM casing reamer sales, with deliveries in all geomarkets

▪Delivered two packages of VX-57 drillpipe and accessories to bp in the UK

▪Secured a second package of Wired Drillpipe and accessories for Aker BP

▪Onboarding of Shell Albania and Dosco Israel as new clients

In terms of technology development, we made a significant breakthrough in 2022, successfully installing and running our fully automated and hands-free Continuous Circulation System (CCS) on Deepsea Aberdeen. This technology is critical to areas/wells where the operating envelope for pore pressure is narrow. This Odfjell Technology system is market leading and differentiates itself with the ability to be operated remotely, removing the need for people to enter the red-zone of the drill-floor and is fully compatible with wired drill-pipe.

In order to meet the increasing demands from our clients, we also made improvements to several of our core products this year—improvements that are targeted to increase efficiency and reduce the cost of operations.

Caring for the environment is always considered in our planning and execution. In 2022, as part of our upgrade of the Tananger facility, we replaced the acid baths with modern ultrasound cleaning facilities and replaced the fleet of diesel forklifts with electric forklifts. 

We launched GO GREEN, our campaign under our "People Initiative" that aims to raise environmental awareness of our people and challenge them to perform small and sustainable acts to "Reduce, Reuse and Recycle" at work and at home. We took various steps in our other global offices and workshops to reduce energy consumption and increase the recycling and reuse of waste.

Odfjell Technology continues to significantly invest in our people and their safety.

Our mental health campaign "I see you" was rolled out this year. We also completed 7 years without a loss time incident (LTI) in Turkmenistan and 9 years without an LTI in the UK. Global leadership insight programs were conducted along with local leadership masterclasses in all areas.

Though the uncertainty around the global political situation is likely to remain unchanged in 2023, Odfjell Technology is confident in our strategic direction and ability to reach our long-term targets.

In the coming years our Well Services division has ambitions to realise significant growth through diversification of product offerings and new sectors such as geothermal and increased geographical footprint in new territories, including Africa.

This year we successfully separated our platform drilling services from Odfjell Drilling, forming the new and focused Operations Business Area within Odfjell Technology.

We provide drilling operations to 16 fixed installations across Norway and the UK (10 operative and 6 in maintenance mode). In addition, we now also provide services to the Linus jack-up rig which is an exciting first for Odfjell Technology. Moving into this area will enable us to grow and develop in the jack-up rig market.

We have delivered efficient operations and a stable and strong order backlog, whilst safeguarding margins. Going forward, we will continue to enhance the collaboration capabilities across our business, utilising our internal competence to its fullest.

Our contract successes in 2022 were:

▪Contract signed with SFL to provide management services for the harsh environment jack-up drilling rig Linus. The rig is contracted to ConocoPhillips in the North Sea until the fourth quarter of 2028.

▪The Serica Energy contract has been successfully renewed for a further year and discussions are ongoing regarding future services.

▪The Johan Sverdrup and Heidrun contracts with Equinor have been merged. The first option was exercised in October 2022 for two years with two 2-year options thereafter

▪Mariner implemented a Performance Incentive Agreement with Equinor to drive improvements

▪bp Clair Phase 1 moved into the deemed cost alliance model in December, in alignment with the Clair Ridge model

▪Working with a new client, OKEA ASA who have taken over the Brage platform from Wintershall Dea

Our contract portfolio and backlog is presented below:

Supply Chain Management (SCM) includes all purchasing and logistics functions. It is a centralised function, enabling us to negotiate the best terms for all Business Areas and ensuring resources and best practices are optimised. There is a global standard policy covering Enterprise Resource Planning (ERP) system use, ERP and SCM training, parts catalogue code structure and classification, all supported and managed centrally.

Process compliance, efficiency and effectiveness are monitored for consistency across all Business Areas and key performance indicators reported. SCM is a critical function in ensuring operations run smoothly and digital initiatives in SCM are a significant contributor to increasing efficiency.

SCM is instrumental when looking at how to reduce waste, track and record emissions from logistics to target reductions and utilise more environmentally friendly solutions.

As an international Group, our suppliers are spread around the globe, with the highest activity levels being in Norway, UK and United Arab Emirates. The main types of suppliers are suppliers of drilling related equipment, spare parts and safety equipment and operational consumables, along with various service suppliers. 

We screen all potential new suppliers through our Become A Supplier (BAS) process before they are added to an Approved Vendor List within our ERP system. This is to assure our governance and ethical standards are met down through the supply chain.

The supplier prequalification process includes assessments of the supplier in a variety of areas which are evaluated against our expectations. During 2022, the Group has undergone Human Right's risk assessments and our BAS process now incorporates a separate questionnaire on human rights to allow us to assign a risk score based on self-assessment and evaluate compliance down the supply chain. Suppliers are also assessed for their compliance with statutory regulations and the Odfjell Technology Code of Business Conduct. We look to have open and constructive relationships with our key supplier stakeholders through audits, performance reviews, collaborations and regular meetings with key frame agreement suppliers. More information can be found under responsible agents and suppliers in the Sustainability Report page 39.

There have been a number of economic pressures affecting the supply chain this year, with an impact on the availability of products and increasing lead times. The SCM function has adapted to take these challenges into account with increased forward planning.

Appointed 10 January 2022

Helene Odfjell (born 1965) and a UK resident, has a Master of Business Administration from the Norwegian School of Economics (NHH), a Master of Business Administration from London Business School and is a Chartered Financial Analyst. Mrs. Odfjell has many years of experience in business and management and holds many board and management positions in the affiliates of the Company. Ms. Odfjell was Chair of the Board of Odfjell drilling Ltd for several periods over the last few years before being appointed Chair of Odfjell Technology Ltd. Ms. Odfjell controls 23,825,396 shares in the Company as at year end 31 December 2022.

Appointed 10 January 2022

Susanne Munch Thore (born 1960) and a Norwegian resident, is a partner with the Norwegian law firm Arntzen de Besche. She has a law degree (cand. jur.) from University of Oslo, a Diploma of International Affairs from John Hopkins School of Advanced International Studies, Bologna and a Master of Laws from Georgetown University, Washington D.C. She was a partner in Wikborg Rein's Oslo office and part of the firm's Corporate Finance and Tax group. She has been Legal Officer at the Oslo Stock Exchange and has assisted foreign and Norwegian entities with mergers and acquisitions, capital market transactions and stock exchange listings, as well as transactions pertaining to company law and securities law, and has extensive experience from various boards. Ms. Munch Thore owns 500 shares in the Company as at year end 31 December 2022

Appointed 16 December 2021, resigned 10 January 2022

Biography presented in the Executive Management Team section

Appointed 10 January 2022

Alasdair Shiach (born 1956) and a UK resident, has a Bachelor’s degree in Business Studies from Robert Gordon’s University (formerly RGIT) in Aberdeen, Scotland. Mr Shiach has 40 years of international experience in the Oilfield Service sector having worked for Dresser Industries and then Baker Hughes Inc. Prior to his retirement in May 2016, Mr Shiach held senior executive leadership positions at Baker Hughes, including President of the Drilling Fluids product line and President of the Russia Caspian region as well as assignments in the USA, UAE, Saudi Arabia and Norway. Mr Shiach is also on the board of Welltec.

Appointed 29 March 2022

Victor Vadaneaux (born 1964) is a Senior Advisor in private equity and works independently with various private equity firms to assess investment opportunities and build significant value in their portfolio companies. Mr. Vadaneaux has extensive experience in leading management teams in manufacturing and distribution businesses, and has held a variety of management positions in various companies. Mr. Vadaneaux holds a Master of Business Administration from Harvard Business School, a Master of Science from Telecom Paris and an engineering degree from École Polytechnique. Mr. Vadaneaux owns 16,563 shares in the Company as at year end 31 December 2022

The Audit Committee in Odfjell Technology (the "Committee") is formally appointed by the Odfjell Technology Ltd Board and comprises two non-executive directors, with a diverse range of competence based on their expertise and experience.

The Committee’s primary function is to assist the Board in fulfilling its responsibilities concerning the Company and the Group in respect of:

▪understanding, assessing, and monitoring business and financial risks and risk management systems

▪monitoring annual and interim financial reporting along with proposals to ensure its integrity

▪overseeing, assessing and reporting on the performance of internal control and external audit activities

▪overseeing legal and regulatory compliance

▪reviewing and monitoring the selection and independence of statutory auditors, maintaining continuous contact with the appointed auditor regarding auditing of annual accounts and monitoring audit performance

▪ reviewing arrangements for the confidential raising and investigation of concerns in financial reporting and other matters

▪preparing the Board’s review of the financial reporting process, and sustainability reporting, providing recommendations or suggestions to ensure integrity of reporting

The Committee operates autonomously of management and refers all views and recommendations to the Board for discussion and resolution after each Committee meeting.

The Committee consists of two Board members, one of which is considered to be independent and have competence in accounting or auditing. Susanne Munch Thore is chair of the Committee and is independent of the Executive Management of the Company. The CFO acts as secretary of the Committee.

The Committee shall endeavour to hold four meetings a year and interim meetings may be called if required. Members of management, auditors, and others are invited to attend and provide pertinent information, as necessary. As the Odfjell Technology Group was newly formed in 2022, only two meetings were held in line with approval of quarterly reporting. The focus was on accurately prepared quarterly reports, based on consistent use of accounting principles defined by IFRS.

Documentation provided to the Committee as preparation for meetings, include reports, memos and policies provided by accounting, tax, and legal experts, both internal and external.

Matters of interest and concern were promptly reported to the Board where action or improvements were required regarding any aspect of financial reporting, risk management, internal control, compliance, or audit-related activities. The Group’s internal controls have been determined by the Committee to be appropriate and effective.

During the year, the Committee has considered all relevant laws, regulations, codes, and any other applicable rules. They have reviewed tax and compliance activities and matters as well as any material disputes. The Committee has focused on revenue recognition and contingent liabilities, including the use of reasonable assumptions, estimates and judgement.

A compliance plan for 2022 was presented to the Committee, as well as an outline of Enterprise Risk management. The requirements of the Transparency Act introduced in Norway from 1 July 2022 were reviewed and required measures taken to fulfil new requirements, mainly in relation to human rights impact assessments and risk mitigation.

The 2022 Audit plan was presented to the Committee by KPMG, introducing the audit team, and discussing focus areas and audit quality. The Committee oversees the type and volume of other services provided by the audit firm. No indications were found that these services have had a negative impact on the auditor’s independence.

The Committee has used the auditor’s report to the Committee as the basis for understanding and improving the internal control systems of the Group, with an audit focus area being potential management override of controls.

An outline of the risk management governance model was presented to the Committee as well as an overview of risks from a macro perspective. The CFO shall ensure internal control in cooperation with the administration and report to the Committee.

The annual financial statements for the year ended 31 December 2022, as well as the external auditor’s presentations, management’s response, and the auditor’s opinion, were reviewed by the Committee. The views of the Committee were communicated to the Board prior to its approval of the financial statements.

Comparison of remuneration and Company performance over time

As this is the first year of the Odfjell Technology Group, the table below only shows information for 2022.

chosen by clients for our expertise and reputation. Quality, Health, Security, Safety and Environment Management are of paramount importance to Odfjell Technology, and we strive for high quality performance and safe and secure operations through continuous improvement programmes. We aim for organisational robustness, zero injuries and failures, strong cyber and physical security, delivered by a competent and motivated workforce.

Our onshore support centres work collaboratively in real time with our operations teams. This philosophy defines the team-focused nature of the Group.

We have a clearly defined process for developing and managing strategic direction which involves analysis, planning, monitoring, and execution. Our corporate strategy and business model is explained in more detail in the Strategic Report.

Odfjell Technology has adopted five core values that help define and instruct our business.

The Group had book equity of NOK 779 million and a book equity ratio of 25% as at 31 December 2022.

The Company has only one class of shares. Each common share in the Company carries one vote, and all common shares carry equal rights, including the right to participate in General Meetings. All shareholders are treated on an equal basis.

The shares and negotiability section of the Corporate Governance Report details the transferability of common shares.

The number of ordinary shares issued in Odfjell Technology Ltd. as at 31 December 2022 is 39,463,867

On 27 June 2022, the Company implemented a long term incentive share option plan. A total of 1,995,000 options have been awarded to certain of its employees at strike prices from NOK 22.31 to NOK 24.13 per share.

The Company is not aware of any shareholder agreements or any other agreements which limit trading of the Company’s ordinary shares or voting rights as at 31 December 2022.

The Company and a number of its subsidiaries, are governed from and tax resident in the United Kingdom. Three out of four directors of the Company are UK residents. The Company has published its tax strategy on its website in compliance with the UK Finance Act 2016 Schedule 19.

The overall aim of the tax strategy is to support the business by maintaining a sustainable tax rate, while mitigating tax risks and complying with rules and regulations in the applicable jurisdictions in which Odfjell Technology operates.

The Group maintains internal policies and procedures to support its tax control framework and provides training to its personnel to manage tax risks.

The tax strategy aligns to the Group's wider risk and control framework. Key risks and issues related to tax are escalated to and considered by the Group Audit Committee and Board of Directors on a regular basis.

The Group operates in approximately 30 countries and is exposed to a variety of tax risks as follows:

▪Tax compliance and reporting

▪Transactional

▪Reputational

Tax risks are managed by the Audit Committee. Where appropriate, the Group looks to engage with tax authorities to disclose, discuss and resolve issues, risks, and uncertain tax positions. The subjective nature of global tax legislation means that it is often not possible to mitigate all known tax risks. As a result, at any given time, the Group may be exposed to financial and reputational risks arising from its tax affairs.

The Group acknowledges its responsibility to pay the level of tax required by the laws of the jurisdictions in which it operates and also its responsibility to its shareholders to structure its affairs in an efficient manner.

The Group seeks to comply with its tax filing, tax reporting and tax payment obligations globally and to foster good relationships with tax authorities.

During 2022, Odfjell Technology has been developing strategic plans and exploring growth and diversification opportunities. We have initiated projects to ensure that we adapt to changes in the energy market. Odfjell Technology strives to be competitive in everything that we do and to be resilient to external factors affecting the market.

ESG is one of our top priorities and following the spin-off of the Odfjell Technology Group we are developing our ESG strategy and a reporting framework. The Global Reporting Initiative framework is used to drive continuous improvement in ESG efforts, and our focus is on creating clear ESG ownership in all Business Areas and functions. 2022 saw two major projects on human rights and climate risk being undertaken. The Group will publish a Human Rights Statement in line with the Transparency Act by 30th June 2023. In the meantime, reference can be made to the human rights section of our website - Human rights - Odfjell Technology and also to the 2021 Modern Slavery Statement published under Odfjell Drilling prior to the spin-off of Odfjell Technology Modern slavery statement - Odfjell Drilling.

Gender pay gap reporting for Norway and the UK, prior to its spin-off from the Odfjell Drilling Group, can also be found on the Odfjell Drilling website, Gender pay gap - Odfjell Drilling until such time that Odfjell Technology publishes its first statements in line with reporting requirements.

More detail on these matters can also be read in our Sustainability Report which is available at www.odfjelltechnology.com.

For details on Executive remuneration, please refer to our Executive Remuneration Report.

The general situation for the global oil service industry is expected to improve as a result of under-investment in the sector in recent years. The supply of oil and gas is too low to meet expected demand, therefore an increase in investments and activity is vital to bridge the increasing energy demand as new energy sources take time to implement. The increase in drilling activity and field investments is expected to increase demand for our services.

We have established a strong presence in the North Sea with efficient operations and strong client relationships, which we expect to capitalise on further. We see opportunities to grow in the decommissioning plug and abandonment area, particularly in the UK.

The engineering market is improving both in existing deliverables and in green initiatives. We are well positioned to grow in existing services and further expand our portfolio of green services.

With the move to sustainable energy sources, we are researching opportunities to diversify into renewables or other sectors supporting the emerging energy markets. Our skills and experience lend themselves to certain areas, and already we have ventured into offshore wind through our investment in and support given to Odfjell Oceanwind.  

Activity for the three main business segments is summarised below.

Well Services provides the most up to date technology available for hands-free tubular running operations, high specification drilling tubulars and market-leading downhole tools. In addition, we have a vast inventory of equipment and our in-house engineering is highly specialised in the development of new technology. 2022 saw us develop and install our new Continuous Circulation System (CCS) for the Deepsea Aberdeen.

Our business has a global presence with 15 offices and operating bases servicing contracts in around 30 countries, positioning Well Services as a leading provider in the front line of our industry. With approximately 290 clients worldwide, we service a range of sectors, mainly oil and gas, but also including hydrogen and geothermal.

2022 has seen growth in the business with entry into new geographical markets and high recruitment levels.

Operations secured further firm backlog in 2022 with contract extensions and the exercising of options. The most significant development in 2022 was the signing of a management services contract for the Linus jack-up drilling rig which takes us into a new market. Collaboration across all Odfjell Technology Business Areas is key to delivering value to clients, and we work in a number of alliances. We continue to provide, integrated drilling services including onshore support, production drilling and completion, well maintenance, facility maintenance planning and plugging and abandonment which is a service we will be focussing on in 2023.

Projects & Engineering continue to build their competency to offer a range of services including feasibility and concept studies, Front End Engineering Design (FEED), pre-FEED, subsea services and integrity and inspection. Our differentiator is our close link to operations which means we bring an operational perspective to the process, defining scope, designing the engineering solution and managing the project execution and installation. A growing offering is the Energy Efficiency service, assisting asset owners to map energy consumption and carbon emissions and providing advice on optimising energy consumption and reducing emissions, through changes in processes, technology etc.

More detail regarding the activities of each business segment can be found in the Strategic Report.

We see a positive outlook for 2023 with demand and pricing in all our markets indicating a cycle upturn. Activity is increasing, and we are seeing more tenders and inquiries. In particular, we see Well Services increasing in the Middle East and Europe. Developing new technological solutions such as the recent Continuous Circulation System, keeps us at the forefront of our industry.

The solid backlog in Operations gives us predictability and there is opportunity to increase our integrated services provision to current clients.

There is a large volume of Special Periodic Survey (SPS) activity coming up for Projects & Engineering in the next two years, which is an area we excel in.

The energy transition is key to the future of all, but there is a gap between supply of renewable energy and demand. Oil and gas is therefore expected to remain a vital part of the energy mix in the foreseeable future.

The key word is "transition" and Odfjell Technology will focus on how we use our expertise in contributing to the move towards renewable energy. As well as our investment in Odfjell Oceanwind to develop mobile offshore wind, we are also researching a number of other renewable fields to determine our renewables strategic direction. We already use our Well Services skills in sectors such as geothermal.

Together with Operations and Projects & Engineering, there is significant growth potential in the UK decommissioning market, as infrastructure comes to the end of its operational life. More than 2,000 wells in the UK are likely to be permanently abandoned over the next decade and plug and abandonment represents a significant proportion of decommissioning spend. Our culture of being adaptable, innovative and focussed on continual improvement will stand us in good stead in the transitioning energy market.

(Comparable figures in brackets, based on predecessor combined financial figures, see Note 2 for more information)

Odfjell Technology generated operating revenue of NOK 3,885 million in 2022 (NOK 2,948 million), an increase of NOK 937 million. There is increased revenue in all the segments from 2021 to 2022.

Total operating expenses were NOK 3,514 million (NOK 2,830 million), an increase of NOK 684 million. Personnel expenses increased by NOK 485 million mainly due to increased number of personnel and higher hired personnel cost.

The operating profit (EBIT) amounted to NOK 384 million (NOK 125 million), an increase of NOK 259 million. There is an increase in all the segments, but the main contributor is Well Services. The increased EBIT in the segments are partly offset by increased overhead costs

Net financial expenses amounted to NOK 138 million (NOK 17 million). The increase in net expenses of NOK 121 million was mainly explained by interest expenses on debt issued in 2022 and increased net currency loss in 2022 compared to 2021.

The income tax expense was positive with NOK 26 million (positive with NOK 9 million) mainly due to utilisation of unrecognised tax losses in relation to group contribution received from the Odfjell Drilling Group in Q1 2022.

Net profit for the Group was NOK 253 million (NOK 112 million). Total comprehensive income was NOK 403 million (NOK 191 million).

Consolidated total assets as at 31 December 2022 amounted to NOK 3,115 million (NOK 3,920 million), a decrease of NOK 805 million mainly due to the re-organisation and establishment of the Odfjell Technology Group, which significantly impacted certain receivables from the Odfjell Drilling Group. Total non-current assets amounted to NOK 1,466 million (NOK 1,149 million). Current assets amounted to NOK 1,648 million (NOK 2,771 million), of which NOK 560 million was cash and cash equivalents (NOK 498 million).

Total equity amounted to NOK 779 million. The equity in the reported 2021 periods are not comparable as these are based on carve-out combined financial statements. The equity ratio was 25%.

Total liabilities amounted to NOK 2,336 million (NOK,958 million), reflecting an increase in interest-bearing borrowings of NOK 1,340 million as the Group issued interest-bearing borrowings in Q1 2022 in order to acquire shares in subsidiaries. Net interest bearing debt (excluding lease liabilities) amounted to NOK 780 million. In addition, lease liabilities (IFRS 16 Leases) amounting to NOK 127 million (NOK 108 million).

Cash flow from operating activities amounted to NOK 568 million (NOK 369 million). The variance of NOK 184 million from EBIT in 2022 is mainly explained by depreciation, amortisation and impairment, offset by interest paid.

Net cash outflow used in investing activities amounted to NOK 2,705 million (NOK 438 million). In 2022, NOK 2,343 was spent on purchase of shares in subsidiaries and to acquire interests in joint-ventures, and a subordinated mandatory convertible loan of NOK 35 million was paid out to the joint-venture. The remaining cash outflow was mainly due to purchases of Well Services equipment.

Net cashflow from financing activities amounted to NOK 2,200 million (NOK 446 million). In 2022 the Group had proceeds of NOK 1,296 million from external borrowings. As part of the reorganisation of the group, there was also a cashflow of NOK 1,057 million from the Odfjell Drilling cash pool, and proceeds from capital increases of NOK 45 million, and the Group paid dividends of NOK 177 to the Odfjell Drilling Group.

The Group makes estimates and assumptions concerning the future. These estimates are based on the actual underlying business, its present and forecast profitability over time, and expectations about external factors such as interest rates, foreign exchange rates and other factors which are outside the Group’s control. The resulting estimates will, by definition, seldom equal the related actual results.

There is use of judgement in the Group's revenue recognition, as well as in the considerations related to recognition of deferred tax asset for carried forward tax losses, and considerations related to contingent liabilities.

Please refer to Note - 4 Critical accounting estimates and judgements in the Consolidated Financial Statements for further information.

The business of the Parent Company, Odfjell Technology Ltd., is as a holding company for investments in subsidiaries. The Company was only incorporated in December 2021, and therefore did not have any activity in 2021.

The Parent Company reported an operating loss (EBIT) of NOK 23 million mainly due to legal fees and financial assistance.

The Parent Company reported a share of losses from joint venture Odfjell Oceanwind of NOK 19 million.

The Parent Company reported net financial expenses of NOK 134 million, mainly related to interest expenses amounting to NOK 101 million. In addition, the Company had net currency loss of NOK 28 million mainly related to the USD 25 million revolving credit facility.

The Parent Company reported a net loss of NOK 176 million.

Total assets in the Parent Company amounted to NOK 2,691 million as at 31 December 2022, mainly related to investments in subsidiaries and joint ventures.

Equity in the Parent Company amounted to NOK 931 million (NOK 88 thousand), corresponding to an equity ratio of 35%.

Cash flow used in operating activities was NOK 109 million The variance of NOK 86 million from EBIT in 2022 is mainly explained by interest paid.

Cash flow used in investing activities was NOK 1,030 million. NOK 2,327 was spent on purchase of shares in subsidiaries and to acquire interests in joint-ventures, and a subordinated convertible loan of NOK 35 million was paid out to the joint-venture. The Company also received dividends from subsidiaries of NOK 1,036 million, and had proceeds from sale of shares and current cash pool of a total of NOK 297 million.

Cash flow from financing activities was NOK 1,340 million. The Company had proceeds of NOK 1,296 million from external borrowings and proceeds from capital increases of NOK 45 million.

Operating revenue for Well Services in 2022 was NOK 1,365 million (NOK 996 million) an increase of NOK 369 million. All regions continue to experience increased levels of activity. Key drivers are commencement of new contracts in Norway, Middle East and Asia, also a notable recovery in European markets post COVID-19.EBITDA for the segment was NOK 485 million (NOK 258 million) an increase of NOK 227 million with corresponding EBITDA margins of 36% (26%). Increased activity, a shift towards higher margin product offerings and results from cost initiative programmes all continue to contribute to the increase in EBITDA and margin.EBIT for the segment FY 2022 was NOK 226 million (NOK 47 million).

Operating revenue for Operations in 2022 was NOK 1,904 million (NOK 1,506 million), an increase of NOK 398 million mainly due to higher activity level and the commencement of a jack-up management from September 2022.

EBITDA for the segment was NOK 157 million (NOK 101 million), an increase of NOK 56 million. The EBITDA margin for the Operations segment in FY 2022 was 8% (7%). The drivers for the increase are high financial performance on existing contract portfolio and start-up of jack-up management from September 2022.

EBIT for the segment equals EBITDA.

Operating revenue for Projects & Engineering in 2022 was NOK 581 million (NOK 358 million), an increase of NOK 223 million. This is mainly explained by increased sales volume within both the existing client portfolio and new opportunities that we have started delivering on in the latter parts of 2022.

EBITDA for the segment was NOK 72 million (NOK 20 million), an increase of NOK 52 million. The EBITDA margin for the segment was 12% (6%).

EBIT for the segment equals EBITDA.

The Group provides well services equipment, drilling operations and maintenance services, and engineering services, primarily for the oil and gas industry, which historically has been cyclical in its nature. The oil service market has developed positively in recent years due to a strong focus on cost discipline and more efficient operations, combined with a healthier oil price development. The focus on alternative energy sources and the overall future mix of energy remains strong. The transition into greener energy sources is expected to impact the energy market in the coming decades, however the need for continued exploration and production of oil and gas is viewed as vital, and it has become more apparent recently.

The general situation for the global oil service industry is expected to improve as a result of under-investment in the oil and gas sector over the last 8 years. The supply of oil and gas is too low to meet the expected demand. Increase in investments and activity is vital to bridge the increasing energy demand as new energy sources take time to implement. There is an increased appetite for field development and production spending across the segments.

The Group seeks to mitigate these risks by securing contracts with reputable clients, preferably long term, for its services. All offshore contracts are associated with risk and responsibilities, including technical, operational, commercial, and political risks.

Factors that, in the Group’s view, could affect its results materially include: volatile oil and gas prices, global political changes regarding energy composition, competition within the oil and gas services industry, changes in clients’ spending budgets and developments in the financial and fiscal markets.

The Group is exposed to a range of financial risks: liquidity risk, market risk (including currency risk, interest rate risk, and price risk), and credit risk. The financial risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. To some extent, the Group uses derivative financial instruments to reduce certain risk exposures. Risk management is carried out on a Group level. The Group identifies, evaluates and hedges financial risks in close co-operation with the Group's operational units. The board of Odfjell Technology Ltd. has established principles for risk management of foreign exchange risk, interest rate risk and use of derivative financial instruments.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of credit facilities and to have sufficient cash or cash equivalents at any time to be able to finance its operations and investments in accordance with the Group's strategic plan.

Odfjell Technology held cash and cash equivalents amounting to NOK 560 million at the end of 2022. This is deemed to be sufficient funding for the Group’s current activity levels and committed capital expenditures during 2023.

The Group's refinancing risk is low, with a bond loan maturing in February 2026 and a rolling credit facility of USD 25 available until the same quarter.

The liquidity risk is connected with the market risk and the re-contracting risk for the segments. The management continuously focuses on securing new profitable contracts to generate sufficient cash flow from operations, hence reducing the liquidity risk going forward.

Operating in more than 30 jurisdictions, Odfjell Technology do from time to time receive enquiries from authorities about compliance related matters. Refer to Note 30 - Contingencies regarding notice of a decision received 1 October 2021 from HM Revenue and Customs in the UK which has been appealed. The Group has at 31 December 2022 not received any other formal material assessment which is not disclosed in the financial statements.

Market risk is the risk of a change in market prices and demand, as well as changes in currency exchange rates and interest levels.

Firm periods in the contract backlog provides a level of security for the near future.

The Group operates internationally and is exposed to foreign exchange risk arising from various exposures to currency fluctuations, primarily with respect to USD and NOK. The Group seeks to minimise these risks through natural hedging by balancing the currency in and out flow and will use financial hedging instruments if required.

The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's senior secured bond, based on NIBOR and the RCF based on USD Secured Overnight Financing Rate. The Group evaluates the level of interest rate hedging based on assessment of the Group’s total interest rate risk and currently has a combination of fixed and floating interest rates in order to limit exposure. The Board of Directors regularly considers the interest payment hedging of the external financing and mandates administration to execute necessary changes.

Including interest rate swaps entered into, the fixed-rate portion of the Group’s interest bearing debt as at 31 December 2022 is approximately 29%.

The current main market for the Group’s services is the offshore oil and gas industry, and the clients consist primarily of major international oil companies, independent oil and gas producers and government owned oil companies. The Group performs ongoing credit evaluations of clients and generally does not request material collateral. Credit risk is considered to be limited.

Included in the Trade receivables as at 31 December 2022 the Group has an outstanding amount of EUR 4 million - circa NOK 42 million, from clients in Iran. The Group's activities in Iran ceased prior to reinforcement of US sanctions early November 2018. No payments have been received after this date, due to no current efficient bank channels out of Iran. The Iranian clients are working on improving the liquidity situation and finding appropriate payment routes. The Group's Iranian clients have previously demonstrated that they prioritise supplier payments, and although delayed, they have historically paid their outstanding amounts. An impairment loss of EUR 0.5 million -circa NOK 5 million, has been accrued for related to these trade receivables as at 31 December 2022, an increase of EUR 0.1 million - circa NOK 1 million from 31 December 2021

ESG risks are considered in day to day operations, as well as at an enterprise risk level and in line with new legislative requirements. During 2022, efforts were concentrated on the evaluation of human rights risks across all Business Areas and jurisdictions, looking at where the business may have an impact.

During 2022, a project was undertaken with external advisors to raise awareness and assess the impacts of climate risks and opportunities. Cross-functional workshops were held to review the impact on the business from both physical and transitional risks in the short, medium and long term, prioritising risks for further deep dives.

The most significant transition risks identified, along with mitigating actions were:

▪ Increased resources, skills and tools required to measure, track and report on climate data, leading to increased costs. In house expertise being developed, gap analysis being conducted, and software tools will be researched.

▪ Impact on the ability to attract and retain talent, increasing costs. Training programmes to be reviewed and increase focus on communicating our sustainable activities.

▪ Changes in consumer behaviours will reduce the demand for oil and gas and therefore revenue. This will be addressed through diversification of our client portfolio and services to support the energy transition.

▪Cost of and access to capital may go up as banks move to low carbon portfolios, leading to increased interest costs. Consider green funding resources for investments and diversify to low carbon portfolio.

The most significant physical risks identified, along with mitigating actions were:

▪ Impact of extreme weather offshore on crew and equipment logistics could increase costs and result in downtime. Critical spares analysis and robust planning required as well as protection in commercial contracts.

▪Heat, floods and tropical storms may increase in certain geographies we operate in, damaging infrastructure and increasing costs. Business continuity plans, remote working and reviews of locations required to address risk.

▪ Heat stress will impact employees and equipment working outside in certain locations. Health tracking and storage of equipment to be monitored.

More detail on these risks can be found in our Sustainability Report.

Odfjell Technology has a group insurance policy for the liability of the Company’s and its subsidiaries’ Directors and Officers. The insurance covers personal legal liabilities including legal costs for defence. The limit of liability is NOK 75 million per claim and in aggregate per year.

The financial statements have been prepared on the basis of the going concern assumption and the Directors have confirmed that this was realistic at the time the accounts were approved.

When assessing the going concern assumption, the Directors and management have considered cash flow forecasts, funding requirements and order backlog.

The Group's refinancing risk is low, with a bond loan maturing in February 2026 and a rolling credit facility of USD 25 million available until the same quarter.

Taking all relevant risk factors into consideration, the Board has a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future.

There have been no events after the balance date with material effect for the financial statements ended 31 December 2022.

Items in the statement above are disclosed net of tax. The income tax relating to each item of other comprehensive income is disclosed in Note 9 - Income Taxes.

The accompanying notes are an integral part of these financial statements.