Report 1st interim period 2021 - Vy Group Key information Board of Director's Report Numbers and notes

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Report 1st interim period 2021 - Vy Group Key information Board of Director's Report Numbers and notes
Report 1st interim period 2021
Vy Group

Key information
Board of Director’s Report
Numbers and notes
Report 1st interim period 2021 - Vy Group Key information Board of Director's Report Numbers and notes
Table of contents

1st interim period 2021

Key information                                         3

Board of Director’s report                              4

Group income statement                                  8

Group balance sheet                                     9

Group cash flow statement                               10

Development in equity                                   11

Operating segments                                      12

Notes – reporting information                           14

Tax policy                                              17

The interim report is not subject to financial audit.
Report 1st interim period 2021 - Vy Group Key information Board of Director's Report Numbers and notes
Key information

Financial key figures
                                                                  Year to date 2021          Year to date 2020
All figures in MNOK

Group profit
Operating revenue                                                             4 655                       5 148
Operating profit                                                               -384                         -77
Profit before income tax                                                       -411                        -217

Group cash flow
Net cash flow from operations                                                   347                         111

Group balance sheet
Net interest bearing debt *                                                   5 698                      4 943

Equity
Return on equity (ROE) (last 12 months)                                     -23,5 %                       5,8 %
Equity ratio                                                                 22,5 %                      30,9 %

* Net interest-bearing debt includes net pension liabilities

Key performance indicators
                                                                  Year to date 2021           Year to date 2020

Vy Group
Sick leave ratio (last 12 months)                                            8,0 %                       7,2 %
H1 (Lost Time Injury per million work hours)                                   6,9                         6,0

Passenger train

Number of train journeys - Norway (mill.)                                       7,4                       15,2
Produced seat kilometers - Norway (mill.)                                    2 578                       3 165
Punctuality - passenger train - Norway                                       90 %                        90 %

Bus transport
Number of bus journeys (mill.)                                                15,9                        26,0
Produced carriage kilometres (mill.)                                           57,1                       55,2
Customer satisfaction express bus (index 0-100)                                 86                          77

Freight transport
Number of transported TEU - freight train (1.000)                              108                          97
Net tonn km. (mill.)                                                           970                        894
Punctuality - freight train                                                  95 %                         95%

3                                                              Vy Group – Report for the 1st interim period 2021
Report 1st interim period 2021 - Vy Group Key information Board of Director's Report Numbers and notes
Board of Director’s report

Summary for the first four                            tourists as customers, a big part of the customer
months of 2021                                        base has been temporarily lost.
(Last year’s figures in brackets)
                                                      Developments in key management
The Covid-19 pandemic had a significant impact        parameters:
on the group’s operations in the first four months    • Decline in number of journeys by passenger
of 2021. New highs in the levels of infection and        trains in Norway of 51 per cent
tight restrictions kept the number of journeys        • Decline in number of journeys by bus of
with Vy at a significantly lower level than normal.      39 per cent
The comparative figures with the same period          • Punctuality for passenger train operations is
last year are affected by the fact that the first        90 percent (90 percent)
two months of 2020 were not impacted by the           • Punctuality in freight operations improved
pandemic.                                                to 95 per cent (95 per cent)
                                                      • Sick leave during the period is 8.7 per cent
The authorities have stated that public transport        (8.7 per cent)
will be maintained at a high level, especially        • H1 has increased to 6,9 (6,0)
to ensure that employees who work within
critical functions will be able to get to and from    Financial development
work and at the same time be able to keep             • Operating profit is -384 MNOK (-77 MNOK)
social distance. Public purchasers (county            • Profit after tax is -322 MNOK (-168 MNOK)
municipalities and the Norwegian Railway              • Return on book equity over the last 12
Directorate) have therefore largely maintained            months is -23.5 percent (5.8 percent)
public transport during the pandemic. As a            • Reduced earnings in the Passenger train
general rule, payment for the offer has been              operation compared to the same period last
maintained, and additional agreements have                year
been entered into to compensate for parts of          • Reduced earnings in the Bus operation
the loss of income where Vy has full or partial           compared to the same period last year
revenue responsibility in the form of revenue         • Improved results for the Freight operation
from passengers.                                      • Impairment of contracts of NOK 127 million,
                                                          mainly due to Covid-19 which leads to
For commercial lines, the loss of revenue has             weaker market and profit development
been significant, even though support schemes
have compensated for parts of the loss. Vy has
continued to offer services at a reduced level        Summary of Results and Trends for
within the express bus business, which in turn        the Business Areas
has led to continued layoffs.
                                                      Passenger Train Operations
Demand for the transport of goods by rail is          Vy operates traffic package West as well as train
positively affected by the pandemic. Demand           traffic in Eastern Norway. The company is now
for the transport of aviation fuel and timber         working to present a tender for traffic package 4
has fallen significantly, but the fall is more than   for Eastern Norway, starting in December 2023.
offset by increased demand for the transport of       Traffic package 5 has been postponed and
groceries and packages.                               start-up is planned for December 2025.

Vys’ tourism offer has been hit hard by the           Operating revenues for the passenger train
corona pandemic. For Fjord Tours Group and            business as of the first four months of 2021
Flåm Utvikling, which largely have foreign            are NOK 2,169 million (NOK 2,673 million), a

4                                                              Vy Group – Report for the 1st interim period 2021
reduction of 19 per cent from the previous year.     aviation fuel has been reduced compared to a
The total number of journeys in the passenger        normal year.
train business in Norway is 7.4 million. This is
a reduction of 51 per cent compared with the         The average punctuality of freight trains was
same period last year. The main reason for           maintained at 95 per cent (95 per cent) within
the decline is the strict measures that were         15 minutes, significantly better than the target
introduced as a result of the pandemic.              of 92 per cent.

The operating profit for the passenger train         Operating revenues are NOK 356 million (NOK
business is -266 MNOK (70 MNOK) as of the            318 million), and operating profit is NOK 12
first four months of 2021. The main reason for       million (NOK 3 million). The main reason for the
the decline is a reduction in passenger revenues     improvement in profits is increased demand,
due to the reduced number of journeys, which         effects of an internal efficiency program and
is partly offset by production adjustments           environmental support from the authorities.
and other cost reductions, as well as the
supplementary agreement with the Norwegian           Customer experience and innovation
Railway Directorate to compensate for parts of       The Customer experience and innovation
the loss. In addition, contracts have been written   business aims to develop and offer good user
down by NOK 127 million.                             experiences and customer information, as well
                                                     as contribute to sustainable tourism. A good
In Norway, Vy achieved a punctuality of 90 per       travel planning platform and mobility services
cent, similar to the corresponding period last       strengthen the bus and train services, and make
year.                                                it easier to travel by public transport.

Bus Operations                                       Vys’ investment in 250 free-flow electric city
Vy Bus carries out regular services on tenders or    cars in Oslo developed largely according to the
contracts with county municipalities in Norway       plan before the pandemic. After the authorities’
and Sweden, as well as express bus services          introduction of measures to reduce the risk of
and tour services. The number of bus journeys        infection, however, the volume has been 71 per
for scheduled buses in Norway and Sweden             cent of the corresponding period before the
has been significantly reduced as a result           pandemic.
of the pandemic, but the service has largely
been maintained in agreement with the county         Within tourism, fjord, mountain and cultural
authorities. The number of express bus journeys      experiences are sold to Norwegian customers,
in Norway was reduced to 26 per cent of the          tourists and international tour operators. The
normal level during the period.                      main part of the investment is made through
                                                     our part ownership in Fjord Tours Group and
Total operating revenues per the first four-         Flåm Utvikling. We are working to develop more
month period are NOK 1,868 million (NOK              attractive tourism packages by train, bus and
1,941 million). Operating profit is -69 MNOK         boat together with local tourism players.
(-28 MNOK). The main reason for the loss of
profit is a decrease in the number of journeys       The travel industry has been severely hit by
and passenger revenues as a result of Covid-19       the pandemic, and there has been a 91 percent
measures, which is partly offset by cost             decrease in travel with Flåmsbana compared to
reductions related to reduced route offers and       a normal year, and cancellations and reductions
lay offs.                                            in future bookings for Fjord Tours Group. The
                                                     increase in domestic travellers has only partially
Freight Operations                                   compensated for the shortfall in foreign tourism.
The freight operations are less affected by
the pandemic than other business segments.           Management
Demand for combined transport has been rising        Vy is one of the largest mobility operators in
the last few months, while demand for industrial     the Nordic region with operations in passenger
trains for timber transport and transport of         trains, bus, freight and tourism in Norway and

5                                                              Vy Group – Report for the 1st interim period 2021
Sweden. The parent company Vygruppen AS is          are expected to be vaccinated by July-August.
owned by the Norwegian state represented by         It is uncertain when the travel pattern will
the Ministry of Transport and Communications.       be normalized and what will be the new
Vy’s most important sustainability contribution     normal level of mobility. Vy therefore prepares
is to make traveling by public transport easier,    several scenarios for future development and
which reduces greenhouse gas emissions,             associated measures to minimize potentially
relieves congestion, reduces the number of          adverse financial effects. The financial
accidents, leads to fewer local emissions and       development in 2021 is also dependent on
less noise.                                         the support measures from the authorities
                                                    to compensate for loss of revenue due to the
For a detailed account of:                          pandemic. In the revised national budget, the
• Corporate governance                              government proposed to allocate funds for such
• Ownership                                         support until the end of October.
• Strategies and goals
• Efforts to promote sustainability                 The passenger train market is exposed to
• Internal control and                              competition. Vy operates the traffic in Eastern
• Risk                                              Norway, the Bergen line and local traffic around
                                                    Bergen, and works with the tender in the
reference is made to the description in the         competition for traffic package 4 for Eastern
Group’s annual and sustainability report for        Norway, which is scheduled to start in December
2020.                                               2023. Vy maintains the route offer according
                                                    to the agreement with the Norwegian Railway
Financial Development                               Directorate.
Profit after tax per the 1st four-month period
of 2021 for Vygruppen is -322 MNOK (-168            In the bus business, the route offer is maintained
MNOK), a reduction of 154 MNOK compared to          in accordance with agreements with the public
last year. Operating profit is -384 MNOK (-77       transport companies. For the commercial bus
MNOK).                                              routes and airport buses, the supply is adapted
                                                    in line with the development in demand. Vy
The group’s net cash flow from operating            Buss will start up new contracts, for example in
activities is 347 MNOK (111 MNOK). Net              Trøndelag and in Sweden, and will participate in
investments excluding leasing are -82 MNOK          several large new bus offers in both Norway and
(308 MNOK). The investments are mainly used         Sweden.
to increase capacity and profitability within the
passenger train and bus business.                   The situation for freight transport by rail is
                                                    challenging. Demand for freight transport is
For the group, equity per the first four-month      positively affected by the pandemic, with growth
period of 2021 is NOK 3,807 million, which gives    in transport needs for groceries and packages,
an equity ratio of 22.5 per cent.                   but reduced demand for transport of jet fuel and
                                                    timber. The company will adapt production to
The group’s return on book equity over the last     demand. The focus on new customer solutions
12 months. is -23.5 percent (5.8 percent).          and improvement measures is continued to
                                                    improve profitability. At the same time, better
The accounts have been prepared on the              and predictable framework conditions, including
assumption of continued operations, and the         the continuation of the environmental support
board confirms that the assumption is present.      scheme, are very important to ensure long-term
                                                    profitability and future transport of goods by rail.
Outlook
Waves of infection after the New Year led           In tourism, we adapt the offer and marketing
to continuing strict restrictions from the          to Norwegian tourists, and prepare for growth
authorities, and the number of journeys with Vy     when international air traffic reopens.
remained at a low level as a result. Vaccination
is underway, and large parts of the population      Our main goal for 2021 is to work to re-establish
                                                    profitability and ensure future competitiveness.

6                                                             Vy Group – Report for the 1st interim period 2021
We will re-establish our commercial offers in line            We believe that public transport will play a
with the development in demand.                               key role in the years ahead and that it will be
                                                              absolutely essential for Norway to achieve its
We will continue our focus on digital solutions,              climate goals.
explore the possibilities inherent in new
technology and develop offers and new services                The Board would like to express deep gratitude
that make it easy to travel in an environmentally             to our employees, who each day carry out a
friendly way.                                                 socially critical effort to maintain the offer during
                                                              the demanding pandemic.

                                                 Oslo, 31st of May 2021

                                            Board of directors in the Vy Group

    Berit Svendsen/ Chairman of the board             Åsne Havnelid                               Geir Inge Stokke

           Wenche Teigland                       Semming Semmingsen                               Ove Sindre Lund

            Jan Audun Strand                    Grethe Therese Thorsen                        Gro Bakstad/ CEO

7                                                                           Vy Group – Report for the 1st interim period 2021
Group income statement

Income statement                                                 Year to date                  Year
                                                                                                             Last
                                                                                                        12 months
                                                         Notes   2021           2020         2020
Operating revenue                                            1   4 655          5 148        14 506        14 013
Payroll and related expenses                                      2 188         2 217         6 266         6 237
Depreciation and impairment                                        695           724          2 389         2 360
Other operating expenses                                     2    2 142         2 273         6 613         6 482
Total operating expenses                                         5 025          5 214        15 268        15 079
Share of profit of joint ventures                                   -14           -12           -24           -26
Share of profit in associates                                           -           1             5             4
Operating profit                                                  -384            -77          -781        -1 088

Financial items
Financial income                                                    19            33             58            45
Financial expenses                                                 -43           -145          -236          -133
Net financial expenses - pensions                                   -6             -9           -25           -22
Unrealised fair value changes                                        3            -19             9            30
Net financial items                                                -27           -141          -194           -80

Profit before income tax                                           -411          -217          -975         -1 169
Income tax expense                                                  89            49            117           156
Profit for the year                                               -322           -168          -858         -1 012

Attributable to
Non-controlling interest                                                -              -            -            -
Equity holders                                                    -322           -168          -858         -1 012
TOTAL                                                             -322           -168          -858         -1 012

OTHER COMPREHENSIVE INCOME
Profit for the year                                               -322           -168          -858         -1 012
Items that will not be reclassified to profit or loss
    Deviation retirement benefit obligations                            -              -         95            95
    Tax related to items that will not be reclassified                  -              -        -21           -21
Items that can be reclassified in net income in later
periods
    Currency translation differences                               -67           129            106           -90
Total comprehensive income for the period                         -389            -39          -678        -1 029

Attributable to
Non-controlling interest                                                -              -            -            -
Equity holders                                                    -389            -39          -678        -1 029
Total comprehensive income for the period                         -389            -39          -678        -1 029

8                                                                Vy Group – Report for the 1st interim period 2021
Group balance sheet
Overview financial position                              Notes                30.04.2021        31.12.2020       30.04.2020
ASSETS
Intangible assets                                                                    1 126            1 202             1 418
Deferred tax assets                                                                   306               221               109
Property, plant and equipment                                                       10 077            9 974             8 446
Investments in associates                                                              36                35                32
Financial fixed assets                                                                105                81                82
Total non-current assets                                                            11 650            11 513           10 087
Investment in joint ventures                                                          145               133               145
Inventories                                                                           543               589              748
Trade and other receivables                                                          1 814            1 635             1 592
Financial assets                                                                     1 866            1 861             1 810
Cash and bank deposits                                                                868              1 177            1 265
Total current assets                                                                5 236             5 395             5 560
TOTAL ASSETS                                                                        16 886           16 908            15 646
EQUITY AND LIABILITIES
Ordinary shares and share premium                                                   3 686             3 686             3 686
Retained earnings                                                                      121              510             1 149
Total equity                                                                         3 807            4 196             4 834
Debt                                                                                6 708             6 529             5 062
Deferred income tax liabilities                                                        112              118                   -
Retirement benefit obligations                                                       1 284            1 293             1 486
Provisions for other liabilities and charges                                          320               262              224
Total long term liabilities                                                         8 424             8 202             6 772
Trade and other payables                                                             2 919            2 752             2 502
Tax payable                                                                             11               23                43
Debt                                                                                 1 725            1 735             1 495
Total short term liabilities                                                        4 655             4 510             4 040
TOTAL EQUITY AND LIABILITIES                                                        16 886           16 908            15 646

                                                    Oslo, 31st of May 2021

                                               Board of directors in the Vy Group

       Berit Svendsen/ Chairman of the board             Åsne Havnelid                              Geir Inge Stokke

               Wenche Teigland                      Semming Semmingsen                              Ove Sindre Lund

               Jan Audun Strand                    Grethe Therese Thorsen                       Gro Bakstad/ CEO

9                                                                            Vy Group – Report for the 1st interim period 2021
Group cash flow statement

Cash flow statement                                                           Year to date                          Year

                                                                Notes         2021              2020              2020
Profit (+)/ Loss (-) for the period before income tax expense                   -411              -217             -975

Depreciation and impairment                                                     695               724             2 389
Gain on sale of property, plant and equipment (PPE)                               -4                -5               -19
Difference between exp. and paym. made/receiv. for pensions                       -9               -31              -128
Changes in provisions for other liabilities and charges                          86                 -5               149
Change in unrealised fair value                                                   -3                19                -9
Interest items                                                                     1                47                 5
Shares of profit from associated and joint ventures                               14                11                19
Changes in working capital                                                       -18             -430               -211
Taxes paid                                                                        -4                -2                -4
Net cash flow from operating activities                                         347                111             1 216

Acquisition of subsidiaries less cash acquired                      4            -19             -1 174            -1 174
Changes in financial non-current assets                                          -24             1 604             1 617
Purchase of property, plant and equipment                                        -48              -130              -397
Proceeds from sale of assets                                                       9                 8                79
Net cash flow from investment activities                                         -82              308                125

Repayment of debt                                                                 -1                 -1               -2
Repayment on leases debt                                            3           -572             -565             -1 577
Net cash flow used in financial activities                                      -573             -566             -1 579

Net change in cash and bank deposits for the period                             -308              -147             -238
Cash and bank deposits as at the beginning of the period                       1 177             1 395             1 395
Foreign exchange gain/loss on cash and bank deposits                              -1                17                20
Cash and bank deposits as at the end of the period                              868              1 265             1 177

10                                                                      Vy Group – Report for the 1st interim period 2021
Development in equity

Development in equity

                                                             Restricted                Acc.
                                  Ord. shares and        equity, hedging          currency        Retained
 1st interim period 2021           share premium                 reserve        translation       earnings       TOTAL

Equity 1st of January 2021                  3 686                       1               102            408        4 196
Profit for the interim period                       -                      -                  -       -322         -322
From other comprehensive income                     -                      -            -67                  -      -67
Equity 30th of April 2021                   3 686                       1                35             86        3 807

                                                             Restricted                Acc.
                                  Ord. shares and        equity, hedging          currency        Retained
 1st interim period 2020           share premium                 reserve        translation       earnings       TOTAL

Equity 1st of January 2020                  3 686                       1                -6           1 192       4 873
Profit for the interim period                       -                      -                  -        -168        -168
From other comprehensive income                     -                      -            129                  -      129
Equity 30th of April 2020                   3 686                       1               124           1 024       4 834

                                  Ord. shares and       Restricted equity,     Acc. currency      Retained
2020                               share premium         hedging reserve         translation      earnings       TOTAL

Equity 1st of January 2020                  3 686                       1                -6           1 192       4 873
Profit for the interim period                       -                      -                  -       -858         -858
From other comprehensive income                     -                      -            106             74          180
Equity 31st of December 2020                3 686                       1               102            408        4 196

11                                                               Vy Group – Report for the 1st interim period 2021
Operating segments

Segment information

Business segments
As of 30 April 2021, the Group has its main activities in the following segments:

(1)      Train: passenger train operations
(2)      Bus: passenger bus operations
(3)      Freight: freight train operations
(4)      Customer experiences and innovation
(5)      Other: Other entities and Group functions

In line with changes in the management reporting structure the Group has adjusted the segment
reporting as of 1 January 2021 so that Mobility and Travel has changed name to Customer experience
and Innovation. At the same time some Group functions have been transferred to the Other segment.
Comparative figures for 2020 are adjusted accordingly.

Segment assets in the tables below consist mainly of property, plant and equipment, intangible
assets, inventories and other assets and cash, while deferred tax asset and derivative instruments are
not included.

                                                                                       Customer ex-
 Year to date 2021                           Passenger                                periences and
                                                  train       Bus       Freight          innovation       Other/elim       Group

Sales reveneue 		                                   689       1 824         338                       -          210        3 061
Public purchases                                   1 391            -             -                   -                -    1 391
Other revenue                                        89         44           18                  42               10         203
Operating revenue                                 2 169       1 868         356                  42              220        4 655
Operating expenses 		                             2 071       1 673         303                  72              212        4 330
Depreciation, impairment                            364        264           41                   5               21         695
Total operating cost 		                           2 435       1 937         344                  77              233        5 025
Share of profit/loss in joint ventures and
associated companies 		                                   -         -             -              -14                   -      -14
Operating profit 		                                -266        -69           12                 -49               -13        -384

Segment assets                                    6 098       6 249        1 071                275            2 873       16 566
Investments                                         508        291           25                   5               20         849

12                                                                        Vy Group – Report for the 1st interim period 2021
Customer ex-
                                             Passenger                                periences and
 Year to date 2020                                train       Bus       Freight          innovation       Other/elim       Group

Sales reveneue 		                                 1 030       1 891         306                       1          192        3 420
Public purchases                                  1 509             -             -                   -                -    1 509
Other revenue                                       134         50           12                  46              -23         219
Operating revenue                                 2 673       1 941         318                  47              169        5 148
Operating expenses 		                             2 195       1 719         277                  97              202        4 490
Depreciation, impairment                            408         251          38                   6               21         724
Total operating cost 		                           2 603       1 970         315                 103              223        5 214
Share of profit/loss in joint ventures and
associated companies 		                                   -         1             -              -12                   -      -11
Operating profit 		                                  70         -28           3                 -68              -54          -77

Segment assets                                    5 345       5 862        1 159                337            2 906       15 609
Investments                                           9         109          12                       -                -     130

                                                                                       Customer ex-
                                             Passenger                                periences and
 2020                                             train       Bus       Freight          innovation       Other/elim       Group

Sales reveneue 		                                 2 627       5 461         938                   1              565        9 592
Public purchases                                   4 141            -             -                   -                -    4 141
Other revenue                                       501        166           37                 139              -70         773
Operating revenue                                 7 269       5 627         975                 140              495       14 506
Operating expenses 		                             6 422       4 947         877                 290              343       12 879
Depreciation, impairment                           1 152      1 016         118                  38               65        2 389
Total operating cost 		                           7 574       5 963         995                 328              408       15 268
Share of profit/loss in joint ventures and
associated companies 		                                   -      5                -             -24                    -      -19
Operating profit 		                                -305        -331         -20                -212               87         -781

Segment assets                                    6 027       6 286        1 111                170            3 091       16 685
Investments                                       1 535       1 678          65                   7                2        3 287

13                                                                          Vy Group – Report for the 1st interim period 2021
Notes – reporting information
Framework and accounting principles                  Segment Reporting
                                                     The Group reports its operating segments
The Vy Group’s financial statements have been        according to how Group management, which
prepared in accordance with International            is the chief operating decision-maker, adopts,
Financial Reporting Standards (IFRS) and             follow-ups and evaluates decisions which
interpretations from the IFRS interpretations        is in line with the internal reporting which is
committee (IFRIC) as determined by EU.               regularly evaluated by the management and
                                                     which is the basis for allocation of resources and
The consolidated financial statements for the        achievement of objectives.
Group have been prepared on a historical cost
basis except for derivative financial instruments,   The Group has the following operating
certain financial assets and liabilities which are   segments:
carried at fair value.
                                                     Passenger train: passenger train operations
The interim financial statements have been           Bus: passenger bus operations
prepared in accordance with IAS 34 Interim           Freight: freight train operations
Financial Reporting. The interim financial           Customer experiences and innovation
statements should be viewed in conjunction with
the last published annual report containing a full   The Other segment consists of other activities in
description of the Group’s accounting principles.    the Group such as cleaning of trains, a captive,
                                                     Team Verksted and Group functions.
Accounting principles applied in 2021 are
consistent with the accounting principles that
were used for the financial statements in 2020.

The consolidated financial statements have
been prepared on a going concern basis.

14                                                            Vy Group – Report for the 1st interim period 2021
1. Revenues

Analysis of Operating income by category
                                                                                        Year to date          Year to date               Year
                                                                                               2021                  2020               2020
Transport revenue                                                                              4 243                 4 803              13 218
Other revenue                                                                                    412                   345               1 288
Total                                                                                          4 655                 5 148             14 506

The Group mainly operates in Norway. The Group also has some operations in Sweden.

Information of important customers
The Group has one customer that constitutes more than 10 % of operating income. The Government’s public purchase from the
Vy Group is 1 266 MNOK (1 395 MNOK) as of 30th of April 2021.

In connection with the Covid-19 pandemic, the Government has adopted a support scheme by allowing the Norwegian Railway
Directorate to enter into temporary additional agreements regarding the state purchase of passenger train services. Income
from this support scheme is included in the government’s purchase of services from the Vy Group.

Type                                                            Segment                  IFRS 15 behandling
Personnel transport                                             Passenger train and bus Revenue recognition at the transport date
Food and on board services                                      Passenger train and bus Revenue recognition at the date of sale
Agreements with counties and municipalities                     Bus                      Revenue recognition at the transport date
Workshop services                                               Bus                      Revenue recognition when the service is delivered
Agreements with counties and municipalities                     Passenger train and bus Revenue recognition at the transport date
Traffic agreement with the state of Norway and                  Passenger train and bus Revenue recognition at the transport date
public purchaser abroad
Fees                                                            Passenger train and bus Revenue recognition at the date of issuance
Freight and terminal services                                   Freight                  Revenue recognition when the service is delivered
Other services - sale of ad hoc services, renting premises etc. All                      Revenue recognition when the service is delivered

2. Other expenses

Other expenses
                                                                                         Year to date         Year to date               Year
                                                                                                2021                 2020               2020
Sales- and overhead expenses                                                                       419                 479               1 350
Energy used in operations                                                                          377                 361                    970
Property expenses, repair and maintenance                                                         699                  788                   2 171
Other operating expenses                                                                           647                 644               2 122
Total                                                                                            2 142               2 273               6 613

15                                                                                       Vy Group – Report for the 1st interim period 2021
3. Leases
                                                                                  Year to date       Year to date            Year
 Specification of the changes in right of use assets                                     2021               2020            2020
Opening balance right of use assets                                                       8 028             6 763            6 763
Depreciations                                                                                 -555           -553           -1 636
Addition and changes in agreements                                                            798              116           2 873
Other                                                                                          -35             26              28
Total closing balance                                                                     8 236             6 352           8 028

  Specification of the changes in liabilities                                      Year to date       Year to date           Year
                                                                                          2021               2020           2020
Opening balance leasing obligation                                                        8 251              6 903          6 903
Lease payments                                                                                -580            -565          -1 581
Addition and changes in agreements                                                             811             107          2 865
Other/currency effects                                                                         -62              86             64
Total closing balance                                                                     8 420              6 531           8 251

Further, there is a future lease liability of approximately NOK 1 606 million (nominal) for lease of passenger trains and buses,
which are ordered, but not delivered. Lease liabilities and right of use assets will be recognized when the trains and buses are
delivered and made available for use by the Group.

  Liabilities                                                                  Year to date          Year to date            Year
                                                                                      2021                  2020            2020
Short-term liabilities                                                                 1 714                1 481            1 733
Long-term liabilities                                                                 6 706                 5 050            6 518
Total                                                                                 8 420                 6 531            8 251

  Finance costs                                                                Year to date          Year to date            Year
                                                                                      2021                  2020            2020
Finance costs leasing liabilities                                                        62                    62              168

                                                                               Year to date          Year to date            Year
 Cash-Flow                                                                            2021                  2020            2020
Total cash-flow lease payments
                                                                                        642                   627            1 795

4. Acquisition of shares in Minibuss 24-7 AS

On 9 April 2021, the Group paid 19 MNOK in cash for 50.67% of the shares in Minibuss 24-7 AS. Prior to the acquisition, the
Group owned 49.33% of the shares and the company has been recognised as an associated company within the Bus segment.
The acquisition was formally approved by the Norwegian Competition Authority in the beginning of May. The company is
therefore still recognised as an associated company as per 30th April and the cash consideration is recognised within “Financial
fixed assets” in the balance sheet. The company will be recognised as a fully owned subsidiary in the group accounts after the
approval by the Norwegian Competition Authority.

5. Contract losses

Passenger train contract loss in Norway
Operating revenue in the bus and passenger train segments is mainly related to long term tender contracts. At each interim
reporting period, the contracts are evaluated for any provisions according to IAS 37. In these evaluations the Group measures
present value of future expected cash flows from operational activities in each separate contract, where estimated payments
include all future unavoidable operating expenses. The provision is limited to the lower amount of continuing or exiting the
contract. The provision is released over the remaining contract period. As per the first interim period, a contract loss of 127
MNOK has been recognized in the passenger train segment.

16                                                                              Vy Group – Report for the 1st interim period 2021
Tax policy
Background				                                                     towards each host country’s tax authorities, including
                                                                   providing timely and correct information to form the basis
                                                                   for taxation of the company. Our companies are expected
In line with expectations from the owner enshrined in
                                                                   to follow the tax laws of the countries in which they operate,
Eierskapsmeldingen (Meld.St.8 2019–2020), Vygruppen
                                                                   both in terms of the letter and intent of the law.
AS has prepared a policy for the group’s tax behaviour. The

policy has been communicated to all our subsidiaries.
                                                                   Through active follow-up, Vygruppen will ensure that our

                                                                   companies are operated responsibly and professionally. This
About Vygruppen and our tax policy                                 also means that we will contribute to increased awareness
				                                                               of tax legislation and compliance with the rules that apply to
Vygruppen is a transport and tourism group owned by the            the individual company.
Norwegian state via the Ministry of Transport. We will ensure
customers the best journey by providing environmentally
friendly, smart, cost-effective and safe transport. In addition,   3. Integrity and fairness
the Group provides freight of goods on track.
                                                                   We are not participating in artificial schemes to reduce
All our activities are carried out with a focus on safety and      taxes.
are based on environmental solutions.			                           Vygruppen should not knowingly contribute to harmful tax
						                                                             practices. We will to the best of our ability ensure that our
Our tax policy rests on three fundamentals:		                      companies do not engage in harmful or potentially harmful
					                                                              tax behavior. At the same time, we consider it appropriate
1. Sustainability					                                             that the companies within the group are taking advantage of
                                                                   the tax incentives that exist for its businesses.

Tax revenues are a prerequisite for sustainable
development.					                                                  Our companies are further encouraged to:
Profitable companies contribute to increased tax revenues,
which in turn contributes to the financing of the individual       a) Comply with tax legislation
state’s development. Through success in our work, we will          Companies must comply with all applicable laws and
indirectly contribute to the funding of key institutions such      regulations in the countries in which they operate.
as health, welfare and education, as well as fixed assets and
infrastructure.					                                               b) Do not participate in undermining the country’s tax
                                                                   base or encourage to transfer of profits
                                                                   Companies must not adopt artificial schemes, such as the
                                                                   use of internal pricing to move taxable profits from where
2. Origin and transparency			                                      they have their business.

Our companies must pay taxes to the country where the              c) Do not take part in aggressive tax planning
values are created.			                    		                       Companies should not take part in any kind of aggressive tax
Vygruppen operates in Norway and Sweden. Regardless of             planning that drains the local tax base.
where the business is located, all our companies shall pay
tax to the host country where the values are generated. In

addition, all our companies are expected to act transparently

17                                                                             Vy Group – Report for the 1st interim period 2021
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