Corporate governance
Good corporate governance is important to ensure value creation over time , as well as achieveing low cost of capital and earning investor confidence
Frøy is fully committed to its shareholders. We intend to provide comprehensive and fully updated information to our investors and analysts.
Frøy complies with the Norwegian Code of Practice for Corporate Governance for the financial year 2021. The company has adopted the «follow or explain principle» with respect to the Code´s application
TARGETS AND POLICIES
Frøy´s financial targets and capital allocation strategy provides a framework for allocation of capital to new investments, dividends and debt.
Profitability
Frøy targets return on equity of minimum 10-18% depending on client, project structure and contract length (risk)
Growth:
Frøy has disciplined focus on long-term contracts for new wellboats. New growth projects are subject to satisfactory return profile in line with or above the targeted profitability level
Capital structure:
The company target an overall leverage at or below NIBD/EBITDA 3.5x on a fully invested basis. Frøy will take into consideration the expected earnings from newbuilds when assessing the fully invested NIBD/EBITDA.
Frøy´s primary source of debt financing is long term bank loans
Frøy has a strategy of financing its vessels and equipment with 5-year term loans with different repayment profiles depending on vessel or equipment and contract coverage
Dividend Policy:
Frøy´s ambition is to maximize long term value for its shareholders through positive share price development and a growing dividend based on long term earnings.
Frøy intend to pay out minimum 50% of net profit as dividend provided that the Company´s financial gearing, at a fully invested basis is at or below the targeted debt level of NIBD/EBITDA 3.5x and that the Company has sufficient liquidity to meet future obligations
Shareholder returns are distributed primarily as cash dividends with the option of using share buybacks as a complementary supplement on an ad-hoc basis.