Statement of Financial Position
in millions of US$ | 2022 | 2021 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|
Total equity | 4,914 | 3,537 | 3,462 | 3,613 | 3,612 |
Net debt1 | 7,881 | 6,681 | 5,209 | 4,416 | 3,818 |
Net cash | 683 | 1,021 | 414 | 506 | 718 |
Total assets | 15,889 | 13,211 | 11,085 | 10,287 | 9,992 |
- 1 Net debt is calculated as total borrowings (including lease liabilities) less cash and cash equivalents.
Total equity increased from US$3,537 million at December 31, 2021 to US$4,914 million. Notwithstanding the dividend distributed to the shareholders of US$180 million, this increase mainly resulted from (i) the positive result over the current period, (ii) capital contribution from non-controlling interest in special purpose entities and (iii) the increase of the hedging reserves. The movement in hedging reserve is mainly caused by the increase of the marked-to-market value of interest rate swaps due to increasing market interest rates during the year.
Net debt increased by US$1,201 million to US$7,881 million at year-end 2022. While the Lease and Operate segment continues to generate strong operating cash flow, the Company drew on project finance facilities for FPSO Liza Unity during its construction phase, FPSO Prosperity, FPSO ONE GUYANA and FPSO Sepetiba to fund continued investment in growth on these FPSOs under construction. With regards to FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão for which 2021 bridge loans were fully drawn in advance of investments in growth, the associated excess of financing cash flow generated (approximately US$800 million as of December 31, 2021), was consumed as a result of progress made on investments in the two units during the current year.
Half of the Company’s debt as of December 31, 2022, consisted of non-recourse project financing (US$4.5 billion) in special purpose investees. The remainder (US$4 billion) comprised borrowings to support the ongoing construction of five FPSOs which will become non-recourse following project execution finalization and release of the related Parent Company Guarantee. The Revolving Credit Facility (RCF) was undrawn at year-end and the net cash balance stood at US$683 million (December 31, 2021: US$1,021 million). Lease liabilities totaled US$46 million as of December 31, 2022.
Total assets increased to US$15.9 billion as of December 31, 2022, compared with US$13.2 billion at year end 2021. This primarily resulted from the increase of contract assets related to the FPSO projects under construction and the increase of derivative financial instruments (mainly caused by the increase of the marked-to-market value of interest rate swaps due to increasing market interest rates during the year). These variations were partially offset by a reduction of the gross amount of the finance lease receivables, in line with the repayment schedules, the regular depreciation of PP&E as well as the decrease in the net cash balance.
RETURN ON AVERAGE EQUITY
Return on average equity (ROAE) measures the performance of the Company based on the average equity attributable to the shareholders of the parent company. ROAE is calculated as Underlying profit attributable to shareholders divided by the annual average of equity attributable to shareholders of the parent company.
2022 ROAE stood at 15.1%, above the past three-year average of 13.6%. This is driven by a higher underlying profit attributable to shareholders, mainly explained by the increase in the Turnkey activity.