The Board of Directors finds that the financial results from research activities for 2016 is satisfactory, taking into consideration market-related difficulties in oil and gas.
Measures that were implemented for an improved cost structure in the parent company IRIS with reduced staffing, changes in pension scheme, etc. in 2015 will provide a good basis for 2016 and contribute to a satisfactory annual result in a challenging period of reduced activity.
Activities within IRIS Energy, Ullrigg Drilling and Well Centre, and IRIS Social Science make a positive contribution to operating profits, while activities within IRIS Environment
show a negative operating result. Efforts are actively being made for better market adaptation for IRIS Environment, including more efficient utilisation of the laboratory infrastructure. The measures that have been implemented are expected to provide positive market effects and financial impact for 2017.
The commercialisation of research results from both IRIS and the University of Stavanger is an important part of our value creation. The results of the commercialisation activities will naturally vary somewhat from year to year, but in the Board of Directors’ opinion, show that development over time is good.
The shares of Calysta Inc. that were owned, were sold in 2016 for just under NOK 40 million, against the original amount invested of just over NOK 8 million. The book value of the shares at the time of sale (valued according to the equity method of reclassification of shares as of 31/12/2015) amounted to NOK 65.7 million. The Group’s accounting loss for 2016 amounts to NOK 25.8 million.
Operating revenues for the IRIS Group in 2016 amounted to NOK 305 million, of which sales revenues accounted for NOK 301 million. Sales revenues declined by NOK 10 million (a 3 percent decline) compared with 2015. The accounts of the IRIS Group show a profit (before taxes) in the amount of NOK 24.2 million, compared with NOK 23.5 million in 2015. The losses on the sale of shares of Calysta Inc. must be taken in to account when looking at the negative earnings performance for 2016. (USA).
The 2016 financial accounts of the parent company IRIS show operating revenues of NOK 310 million and profit (before tax) in the amount of NOK 15.7 million. Sales revenues amounted NOK 300 million, which is a decline of NOK 12 million or 4%.
The financial results for IRIS include group contributions from subsidiaries in the amount of NOK 6.2 million, which have been posted under Other operating revenues. In general, a decrease in other Operating income should be seen in connection with the fact that IRIS received compensation for technology transfer of some NOK 11 million for 2015. Write-down concerning shares in Sekal AS have been incorporated in the amount of NOK 8.9 million for 2016.
Group contributions to subsidiaries amounted to NOK 7.9 million (NOK 19.3 million in 2015).
Shareholder equity in the IRIS Group amounts to NOK 144 million at 31 December 2016, which corresponds to an equity ratio of 48% (52% in 2015).
Shareholder equity in the parent company IRIS increased by NOK 4.3 million and amounted to NOK 157 million at 31 December 2016. This corresponds to an equity ratio of 50% (48% in 2015).
Working capital in the IRIS Group increased by NOK 43.0 million in 2016 and amounted to NOK 86.6 million at 31 December 2016. The significant increase in working capital must be seen in the context of the sale of shares in Calysta Inc. in an approx. amount of NOK 40 million.
Working capital in the parent company IRIS amounted to NOK 41.7 million at 31 December 2016, compared to NOK 35.6 million in 2015.
Total investment in equipment, laboratories and plant, etc. for 2016 amounted to NOK 13.8 million, an amount NOK 0.5 million lower than the previous year. Of total investments, NOK 5.2 million is self-financed and NOK 8.6 million is project-financed. Self-financed investments show a small decline compared with 2015.
The Board of Directors of directors believes that the annual accounts give a true picture of the company’s assets and liabilities, financial position and results.