JOTUN GROUP
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Contractual obligations and guarantees
Purchase obligations
The Group’s contractual purchase obligations are mainly
related to investments in new plants and buildings. There is
a substantial investment program ongoing in the Group. Out
of the total ongoing investment program, NOK 613 million is
contractual committed capital expenditures (CAPEX) at year
end. These contractual commitments mainly relate to projects
in Norway. For purchase of raw materials there are no actual
commitments for the Group. In general, these contracts can be
terminated without significant penalties.
Leases
21
22
Other obligations
The parent company has guarantees covering tax withholding
and other guarantees for subsidiaries. These amounted to
approximately NOK 219 million in 2018 (2017: NOK 290 million).
A subsidiary in China, Jotun Coatings (Zhangjiagang) Co. Ltd.,
has used bank drafts to pay some of its suppliers. The issuing
bank(s) is obligated to make unconditional payment to the
supplier (or bearer) on a designated date. If unforeseen events
occur and the issuing bank(s) is not able to meet its obligation,
then Jotun would still hold the final obligation towards its
suppliers. Unsettled bank drafts totalling NOK 553 million have
been used as payment as of 31 December 2018.
Leasing commitments show the Group’s current and non-current commitments arising from leasing contracts for property, plant and
equipment. All leasing contracts included in this disclosure note are regarded as operating leases, and lease amounts are presented as
operating expenses in the income statement.
(NOK THOUSAND) 2018 2017
Operating lease expenses
Machinery, vehicles and equipment 78 874 69 509
Factory, premises and buildings 61 035 42 429
Land 3 550 3 622
Cost current year 143 460 115 560
Overview of future minimum lease payments related to operating leases
Cost next year 126 374 108 373
Cost next 2–5 years 226 279 207 442
Cost after 5 years 221 317 75 475
Future minimum lease payments 573 970 391 290