Fourth Quarter 2013 Results Oslo 13 February 2014 Agenda - - PowerPoint PPT Presentation

Fourth Quarter 2013 Results

Oslo – 13 February 2014

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Agenda

• Highlights
• Financials
• Operational review
• Market update and prospects
• Q&A session

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Highlights

• Time-charter results down 5%

compared with last quarter

• EBITDA of USD 18 million
• Impairment of net USD 76 million

recognised related to OTR

• The terminal construction project in

Charleston completed in December

Highlights

50 100 150 200 08 09 10 11 12 13

Index 1990=100

ODFIX

50 100 150 200 250 300 350 04 05 06 07 08 09 10 11 12 13

USD mill

Annual EBITDA – actual ow nership

Chemical tankers Tank terminals

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Income statement - Fourth quarter 2013

USD mill

4Q13 3Q13 Gross revenue 284 296 Voyage expenses (127) (127) TC expenses (45) (37) Operating expenses (63) (68) General and administrative expenses (32) (28) Operating result before depr. (EBITDA) 18 37 Depreciation (31) (33) Impairment (81)

• Capital gain/loss on fixed assets

(5) 19 Operating result (EBIT) (99) 23 Net finance (11) (13) Taxes 9 (0) Net result (102) 9

Financials

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Quarterly figures - from continued operation

USD mill

50 100 150 200 250 300 350 2011 2012 2013

USD mill

Gross Revenue

5 10 15 20 25 30 35 40 45 2011 2012 2013

USD mill

EBITDA

• EBITDA 4Q lower due to softer volumes at year end
• Reduced ownership share in tank terminal division in 4Q following the LG

transaction in 3Q

Financials

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Quarterly figures - from continued operation

USD mill

12 11 ‐6 8 ‐5 8 2 ‐25 23 ‐1 ‐23 ‐99

• 120
• 100
• 80
• 60
• 40
• 20

20 40 2011 2012 2013

USD mill

Operating Result (EBIT)

11 ‐4 ‐13 5 ‐28 ‐2 261 ‐39 9 ‐8 ‐40 ‐102

• 150
• 100
• 50

50 100 150 200 250 300 2011 2012 2013

USD mill

Net Result

• Impairment of gross USD 81 million at OTR,

positive tax effect of USD 5 million

• Capital loss of USD 4.7 million related sale of

vessels

• Capital gain of USD 19 million following the

completion of the LG transaction in third quarter

‐9 ‐10 ‐10 ‐11 ‐12 ‐12 ‐13 ‐13 ‐12 ‐11 ‐12 ‐11 2 2 ‐2 5 ‐9 ‐3 ‐6 6 1 ‐1

• 25
• 20
• 15
• 10
• 5

5 10

USD mill

Net Finance

Net interest Other financial/currency

2011 2012 2013

Financials

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Balance sheet – 31.12.2013

USD mill - Assets Ships and newbuilding contracts 1 325 Tank terminals and intangible assets 536 Other non-current assets/receivables 141 Total non-current assets 2 002 Available-for-sale investments and cash 162 Other current assets 196. Total current assets 357 Total assets 2 360 Equity and liabilities Total equity 759 Non-current liabilities and derivatives 82 Non-current interest bearing debt 1 216 Total non-current liabilities 1 298 Current portion of interest bearing debt 134 Other current liabilities and derivatives 168 Total current liabilities 302 Total equity and liabilities 2 360

• Cash balance of USD 162 million
• Maturity bond in December USD 62.5 million
• 9.8% of own shares held as treasury shares
• Equity ratio 32.2%

Financials

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Debt development

• Secured long-term sale/leaseback financing for two of the Korean newbuildings
• Secured export credit financing of the two remaining vessels
• Exploring various financial arrangements for our gas newbuildings
• Evaluating refinancing of maturing vessel mortgage loans

200 400 600 800 1,000 1,200 1,400 2014 2015 2016 2017 2018

USD mill

Debt Portfolio

Ending balance Repayment

50 100 150 200 250 300 350 400 2014 2015 2016 2017 2018

USD mill

Planned Debt Repayments

Secured loans Balloon Leasing NOK bond 12/15 NOK bond 12/17 NOK Bond 12/18

Financials

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Capital expenditure programme – Odfjell’s share

In USD mill

2014 2015 2016 2017 2018 Hyundai Mipo, 4 x 46,000 DWT 55 Sinopacific, 4 x 17,000 cbm 18 81 63 Docking 24 24 24 24 24 Terminals1) 99 52 16 6 4 Total 196 157 103 30 28

1) Planned not commited

Financials From the naming ceremony of Bow Trajectory and Bow Tribute in Korea

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Income statement – 4Q13 chemical tankers and LPG/Ethylene

USD mill

4Q13 3Q13 Gross revenue 260 264 Voyage expenses (127) (127) TC expenses (45) (37) Operating expenses (46) (47) General and administrative expenses (24) (23) Operating result before depr. (EBITDA) 18 29 Depreciation (21) (24) Capital gain/loss on fixed assets (5) Operating result (EBIT) (8) 5

Financials

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Income statement – 4Q13 tank terminals

USD mill

4Q13 3Q13 Gross revenue 25 33 Operating expenses (17) (21) General and administrative expenses (9) (6) Operating result before depr. (EBITDA) (0) 7 Depreciation (10) (9) Impairment (81)

• Capital gain/(loss)

19 Operating result (EBIT) (91) 17

Financials

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Results per segment

4Q13 3Q13

USD mill Chemical tankers/LPG Tank terminals Chemical tankers/LPG Tank terminals

Gross revenue 260 25 264 33 EBITDA 18 (0) 29 7 EBIT (8) (91) 5 17

0% 20% 40% 60% 80% 100% Gross revenue EBITDA Assets

4Q13

Chemical tankers Tank terminals

Financials

50 100 150 200 250 300 350 04 05 06 07 08 09 10 11 12 13

USD mill

Annual EBITDA – actual ow nership

Chemical tankers Tank terminals

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Tank terminals EBITDA – by geographical segment

‐33 14 23 18

• 40
• 30
• 20
• 10

10 20 30 Europe North America Asia Middle East

USD mill

EBITDA YTD 2013

EBITDA Tank Terminals by 4Q13 3Q13 geographical segment* Europe (8) (8) North America 3 4 Asia 3 7 Middle East 2 4 Total EBITDA 7

• Negative EBITDA 4Q of USD 9.1 million at OTR
• USD 2 million in non-recurring items
• Mostly stable on all other terminals

Financials

* Revenue and profit from the terminals included in the Lindsay Goldberg transaction in 2013 are recognized according to the new ownership percentages from 1 September.

Vessel operating expenses - large chemical tankers

2,000 4,000 6,000 8,000 10,000 12,000 04 05 06 07 08 09 10 11 12 13 USD

USD / day, total USD/day, crew Operational review

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Bunker development

71.4 69.4 68.6 70.1 71.1 (7.7) (7.1) (4.8) (3.1) (4.9) (1.9) (2.0) (1.0) (1.8) (1.1) 61.8 60.2 62.7 65.2 65.1

(30) (20) (10)

• 10

20 30 40 50 60 70 80 4Q12 1Q13 2Q13 3Q13 4Q13

USD mill

Net Bunker Cost

Bunker purchase Bunker clauses Bunker hedging Net bunker cost

• Net bunker cost per tonne in 4Q was USD 553
• About 20% of the 2014 exposure is hedged
• Bunker clauses in CoAs cover about

53% of the exposure

100 200 300 400 500 600 700 800 09 10 11 12 13 14

USD/mt

Platts 3.5% FOB Rotterdam

Operational review

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Fleet development - last 12 months

Fleet additions DWT Built Tanks Transaction January 2014 Celsius Mumbai 19 993 2005 Stainless 1.5 years TC December 2013 RT Star 26 199 2011 Stainless 3 years TC December 2013 Celsius Miami 19 991 2005 Stainless 1.5 years TC November 2013 Celsius Manhatten 19 807 2006 Stainless 1.5 years TC November 2013 Bow Condor 16 121 2000 Stainless Purchase J/V October 2013 Bow Eagle 24 700 1988 Stainless 1 year TC August 2013 Southern Koala 21 290 2010 Stainless 2 years TC August 2013 Golden Top 12 705 2004 Stainless 2.5 years TC July 2013 Celsius Mayfair 20 000 2007 Stainless 2 year TC June 2013 Bow Pioneer 75 000 2013 Coated New delivery May 2013 Bow Engineer 30 086 2006 Stainless Purchase March 2013 UACC Messila 45 352 2012 Coated 1 year TC March 2013 Bow Nangang 9 000 2013 Stainless New delivery March 2013 Chembulk Sydney 14 271 2005 Stainless 1-2 years TC January 2013 Chembulk Wellington 14 312 2004 Stainless 1-2 years TC

Operational review

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Fleet development – last 12 months

Fleet disposals, owned DWT Built Tanks Transaction December 2013 Bow Mate 6 001 1999 Stainless Sale October 2013 Bow Eagle 24 700 1988 Stainless Sale May 2013 Bow Cheetah 40 257 1988 Coated Recycling January 2013 Bow Leopard 39 512 1988 Coated Recycling

Operational review

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Odfjell Gas Carriers - at a glance

 Established June 2012 with the acquisition of two gas carriers  Wholly owned subsidiary of Odfjell SE with in-house commercial and technical management  Focus on ethylene capable semi-refrigerated LPG carriers  Newbuilding programme of four 17,000 cbm LPG/Ethylene carriers for delivery in 2015 - 2016  Options for four additional gas carriers of 17,000 or 22,000 cbm for delivery in 2016-2017

Operational review

2 x 4 x 4 x

The Odfjell LPG/Ethylene carrier fleet

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Odfjell Gas Carriers - financing

 We are assessing various sources of finance for the order of four 17,000 cbm LGP/Ethylene vessels (with up to four options)  We are also evaluating potential sources of financing to fund further growth of our LPG/Ethylene activities, including partnerships with industrial or financial stakeholders

Operational review

• 10

20 30 40 50 60 70 US (ethane) US (propane) US (butane) US (naphta) W.Europe (naphta) FE Asia (naphta) US cents per pound

Ethylene feedstock price

October 2005 Current

Large cost benefits for US petrochemicals producers

~$0.40/lb advantage Source: Bloomberg, SEB Research, Enterprise Products Partners

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Odfjell Gas Carriers - timing and future

 Well positioned to benefit from growing long haul trade  Odfjell’s strong brand name and global network of marketing and operating offices provide a robust competitive edge  Robust long-term market fundamentals driven by the US shale gas revolution  Contracting tonnage at attractive prices at the bottom of the cycle  Petrochemical demand strongly linked to GDP growth, expected to pick up in 2014 and gain momentum through 2016  Aim to pursue a well-balanced portfolio of spot, TC and contract business

Operational review

2.9 1.4 1.3 1.0 0.5 0.8 2.4 3.3 3.6 5.0 8.5 11.8 14.5 2 4 6 8 10 12 14 16 2008 2009 2010 2011 2012 2013E 2014E 2015E Million tonnes LPG Imports Exports

US LPG imports / exports

Source: Poten & Partners, EIA, SEB Research

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Terminal projects and expansions

Operational review

• Construction project at Charleston completed in December 2013 –

80,000 cbm available for service

• Terminal project in Tianjin in progress and planned completed by 4Q 2014
• Expansion project adding 30,000 cbm at the terminal in Houston expected

completed by end of 2Q 2014

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Tank terminal capacity

200 400 600 800 1,000 1,200 1,400 1,600 1,800 Cubic Metres`000

Mineral oil storage Chemical storage Ongoing expansions

Current capacity 5,423,602 Ongoing expansions 584,350 Total capacity in CBM (incl. related parties): Operational review

* Odfjell’s ownership share in the respective tank terminals is shown in percentage

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OTR update

Operational review

• Renewal of environmental operating permit started, will cover new regulatory

requirements for the industry

• Inspections and the need for efficient implementation of improvements have

made it necessary to slow down the pace at which capacity is brought back on stream

• 730,000 cbm available capacity as per end December 2013
• Substantial efforts under way to improve the profitability by bringing back

further tank capacity in service and by adjusting the cost structure

• Continued development of long-term business plan
• Impairment of net USD 76 million recognised in fourth quarter

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Market update – chemical tankers

• Time charter results down 5% compared with previous quarter due to lower

volumes shipped

• Activity slowed during fourth quarter, December in particular
• Volume and rates out of US and Europe remained strong
• Decline in exports out of Asia and the Middle East put increased pressure on rates
• Most CoA renewals at higher rates

Market update and prospects

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Core Chemical Deep-sea Fleet 2004 - 2017

Orderbook and estimated recycling per February 11th, 2014

* Outphasing 30 years (Europe built) and 25 years (Asian built)

Source: Odfjell FLEETBASE

Market update and prospects

• 8
• 4

4 8 1 , 2 1 , 6 2 ,

04 05 06 07 08 09 10 11 12 13 14 15 16 17

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• 6

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• 3

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D e l i v e r i e s O r d e r b

• k

A c t u a l l y d e m

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i s h e d E s t i m . v e s s e l

• u

t p h a s i n g N e t f l e e t g r

• w

t h %

• f

y e a r

• s

t a r t f l e e t

Average annual net growth: 2004 - 2013: 7.6% 2014 - 2017: 1.9%

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Prospects

• Strongest GDP growth in the US for the last three years
• Continued gradual improvement of the European economy
• Still healthy economic growth in China
• The fundamentals within the LPG/Ethylene segment continue to improve
• First quarter expected to be similar or slightly better than fourth quarter for both

the chemical tanker and LPG/Ethylene segments

• For our tank terminals, with the exception of OTR, we expect continued stable

results

Market update and prospects

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Company representatives

Terje Iversen – CFO, Odfjell SE Email: Terje.Iversen@odfjell.com Phone: +47 932 40 359 IR – contact: Tom A. Haugen – VP Finance, Odfjell SE Email: Tom.Haugen@odfjell.com Phone: +47 905 96 944 Jan A. Hammer – CEO, Odfjell SE Email: Jan.Hammer@odfjell.com Phone: +47 908 39 719

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Thank you

For more information please visit our webpage at www.odfjell.com

Q&A session