Exmar : Results 2016

PRESS RELEASE RESULTS 2016

Antwerp

30/03/2017 - 5.45 pm

Regulated information Contains inside information

During its meeting of 30 March 2017, the Board of Directors of EXMAR reviewed the results for the year ending 31 December 2016.

Key figures

Note 1: The figures in these columns have been prepared in accordance with IFRS as adopted by the EU

Note2: The figures in these columns show joint ventures applying the proportionate consolidation method instead of applying the equity method. The amounts in these columns correspond with the amounts in the 'Total' column of Note 2 Segment Reporting in the Financial Report as per 31 December 2016. A reconciliation between the amounts applying the proportionate method and the equity method is shown in Note 3 Reconciliation Segment Reporting in the Financial Report as per 31 December 2016.

Cash Flow from operations (EBITDA as per proportionate consolidation method) for the year 2016 was USD 116.5 million and the Operating result (EBIT) was USD 70.4 million. The Consolidated Result after Tax amounts to USD

Press Release | Final Results 2016 Financial Report available on website 27 April 2017 Contact: Patrick De Brabandere| COO +32 3 247 56 33 Publication 1st Quarter results 27 April 2017 www.exmar.be

The audit of the accounting information in the annual announcement has not yet been completed by the statutory auditor.

Highlights 2016 and Outlook 2017

LPG

• The operating result (EBIT) of the LPG fleet in 2016 was USD 34.2 million (as compared to USD 17.8 million in 2015). EBIT for fourth quarter was USD 5.6 million. Despite deteriorating market conditions the EXMAR LPG fleet succeeded in positively contributing to the Group result thanks to a solid contract portfolio and first class operations. The result has been positively influenced by USD

  14.3 million in badwill (non-cash) realized on the acquisition of the remaining 50% in 10 pressurized vessels.

  Time-Charter Equivalent (in USD per day)	YTD February 2017		December 2016	YTD December
  2015
  Midsize (38,115 m³)	22,393		25,823	30,319
  VLGC (83,300 m³)	12,978		26,771	55,255
  Pressurized (3,500 m³)	5,476		5,201	5,473
  Pressurized (5,000 m³)	6,766		6,611	7,790

  VLGC:

• VLGC earnings in 2016 have recorded a significant drop compared to the previous year, owing to a lack of arbitrage opportunities, a slowing down of US LPG export volume growth and the delivery of 45 vessels. Outlook for 2017 remains difficult due to a pessimistic product market outlook and the expected delivery of 23 more VLGC's in 2017.

• EXMAR LPG (our Joint venture with Teekay LNG) operates only one VLGC (BW TOKYO). The vessel has been employed under Time-Charter until mid-2016 and has been employed since redelivery on basis of short-term extensions with Itochu Corporation of Japan in accordance with the LPG Baltic Index.

  Midsize (MGC):

• The Midsize segment has seen major corrections throughout 2016. Difficult product pricing and increased vessel supply (grown by 18% in 2016) have led to sharp reductions in earnings starting in the first half of 2016. Another 14 MGC's will enter the market in 2017.

• EXMAR took delivery in 2016 of LPG/C KNOKKE, KONTICH and KORTRIJK (38,000 m³ - built at Hanjin Heavy Industries - Philippines) and LPG/C KALLO on 30 March 2017. With three additional MGC (38,000m³) newbuilds foreseen between July 2017 and January 2018, EXMAR expects to secure employment opportunities for these vessels as they are beneficiaries of the improved capacity, greater efficiency and lower fuel consumption.

• Forward employment cover for the Midsize fleet as a whole amounts to as much as 70% for 2017 and 45% for 2018. Weaker spot market conditions will however negatively influence the contribution of the MGC fleet in 2017.

  Pressurized:

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• After a challenging year 2016 with ample ships incurring idle time both East and West, the fourth quarter 2016 and start of 2017 saw rates creeping up as a result of promising outlook figures and shipping tightness in the East.

• EXMAR's focus remains on developing term business with first class customers both in South East Asia and Europe.

• The Pressurized fleet is covered up to 90% for 2017 and 15% for 2018.

  LNG & LNG Infrastructure:

• The operating result (EBIT) of the LNG division in 2016 was USD 41.0 million (as compared to USD

  20.9 million in 2015). EBIT for fourth quarter was USD 9.7 million. This result has been positively influenced by a USD 9.0 million termination fee received from PACIFIC EXPLORATION & PRODUCTION (PEP) following the termination of the employment contract of CFLNG.

• The existing LNG and LNG Regasification fleet has performed in accordance with the underlying time-charter contracts and the same is expected for 2017, with the exception of EXCEL which is operated under a short-term contract stretching up to one year at today's low market rates for steam-turbine vessels.

• CARIBBEAN FLNG (CFLNG): with the financial restructuring of our customer PEP, no other option was available early 2016 than to cancel our employment contract at the best possible terms. PEP's cancellation of the project caused a revisiting of the arrangements with the shipyard and of the financing to be available at delivery. With commissioning successfully accomplished, final acceptance has been reached on 31 January 2017 and complementary support from Wison Shipyard has now been agreed during the lay-up period at the yard until the unit will be towed to its place of employment. The delivery will take place before the end of April 2017 at which time the last instalment (USD 200.5 million) is due to the yard. In the meantime the documentation for the USD 200 million financing of the CFLNG from Bank of China and a leading European financial institution with a tenor of 12 years has been finalized and signing, subject prior Sinosure approval, is foreseen for mid-April. Discussions on future employment with different parties are progressing; however no revenues are expected before early 2018.

  The order for a second FLNG at WISON shipyard has been cancelled.

• FSRU Barge: the construction of the barge based FSRU at Wison shipyard has resumed in full force after some backlog suffered in 2015. The unit was launched in January 2017 and delivery is planned by mid-2017 at which time the final instalment (USD 83.6 million) will be due. Three commercial leads are being actively developed which foresee mobilization and commissioning on site after delivery form the yard. Financing will be developed in parallel with employment negotiations. Interest from several financiers has been received.

• In addition to the FSRU under construction, EXMAR has two newbuild LNG import infrastructure projects under development with technical and permitting field work being performed and with a target for investment decision in 2017.

• For the Swan Energy import terminal parties have reduced the cooperation to development of floating regasification services only.

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• In September 2016 EXMAR and VOPAK started exploratory discussions on the possible acquisition of EXMAR's share in its floating LNG storage and regasification business (FRSU's) by VOPAK. These discussions resulted in EXMAR and VOPAK signing an agreement on 21 December 2016 for the acquisition of the FSRU business of EXMAR by VOPAK and the cooperation between EXMAR and VOPAK in future projects. This agreement is subject to certain conditions being fulfilled and approvals being obtained from multiple stakeholders. EXMAR and VOPAK are working on the implementation of this transaction. The timing of its closing is unclear.

  OFFSHORE:

• The operating result (EBIT) of the OFFSHORE division in 2016 was USD -3.6 million (as compared to USD 4.4 million in 2015). EBIT for fourth quarter was USD -2.5 million.

• Since the peak in the crude price in the summer of 2014 the price of oil dropped to its lowest in February 2016. The result of the dramatic drop of the price of oil brought deepwater development to a near stand-still in 2016. It was only in the second half of 2016 that oil companies started to engage contractors and suppliers to commence early work on new developments.

• EXMAR'S reputation for efficient design and project execution was firmly established in 2015 with the DELTA HOUSE production facility for account of LLOG.

• While the market continues to be challenged with achieving the estimated savings which form the basis of new projects, EXMAR'S OPTI® Floating Production System is a proven low-cost and early production facility to create early cash-flow for our customers.

• During the summer of 2016 EXMAR sold 60% of its ownership in the WARIBOKO accommodation barge to its Nigerian partners, Springview. The Time-Charter contract to TOTAL Nigeria has been extended until the end of the year 2017. The accommodation barge NUNCE (50%) remains under contract with SONANGOL until at least the end of 2019. The KISSAMA was redelivered at the end of 2016 following a long-term contract in Angola and is being sold.

  SUPPORTING SERVICES

• The contribution of the Services activities (EXMAR SHIPMANAGEMENT, BELGIBO, TRAVEL PLUS) to the operating result (EBIT) for 2016 was USD 1.8 million (compared to USD 1.2 million in 2015). EBIT for fourth quarter was USD -0.3 million.

  The contribution of the Holding activities to the operating result (EBIT) 2016 was USD -3.0 million

  (compared to USD -4.2 million in 2015). EBIT for fourth quarter was USD 3.3 million.

• In 2016 EXMAR SHIPMANAGEMENT further increased the number of ships and floating marine infrastructure it has under management to 46. The results continue to show a positive trend and outlook for 2017 remains strong. EXMAR SHIPMANAGEMENT has entered into negotiations with the Christian Leysen led AHLERS for participation into the latter's shipmanagement and training activities. Transaction is expected to be completed by April 2017.

• The year 2016 started very well for TRAVEL PLUS but the tragic events of 22 March 2016 strongly affected air traffic. A strong recovery noticed over the last four months allows TRAVEL PLUS to record higher turnover and net result in 2016 and higher expectation for 2017.

• BELGIBO realized in 2016 strong revenue growth in Industry, Terminal Liability and Employee benefits activities. Contribution of Aviation and Marine were however disappointing. The outlook 2017 remains positive.

In July 2014, a NOK 700 million Senior Unsecured Bond was issued (swapped to USD 114.0 million). During 2015, an additional amount of NOK 300 million was issued and added to the original NOK

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700.0 million bond (swapped to USD 38.0 million). The total nominal amount of NOK 1.000.0 million (USD 152.0 million) matures in July 2017. EXMAR is actively pursuing several alternatives for the refinancing of this bond.