Mercator : Investor Presentation

EARNINGS PRESENTATION

Q2FY17

The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. The consolidated financial numbers are management certified and approved by the Board. However only standalone numbers have been reviewed by the statutory auditors.This presentation should not be relied upon as a recommendation or forecast by Mercator Limited and any of their subsidiaries cannot be relied upon as a guide to future performance. This presentation contains 'forward-looking statements' - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. We caution you that reliance on any forward-looking statement involves risk and uncertainties, and that, although we believe that the assumption on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statement based on those assumptions could be materially incorrect. This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Mercator Limited or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

1. Exiting non-core business - Dry bulk shipping(Feb'16), MOPU (Dec'16).

2. Focus on high growth and profitable businesses - Dredging, Tankers and Oil & Gas.

3. Deleveraging - 6% reduction in 1HFY17; Sale of MOPU to reduce debt by further 20%.

4. Cost reduction and asset sweating - Improvement in EBITDA margin.

We are committed to creating a sustainable business model with a focus on annuity style earnings. Our current divestment is in line with that strategy. The key priority is de- leveraging and management decisions are taken with that objective in mind

Exited Mobile Offshore Production Unit (MOPU) in Nigeria for cash consideration of US$76mn.

Tankers and Dredging - all vessels gainfully deployed. Rebound in commodity prices supporting coal sales.

Seasonal higher bunker costs and bunching of maintenance impacted dredging business in Q2.

Sequential improvement in profitability driven by Tankers' return from dry docking and higher coal prices.

Significant reduction in debt; proceeds from sale of MOPU to further reduce debt. Post deal (end Jan 2017) expecting Net Debt (including working capital) to reduce from about Rs24 bn to about Rs 18 bn.