SWAN REEFER ASA ("SRI") SIEM SHIPPING INC. REPORT FOR THE FIRST NINE MONTHS AND 3RD QUARTER 2014


24 October 2014 - SIEM SHIPPING INC. (the "Company"; OSE Symbol: SSI) announces its results for the nine month period and quarter ended 30 September 2014, prepared in accordance with the International Financial Reporting Standards ("IFRS"), as discussed below.
Siem Shipping Inc., operating in the specialised reefer industry as STAR Reefers, is a leading global owner and operator of refrigerated vessels and directly controls 32 vessels with a total capacity of 18 million cbft.

Highlights of 3rd Quarter of 2014

 Net loss of USD0.2 million (Q3 2013 net income of: USD0.6 million)

 EPS USD-0.02 (USD0.06)

 EBITDA of USD6.0 million (USD4.2 million)

 Wellington Star charter renewed for a further two-year period

 Refinanced existing debt with a new USD100 million credit facility

Writedown of USD1.1 million on sale and delivery of Ecuador Star in October

 Approx. 93% of fleet capacity is fixed for the balance of 2014

 Contract backlog: USD438 million (USD470 million)

3rd Quarter Financial Statements

Siem Shipping reported a net loss of USD-0.2 million (Q3 2013: net profit USD0.6 million).
The net loss in Q3 2014 includes a writedown of USD 1.1 million relating to sale of Ecuador Star. The delivery of the vessel to the new owner took place in October 2014. Earnings per share was USD -0.02 per share (USD0.06 per share).
Gross revenue was USD57.8 million (USD58.4 million) and available capacity increased by
9% to 55.6 million cbft. (51.1 million cbft.). Net operating revenue after voyage expenses was USD39.4 million (USD36.9 million). The increase in net revenue was due to more capacity being available and higher rates being earned. The third quarter 2013 was affected by the four C-Class vessels (Caribbean Star, Costa Rican Star, Cote D'Ivoirian Star, and Colombian Star) not being operational for the whole quarter due to the lengthening project.
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Ship operating and administrative expenses were USD16.8 million (USD16.3 million), with the increase mainly due to an increase in repair and maintenance costs.
Time charter and bareboat expenses were USD16.6 million (USD16.4 million).
Depreciation and amortisation was USD3.3 million (USD2.5 million). The increase in depreciation was due to a higher depreciation base following the investment in the lengthening of the four C-Class vessels.
Interest expense was USD1.9 million (USD1.1 million). The increase in interest expenses was due to the loan facility financing the lengthening of the four C-Class vessels.
Other financial items were USD0.1 million (USD-0.1 million) of which the mark-to-market of
5-year interest swaps amounted to a gain of USD0.2 million (USD0.1 million).

Year-to-Date Financial Statements

The Company reported a net income of USD1.4 million (net income USD5.3 million).
Earnings per share was USD0.15 (USD0.54).
Gross revenue was USD178.8 million (USD196.5 million). Net operating revenues after voyage expenses were USD114.9 million (USD113.9 million). The available capacity reduced by 0.2% to 162.4 million cbft (162.7 million cbft).
Ship operating and administrative expenses were USD49.4 million (USD48.8 million)
primarily due to increased repair and maintenance costs.
Time charter and bareboat charter expenses decreased to USD49.2 million (USD49.5 million).
Depreciation and amortisation was USD9.5 million (USD7.8million). The increase in depreciation was due to a higher depreciation base following the lengthening of the four C- Class vessels.
The Ecuador Star was sold in September resulting in a net book loss of USD1.1 million and the delivery to the new owner was made in October 2014.
Interest expense was USD4.5 million (USD2.6 million). Interest expense increased due to net increased borrowing and higher interest rates.
Other financial items were USD0.2 million (USD0.3 million), which included the mark-to- market of 5-year interest swaps gain of USD0.5 million (USD0.6 million).

Statement of Financial Position

Shareholders' equity was USD157.9 million at 30 September 2014 (31 December 2013:
USD156.5 million) or USD16.36 per share (31 December 2013: USD16.22 per share). On 30
September 2014, Siem Shipping refinanced its credit facility with ABN AMRO and Siem Industries Inc. (76.8% shareholder of the Company) with a six-year USD 100 million loan from ABN AMRO and Credit Suisse. Part of this (USD 70 million) was drawn and the proceeds were used to repay the interest-bearing debt to ABN AMRO (USD12.1 million) and Siem Industries (USD44 million). The balance will be available for general working capital
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purposes and for the possible acquisitions of vessels. The new facility carries an interest rate of Libor plus a margin of 2.4%, an arrangement fee of 1% and a commitment fee of 1%. The first scheduled repayment of the facility is scheduled in November 2014. In addition to the liabilities on the balance sheet, Siem Shipping has significant long-term charter commitments (see note 7 to the accounts).

Market

In Q3 2014, the average market spot rates were 31 cents per cubic foot per 30 days ("cents"),
similar to the same period in 2013 (32 cents). During the third quarter, however, there were limited opportunities for fixing spot banana cargoes as volumes reduced out of Ecuador. The banana traders switched some of their business from conventional reefer vessels and accepted the very aggressive rates that were available on container vessels. The political unrest in a number of the Mediterranean markets impacted on volumes even though local prices for fruit were reasonably strong.
The adverse climatic conditions in Argentina severely affected citrus exports, with a year-on- year 45% reduction in the lemon exports to the Mediterranean. The citrus crop in South Africa also suffered. Black spot issues reduced exports to the EU, but shipments to the US East Cost were greater in number and size than expected.

Operational Issues

During the first nine months of 2014, unplanned off-hire due to technical reasons was 0.7%
(2013: 0.5%). During the third quarter of 2014, there were four operational incidents leading to off-hire; however, none of the incidents was of a material character.
The statistics of our in-house technical management company, STAR Reefers Poland, continue to demonstrate superior performance to those the Company experienced with third- party managers in the past. The Company was saddened by the death of an off-duty Able Seaman on board the Colombian Star in a tragic self-inflicted accident in September.

Fleet Changes, Deployment and Contract Backlog

In December 2012, Siem Shipping entered into a contract with Alaska Reefer Management to
charter-out the Wellington Star. This contract was renewed in 2013 and has now been renewed again for a two-year period.
The project to lengthen the four C-Class vessels was completed in March 2014. The project took longer than anticipated due to delays by the shipyard. The first two vessels were redelivered in 2013, the third vessel was redelivered in January 2014 and the fourth vessel was redelivered in March 2014. The yard has submitted contract variations on all four vessels for claims for more time on the projects than it had anticipated when it signed the contract. The claims are disputed by the Company. To avoid any delay in redelivering the last vessel, Siem Shipping issued a guarantee letter to Quingdao Beihai Shipbuilding yard stating that it would reimburse any costs for which it was properly liable. Siem Shipping has taken legal advice in this matter and is hopeful that an amicable settlement can be achieved. All four vessels are contracted-out on seven-year time charters.
As of 30 September 2014, 93% of fleet capacity for the remainder of 2014 had been fixed. The contract backlog at 30 September 2014 was USD438 million.
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Outlook

Even though Siem Shipping's fleet is only modestly exposed to the reefer spot market, there
is, however, little doubt that a low spot market has an impact on the rates which can be achieved for term contracts. The general outlook remains unchanged: the 2014 spot market appears to have contracted significantly and reefer operators have responded by becoming more trade-route orientated.
The impact of Russian sanctions will be better understood over the coming months. The sanctions have reduced fruit exports from Europe to Russia and seem to be stimulating greater trade to the Russian Baltic from a number of non-EU countries in North Africa and South America.
Further evidence of aggressive pricing by the container lines was demonstrated during the third quarter, with Hamburg Sud offering a 12-month low-cost service to one of the banana majors. It is anticipated that this type of predatory pricing behaviour will continue whilst the container operators suffer from low demand for their services.
23 October 2014

The Board of Directors of Siem Shipping Inc.

This release contains certain forward-looking statements regarding the intents, beliefs or current expectations. These forward-looking statements are based on information currently held. The Company assumes no obligation to update these statements. It is important to note that these forward- looking statements involve uncertainties about future performance. The Company's actual results may differ materially from these statements as a result of various important factors beyond the control of the Company.

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SIEM SHIPPING INC. GROUP- 3rd QUARTER 2014

STATEMENTS OF COMPREHENSIVE INCOME

(in $ thousand)

2014

Q3

2013

Q3

2014

Jan-Sep

2013

Jan-Sep

2013

Jan-Dec

Unaudrted

Unaudrted

Unaudrted

Unaudrted

Audrted

Gross revenue

$ 57,772

$ 58, 362

$ 178,772

$ 196,498

$ 255,433

Voyage expenses and other operating revenue

-18,380

-21,435

-63,835

-82, 642

-105,726

Net operating revenue

39,392

36,927

114,937

113,856

149,707

Ship operating and administrative expenses

-16,842

-16,341

-49,407

-48,779

-66,955

lime charter hire

-16,160

-15,915

-47,961

-48,241

-64,343

Op. income bef. depr. and bare-boat hire

6,390

4,671

17,569

16,836

18,409

Bareboat charter hire

-425

-438

-1,260

-1, 243

-1,662

Depreciation and amortisation

-3,262

-2, 537

-9,479

-7, 753

-10,286

lmpaimnent charges

-300

-300

Operating income

2,703

1,696

6,830

7,540

6,161

lnterest expense

-1,903

-1,055

-4,546

-2,584

-3,715

Other financial items net

71

-65

238

317

308

Loss on sale ofvessels

-1,059

-1,059

Net financial items

·2,891

·1,120

-6,367

·2,267

-3,407

Net ineome l (loss) before tax

-188

576

1,463

5,273

2,754

Taxes

-10

-6

-36

-21

-32

Net income

$ -198

$ 570

$ 1,427

$ 5,252

$ 2,722

Other comprehensive income

Total comprehensive income l (loss)

$ ·198

$ 570

$ 1,427

$ 5,252

$ 2,722

Eamings l (loss) per share, basic and diluted (amounts rn $)

-0.02

0.06

0.15

0.54

0.28

'Md. avg. common shares outstandrng

9,647,479

9,647,4 79

9,647,479

9,647,4 79

9,647,479

lssued and outstanding s hares

9,647,479

9,647,4 79

9,647,479

9,647,4 79

9,647,479

STATEMENTS OF FINANCIAL POSITION 2014 2013 2013

30 Sep 30Sep 31 Dee

(in $ thousand) Unaudrted Unaudrted Audrted

ASSETS

Tangible non-current assets :

Ves sels

$ 191,378

$ 166,949

$ 187,483

Capitalis ed project costs

20, 360

13,362

Other non-c urrent assets

106

194

169

Other non-current as sets

P ension funds

Current as sets:

lnventory

195

8,082

213

9, 026

195

8,301

Non-current as se!held for sale l s old

3,915

Receivables and other c urrent ass ets

19,978

29,733

24,512

Bank deposits

28,338

11,996

16,577

Total assets

$ 251,992

$ 238,471

$ 250,599

SHAREHOLDERS' EQUITY ANO LIABILITIES Shareholders' equity:

Share capitai

$ 96

$ 96

$ 96

Additional paid-in capitai

78,687

78, 687

78,687

Retained eamings

79,095

80,198

77,668

Total shareholders' equity

157,878

158,981

156,451

lnterest-bearing debt, long-temn

57,333

37,496

46,558

lnterest-bearing debt, short-temn

11,467

11, 920

11,944

Other short-temn debt

25,314

30, 074

35,646

Total liabilities

94,114

79,490

94,148

Total shareholders' equity and liabilities

$ 251,992

$ 238,471

$ 250,599

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STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in $ thousand)

Shareholders' equity at beginning of period

- Net profit for the period

Shareholde rs' equity at end of period

2014 2013 2013

Jan-Sep Jan-Sep Jan.Oec

Unaudtted Unaudited Audtted

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in $ thousand)

Shareholders' equity at beginning of period

- Net profit for the period

Shareholde rs' equity at end of period

$156,451 $ 153,729 $ 153,729

1,427 5,252 2,722

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in $ thousand)

Shareholders' equity at beginning of period

- Net profit for the period

Shareholde rs' equity at end of period

$157,878 $ 158,981 $ 156,451

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in $ thousand)

Shareholders' equity at beginning of period

- Net profit for the period

Shareholde rs' equity at end of period

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Notes to the Accounts

1 Basis for preparation

The consolidate d financial statements have been prepared in accordane e lNith lAS 34 "InterimFinancialReporting".

The interim financial inforrnation for 2014 and 2013 are unaudited.

2 Significant accounting policies

The accounting policies used in the prepamtion ofthe financial statements are consistent lNith those disclosed in the armual financial statements forthe year ended 31 December 2013. The consolidated condense d financial statements should be re ad in conjunction lNith the 2013 annual financial statements, which include a full description ofthe Group's accounting policies.

3 Segment reporting

The Siem Shipping fie et consists of32 specialised reefer vessels lNith an average size of 569,000 cbft. The smallest vessei

has a capacity of 424,000 cbft and the largest vessel618,000 cbft. The vessels primarily transport fruii from the Southem to the Northem hemisphere.

Revenue Q3 2014

Q3 2013 Jan-Sep 2014 Jan-Sep 2013

2013

Bananas 87>/o

89%

82% 87%

90%

Deciduous

C:itrus Fish Other

O"/o 0%

Z'/o 3%

9% 7%

Z'/o 1%

7% 4% 3%

3% 3%

7% 5% 4%

1% 1% 1%

Total 100%

100%

100% 100%

100%

4 Revenue

Revenue consists oftime charters and voyage charters.

Other operating revenue consists ofnet revenue fromshort-termcharters on non-core vesse1s and management fees.

{in $ thousand) Q3 2014

Q3 2013 Jan-Sep 2014 Jan-Sep 2013 2013

Gross revenue T/C Gross revenue V/C Total gross revenue

Voyage e.:>penses and other operating revenue

29,107

28,665

57,772

-18,380

25,412 80,896 79,344 103,790

32,820 97,876 117,154 151,643

58,232 178,772 196,498 255,433

-21,435 -63,835 -82,642 -105,726

Net operating revenue 39,392

5 Tangible assets

(in $ thousand)

Book value beginning ofyear

Additions, including capitalised project costs

Reclassification- assets he1d for sale l so1d

Depreciation and arnortisation of dry-docking forthe period

36,797 114,937 113,856 149,707

30-Sep-14 30-Sep-13 31 Dee 13

201,014 174,263 174,263

7,647 23,151 39,977

-3,915

-12,204 -9,911 -13,226

Loss on sale ofasset -1,058

Book value end ofperiod 191,484 187,503 201,014

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6 Interest-bearing debt

(in $ thousand)

Balance (including financing fees) 31 December 2013

Newdebt Repaid debt Financing fees

Balance (including financing fees) 30 September 2014


Balance (including financing fees) 30 September 2013

7 Charter conunitments

Siem

Industries ABNAMRO

Loan Syndicate Total

34,614 23,888 58,502

9,000 70,000 79,000

-44,000 -24,260 -68,260

386 -828 -442

68,800 68,800

25,576 23,840 49,416

From l October 2014

(in $ thousand) 2014 2015 2016-2023 Total

Long -term charters 16,283 63,419 361,921 441,623

8 Related parties

Siem Industries lnc. oVlls 76.8% ofSiem Shipping lnc. Mr. Kristian Siemis Chainnan ofthe Board in Siemlndustries. Siem Industries is controlled by a trust whose potential beneficiaries include M r. Kristian Siemand his family.

The Company leases office space from other Siem Group companies and shares joint office facilities Vith other corrq:mnies

in the Siem Group in the Cayman Islands.

Siemlndustries has provided secondary guarantees forthe timely payment ofcharterhire, relating to certain ofthe vessels Siem Shipping has on long-termcharters. The fee paid to Siemlndustries for providing the guarantees year to date VaS USD0.4 million. SiemCar Carriers AS is indirectly 1000/o oVIle d by Siemlndustries. Siem Shipping provides management services to SiemCar Carriers on an anns' length basis and the fee charged yearto date September 2014

VaS USDO.S million.

In January 2013, the Company secured USD35 million offinancing for the lengthening ofthe four C-Class vessels

{Caribbean Star, Costa Rican Star, Cote D'Ivoirian Star and Colombian Star) from Siemlndustries lnc. The loan is a

3.5-year unse cure d loan, lNith an arrangement fee of 1.5% and a connnitment fee of3.5% p.a., and carries an interest rate of

3-month Liborplus a margin of8.5% p.a. In March 2014, Siemlndustries provided an additional USD9.0 million for one year for financing ofthe lengthening project and addrtional working capitai. The loan is also an unse cure d loan, lNith an arrangement fee of0.5% and a connnitment fee of2.5% p.a., and canies an interest rate of3-month Libor plus a margin of

8.5% p.a. Totalinterest, connnitment and arrangement fee e.xpenses year to date September 2014 were USD2.7 million. The Group refinanced ali interest-bearing debt on 30 September 2014, when ali interest-bearing debt to Siemlndustries

VaS repaid.

Also doVllload ourweb p age: VVV.siemshipping.com

For further inforrnation, please contact

Simon Stevens, CEO -+44 207 747 0500

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