TTS Group achieved an operating profit (EBITDA) of MNOK 137.8 in Q2 2015, consisting of an operational profit of MNOK 34.2, and a one-off effect of MNOK 103.7 that relates to the acquisition of control of the jointly owned Chinese company TTS Hua Hai. - The stable good results within the services and car carrier segments, together with the reduced losses in offshore and heavy lift segments, are contributing to the positive result, says Björn Andersson, CEO of TTS Group ASA.

In accordance with applicable accounting regulations, as of Q2 2015 TTS runs from joint control to full control of the jointly owned Chinese company TTS Hua Hai. This follows amendments to the agreements that governing the control of the company. A technical valuation in relation to the control transition provides a positive one-off effect of MNOK 103.7 for TTS Group EBITDA in Q2. TTS Hua Hai is consolidated 100% in TTS Groups accounting from Q2 2015 and thereby also contributes with a positive EBITDA effect of MNOK 19.6 for the same quarter.

- If we look solely at TTS Groups 100% owned companies, we also record a significant profitability improvement in Q2, with an EBITDA of MNOK 14.6; up MNOK 24.9 from the same period in 2014. This confirms that the restructuring measures in 2014 and the ongoing cost reduction program have had effect. At the same time we certainly could have wished for better benefit from the market in certain segments, says Andersson.

Besides TTS Hua Hai, the two business units RoRo / Cruise / Navy and Services are the most important contributors to a positive operating result, with EBITDA respectively MNOK 16.2 and MNOK 19.7 million. The reduced losses in the business unit Offshore, together with a break even result from business unit Multipurpose / General Cargo which had a loss at the same period in Q2 2014, have also contributed to the profit growth.

TTS Groups total revenues in Q2 were MNOK 816, including a turnover of MNOK 261 in TTS Hua Hai. For TTS Group 100% -owned companies, revenue went down slightly compared to Q2 2014.

- This only emphasizes the importance of the accumulation and development of business that we are now conducting with full force in China, the world's largest shipbuilding nation, says Andersson.
The total order backlog at the end of Q2 2015, including TTS Hua Hai and 100% of the joint ventures in China, was NOK 4 477, compared to MNOK 4 215 at the same time in 2014.

Business units in brief
The business unit RoRo / Cruise / Navy ensures its solid market position and achieved a turnover of MNOK 160 in Q2, in line with the corresponding period in 2014. EBITDA was MNOK 16.2, a slight decrease compared to Q2 2014. A solid backlog MNOK 785 at the end of Q2 will lay the foundation for continued strong growth in the coming quarters.

Revenue growth in business unit Container / Bulk / Tank from MNOK 112 in Q2 2014 to MNOK 318 in Q2 this year was entirely due to the consolidation of TTS Hua Hai. Turnover in other businesses within this segment declined from MNOK 112 to MNOK 57, which primarily reflected the challenged market conditions outside of China. As a result of the valuation in connection with the acquisition of control in TTS Hua Hai and the positive EBITDA from TTS Hua Hai the business unit delivered an EBITDA of MNOK 110.9 in Q2 2014.

The Offshore business unit is characterized by a market that is significantly weaker compared to the period in last year. The Offshore business unit had a turnover of MNOK 92, compared to MNOK 130 in Q2 2014. As a result of extensive cost cuts and better control of the project portfolio, the EBITDA loss is significantly reduced, from minus MNOK 30 in Q2 2014 to minus MNOK 8.2 in Q2 2015.

The business unit Multipurpose / General Cargo had a turnover of MNOK 38 in Q2 2015, marginally up compared to Q2 2014. Despite low external sales, the use of device capabilities within the group has contributed to an EBITDA of MNOK 0.7, compared to an EBITDA loss of MNOK 11.7 in Q2 2014. It is expected that orders signed in Q2 2015, primarily in the jointly controlled Chinese company TTS-SCM, will result in an increased activity in the coming quarters.

The achieved turnover for the Shipyard Solutions unit in Q2 was MNOK 43 and an EBITDA of MNOK 0.1, which as in line with Q2 2014.
Also for Q2 2015 the Services unit delivered satisfactory results with a turnover of MNOK 161 and an EBITDA of MNOK 19.7, compared to respectively MNOK 142 and MNOK 12.8 in the same period in 2014.

Outlook
Both for the car carrier market and the heavy lift market where TTS has very solid market positions - continued positive growth is expected, while the service market is expected to remain stable going forward.
- For Container / Bulk / Tank market, good development particularly in large container ships is expected. The bulk sector remains weak, but we see a tendency for reduced tonnage, which is positive for the market in the longer term. Tank sector is still strong, but we see some signs of decline in the segment. For offshore market, we expect a continued weak market in the foreseeable future, and will therefore continue ongoing efforts to bring down the cost base in our Offshore business unit. We expect otherwise significantly increased activity in China in the heavy lift segment, and new contracts within the car carrier segment, says Andersson.
- For TTS Group as a whole, I am convinced that further development of the product portfolio and continued focus on complete deck equipment packages for the leading ship types in different segments, implies positive, long-term opportunities, says Andersson.
Bergen 19 August 2015
TTS Group ASA
Tel: +47 55 94 74 00 / Fax: +47 55 94 74 01
http://www.ttsgroup.com

Contact persons
For further information, please contact:
CEO Björn Andersson, M: +47 911 33 671
CFO Henrik Solberg-Johansen, M: +47 982 06 438
SVP Corporate Communications Miao Reinlund, M: +47 900 65 883

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