KN Energies AB

Earnings Release • Jan 31, 2019

AB KLAIPĖDOS NAFTA UNAUDITED FINANCIAL RESULTS FOR 2018

31st January 2018

CONTENT

• ➢ About the Company
• ➢ Highlights
• ➢ Financial results
• ➢ Investment overview
• ➢ Other information

ABOUT THE COMPANY

Our mission	Ensure reliable and effective supply of LNG and transhipment of oil products.
Our vision	A reliable operator of oil and LNG terminals that adds value through implemented projects and balanced expansion.

The Company in its activities is being led by these in 2018 renewed values:

OIL TERMINALS LNG TERMINALS

HIGHLIGHTS

AB KLAIPĖDOS NAFTA AND EMPLOYEES

part of yearly bonus to its employees in company shares. The aim of this decision is to strengthen the motivation of employees to achieve long-term goals of the organization and to promote responsibility for overall performance.

In October, KN became the first state-owned company in Lithuania, which decided to pay

In mid-November, KN Code of Conduct came into effect. KN employees committed themselves to comply with the requirements of the Company's values-based code. In order to ensure effective compliance with KN's obligations the requirements of the Code of Conduct also is expected to be met by KN contractors, customers and other KN partners.

Active member of the port community. KN employees actively joined Sports Games of Klaipeda Port Company Employees events. Since November, nearly 50 employees of KN have competed with other Klaipėda port companies in basketball, darts, bowling and other games.

AB KLAIPĖDOS NAFTA IN PUBLIC

KN continues its participation in the most important energy events. The Company's activities and competencies were presented in November at Vilnius Energy Forum and at the event organized by the Polish Embassy to discuss energy issues in Eastern and Central Europe. In December KN shared its knowledge with participants of CWC World LNG Summit.

KN pays great attention to youth education. At the end of November, Junior Achievement Lithuania student group from the Vilnius Santara Gymnasium visited KN's office and learned about KN activities and global energy trends. On January 11th, 2019, KN activities and LNG engineering study program were presented at the study fair "Studijų regata '19" in Klaipėda.

KN prepared the Plan of Environmental Measures and submitted it to environmental authorities. During October the plan was presented to local communities located near KN oil terminal and to Klaipėda city authorities. KN investments into the environmental field are expected to reach EUR 8 million by the end of 2021.

FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS (UNAUDITED), MEUR

Revenue Net profit EBITDA

-

Q1 Q2 Q3 Q4

RESULTS OF OIL TERMINALS FOR Y 2018

Revenue 37.9 35.2 Net profit 12.1 9.9 EBITDA 20.3 18.5 Transhipment quantities in Klaipėda oil terminal,

BUSINESS FACTORS:

During Y 2018 Klaipėda Oil terminal reloaded 7 per cent less oil products compared to same period in 2017 due to following reasons:

MEUR Y 2017 Y 2018

• Decrease in quantities of light oil products of the main Company's client (AB Orlen Lietuva);
• Despite tense geopolitical situation in neighbouring countries KN manged to maintain almost the same level of transit oil products (decrease in quantities 5 %).

Subačius oil terminal activities:

• The average storage volumes of oil products have increased by 5.1% (Y 2018 206 thousands tonnes; 2017 – 196 thousands tonnes);
• Transhipment volume amounted to 106 thousand tons during Y 2018 (during the same period of 2017 – 99 thousand tons).

Regasification and reloading, thousand MWh

LNG TERMINALS' RESULTS FOR Y 2018

BUSINESS FACTORS:

During Y 2018 in the LNG terminal:

• 10 LNG carriers (during Y 2017 15 LNG carriers) have been accepted;
• 608.0 thousand tons of LNG have been delivered (during Y 2017 840.0 thousand tons);
• Total quantities of LNG regasification and reloading have decreased due to high LNG prices in global markets;
• 319 thousands MWh of LNG was reloaded to small-scale LNG carriers during the Y 2018, (Y 2017 – 285 thousands MWh).

ASPECTS OF REGULATION:

The activity of LNG terminal is regulated and has the set price cap. The revenue and profit of LNG activity does not depend on re-gasification volume, therefore, there are differences between financial and regulated profit and revenues.

LNG RELOADING STATION

• Since the end of 2017 till the final acceptance of project (October 2018) LNG reloading station was working at commissioning mode.
• Activity results of LNG RS for the year 2018:
• 64 thousands MWh of LNG were reloaded to LNG trucks;
• LNG was reloaded into 240 trucks and distributed across 4 countries: Estonia, Latvia, Lithuania and Poland.

STRUCTURE OF SALES REVENUE AND EBITDA BASED ON OPERATING SEGMENTS (UNAUDITED)

FINANCIAL FIGURES (UNAUDITED)

MEUR	Y 2017	Y 2018	Change, MEUR	Change, %
Sales Revenue	106.5	100.0	-6.5	- 6%
Gross profit	23.7	17.3	-6.4	- 27%
EBITDA	31.4	26.9	-4.5	- 14%
Profit before taxation (EBIT)	17.5	11.8	-5.7	- 32%
Net profit	17.0	11.5	-5.5	- 32%
Gross profit margin	22.3%	17.3%	-	- 22 pp
EBITDA margin	29.4%	26.9%	-	- 9 pp
Net profit margin	16.0%	11.5%	-	- 28 pp
Return on equity (ROE)*	8.7%	5.8%	-	- 33 pp
Return on assets (ROA)*	6.3%	3.9%	-	- 38 pp
Profit per share (EPS), EUR/share	0.045	0.030	-0.015	- 32%
Average number of shares	380,606,184	380,606,184

* The return on equity (ROE) and return on assets (ROA) were calculated by dividing the net profit (losses) of the last twelve months by the average of equity or asset values at the beginning and the end of the reference year.

COMPARISON OF UPDATED PLAN OF YEARLY RESULTS FOR Y2018 WITH ACTUAL RESULTS

Description	Forecast for Y 2018 (updated during the Q3 2018)	Actual results for Y 2018	Fulfillment
Yearly oil transhipment volume	6.7 million t	6.6 million t	98.5 %
Yearly LNG terminal regasification volume	9.0 million MWh	9.1 million MWh	101 %
Yearly revenue	100.2 million EUR	100.0 million EUR	99.8 %
Yearly EBITDA	27.0 million EUR	26.9 million EUR	99.6 %
Yearly net profit	11.8 million EUR	11.5 million EUR	97.5 %

BALANCE SHEET (UNAUDITED)

Assets, MEUR

Equity and liabilities, MEUR

INVESTMENT OVERVIEW

PROGRESS OF INVESTMENT DURING Y2018

OIL TERMINAL EXPANSION PHASE II

LFO 6 x 20 000 m3 tanks installation - Installation of tanks wall plates and tank park concrete walls ongoing. Roofs of two tanks painted.

LFO 2 x 10 000 m3 and 4 x 5 000 m3 tanks installation - Installation of tanks wall plates and tank park concrete walls ongoing. 2x10 000m3 tanks erected in full height. Hydrotesting completed. Ongoing with internal painting.

KN results for Y 2019 expected to be as follows:

• Oil transhipment volume yearly forecast 7.2 million t.;
• LNG terminal regasification volume forecast not less than MWh 5.0 million;
• Yearly revenue forecast EUR 105.9 million;
• EBITDA is predicted to be EUR 26.5 million;
• Net profit yearly forecast EUR 11.4 million.

Forecasted revenue for the year 2018 was 10.2 M EUR

OTHER INFORMATION

SHAREHOLDERS AND SHARES

Since 2003 the shares of the Company are listed on NASDAQ OMX Vilnius stock exchange:

• ➢ ISIN code LT0000111650
• ➢ Abbreviation KNF1L

As at 31 December 2018, all the shares of the Company were owned by 2 191 shareholders (as at 31st December 2017 – 2,178).

		31 December 2018		31 December 2017
Shareholder's name (company's name, address, company code of registration)	Number owned shares (unit)	Part of authorized capital (%)	Number owned shares (unit)	Part of authorized capital (%)
The Republic of Lithuania, represented by the Ministry of Energy of the Republic of Lithuania	275,241,290	72.32	275,241,290	72.32
Concern AB Achemos grupe	39,605,234	10.41	39,113,150	10.28
Other (each owning less than 5%)	65,759,660	17.28	66,251,744	17.40
Total	380,606,184	100.00	380,606,184	100.00

Price, Eur Unit, thousand

Audit committee members: Andrius Varanavičius, Laura Garbenčiūtė-Bakienė and Žana Kraučenkienė (appointed as at 3 December 2018 m.).

Supervisory Board members: Tomas Lukoševičius, Eimantas Kiudulas and Andrius Varanavičius.

Board members: Dainius Bražiūnas, Mantas Bartuška, Giedrius Dusevičius, Bjarke Pålsson ir Ian Bradshaw (appointed as at 2 January 2019 m.).

MANAGEMENT OF THE COMPANY

Mindaugas Jusius Chief Executive Officer

Jonas Lenkšas Chief Financial Officer

Darius Šilenskis Oil Business Director

Rytis Valūnas Chief Administrative Officer and General Counsel

Genadijus Andrejevas Technical Director

Tadas Matulionis LNG Business Development Director

Arūnas Molis Klaipėda LNG Director (since ² January 2019)

THANK YOU

AB Klaipėdos nafta

Registered address - Burių str. 19, LT-91003; Klaipėda Lithuania

Tel. +370 46 391772 e-mail media@kn.lt www.kn.lt