KN Energies AB

Earnings Release • Oct 25, 2018

AB KLAIPĖDOS NAFTA UNAUDITED FINANCIAL RESULTS FOR THE 9 MONTHS OF 2018

25th October 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

KN HIGHLIGHTS Q3 2018

21 August 2018

28 September 2018

AB KLAIPĖDOS NAFTA IN PUBLIC

KN expertise in LNG field receives continuous attention from Lithuanian and foreign media. German TV 3sat program Makro discussed main topics of the EU energy sector choosing LNG terminal in Klaipėda as a role model. In September The Wall Street Journal interviewed CEO of KN about Europe's opportunities in LNG sector.

KN representatives advance their competence, present the Company's activities at the world's largest energy conferences. In September 2018, Representatives of KN participated in the Gastech Exhibition & Conference, which took place in Barcelona and joined discussion panel about FSRUs.

KN prepared the Plan of Environmental Measures and submitted it to environmental authorities. KN investments into the environmental field are expected to reach EUR 8 million by the end of 2021 and greatly reduce impact on environment in surrounding areas.

AB KLAIPĖDOS NAFTA AND EMPLOYEES

KN promotes professional development of employees and executives. During the third quarter 16 internal trainings took place. The company also launched 360 feedback surveys on executives, which aims at helping them to develop their further leadership and management skills.

The Company promotes employees to become ambassadors of the company to volunteer during various events. 27 KN employees volunteered at the Sea Festival in Klaipėda, where they presented the company's activities.

KN invests in culture. The company contributed to the revival of the dance and history performance "Neužšąlantys namai" ("Non-freezing home"), which took place in Klaipėda. KN employees had the opportunity to see the performance premiere dedicated to them in open city areas.

KN promotes a healthy lifestyle amongst employees and supports sport initiatives. In September, the basketball and football teams of the KN have been formed. The basketball team have already showed exceptional achievements - in the middle of September, the team won the second place in the Energy Basketball Tournament.

FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS (UNAUDITED), MEUR

Negative impact on Q3 financial results was mainly influenced by the following reasons:

• Increase in depreciation expenses (In 2018 KN have finished couple investment projects);
• Decrease in oil transshipment volumes and transhipment revenues respectively made negative impact on oil terminal results;
• Increase in FSRU expenses (comparing to Q2).

Revenue Net profit EBITDA

FINANCIAL FIGURES (UNAUDITED)

MEUR	9 months of 2017	9 months of 2018	Change, %
Sales Revenue	79.5	75.8	-5%
Gross profit	17.6	15.3	-13%
EBITDA	23.9	22.4	-6%
Profit before taxation (EBIT)	13.5	11.3	-16%
Net profit	12.3	11.4	-7%
Gross profit margin	22.1%	20.1%	-2 pp
EBITDA margin	30.1%	29.6%	-0.5 pp
Net profit margin	15.5%	15.0%	-0.5 pp
Return on equity (ROE)*	6.7%	8.2%	1.5 pp
Return on assets (ROA)*	5.1%	5.7%	0.6 pp
Profit per share (EPS), EUR/share	0.034	0.030	-0.004
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.

Equity and liabilities, MEUR

Total equity Financial liabilities Other non-current and current liabilities

KLAIPĖDA OIL TERMINAL RESULTS FOR 9 MONTHS OF 2018

Transhipment, thousand tons

MEUR	9 months of 2017	9 months of 2018
Revenue	26.0	25.0
Net profit	7.8	8.4
EBITDA	13.9	13.9

BUSINESS FACTORS:

During 9 months of 2018 Oil terminal reloaded 4.1 per cent less oil products compared to same period in 2017 due to following reasons:

• Belarusian companies have already reloaded planned yearly quantities in Klaipėda oil terminal and have not signed long-term service agreements (KN activities are based on such kind of agreements) for future quantities yet;
• Export of oil product quantities of the main Company's client (AB Orlen Lietuva) have decresed;
• Russia and Belarusia still continue negotiations which include agreements related to gas, oil and oil products and make an impact on oil transit quantities.

SUBAČIUS OIL TERMINAL RESULTS FOR 9 MONTHS OF 2018

Average storage volume, thousand tons

MEUR	9 moths of 2017	9 months of 2018
Revenue	1.8	2.0
Net profit	0.3	0.5
EBITDA	1.0	1.2

BUSINESS FACTORS:

The average storage volumes of oil products has increased by 6.8 per cent during the first 9 months of 2018 (comparing to the same period in 2017). The main reason is related with adtional commercial volumes.

Transhipment volume amounted to 96 thousand tons during the first 9 months of 2018 (during the same period of 2017 – 80 thousand tons).

LNG TERMINAL RESULTS 9 MONTHS OF 2018

Regasification and reloading, thousand MWh

* Company's estimated regulated LNG profit for the year 2018 amounts EUR 4.2 million. The additionally received amount of revenue (or lack of income) will be dedicated for compensation of the LNG terminal necessarily expenses for the coming financial periods

MEUR	9 months of 2017	9 months of 2018
Revenue	51.7	48.4
Net profit	4.7	4.1
EBITDA	9.5	8.4

BUSINESS FACTORS:

During 9 months of 2018 in the LNG terminal:

• 8 LNG carriers (during to 9 months of 2017 13 LNG carriers) have been accepted;
• 486,0 thousand tons of LNG have been delivered (during 9 months of 2017 – 714.6 thousand tons);
• Total quantities of LNG regasification and reloading have decreased due to high LNG prices in global markets;
• 240.145 MWh of LNG was reloaded to small-scale LNG carriers (total 6 LNG carriers).

LNG RELOADING STATION

• During 9 months of 2018 most of final works were done in Klaipėda LNG Reloading station and the following services can be provided:
• Acceptance of LNG from LNG carriers and temporary storage;
• Transhipment to LNG trucks;
• LNG bunkering directly to vessels.
• Results of services provided by LNG reloading station during 9 months of 2018:
• 7.3 thousand m3 of LNG were reloaded to LNG trucks;

• LNG was reloaded into almost 200 trucks. This LNG was distributed across 4 countries: Estonia, Latvia, Lithuania and Poland.

• 2 users of the reloading station in 2018: LITGAS (Lithuania) and Eesti Gaas (Estonia).

KN expected yearly results are updated as follows:

• Oil transhipment volume yearly forecast 6.7 million t;
• LNG terminal regasification volume forecast MWh 9.0 million;
• Yearly revenue forecast EUR 100.2 million;
• EBITDA is predicted to be EUR 27.0 million;
• Net profit yearly forecast EUR 11.8 million.

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.

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