KN Energies AB

Earnings Release • Apr 28, 2017

28th April 2017

AB KLAIPĖDOS NAFTA UNAUDITED FINANCIAL RESULTS FOR THE 1 st QUARTER 2017

CONTENT

• About the Company
• Highlights
• Financial results
• Other information

ABOUT THE COMPANY

HIGHLIGHTS

DECISIONS OF ORDINARY GENERAL MEETING OF SHAREHOLDERS

The decisions of the Annual General Meeting of shareholders of the Company held on the 21st April 2017 :

• Approved the audited Financial Statements and Annual report of AB Klaipedos nafta for the year 2016
• Approved the Company's profit available for appropriation (total EUR 13.8 million):
• For dividends 70% of net profit or EUR 9.7 million (EUR 0.025 per share)
• For legal and other reserves EUR 4.1 million.
• Assigned the audit company UAB Ernst & Young Baltic to perform the audit of the Financial Statements of the Company the years 2017 and 2018; the total fee – EUR 48 thousand.
• Approved the decision of the Company's board to sign loan agreement with Nordic Investment Bank:
• The maximum amount of the loan EUR 20.7 million.
• Interest: floating interest rate of 1,20% margin adding 6 month Euribor.

HIGHLIGHTS OF Q1 2017

• The Board of the Company – international. The Supervisory Council of AB Klaipėdos Nafta adopted elected Bjarke Palsson for the Board Member of the Company from 24th January 2017.
• Change in Company's management. After resignation of Company's General Manager Mantas Bartuška in the end of 2016, from 11th April 2017 Mindaugas Jusius was approved by the Board of the Company as new General Manager. Marius Pulkauninkas was an acting General Manager during interim period.
• Allocated Liquefied Natural Gas Terminal Capacities to AB Achema - 5,839.9 thousand MWh, usage period: from the 1st of April 2017 until the 30th of September 2017. The capacities at the Terminal are also allocated for UAB Lietuvos dujų tiekimas and UAB LITGAS.
• The allocation of capacities of the Liquefied Natural Gas Terminal. On 25th of April 2017 the Company invited the potential users of the LNG Terminal to submit their requests for allocation of LNG terminal capacities for the upcoming Gas Year (lasting from the 1st of October, 2017 to the 30th of September, 2018).
• Corporate Social Responsibility report. In 7th April 2017 announced AB Klaipedos nafta Social responsibility report for the year 2016.

FINANCIAL RESULTS

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

Revenue of 1 st quarter 2016, MEUR Revenue of 1 st quarter 2017, MEUR

BUSINESS FACTORS:

During 1st quarter 2017 Oil terminal reloaded 33.6 per cent less oil products compared to same period in 2016. The reduce in transshipment volume is explained by:

• the reduce in transit cargos from Belorussia refineries in connection with reduction of crude oil supply into these refineries.
• At this moment the oil supply to the refineries is renewed.
• an earlier than last year executed turnaround of AB ORLEN Lietuva refinery and respectively temporary reduction of transhipment of this company.

MEUR	Q1 2016	Q1 2017
Revenue	11.8	8.1
Net profit	4.7	2.6
EBITDA	6.8	4.6

Transshipment, thousand tons

BUSINESS FACTORS:

Oil product storage quantities has reduced in 2017 that accordingly affected sales revenues.

Transshipment in Subačius oil terminal amounted to 29.4 thousand tons in 1st quarter 2017 (1st quarter 2016 – 26 thousand tons).

MEUR	Q1 2016	Q1 2017
Revenue	0.7	0.6
Net profit	0.2	0.1
EBITDA	0.5	0.3

BUSINESS FACTORS:

During 1 st quarter 2017 3 LNG carriers have been accepted, which have delivered 147.1 thousand tons of LNG;

In the 1st quarter LNG reloading service from FSRU was held for the first time. 2 LNG small carriers have been accepted, which reloaded 11 thousand tons of LNG.

*Based on the profit calculation methodic of the regulated activity the normalized profit for the total year 2017 in preliminary calculations would be EUR 3.2 million.

MEUR	Q1 2016	Q1 2017*
Revenue	18.1	18.5
Net profit	2.1	2.5
EBITDA	3.8	4.2

Re-gasification, thousand MWh

FINANCIAL FIGURES (UNAUDITED)

MEUR	Q1 2016	Q1 2017	Change, %
Sales Revenue	30.6	27.3	-10.8%
Gross profit	8.9	6.5	-27.0%
EBITDA	11.0	8.7	-20.9%
Profit before taxation (EBIT)	7.6	5.2	-31.6%
Net profit	6.9	4.8	-30.4%
Gross profit margin	29.1%	23.8%
EBITDA margin	35.6%	31.9%
Net profit margin	22.5%	17.6%
Return on equity (ROE)*	12.8%	5.9%
Return on assets (ROA)*	9.8%	4.7%
Profit per share (EPS), EUR/share	0.018	0.013	-27.8%
Average number of shares	380,606,184	380,606,184	-

* Ratios are calculated for the last 12 month period.

BALANCE SHEET (UNAUDITED)

Assets, MEUR

Equity and liabilities, MEUR

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 March 2017 all the shares of the Company were owned by 2,043 shareholders (as at 31 December 2016 – 1,993).

Shareholder's name (company's name, address, company code of registration)	31st of March 2017		31st of December 2016
	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	38,975,150	10.24	38,975,150	10.24
Other (each owning less than 5%)	66,389,744	17.44	66,389,744	17.44
Total:	380,606,184	100.00	380,606,184	100.00

TRADING IN KNF1L SHARES ON NASDAQ VILNIUS STOCK EXCHANGE FOR 3 MONTH OF 2017

ORGANIZATIONAL STRUCTURE

Supervisory board members:

Agnė Amelija Kairytė Romas Švedas Eimantas Kiudulas

Audit committee members:

Linas Sasnauskas Eimantas Kiudulas Kasparas Žebrauskas

Board of the Company members:

Dainius Bražiūnas Mantas Bartuška Giedrius Dusevičius Mindaugas Jusius (till 11th April 2017) Bjarke Palsson (since 24th January 2017)

Mindaugas Jusius General Manager

Osvaldas Sabaliauskas Deputy General Manager

Marius Pulkauninkas Director of Finance and Administrative Department

Genadijus Andrejevas Director of Technical Department

Darius Šilenskis Director of Oil Commerce Department

Gediminas Vitkauskas Director of the Oil Terminal Department

Tadas Matulionis Director of the LNG Terminal Department

QUESTIONS & ANSWERS

THANK YOU

AB Klaipėdos nafta

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

Tel. +370 46 391772

Fax +370 46 311399

www.kn.lt