Hunter Group ASA

Investor Presentation • Sep 16, 2021

Hunter Group ASA - Company Presentation 16 September 2021 Save a tree – presentation can be found at www.huntergroup.no Pareto Securities 28th Energy Conference

CERTAIN STATEMENTS INCLUDED IN THIS DOCUMENT CONTAIN FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING PLANS, OBJECTIVES, GOALS, STRATEGIES, FUTURE EVENTS OR PERFORMANCE, AND UNDERLYING ASSUMPTIONS AND OTHER STATEMENTS, WHICH ARE OTHER THAN STATEMENTS OF HISTORICAL FACTS. THE WORDS "BELIEVE," "ANTICIPATE," "INTENDS," "ESTIMATE," "FORECAST," "PROJECT," "PLAN," "POTENTIAL," "MAY," "SHOULD," "EXPECT" "PENDING" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS IN THIS DOCUMENT ARE BASED UPON VARIOUS ASSUMPTIONS, MANY OF WHICH ARE BASED, IN TURN, UPON FURTHER ASSUMPTIONS, INCLUDING WITHOUT LIMITATION, MANAGEMENT'S EXAMINATION OF HISTORICAL OPERATING TRENDS, DATA CONTAINED IN HUNTER GROUP'S RECORDS AND OTHER DATA AVAILABLE FROM THIRD PARTIES. ALTHOUGH HUNTER GROUP BELIEVES THAT THESE ASSUMPTIONS WERE REASONABLE WHEN MADE, BECAUSE THESE ASSUMPTIONS ARE INHERENTLY SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT AND ARE BEYOND HUNTER GROUP'S CONTROL, YOU CANNOT BE ASSURED THAT HUNTER GROUP WILL ACHIEVE OR ACCOMPLISH THESE EXPECTATIONS, BELIEFS OR PROJECTIONS. THE INFORMATION SET FORTH HEREIN SPEAKS ONLY AS OF THE DATES SPECIFIED AND HUNTER GROUP UNDERTAKES NO DUTY TO UPDATE ANY FORWARD-LOOKING STATEMENT TO CONFORM THE STATEMENT TO ACTUAL RESULTS OR CHANGES IN EXPECTATIONS OR CIRCUMSTANCES. IMPORTANT FACTORS THAT, IN HUNTER GROUP'S VIEW, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION: THE STRENGTH OF WORLD ECONOMIES AND CURRENCIES, GENERAL MARKET CONDITIONS, INCLUDING FLUCTUATIONS IN CHARTERHIRE RATES AND VESSEL VALUES, CHANGES IN DEMAND IN THE TANKER MARKET, INCLUDING BUT NOT LIMITED TO CHANGES IN OPEC'S PETROLEUM PRODUCTION LEVELS AND WORLD WIDE OIL CONSUMPTION AND STORAGE, CHANGES IN HUNTER GROUP'S OPERATING EXPENSES, INCLUDING BUNKER PRICES, DRYDOCKING AND INSURANCE COSTS, THE MARKET FOR HUNTER GROUP'S VESSELS, AVAILABILITY OF FINANCING AND REFINANCING, ABILITY TO COMPLY WITH COVENANTS IN SUCH FINANCING ARRANGEMENTS, FAILURE OF COUNTERPARTIES TO FULLY PERFORM THEIR CONTRACTS WITH US, CHANGES IN GOVERNMENTAL RULES AND REGULATIONS OR ACTIONS TAKEN BY REGULATORY AUTHORITIES, POTENTIAL LIABILITY FROM PENDING OR FUTURE LITIGATION, GENERAL DOMESTIC AND INTERNATIONAL POLITICAL CONDITIONS, POTENTIAL DISRUPTION OF SHIPPING ROUTES DUE TO ACCIDENTS OR POLITICAL EVENTS, VESSEL BREAKDOWNS, INSTANCES OF OFF-HIRE AND OTHER IMPORTANT FACTORS.

THIS PRESENTATION IS NOT AN OFFER TO PURCHASE OR SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE OR SELL, ANY SECURITIES OR A SOLICITATION OF ANY VOTE OR APPROVAL.

4x 2020 built SMART scrubber fitted eco VLCCs

Shareholder friendly publicly listed investment company

• World's only listed scrubber fitted newbuild VLCC pure play
• Initially bought 8x VLCCs at an average cost of 86.5m with deliveries 2019-20
• 4x 2019 built VLCCs sold to date at average ROE of 45%
• Returning value to shareholders is job #1
• Active key shareholders
• Dynamic and opportunistic approach M&A, S&P, TCs, etc.

• USD 100m returned since inception of Hunter Tankers

• Cost leading and fully transparent corporate structure

• Industry leading G&A
• No hidden fees, poison pills, related party conflicts, etc.
• Fully aligned incentive structure
• Incorporated in Norway

Company overview

4x VLCCs sold and 4x remaining

Average ROE of ~45%

USD ~100m returned to shareholders LTM

Top 10 shareholders (13 sep 2021)

Name	(m) Shares	Ownership
Apollo Limited Asset	169	29%
Sundt AS	38	7%
Songa	36	6%
Paribas BNP	22	4%
Swap Invest	16	3%
Hunter Group	11	2%
Luxembourg DNB	8	1%
Fondsinvesteringer Argentum	5	1%
Forvaltning Stavanger	5	1%
Nordnet Livsforsikring	4	1%
Sum top 10	306	53%
Total	575	100%

Charter coverage	'21 Q2	'21 Q3	'21 '22 Q4 Q1
Hunter Freya			Spot
Hunter Disen		TC	Spot
Idun Hunter		TC	Spot
Frigg Hunter		TC		Spot
days covered %	100%	98%	40%	13%
(\$k/d) dayrate covered Avg	24,000	16,900	24,000	28,500

Hunter Group VLCC spot benchmark

• Adding time charter contracts at the height of the market in 2020 secured premium rates in the period that followed
• Average rates achieved since first delivery in 2019 have been USD ~53,000, compared VLCC spot benchmark of USD ~40,000

• When rates go from USD 30,000 to USD 40,000 per day, earnings increase by almost 100%
• Every USD 10,000 in dayrates increase EPS of approx. NOK 0.2

		2001 built non-scrubber	2011 built non-scrubber	2020 built with scrubber
				13,420
			1,620
		-11,880 9 0	6 5	5 0
Avg. consumption	Tons/day
Fuel type Fuel	- \$/ton	VLSFO 540	VLSFO 540	HSFO 466
price Worldscale rate	%	3 4	3 4	3 4
Flat rate	\$/ton	1 8	1 8	1 8
Cargo amount	M T	270,000	270,000	270,000
freight Gross	USD	1,652,400	1,652,400	1,652,400
Demurrage	"	250,000	250,000	250,000
and broker Port costs	"	-250,000	-250,000	-250,000
Fuel cost	"	-2,187,000	-1,579,500	-1,048,500
freight Net	"	-534,600	72,900	603,900
dyuration Trip	days #	4 5	4 5	4 5
(TCE) Dayrate	USD/day	-11,880	1,620	13,420

AG – China spot voyage @ WS 34 (USD per day)

• Fuel spread and different consumption efficiency leads to very different earnings on a dayrate basis
• Gross freight paid by charterer is usually similar, while fuel costs savings increases net freight
• Eco vessels, constructed with improved designs and delivered from 2015 and onwards, consume significantly less fuel than the benchmark 2011-built vessel which again consumes less than a 20 year old vessel
• Those (like us), who have installed exhaust cleaners ("scrubbers") are still able to consume HSFO. Those without scrubbers had to switch to more expensive VLSFO from 1 January 2020
• Current fuel spread at around \$80/ton, as jet fuel demand is down approx. 20% vs. pre-pandemic

• Approx. 100 "vintage ladies" rumored to be involved in the trading of discounted and sanctioned oil from Iran and Venezuela
• Orderbook of 80 VLCCs (8.5% of existing fleet), the lowest level in 20 years
• Average fleet age of 10.5 years, the oldest in 20 years
• In 2022, 90 vessels will turn 20 years more
• Around 125 vessels are more than 18 years old
• No newbuild yard slots available until 2024
• Yards quoting \$110m for a newbuild, while 2021 built ships are valued at \$97m
• Eco design vessels (built 2015 and after) fetch premium rates

VLCC scrap value more than doubled in 1 year, but still no scrapping…

Source: Company, Arctic Securities

Source: Company, Arctic Securities

4

-300

-200

-100

0

100

200

300

400

Public tanker companies do trade above NAV, sometimes…

-40%

Implied pricing per VLCC (Q2 balance sheet)
price1 Share	NOK	2 8
USDNOK1	x	8 7
dil)2 Shares (fully	Million	592
Market cap.	USDm	190
Cash3	"	-22
other Net assets	"	-17
bearing debt Interest	"	200
EV	"	351
VLCCs	#	4
Implied value VLCC per		88
1) September 13 2021
2) Adj for & options warrants
3) Adj July dividend 2021 payment
		Current FMV: \$94m

\$88m = 93% of FMV \$6m = 7% discount

Source: Company, Fearnley 16

	Quarters		Year to date		Year
(Unaudited figures in USD 1 000)	2Q 2021	2Q 2020	Note	30.06.2021 30.06.2020 31.12.2020
Revenues
Pool revenues	1 501	14 780		4 633	34 710	48 567
Time charter revenues	7 225	14 840		16 508	15 691	60 037
Other income	207	0		280	0	0
Net gain on sale of assets	2 567	0	5	2 567	0	2 492
Total Revenues	11 500	29 620		23 988	50 401	111 096
Operating expenses
Vessel operating expenses	2 509	2 463		5 112	4 383	12 404
Voyage expenses and commissions	429	326	1	764	915	2 912
Depreciation and amortisation expense	3 242	3 313	6	7 260	5 849	16 325
General and administrative expenses	382	334	4	811	637	1 649
Total operating expenses	6 562	6 436		13 947	11 784	33 291
Operating profit (loss)	4 938	23 184		10 041	38 617	77 806
Net financial income (loss)	-2 554	-4 344		-5 072	-8 011	-14 723
Profit (loss) before taxes	2 384	18 840		4 969	30 606	63 083
Tax on ordinary result	0	0		0	0	0
Net profit (loss)	2 384	18 840		4 969	30 606	63 083
Earning per share	0,00	0,03		0,01	0,05	0,11
Earnings per share diluted	0,00	0,03		0,01	0,05	0,11
	Quarters
(Unaudited figures in USD 1 000)	2Q 2021	2Q 2020			30.06.2021 30.06.2020	31.12.2020
Net profit (loss)	2 384	18 840		4 969	30 606	63 083
Other comprehensive income, items to be reclassified to profit & loss
Translation differences	0	0		0	0	0
Comprehensive income for the period	2 384	18 840		4 969	30 606	63 083
Total comprehensive income attributable to:
Equity holders of the parent	2 384	18 840		4 969	30 606	63 083
Total comprehensive income	2 384	18 840		4 969	30 606	63 083

(Unaudited figures in USD 1 000)	Note	30.06.2021	31.03.2021		30.06.2020 31.12.2020
NON-CURRENT ASSETS
VLCC vessels	5,6	338 962	423 257	423 239	427 249
VLCC vessels under construction	5,6	0	0	71 825	0
Other tangible assets	6	145	192	212	210
Total tangible assets		339 107	423 449	495 277	427 459
TOTAL NON-CURRENT ASSETS		339 107	423 449	495 277	427 459
CURRENT ASSETS
Trade and other receivables		8 542	7 208	12 201	5 416
Other short-term financial assets		0	40	0	0
Other short-term assets		7 113	1 864	4 630	1 539
Total current assets		15 655	9 111	16 831	6 956
Cash and cash equivalents		56 138	28 271	17 135	95 146
TOTAL CURRENT ASSETS		71 793	37 383	33 966	102 101
TOTAL ASSETS		410 900	460 831	529 242	529 560
Equity and Liabilities
EQUITY
Share capital (575 362 013 shares)	2	82 625	82 625	82 625	82 625
Own shares	2	-1 660	-1 197	0	-1 121
Share premium	2	46 695	47 318	114 989	113 364
Other equity		81 714	79 330	44 272	76 745
TOTAL EQUITY		209 374	208 076	241 886	271 614
LIABILITIES
Interest-bearing debt	6	186 563	237 367	269 430	237 954
Total non-current liabilities		186 563	237 367	269 430	237 954
Trade payables		556	810	2 936	2 124
Accrued public charges and indirect taxes		53	30	દેશ	୧୫
Current portion of interest-bearing debt		13 436	13 463	14 762	16 605
Other current liabilities		916	1 085	172	1 195
Total current liabilities		14 962	15 388	17 925	19 992
TOTAL LIABILITIES		201 524	252 754	287 355	257 946
TOTAL EQUITY AND LIABILITIES		410 900	460 831	529 242	529 560

Indicative investment returns	Hunter Atla	Hunter Saga	Hunter Laga
Asset sale and TCE revenue	111.5	105.5	112.5
All in construction cost	(86.5)	(86.5)	(86.5)
Opex, G&A and finance	(9.0)	(7.5)	(8.0)
Net equity cash flow	16.0	11.5	18.0
Equity invested	35.0	35.0	35.0
Return on equity	46%	33%	51%

Hunter Group ASA Org. nr. 985 955 107

Dronningen 1 0287 Oslo, Norway +47 975 31 227 info@huntergroup.no