Seaway 7 ASA

Investor Presentation • May 28, 2021

Q1 2021

Financial report

28 May 2021 | Torgeir E. Ramstad | CEO Tom E. Jebsen | CFO

© OHT ASA

Disclaimer

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Agenda

01	First Quarter 2021 Financial Report
02	Status financing
03	Operations and contracts
04	Newbuilding status
05	The sweet-spot for WTG installation
06	Market & Outlook

First Quarter 2021

Q1 2021 Income Statement

in \$ thousands	Q1 2021	Q4 2020
Total revenue	11,666	8,917
Voyage expenses	4,848	3,572
Ship operating expenses	4,236	3,801
Other operating expenses	241	205
General and administrative expenses	2,457	2,180
Operating profit (loss) before depreciation and amortization expenses ("EBITDA")	(116)	(842)
Depreciation and amortization expenses	4,028	4,128
Operating profit (loss)	(4,144)	(4,970)
Net financial income (expenses)	(119)	638
Net profit (loss)	(4,263)	(5,535)
Basic and diluted earnings (loss) - \$ per share	(0.035)	(0.046)

Comments

▪ TCE per day \$17,600 in Q1 2021, up from \$11,200 in Q4 2020. Utilization on the fleet was 90% in Q1 2021, up from 71% in Q4 2020.

▪ OPEX per day \$9,413 in Q1 2021.

▪ EBITDA was negative \$0.1 million in Q1 2021, compared to negative \$0.8 million in Q4 2020.

First Quarter 2021

Q1 2021 Balance sheet and Cash flow

in \$ thousands	31 March 2021	31 December 2020
Non-current assets	259,856	239,409
Bank deposits and cash equivalents	16,276	14,787
Other current assets	21,259	13,507
Total Assets	297,391	267,703
Total Equity	229,464	233,685
Non-current lease liabilities	2,492	2,587
Debt to credit institutions	21,422	-
Total current liabilities	44,012	31,431
Total equity and liabilities	297,391	267,703

in \$ thousands	Q1 2021	Q4 2020
Net cash flow from operating activities	3,877	(2,659)
Net cash flow used in investment activities	(24,201)	(35,565)
Net cash flow from financing activities	21,813	(18,195)

Comments

• Contingent liabilities related to Alfa Lift and VIND 1 specified in note 10, totalling \$381 million.
• Payments in relation to investments under the construction contracts: Final 10% instalment for Alfa Lift prior to delivery.
• \$22 million in drawdown of debt during the quarter.
• \$28 million undrawn from RCF at quarter-end 2021 (and as today 28 May 2021).

5

Status financing

• The Group has accepted a firm offer, subject to satisfactory documentation, for a \$135.0 million Senior Secured Green ECA Credit Facility agreement for the post-delivery financing of the wind foundation installation vessel Alfa Lift.
• In addition to the above and as previously communicated, we have a need for \$40-50 million to take us past delivery of Alfa Lift. Funding options:
  • Bond market
  • Industrial partner/M&A
  • Equity issue

Transportation

Operations and contracts

• Markets continue to be affected by hesitation to commit due to Covid-19 restrictions, but activity levels and pricing continue to show modest improvements as predicted.
• YTD utilisation in Q1 was 90% and Opex in line with budget at \$9,413 per day.
• All five vessels were fitted with exhaust gas scrubbers in 2019 to a total Capex of \$11.4 million. Savings on fuel cost compared to using Low Sulphur Fuel Oil 0.5% stands at \$8.9 million or a payback of 78% so far.

Albatross with offshore wind jack-up "Apollo" on the way to China. Image courtesy Piet Sinke.

Falcon with offshore wind jack-up barge "JB118" on the way to China.

© OHT ASA

Installation

Why has no new contracts been announced in the quarter?

Our timings have unfortunately been too optimistic

• Not one of the projects we are tendering for has been awarded so far.
• Developers are delayed with their announcements compared to earlier plans.
• This is primarily due to everybody wanting to secure the latest WTG technologies, which has led to re-design of wind farms.
• With very few exceptions, all have maintained their original execution schedules.
• Several have to award latest by Q3 2021 to avoid delaying other key milestones related to FID or auction participation.
• Alfa Lift and Vind 1 are both available for the busy 2024 season.

Selected Projects

This overview shows a selection of projects in the market from 2023/24.

Installation

Operations and contracts

• The Dogger Bank A and B projects are in detail design and showing good progress.
• Currently in dialogue with the client regarding impact of certain changes introduced by the client.
• We have placed a major subcontract for the rental of the piling hammer with Menck GmbH.
• Other subcontracts for grillage and lifting equipment have been placed or are imminent.
• No undesired incidents and the Client relationship remains good and constructive.
• Start offshore construction in Q3 2022.

Installation of Transition Piece following Monopile installation.

© OHT ASA

9

Newbuilding status

Alfa Lift

• Vessel was successfully undocked on 28 February and moved to the outfitting quay. The fourth payment milestone was fulfilled.
• Liebherr successfully performed separate overload tests of main crane hooks (picture).
• Liebherr main crane slewing column and A-frame safely arrived at shipyard and was lifted onto the deck in late April (picture).
• Crane pedestal machining soon to complete.
• Shipyard maintains vessel delivery end 2021, but as we will install mission equipment before departure from China, we will keep the vessel at the shipyard in Q1 2022.

VIND 1

• Basic design almost complete, detail design approaching 20%.
• All key equipment selected, VDL target of 10,000t.
• Delivery mid-2023.

A competitor's view on how converted WTIVs compare with newbuilds

They did not get it entirely right…

Some key questions to ask

• What is the crane's capacity at a more realistic outreach of 45m?
• What does max lifting height mean is it main hook / auxiliary hook / boom extensions ?
• For the first WTG in a set you have to lift towers above the nacelles, so what is the max tower height that the main hook can lift over the nacelles on deck?
• How much has jacking speed been affected to achieve a higher VDL than originally designed?
• How much Capex has been put into the vessel in total?
• With deeper sites and ever-increasing hub heights, what is the maximum water depth the vessel can install in?
• 1) In extended mode 2,500t in retracted mode.
• 2) Medium hub height/tower weight.

Numbers can be deceptive with upgraded vessels – it does not help to be able to carry the WTGs if you cannot lift components over the deck or jack up high enough to install them.

Recent newbuilds published indicate a substantial price increase

We believe our Vind 1 has hit a sweet-spot between Capex and capabilities

The larger unit would need +75kUSD/day to provide the same payback time

1) Incremental

Case study: How does number of WTGs carried affect execution time?

Using a 15MW WTG with typical tower weights and transportation distance

The relationship between number of WTGs / trip and number of trips is inversely exponential (see chart).

Reason for diminishing schedule gains of taking more WTGs / trip is that the primary difference to the schedule is only the additional sailing time, as the same number of WTGs are loaded and installed.

Therefore, from a point around 4 WTGs / trip the extra cost for a larger vessel is increasingly more difficult to defend for projects that do not have extended sailing distances.

Difference in schedules between

• 2 → 3 WTGs / Trip (P50): 33 days
• 3 → 4 WTGs / Trip (P50): 19 days
• 4 → 5 WTGs / Trip (P50): 11 days
• 5 → 6 WTGs / Trip (P50): 9 days

P50 WDT indicates the duration when there is a 50% likelihood of non-exceedance due to weather down-time.

Market and Outlook

Offshore wind

Transportation

• We have already seen improved utilisation, to be followed by stronger pricing.
• We see a material reduction of available capacity due to competitors' backlog on oil & gas projects which have not been targeted by the Company, and limited newbuilding activity.
• Bidding Offshore Wind related transportation projects up until 2027, which will represent a substantial part of the market with foundation components to be transported
  • from Asia to Europe, and
  • From Europe to the US.
• Oil & gas decommissioning as well as new gas processing facilities in the Middle East will develop a healthy volume of additional transportation opportunities.
• This is a strategically important market segment in support of our offshore wind strategy.

Installation

• The market looks stronger every day, with Rystad now predicting 250GW installed capacity by 2030, up from 31GW end 2020.
• There will be a critical bottleneck especially within monopile installation from 2024/25, with no newbuilds having been announced in the last 12 months.
• Both our newbuilds are available from 2024 onwards.
• The Company has >\$2 billion in open tenders. None have been awarded so far.
• Developers remain delayed with their contract awards, with several having to make a call at the very latest in Q3 to achieve overall project milestones.
• OHT will continue to be disciplined wrt. pricing and is confident that our timing to market is spot on.

© OHT ASA

14

Summary: Creating a leading Offshore Wind T&I Contractor

A growth story from ~80% reliance on O&G to complete exit in 10 years

Thank you

Torgeir Ramstad

Tom Jebsen

CEO

tr@oht.no

CFO tj@oht.no