KMC Properties ASA

Interim / Quarterly Report • Aug 27, 2020

1 st Half 2020 FINANCIAL RESULTS PRESENTATION 27 August 2020

DISCLAIMER

This document is being furnished for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any security, future or other financial instrument or product. It is not intended to form the basis of an investment decision and has not been verified. Storm Norge AS. ("Storm") makes no recommendation or representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information contained herein or any other information, whether written or oral, made available and any liability therefore is expressly disclaimed. Such information is presented as of the date and, if applicable, time indicated and Storm does not accept any responsibility for updating any such information.

Any simulations, projections, valuations and statistical analyses contained herein have been provided to assist the recipient in the evaluation of the matters described herein; such simulations, projections, valuations and analyses may be based on subjective assessments and assumptions and may utilize one among alternative methodologies that produce differing results; accordingly, such simulations, projections, valuations and statistical analyses are not to be viewed as facts and should not be relied upon as an accurate representation of future events. No representation or warranty is given as to any of the simulations or analyses, or as to the achievement or reasonableness of any future projections or estimates, contained in this document.

This document has been prepared by Storm. The views expressed may not be supported by independent analysis. The author of this document may be remunerated as a result of transactions generated by this information.

KEY TAKE AWAYS

The company has entered into an agreement with Swedbank AB and Aconcagua Management Ltd which requires the company to perform a fair value adjustment of the debt to Swedbank AB (reduction of USD 9.1 million (financial income)).

NAV per share at NOK 11.1 (however, see note 3 and 4 in the H1 2020 report)

Total Comprehensive Income of USD 5.3 million in H1 2020

4.

Gasfield occupancy at 97% (26 August 2020)

Currently no significant financial effects from the Covid-19 pandemic (however, see note 12 in the interim report)

OPERATIONS / FINANCE

Gross rental income excl. VAT per month from the Gasfield building, according to signed contracts as at 30 June 2020, was RUB 15.1m (occupancy at 96%)

2. As at 30 June 2020 it is likely that the company is able to fulfil its debt obligations

The value of the building has decreased to USD 21.4m as at 30 June 2020, mostly due to currency translation (USD 24.8m as at 31 December 2019). The value of the land lease agreement is stable at USD 0.1 million

P&L – MAJOR ITEMS

mill. USD	H1 2020	H1 2019	12M 2019
Total Comprehensive Income	+5.3	+1.5	+2.1
Summary of major items:
NOI from investment properties	+0.7	+0.7	+1.6
Value change investment properties	-3.4	+2.3	+3.5
Other operating expenses	-0.4	-0.6	-1.1
Borrowing costs	-0.7	-0.8	-1.4
Currency gains/ losses	-0.0	-0.1	+0.0
Fair value adjustment bank loan	+9.1	0.0	0.0
Taxes	+0.0	-0.1	-0.3

BALANCE SHEET – MAJOR ITEMS

(US\$ '000)	30/06/20 (1) 31/03/07	31/12/19		30/06/20 (1) 31/03/07	31/12/19 Pro Forma
Investment property	\$21,526	\$24,891	Bank loans	\$11,500	\$19,917
			Deferred tax	\$331	\$422
Total non-current assets	\$21,526	\$24,891	Other liabilities	\$1,146	\$1,439
Cash	\$761	\$742	Total liabilities	\$12,978	\$21,097
Other current assets	\$701	\$861
Total current assets	\$1,461	\$1,603	Equity	\$10,015	\$4,719
Total assets	\$22,992	\$26,497	Total equity and liabilities	\$22,992	\$26,497
			Equity ratio	43.6%	17.8%

STORM REAL ESTATE SHARE PRICE PERFORMANCE SINCE LISTING

• The Storm Real Estate share was listed on Oslo main exchange on 6 July 2010.
• Before listing, the Storm share was traded OTC.
• Share prices are adjusted for dividends and changes in number of issued shares.

Source: Oslo Stock Exchange, Bloomberg

(1) SRE and OSEBX adjusted for dividends. As at 25 August 2020.

DEVELOPMENT OF GASFIELD VALUATION 2012-2020

• Gasfield building valued at USD 80.7 million at peak (2013).
• Current valuation USD 21.4 million.
• Decline in valuation of USD 59.3 million (-73% from peak).

OIL PRICE vs PROPERTY VALUES vs RUBLE

RUSSIA – INFLATION

RUSSIA – INDUSTRIAL PRODUCTION

Economic activity (as measured by industrial production)

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

Foreign Domestic

▪ Total investment volume

Source: Cushman & Wakefield

MOSCOW OFFICE MARKET – VACANCY RATE

MOSCOW OFFICE MARKET - AVERAGE RENTAL RATES IN RUB (1)

Source: Cushman & Wakefield

(1) Average rental rates is a weighted average rental rate of asking rents of deals closed within the period, RUB / m²/ annum/ triple net (net of op.ex and VAT)

MOSCOW OFFICE MARKET – NEW CONSTRUCTION AND ABSORPTION

Low construction, still negative absorption.

EUROPEAN OFFICE CLOCK 2010 –2020

KEY TAKE AWAYS

The company has entered into an agreement with Swedbank AB and Aconcagua Management Ltd which requires the company to perform a fair value adjustment of the debt to Swedbank AB (reduction of USD 9.1 million (financial income)).

NAV per share at NOK 11.1 (however, see note 3 and 4 in the H1 2020 report)

Total Comprehensive Income of USD 5.3 million in H1 2020

Gasfield occupancy at 97% (26 August 2020)

4.

Currently no significant financial effects from the Covid-19 pandemic (however, see note 12 in the interim report)

APPENDIX

GASFIELD BUILDING

Gasfield Building

Class	B+
Gross Area	c. 15,200 m²
Net lettable area	c. 11,011 m2
Occupancy Rate	c. 97%

PERFORMANCE OF THE RUSSIAN MOEX INDEX

Source: Bloomberg, Moscow Exchange

(1) As at 25 August 2020. The MOEX Index is denominated in rubles, the RTS Index is denominated in dollar. Previous name MICEX index.

RUSSIA – US\$/RUB AND NOK/RUB EXCHANGE RATE MOVEMENTS AND CBR KEY RATE

BRENT OIL PRICE

• 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 01/01/2016 01/04/2016 01/07/2016 01/10/2016 01/01/2017 01/04/2017 01/07/2017 01/10/2017 01/01/2018 01/04/2018 01/07/2018 01/10/2018 01/01/2019 01/04/2019 01/07/2019 01/10/2019 01/01/2020 01/04/2020 01/07/2020 Brent Oil Price (US\$) High: 86.29 Average: 56.97 Low: 19.33 Last: 45.86

CONTACT CONTACT

Postboks 1608, Vika 0119 Oslo Norway

E-mail: info@stormcapital.co.uk Tel: +47 92 81 48 62 Web: www.stormrealestate.no