KMC Properties ASA

Investor Presentation • Aug 30, 2019

1 st Half 2019 FINANCIAL RESULTS PRESENTATION 30 August 2019

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 Capital Management Ltd. ("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 Capital Management Ltd. and should not be considered impartial research under FCA Rules. 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.

Storm Capital Management Ltd. is authorized and regulated in the United Kingdom by the Financial Conduct Authority. Its registered office is at Berger House, 36-38 Berkeley Square, London W1J 5AE, United Kingdom.

KEY TAKE AWAYS

1. Total Comprehensive Income of USD 1.5 million in H1 2019

2. NAV per share at NOK 4.0 (after reversed sharesplit)

3. Gasfield occupancy at 95%

4. The company has entered into a conditional agreement with Swedbank with the aim to create a financial capacity to continue operating.

OPERATIONS / FINANCE

1. Gross rental income excl. VAT per month from the Gasfield building, according to signed contracts as at 30 June 2019, was RUB 14.7m

2. As at 30 June 2019 the company is not able to fulfill its debt obligations

3. The value of the building has increased to USD 23.6m as at 30 June 2019 mostly due to currency translation (USD 21.3m as at 31 December 2018). The value of the land lease agreement is stable at USD 0.131 million

STORM CAPITAL MANAGEMENT STORM CAPITAL MANAGEMENT

P&L – MAJOR ITEMS

mill. USD	H1 2019	H1 2018	12M 2018
Total Comprehensive Income	+1.5	-5.7	-7.3
Summary of major items:
NOI from investment properties	+0.7	+0.1	+0.2
Value change investment properties	+2.3	-5.4	-5.3
Other operating costs	-0.6	-0.7	-1.3
Borrowing costs	-0.8	-0.9	-1.8
Currency gains/ losses	-0.1	-0.0	-0.1
Contract- and interest derivatives	+0.0	+0.1	+0.5
Taxes	-0.1	+0.7	+0.1

STORM CAPITAL MANAGEMENT STORM CAPITAL MANAGEMENT

BALANCE SHEET – MAJOR ITEMS

(US\$ '000)	(1) 30/06/19 31/03/07	31/12/18		30/06/19 (1) 31/03/07	31/12/18 Pro Forma
Investment property Total non-current assets	\$23,731 \$23,736	\$21,419 \$21,424	Bank loans Deferred tax Other liabilities	\$19,317 \$161 \$1,178	\$18,678 \$112 \$849
Cash Total current assets	\$633 \$1,046	\$500 \$852	Total liabilities Equity	\$20,657 \$4,125	\$19,639 \$2,637
Total assets	\$24,782	\$22,277	Total equity and liabilities	\$24,782	\$22,277
			Equity ratio	16.6%	11.8%

STORM REAL ESTATE SHARE PRICE PERFORMANCE

• 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.

DEVELOPMENT OF GASFIELD VALUATION 2012-2018

• Gasfield building valued at USD 80.7 million at peak (2013).
• Current valuation USD 23.6 million.
• Decline in valuation of USD 57.1 million (-71% from peak).

OIL PRICE vs PROPERTY VALUES vs RUBLE

RUSSIA – INDUSTRIAL PRODUCTION

Economic activity (as measured by industrial production)

RUSSIA – INVESTMENT VOLUME BY SOURCE OF CAPITAL

Foreign Domestic

• Total investment volume low at USD 0.75bn in H1 2019
• Net outflow of foreign investments in H1 2019

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

Little new construction, but still negative absorption.

EUROPEAN OFFICE CLOCK 2010 –2018

KEY TAKE AWAYS

1. Total Comprehensive Income of USD 1.5 million in H1 2019

2. NAV per share at NOK 4.0 (after reversed sharesplit)

3. Gasfield occupancy at 95%

4. The company has entered into a conditional agreement with Swedbank with the aim to create a financial capacity to continue operating.

APPENDIX

GASFIELD BUILDING

Gasfield Building

Class	B+
Gross Area	c. 15,200 m²
Net lettable area	c. 11,100 m2
Occupancy Rate	c. 86%

PERFORMANCE OF THE RUSSIAN MOEX INDEX

Source: Bloomberg, Moscow Exchange

(1) As at 28 August 2019. 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

Brent Oil Price (US\$)

CONTACT CONTACT

Berger House 36-38 Berkeley Square London W1J 5AE United Kingdom

E-mail: info@stormcapital.co.uk Tel: +47 92 81 48 62 Web: www.stormcapital.co.uk