Klaveness Combination Carriers

Investor Presentation • May 29, 2019

Klaveness Combination Carriers ASA

Q1 2019 Presentation Oslo, 29 May 2019

Disclaimer

This presentation has been prepared by Klaveness Combination Carriers ASA (the "Company") and is furnished to you for information purposes only and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute or form part of any offering of securities, and the contents of this presentation have not been reviewed by any regulatory authority.

The presentation should not form the basis for any investments nor be deemed to constitute investment advice by the Company including its affiliates or any of their directors, officers, agents, employees or advisers. An investment in the Company's securities involves risk, and several factors could cause the actual results, performance or achievements that may be expressed or implied by statements and information in this presentation and by attending or reading the presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you must make your own independent assessment of the information contained in the presentation after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates, projections, opinions or other forward-looking statements contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should make its own verifications in relation to such matters.

This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances, not historical facts, and are sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this presentation (including assumptions, opinions and views of the Company or opinions cited from third party sources) are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company, any of its parent or subsidiary undertakings, or any such person's officers, directors, or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors, nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments described herein.

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The information and opinions contained in this document are provided as at the date of this presentation and may be subject to change without notice. Except as required by law, neither the Company nor any of its affiliates undertake any obligation to update any forward-looking statements or other information herein for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations or publicly release or inform of the result of any revisions to these forward-looking statements which the Company or any of its affiliates may make to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.

This presentation speaks as of May 2019. Neither the delivery of this presentation nor any further discussions by the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. Neither the Company nor the Manager intends to, or will assume any obligation to, update this presentation or any of the information included herein. This presentation shall be governed by Norwegian law. Any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of the Norwegian courts with the Oslo City Court as exclusive legal venue.

Table of contents

I. Highlights

• II. Business & market update
• III. Q1 2019 Result
• IV. Summary and Q&A

First quarter impacted by temporary/timing effects – well on track for an exciting 2020 Highlights 1st quarter and year to date 2019

Q1 2019 results below expected average for 2019	Advancing the introduction of the CLEANBU concept - fleet expansion	Successful private placement, listing and announcement of dividend
• Q1 2019 EBITDA of USDm 4.7 (Q1 2018 of USDm 7.4)	January: 1st • CLEANBU "Baru" delivered.	• May: Successful closing of NOKm 350 (~USDm 40) private
• Low CSS shipment volumes	• April: First CPP COA signed	placement
• Poor dry bulk market	• May: First CPP-Dry combi voyage	• May : Listing on Oslo Axess
• Start up costs /downtime on the first CLEANBU	fixed at TCE earnings 150-200% to standard markets	• May: Announcing USDm 1.4 (0.03 per share) dividends for Q1 2019

• May: Declaration of 2 x CLEANBU options for delivery in Q1 2021

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29.05.2019

Table of contents

• I. Highlights
• II. Business & market update
• III. Q1 2019 Result
• IV. Summary and Q&A

Business and market update | CABU Earnings

Continued outperforming standard tonnage, but premium impacted by temporary lower CSS shipments and a weak dry bulk market

TCE Earnings USD per day¹

• Lower CSS shipment volume caused by timing/temporary effects
• Low share of days in main combi pattern (69%)
• Trading fleet as standard dry vessels in a difficult dry bulk market
• Figures includes Baru CSS lifting in Q1 2019 (on RV)

2) Average monthly earnings per on-hire day for the period 2005 to 2018. Gross of commissions and commercial management fees, Average of the 4 Spot Routes for Baltic Panamax Index (P4TC). Gross rate., Average MR Clean Earnings. Gross rate. 1) The first CLEANBU, Baru, delivered in January lifted one cuastic soda cargo in Q1 2019. This is included in the reported CABU earnings

Business and market update | CABU Caustic soda COA bookings

Increasing CSS COA coverage, but Q1 2019 impacted by Alunorte situation and an uneven distribution of CSS cargoes throughout 2019

Growing CSS COA portfolio in the Pacific, but Atlantic CSS volumes impacted by Alunorte F/M situation

2019 CSS Pacific COA volumes skewed towards second half – increased CSS volumes to Brazil in Q3 - Alunorte builds up to full production

# of CSS Cargoes per year # of CSS Cargoes per quarter 2019

* Alunorte COA expires end Q3-2019

2019 Year of introduction – phase-in "on track" Business and market update | CLEANBU

Phase-in of MV Baru

Q1 2019	✓ January: Delivery / take over processes (7 d) ✓ January/February: First CSS voyage (~30 d) ✓ March/April: Guarantee works (~40 d)
Q2 2019	✓ April/May: First CPP voyage intra SE Asia ✓ May-July: First CPP-Dry combi voyage –CPP to S. America
Q3 2019	July-Aug: Dry return cargo to Far East1 Sept: Scheduled technical modifications at yard1
Q4 2019	Oct-Dec: CPP-dry combi trading + possible spot CPP1

Next deliveries

• Conservative "phase in" to secure a successful introduction to wet-dry combi-trading
• Earnings as regular tanker with "initial discounts"
• First wet-dry combi voyage June-August to/from South America - generating earnings at 150-200% of standard vessels

1) Planned/estimated dates

Proving and expanding the CLEANBU concept Business and market update | CLEANBU

• First CPP COA to Australia concluded in April important milestone for acceptance of CLEANBU concept in the CPP market
• Demonstrate performance in wet-dry combi trading start combi-trading to Australia during 2H 2019
• Substantial expected improvements in CLEANBU earnings with wet-dry combi-trading
• Declaring 2 x CLEANBU options in May for delivery in January 2021 MV BARU Discharge of first CPP voyage in Singapore May 2019

Business and market update | OPEX OPEX impacted by periodization effects & CLEANBU start-up costs

OPEX USD per day

• OPEX for both the CABUs and the first CLEANBU impacted by periodization effects. Higher than normal OPEX during initial months of CLEANBU operation.
• In addition booked \$0.6 million start-up costs linked to training and stand by wages for the CLEANBU fleet

Business and market update | Contract coverage Contract coverage in 2019 and 2020

Volume coverage

Share of estimated total fleet carrying capacity (i.e. volume) booked for rest of 2019 and 20201, 2,

Financial coverage

Share of estimated rate (i.e. price) exposure that has been fixed for rest of 2019¹and 2020

1) Balance 2019 as of end of April

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2) Wet capacity is based on minimum volume on CPP COA.

50%

Successful conclusion of equity and debt financing – investor friendly dividend policy Business and market update

• Successfully completed NOK 350 million (~USD 40 million) private placement 15 May 2019
• Listing of KCC shares on Oslo Axess 22 May 2019
• Concluded USD 91 million bank financing for 3 CLEANBUs for delivery in 2020
• Continuing a shareholder friendly dividend policy declaring \$1.4 million (\$0.03/share) dividends for Q1- 2019 following dividend payment of \$1.4 million (\$0.035/share) for Q4-2019.

Photo: Thomas Brun/ NTB Scanpix

Business and market update

Strong product tanker and fuel market outlook bodes well for KCC's 2020 earnings

Strong product tanker outlook based on low orderbook and positive IMO 2020 effects

Product tanker markets¹

Solid line shows MR (orange) and TC5 triangle trade (dark blue) earnings. Dotted lines forward curves.

Recovering dry bulk markets significant upside when trade disputes and Vale situation settle

Panamax Dry Bulk market²

Solid line is the P4TC historical settled values. Dotted line is the current forward curve

Increasing fuel prices (and freight rates) following implementation of IMO 2020 sulphur cap

1) Source: Shipping Intelligence Network and KCC. Triangle trade TC5 PG-Japan+TC5 Korea/Australia. Bunker is basis Sing380 cst with an estimated USD190 pmt premium for the compliant IMO 2020 0.5% sulphur fuel. MR TCE basis TC7 as per Baltic Exchange. 2) Source: Shipping Intelligence Network, NOS, ICE, FIS

Table of contents

• I. Highlights
• II. Business & market update
• III. Q1 2019 Result
• IV. Summary and Q&A

Consolidated financial statements Q1 2019 (unaudited) Q1 2019 results

Income Statement	Q1 2019	Q1 2018	2018
Net revenues	13 326	13 349	56 393
Operating expenses, vessels	(6 962)	(4 946)	(21 599)
SG&A	(1 627)	(1 029)	(4 037)
EBITDA	4 736	7 374	30 757
Depreciation	(2 778)	(4 171)	(16 840)
EBIT	1 958	3 202	13 917
Net financial items	(2 761)	251	(5 140)
Profit before tax	(803)	3 454	8 777
Tax	-	-	59
Profit after tax	(803)	3 454	8 836
EPS	(0.02)	0.14	0.23

• Company established end March 2018 so that Q1- 2018 not comparable for SG&A and loan costs in parent company.
• Net revenues of USD 13.3 million in line with same quarter last year, however Q1-18 includes negative effects from first time implementation of IFRS 15.
• Administration costs is up for the period due to transaction costs related to listing process (-0.2)
• Useful life estimate changed from 20 to 25 years as of 01.01.2019.
• Higher interest costs due to higher debt after delivery of the first CLEANBU in January. Shareholder loan/Bond loan in KCC only from April 2018.
• Unrealised effects from change in fair value of derivatives (Q1-19: USD -0.9 mill; Q1 2018: + USD 1.4 mill).

Positive EBT adjusted for year-of-introduction effects and unrealized financial derivatives Q1 2019 results

Balance sheet Q1 2019 results

• mainly due to delivery of MV Baru. Final instalment of USD 31 million was financed by drawdown on the DNB/SEB loan facility
• As part of KCC assuming the obligation of the NOK 300 million unsecured bond loan in January 2019, the shareholder loan of USD 36 million from Klaveness Ship Holding AS was repaid
• Provision of dividend based on Q4 results of USD 1.4 million was paid in April
• Equity ratio is 49 % down from 53 % yearend 2018

Cash flow Q1 2019 results

• Positive cash flows from operating activities of USD 4, lower than EBITDA (USD 4.7 million) due to negative changes in working capital
• Negative cash flow from investment activities of USD 47 million relates to instalments on the CLEANBUs and some minor dry dock costs for the CABUs
• Cash flow from financing activities is positive by USD 25 million due to net inflows on bank facilities from the draw-down financing of Baru net after periodic repayment of mortgage debt.
• Cash of USD 69 million includes cash and cash equivalents of USD 72 million and drawn amount of USD 3 million on overdraft facility.

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Table of contents

• I. Highlights
• II. Business & market update
• III. Q1 2019 Result
• IV. Summary
• V. Q&A

Summary Business Update

• Maintain guiding on CABU TC-earnings (>2018 actual of \$17,400/d). CABU earnings to significantly improve in 2nd half 2019 based on concluded CSS cargoes and the announced resumption of Alunorte production
• CLEANBU introduction costs/downtime to negatively impact 2019 P&L, but CLEANBU earnings to improve after start of combi-trading
• Positive 2020 outlook based on strong product tanker market outlook and higher fuel costs following implementation of IMO 2020

Enclosures

Enclosures

Torvald Klaveness & Klaveness Combination Carriers (KCC)

Torvald Klaveness' business segments

Note: Simplified orginazational chart, for illustration purposes only

Enclosures

CLEANBU estimated delivery overview

CLEANBU delivery schedule

Name	DWT1 Contract price2 Option declaration date		2019			2020			2021				2022
			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Baru – 1222	82,425	USD 48.5m	Delivered		January 2019
Barracuda – 1223	83,500	USD 48.5m	Firm		June 2019
Barramundi – 1224	83,500	USD 48.2m	Firm				September 2019
Baleen – 1226	83,500	USD 46.5m	Firm			February 2020
Bangus – 1227	83,500	USD 46.5m	Firm				August 2020
Baiaco – 1228	83,500	USD 46.5m	Firm				October 2020
1229	83,500	USD 46.5m	Firm					January 2021
1247	83,500	USD 46.5m	Firm					February 2021
Option # 3 – 1225	83,500	USD 46.5m	Jun 2019						April 2021
Option # 4 – 1248	83,500	USD 47.4m	Aug 2019							August 2021
Option # 5 – 8	83,500	TBA	Sep and Dec 2019														2021/2022

1) Estimates for vessels under construction, actual DWT might deviate some upon delivery of vessel

Consolidated financial statements Q1-2019 (unaudited) Enclosures Link to full Quarterly Q1-2019 report including notes.

			Quarter ended	Year ended
		Unaudited	Unaudited	Audited
000, dST	Notes	31 Mar 2019	31 Mar 2018	31 Dec 2018
Freight revenue	3	28 308		84 284
Charter hire revenue	3	233	13349	17 540
Total revenues, vessels	3	28 541	13 349	101 824
Voyage expenses		(15 215)		(45 431)
Net revenues from operations of vessels		13 326	13 349	56 393
Operating expenses, vessels		(6962)	(4 946)	(21 599)
Group commercial and administrative services	9	(1 261)	(971)	(3618)
Tonnage tax	10	(36)	(44)	(119)
Other operating and administrative expenses		(330)	(14)	(300)
Operating profit before depreciation		4736	7 374	30 757
Ordinary depreciation	4	(2 778)	(4 171)	(16 840)
Operating profit after depreciation		1 958	3 202	13 917
Finance income	7	730	1 669	2234
Finance costs	7	(3 491)	(1 418)	(7 374)
Profit before tax		(803)	3 454	8777
Income tax expenses	10			ਦਰੇ
Profit after tax		(803)	3 454	8 836
Attributable to:
Equity holders of the parent company		(803)	2 769	7 978
Non-controlling interests			685	858
Total		(803)	3 454	8 836

	Quarter ended	Year ended
000, 0511	Unaudited 31 Mar 2019	Unaudited 31 Mar 2018	Audited 31 Dec 2018
Profit/ (loss) of the period	(803)	3 454	8 836
Other comprehensive income to be reclassified to profit or loss
Net movement fair value on cross-currency interest rate swaps (CCIRS)	119
Reclassification to profit and loss (CCIRS)	283
Net movement fair value on interest rate swaps	(269)	490	368
Net movement fair value FX hedge	(44)		(35)
Net movement fair value bunker hedge	970		(918)
Net movement fair value FFA hedge	ଚିତ୍ରଟି		970
Net other comprehensive income to be reclassified to profit or loss	2 045	490	385
Total comprehensive income/{loss} for the period, net of tax	1242	3 944	9221
Attributable to:
Equity holders of the parent company	1242	3016	8029
Non-controlling interests		928	1 192
Total	1242	3944	9221

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Consolidated financial statements Q1-201 (unaudited) Enclosures Link to full Quarterly Q1-2019 report including notes.

ASSETS	Notes	Unaudited 31 Mar 2019	Audited 31 Dec 2018
Non-current assets
Deferred tax asset	10	15	15
Vessels	4	216 402	167 037
Newbuilding contracts	5	54372	59 877
Right - of-use assets	5	1 787
Long-term receivables from related parties
Long-term financial assets	ાર	870	1 855
Total non-current assets		273447	228786
Current assets
Short-term financial assets	6	2245	464
Inventories		6 186	5 883
Trade receivables and other current assets		9 734	9870
Short-term receivables from related parties		33	594
Cash and cash equivalents		71 665	88 263
Total current assets		89 863	105 074
TOTAL ASSETS		363 310	333 850

EQUITY AND LIABILITIES		Unaudited 31 Mar 2019	Audited 31 Dec 2018
Equity
Share capital	8	4863	4 863
Share premium		92 271	92 271
Other reserves		2096	51
Retained earnings		78 680	80 901
Total equity		177 911	178 086
Non-current liabilities
Mortgage debt	6	121 892	95 746
Long-term liabilities to related parties	6		36 000
Long-term financial liabilities	6		450
Long-term lease liabilities		1411
Bond loan	6,9	34 484
Total non-current liabilities		157 787	132 196
Current liabilities
Short-term mortgage debt	6	13920	12 200
Other interest bearing liabilities	6	3005	2 172
Short-term financial liabilities	6	1 209	918
Short-term lease liabilities		376
Trade and other payables		6 863	7 601
Short-term debt to related parties		742	563
Provision dividend	9	1 418
Tax liabilities	10	78	123
Total current liabilities		27 612	23577
TOTAL EQUITY AND LIABILITIES		363 310	333 859

Consolidated financial statements Q1-2019 (unaudited) Enclosures Link to full Quarterly Q1-2019 report including notes.

		Quarter ended	Year ended
	Notes	Unaudited 31 Mar 2019	Unaudited 31 Mar 2018	Audited 31 Dec 2018
Profit before tax		(803)	3 454	8777
Tonnage tax expensed	10	36	44	119
Ordinary depreciation	4	2778	4 171	16 840
Amortization of upfront fees bank loans		77	51	228
Financial derivatives unrealised loss / gain (-)	ರ್	459	(1 376)	(1 163)
Interest income	7	(541)	(293)	(1 071)
Interest expenses	7	2 294	1326	6972
Taxes paid for the period	10	(45)
Change in current assets		3 वर्ष	(3 363)	(2 070)
Change in current liabilities		(1 129)	3428	(1 782)
Interest received	7	541	293	1071
A: Net cash flow from operating activities		4 060	7735	27 920
Acquisition of tangible assets	বা	(488)	(239)	(2 817)
Installments and other cost on newbuilding contracts	5	(46 056)	(5 472)	(22 126)
Acquisition of subsidiaries, net of cash			863	863
B: Net cash flow from investment activities		(46 544)	(4 848)	(24 080)

Proceeds from mortgage debt	6	31 000		3000
Net proceeds from bond loan and settlement shareholder loan	6	(630)
Transaction costs on issuance of loans	0	(454)
Repayment of mortgage debt	6	(3 050)	(1 471)	(10 528)
Repayment of bond loan
Interest paid	7	(1 718)	(1 326)	(7 103)
Repayment of financial lease liabilities		(94)
Capital increase April 30, 2018				12 000
Capital increase October 10, 2018				45 000
Transaction costs on capital increase				(581)
Acquisition of non-controlling interests				(622)
Group contribution/dividend			(9 958)	(9 958)
Dividends to non-controlling interests			(495)	(495)
C: Net cash flow from financing activities		25 054	(13250)	30 713
Net change in liquidity in the period (A + B + C)		(17 431)	(10 364)	34 552
Cash and cash equivalents at beginning of period		86090	51 538	51 538
Cash and cash equivalents at end of period*		68 660	41 175	86090
Net change in cash and cash equivalents in the period		(17 431)	(10 364)	34 552