Klaveness Combination Carriers

Capital/Financing Update • Jan 2, 2019

Klaveness Ship Holding AS and Klaveness Combination Carriers AS

Proposal to bondholders

02 January 2019

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This presentation has been prepared by Klaveness Ship Holding AS (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 contents of this presentation have not been reviewed by any regulatory authority.

This presentation should not be deemed to constitute investment advice by the Company or Klaveness Combination Carriers AS ("KCC"), including their group companies and any of their directors, officers, agents, employees or advisers. An investment in the Company's or KCC'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 investor presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and KCC 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 forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause the involved company's or companies' actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, forwardlooking statements can be identified by terminology such as "believe," "expect," "anticipate," "intend," "may," "plan," "estimate," "should," "could," "aim," "target," "might", "will", "intend", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, prospective investors should specifically consider various factors. These factors may cause the actual results to differ materially from any forward-looking statement. Although the Company and KCC believe that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement.

No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, neither the Company nor KCC accepts any liability whatsoever arising directly or indirectly from the use of this document, including any reproduction or redistribution.

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 KCC undertake any obligation to update publicly any forward-looking statements 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 the result of any revisions to these forward-looking statements which the Company or KCC may make to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.

This presentation is confidential and will only be communicated to existing investors in the Company's bond issue listed on Nordic ABM (ISIN: NO0010779549, Ticker: KSH03 PRO). The presentation (or parts of it) should not be reproduced, redistributed, communicated, or the contents in other ways announced or published, directly or indirectly, to any other person (with the exceptions for the advisors of the investors) without prior approval from the Company. This presentation is not for presentation or transmission into Australia, Canada, Hong Kong, Japan, Switzerland or United Kingdom. This also applies to the United States or to any U.S. person, as that term is defined under Regulation S promulgated under the Securities Act of 1933, as amended.

KCC on track for IPO in 2019

Proposal Combi Financials Container Appendix

2013
2015
2016
2017
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 1H
2019

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Further develop of Klaveness Combination Carrier AS

• 1. KSH will continue to be a major shareholder in Klaveness Combination Carriers AS
• 1. The intention is to initiate a listing of KCC in Oslo within end of 2019
• 1. KCC is the leading company investing in and operating combination carriers globally
• 1. Equity has been raised to fund the equity portion of all six newbuildings on order, bank debt has been secured for the three newbuilds with delivery in 2019 and will likely be secured for the three 2020 newbuilds in January 2019
• 1. LTV for CLEANBU newbuilds 60-65% with five year tenor and 17-18 years profile. LTV for existing CABU fleet 50-60%¹
• 1. Equity has historically always been raised prior to taking on commitment for further investments

Divest container investment when target pricing is achieved

• 1. The container investment has been and still is a financial investment for KSH
• 1. The container vessels will be sold when target pricing is achieved
• 1. The cash proceeds will likely not be reinvested under the KSH umbrella
• 1. The container fleet is today financed mainly by equity and a drawdown of USD 15m on a bank revolving credit facility (RCF). The USD 55.8m undrawn part of the RCF is part of the liquidity reserve for the entire Torvald Klaveness Group

• 1) Recently renamed. Formerly known as T. Klaveness Shipping AS, Cabu Chartering AS and Klaveness Bulk AS

• 2) All vessels currently owned by SPCs (wholly owned by KCCS) will be transferred to KCCS prior to YE 2018. The empty SPCs will be closed down in 2019
• 3) Seven existing bank facilities will be merged into two facilities with KCCS as Borrower, each approx. USD 100mn with maturity in March 2022 and December 2023

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Improved asset backing 1 2

KSH bond no change in Issuer	Post USD 75m5 equity issue	As is
KCON equity value1	7	7
KCON internal loan1	90	90
KCON excess value2	4	4
KCC internal loan3,5	31	36
KCC equity value4,5	159	140
Sum net asset values	291	277
KCC bond after change in Issuer	Post USD 75m6 equity issue	KCC as is pro-forma
Bond loan	36	36
KCC equity value6	319	221
Sum net asset values	355	257

The bondholders will benefit from a higher implied asset backing as the value of the minority shares in KCC not being owned by KSH is expected to more than offset the value of the container business post a new equity issue

Proposal Combi Financials Container Appendix

• the combination carriers have historically had more stable cash flows at 1.5-2 times higher rates than the standard dry bulk and tanker markets

¹⁾ CLEANBU earnings/day = simulated CLEANBU earnings YTD Oct 2018 not adjusted for phase-in effects expected in 2019, CABU earnings/day = average CABU earnings YTD Q3 2018, Container earnings/day = average container earnings YTD H1 2018

3 KCON is financial investment for KSH

4 Pari-passu with other unsecured debt in KCC

5 Issuer of the bond planned to be a listed entity

6 More frequent reporting

• KCC proposes to replace semi-annual reporting under the KSH bond with quarterly reporting for a KCC bond

Listing of bonds on OSE

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• As part of the proposal to move the Bond to KCC, KCC will apply for a listing of the Bonds at Oslo Stock Exchange. Today the Bond is listed at Nordic ABM

1) Due to the reorganization of the combination carriers business in March 2018, historical consolidated KCC Shipowning financials provide most accurate description of the historical key ratios of KCC in 2015, 2016 and 2017. For Q3 2018 KCC financials has been used. 2015 figures adjusted for balance sheet items related to discontinued operations (selfunloading

vessels)

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Klaveness Combination Carriers AS

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Torvald Klaveness overview Business segments

• Torvald Klaveness is a global shipping company operating around 130 vessels including the dry-bulk vessels, combination carriers and container vessels
• Since the foundation of the company in 1946, growth has been achieved through seeking new and innovative ways of providing cost-efficient and predictable transportation services to customers
• Klaveness is one of the leading service providers and dry-bulk operators in the world and carries around 60 million tons of cargo and makes more than 1,100 vessel fixtures each year

1946 -1960

Handy pool

Specialised bulk carriers

Reefer vessels

Proposal Combi Financials Container Appendix

Largest shareholders

Proposal Combi Financials Container Appendix

#	Investor name	Shares	% of shares outstanding
		(# shares)	%
1	Klaveness Ship Holding AS	25,661,750	63.3 %
2	EGD Shipholding AS	8,733,000	21.6 %
3	Hundred Roses Corporation	2,197,250	5.4 %
4	Others: In total approx. 70 shareholders	3,920,000	9.7 %
Total		40,512,000	100.0 %

Note: Shareholder list post USD 45m Equity Private Placement conducted in September 2018

Additional information

• Declaration dates for 4x option vessels: 2 x end March 2019, 2 x end June 2019
• Payment terms: 10/10/10/70
• Discussion with banks to finance three firm vessels and one options on-going with positive initial feedback. Target is to have firm commitment within mid-January

Note: Owner shares includes USD 45m Equity Private Placement conducted in September 2018

Lasse Kristoffersen (b. 1972) – Chairman of the Board and CEO of Torvald Klaveness

Appointed CEO of Torvald Klaveness in September 2011 after four years as Head of the Specialized dry-bulk activities. President of the Norwegian Shipowners' Association and board member of DNV GL.

Worked 11 years for Det Norske Veritas prior to joining Klaveness.

Holds a Master of Science in Naval Architecture and Marine Engineering from NTNU.

Morten Skedsmo (b. 1969) – Board member and Head of Container in Torvald Klaveness

Appointed Head of Ship Owning & Projects of Torvald Klaveness in September 2012. From 2016 Head of Container.

Started working for Klaveness in 1990 and has held a wide range of positions within chartering, marketing and business development. EVP of Klaveness Asia in Singapore from 2009-2011.

Magne Øvreås (b. 1972) – Board member and CEO of EGD Shipholding AS

Worked six years as CEO of chemical tanker owner Utkilen AS, before joining EGD in 2015.

Has 12 years experience as management consultant in Cardo Partners and The Boston Consulting Group (Oslo, New York and Stockholm).

Holds a Master of Science in Naval Architecture from NTNU, Trondheim and ENSTA, Paris.

Stephanie Wu (b. 1980) – Board member

Worked at HSBC, Hong Kong from 2003 to 2013. Director of various ship owning and investment companies.

Holds a bachelor's degree in economics from the University of California, Irvine.

Engebret Dahm (b. 1965) – Managing Director Appointed Head of Combination Carriers of Torvald Klaveness in January 2015.

CEO of Norwegian Car Carriers AS prior to joining Klaveness.

Held various positions in Klaveness 1990-2006 amongst others as head of the transloader and beltunloader business.

Holds a Master of Science in Finance from NHH.

Proposal Combi Financials Container Appendix

Liv Dyrnes (b. 1980) – CFO Appointed CFO of Torvald Klaveness in February 2017 after 8 years in Klaveness.

Experience from DNB Bank Shipping, Offshore and Logistics prior to joining Klaveness.

Holds a Master of Science in Finance from NHH.

Full asset utilization…

The combination carriers switch between dry and wet cargoes and have hence two laden legs and limited ballast

…and the most fuel efficient solution…

As ballast time is limited, less fuel is consumed per ton-mile of transported cargo, reducing the cost of freight and reducing the customers' environmental footprint

̴ 45% More revenue earning days

Proposal Combi Financials Container Appendix

compared to standard tonnage

40-60%

Lower fuel consumption

per ton-mile transported cargo compared to standard tonnage

…secure premium earnings with downside protection

Achieved rates have been 1.5-2x that of standard product tanker and dry-bulk vessels, with vessel cost at par with standard product tankers

1.5-2.0x Earnings premium to standard tonnage

Premium earnings for KCC

• Increased top line revenues through two laden legs in both dry and wet markets, respectively
• Increased capacity utilization due to limited ballasting
• Increased net earnings due to fuel cost advantage ("ballast bonus")
• Downside protection and upside potential due to diversified market exposure

Benefits for customers

• Reduced freight costs due to larger lot sizes and optimal trading patterns with minimal ballast
• Reduced demurrage costs due to optimization of scheduling
• Reduced environmental footprint Minimum ballast implies reduction in GHG and SOx emissions per transported ton of cargo
• Operational excellence Dedicated tonnage with experienced commercial management and crew ensure cargo and trade familiarity

Reduced ballasting yields superior economics

Proposal Combi Financials Container Appendix

• The CABU and CLEANBU vessels can carry both dry and wet products, hence both the product tanker and dry bulk markets impact earnings
• In addition the value of combining wet and dry cargoes to minimize ballast is influenced by fuel costs ie. higher fuel prices are positive for combination carriers
• Correlation between the three markets has historically been limited giving downside protection and reducing volatility in KCC's earnings
• Acceptable KCC earnings in most market scenarios and strong positive outlook next 2-3 years. Positive outlook for dry bulk markets, prospects for a recovery in the product tanker market and positive effects from IMO 2020 sulphur cap substantiate a strong upside potential in KCC's earnings going forward

1) Average MR Clean Earnings 2) Average of the 4 T / C Routes for Baltic Panamax Index 3) 380cst bunker prices, Singapore

New IMO regulations in 2020… …will create a larger spread between Gasoil and HFO… …resulting in higher earnings for KCC Proposal Combi Financials Container Appendix

Higher bunker prices lead to higher earnings for KCC's fleet as the value of KCC's operational efficiency increases as fuel costs increase

Note: Bunker effect on earnings depend on contract portfolio and trading pattern

• From January 1, 2020, the International Maritime Organization (IMO) has decided that the maximum allowed sulphur content will be 0.5%. Currently, heavy fuel oil has an average sulphur content of 2.45% (and max 3.5%)
• The new IMO regulations will cause the majority of the world cargo fleet to switch out of high sulphur fuel oil (HFO) and into middle distillate gasoil (MDO), creating an expected large spread between HFO and MDO

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dry leg

▪ Equivalent carrying capacity to a LR1 product tanker (10% higher capacity

than a standard LR1 tanker) on the wet leg and a Kamsarmax bulker on the

• Klaveness services six of the eight largest aluminum refineries in the world and is the largest shipper for caustic soda into Australia and Brazil
• Equivalent carrying capacity to a MR product tanker on the wet leg and a Panamax bulker on the dry leg

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NB # 6 CLEANBU 83,563 2020 YZJ

▪ The CABU vessels are employed on both long and short term contracts of affreightment (COAs) as well as in the spot market

• Approximately 50% of the current fleet capacity is allocated to transportation of caustic soda. KCC targets a high contract coverage for caustic soda. The vessels have a deliberately lower contract coverage in the dry-bulk market due to better access to spot dry cargoes and need for flexibility
• All key clients are large "blue chip" companies within the aluminium industry
• Close cooperation with the largest clients, of which the three largest have been clients since before the first CABUs were delivered in 2001, emphasizing the Company's ability to provide the high quality services requested by the customers

top three customers

̴ 90%

Average 1-year forward COA coverage for caustic soda

	Historic caustic soda coverage
--	--------------------------------	--

Proposal Combi Financials Container Appendix

Name	2012	2013	2014	2015	2016	2017
COA coverage for wet – start of year	84%	85%	93%	95%	89%	91%
Utilisation caustic soda days	~100%	~ 100%	~ 100%	~ 100%	~ 100%	~ 100%
start of year1 Average duration (years) –	2.3	3.0	2.9	4.0	3.1	1.6
Average combination carrier fleet size2	7.0	7.0	6.1	6.0	6.3	8.6

Key clients

̴ 100% Average Utilization caustic soda capacity

KCC'S trade lanes for caustic soda Caustic soda market

• Total seaborne trade of caustic soda is around 18 million lmt p.a (2016). Brazil and Australia are the two largest import markets representing 55% of total world seaborne shipments
• The main trades of the CABUs are caustic soda into Australia and Brazil both regions with large and stable exports of dry commodities, enabling the combination of CSS and dry cargoes
• The annual demand for caustic soda imports to Australia and Brazil has remained stable over the past years
• Sourcing is becoming increasingly diverse on the back of increased US Gulf plant capacity, varying regional price differences and utilization rates
• With the increased fleet, Klaveness can cater for customers' increased demand for caustic soda sourcing flexibility by offering an Atlantic – Pacific cross-trade
• Klaveness introduced the CABUs in trades to Brazil in 2014. Based on solid customer support, KCC has increased its market share from 0% in 2014 to around 40% in 2018

1) Average monthly per on-hire day earnings for the period 2005 to 2017. Earnings per on-hire day for H1 2018. Gross before commercial management fees

2) Average of the 4 Spot Routes for Baltic Panamax Index (P4TC). Gross rate

3) Average MR Clean Earnings. Gross rate

4) Average of five CABU ship owning SPCs average ROCE in the period 2005 – 2017 and seven CABU ship owning SPCs average ROCE for 2018, ROCE = EBIT/ (Average total asset less average current liabilities), H1 2018 is annualized figures of first half 2018

The CLEANBUs contracted at 15 year low trough prices Insignificant, if any premium to the price of an LR1 tanker

Proposal Combi Financials Container Appendix

1) Gross of commercial management fee. Average for 2018 calculated as average calendar 2018 less YTD actual plus forward balance 2018

2) Average of the 4 Spot Routes for Baltic Panamax Index (P4TC). Gross rate

3) Average LR1 12 months T/C-rates. Gross rate

4) 2018 E is calculated as weighted average of actual YTD 2018 and forward market for balance 2018

• The charter rates have recovered from record low in February 2016 still upside to historical average
• Positive demand outlook for the years to come seaborn dry bulk demand expected to grow by ̴5% through 2020
• Orderbook and fleet growth at historical lows fleet growth estimated at around 3% p.a. over the next years included slippage and additional new orders
• Higher utilization likely to have a positive impact on charter rates

Proposal Combi Financials Container Appendix

• The product tanker market is currently suffering from oversupply from the last cycle
• Seaborne product trade to grow on higher refinery throughput and increasing tonne-mile
• Product tanker recovery in 2019 based on lower supply growth net fleet growth estimated to be 3.3% in 2018 and 2.2% in 2019
• Utilization expected to increase and impact charter rates positively

KCC Solid financial position

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1) Due to the reorganization of the combination carriers business in March 2018, historical KCC Shipowning financial figures provide most accurate description of the EBITDA created by the ships that constitute the KCC fleet in the period 2015-2017. 2015 and 2016 EBITDA only includes continued operations. KCC Q3 YTD annualized EBITDA for 2018

2) "Annualized 2018 incl 3xCLEANBUs" for illustration purposes only

▪ Book equity increase from 2015 to 2016 due to profit from sale of selfunloader vessels partly offset by dividends and group contributions

Proposal Combi Financials Container Appendix

• YoY decrease in equity ratio in 2016 and 2017 as two CABU vessels were delivered in 2016 and one in 2017 with drawdown of bank financing
• YoY decrease in equity ratio in Q3 2018 due to establishment of the current KCC structure including conversion of equity to the internal unsecured loan from KSH of USD 36mn
• "Q3 2018 + SEP EQ issue" illustration includes USD45mn in new equity from the private placement announced in September 2018 and closed in October 2018
• "Q3 2018 + SEP EQ issue + 3xCLEANBUs" illustration includes USD45mn in new equity from the private placement announced in September 2018 and closed in October 2018 and the immediate balance sheet effects of taking delivery of three CLEANBU vessels (i.e. payment of last yard instalment including change orders and drawdown on postdelivery bank financing)

1) Due to the reorganization of the combination carriers business in March 2018, historical KCC Shipowning financials provide most accurate description of the balance sheet of the New Issuer's in 2015, 2016 and 2017. For Q3 2018 KCC financials has been used. 2015 figures adjusted for balance sheet items related to discontinued operations

2) "Q3 2018 + SEP EQ issue" and "Q3 2018 + SEP EQ issue + 3xCLEANBUs" for illustration purposes only

2) Q3 2018 YTD cash break even rates excludes period effect of change in working capital, prepaid costs related to drydockings and other non-recurring cash flow items

3) CLEANBU simulated earnings does not include any phase-in effects expected in 2019

▪ KCC shall aim to have diversified sources of funding and target to use the bond market on a continuous basis

Proposal Combi Financials Container Appendix

• KCC shall aim to maintain a solid capital structure to give sufficient assurance to the debt and equity providers that the company is solid and sustainable
• Limited refinancing risk with no maturities prior to the bond due date in May 2021
• Klaveness has a strong relationship to its key banks (DNB, SEB, Danske Bank and Nordea) and is in addition in process of securing bank debt from new banks
• The current bank debt matures in March 2022 and December 2023
• Bank loans have been secured for the three newbuilds with delivery in 2019. The company is in process to secure bank debt for the additional three newbuildings with delivery in 2020
• Average margin for bank debt is 2.3% at yearend 2018

1) Assumed USD 30-31 million drawdown on each newbuilding. Committed bank debt for three of six newbuilds included and uncommitted bank debt for last three newbuildings included.

• Container vessels contracted as newbuilds in 2010 as a financial investment. The fleet consists of 6x2,500 TEU, 1x1,700 TEU 1x31,00 TEU Feeder vessels. The 2,500 TEU Feeder vessels are considered state of the art design with eco-features and gears, giving them a competitive advantage and commanding a earnings premium to standard tonnage
• The vessels, denoted Feeder Vessels, are smaller container vessels, often employed in short sea routes to "feed" containers to and from regional hubs
• The vessels are employed on short term time charter contracts with reputable charterers; global liner companies as well as regional feeder operators
• Investment considered non-strategic for the KSH group and eligible for divestment at the right price

Container - fleet overview

MV Baro	MV Balao	MV Balsa	MV Banak
2004 / 1,740 TEU	2013 / 2,500 TEU	2013 / 2,500 TEU	2014 / 2,500 TEU
MV Barry	MV Ballenita	MV Baleares	MV Bardu
2004 / 3,091 TEU	2013 / 2,500 TEU	2014 / 2,500 TEU	2014 / 2,500 TEU

Container eligible for divestment at the right price

1) 6-12 month TC rate fixtures for standard 2500 TEU geared

2) Average gross TC rate achieved based on on-hire days for all vessels (6 x 2,500 TEU , 1 x 1,740 TEU , 1 x 3,091 TEU)

3) Utilization on quarterly basis: on-hire days/ period total days

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• Drydocking program of 4 vessels in 2019
• Off-hire/idle effect of USD 750/day, including days in drydocking and bunkers costs
• All-in debt service of interests and RCF commitment fee. Currently the RCF drawdown is USD 15 mn, which is considered low. Debt service will increase by USD 900/day assuming a "normal" gearing of ~USD 60mn (~52% LTV)
• The container fleet has over the last years had limited free cash flow to service the bond

Income statement ('000 USD)		Balance sheet ('000 USD)
-----------------------------	--	--------------------------

			ended 31 December
USD '000	1H2018	Unaudited Unaudited 1H2017	Audited 2017
Operating revenue, vessels	13 638	10 3 9 5	22880
Other operating revenue		٠
Total operating revenue	13 638	10 395	22880
Operating expenses, vessels	(7698)	(8298)	(16637)
Ordinary depreciation	(2384)	(2502)	(5014)
Tonnage tax	(32)	(33)	(73)
Group administrative services	(1415)	(1356)	(2750)
Other operating and administrative expenses	(7)	(10)	(17)
Total operating expenses	(11536)	(12 200)	(24491)
Operating profit	2054	(1805)	(1611)
Finance income	41	4	91
Finance costs	(3336)	(2904)	(6 101)
Profit before tax	(1194)	(4705)	(7621)
Income tax expenses
Profit after tax	(1194)	(4705)	(7621)

			Year
			ended 31
		As at 30 June	December
		Unaudited Unaudited	Audited
USD '000	1H2018	1H2017	2017
ASSETS
TOTAL ASSETS	116 734	120 170	117387
EQUITY AND LIABILITIES
Equity
Total equity	8 2 0 3	12 3 14	9414
Non-current liabilities
Total non-current liabilities	104 754	104 588	14 340
Current liabilities
Total current liabilities	3776	3 2 6 8	93 632
TOTAL EQUITY AND LIABILITIES	116 734	120 170	117387

• Operating profit turned positive for 1H2018 on the back of higher earnings, however, EBT still negative at USD 2.2 mn for 1H 2018
• Available capacity of USD 55.8 mn under the revolving credit facility. USD 15 mn is drawn. The balance of non-current liabilities is internal loan from KSH.

Proposal	Combi	Financials	Container	Appendix
----------	-------	------------	-----------	----------

Option declarations dated and estimated delivery

						2018				2019				2020				2021
Name	DWT	Contract price	Option declaration date	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Cleanbu # 1 – 1222	83,500	USD 48.5m	Firm			10.01.2019
Cleanbu # 2 – 1223	83,500	USD 48.5m	Firm			21.02. 2019
Cleanbu # 3 – 1224	83,500	USD 48.2m	Firm			30.04.2019
Cleanbu # 4 – 1226	83,500	USD 46.5m	Firm					28.02.2020
Cleanbu # 5 – 1227	83,500	USD 46.5m	Firm							31.08.2020
Cleanbu # 6 – 1228	83,500	USD 46.5m	Firm							31.10.2020
Option # 1 – 1229	83,500	USD 46.5m	30.03.2019									10.01.2021
Option # 2 – 1247	83,500	USD 46.5m	30.03.2019									28.02.2021
Option # 3 – 1248	83,500	USD 46.5m	30.06.2019										30.04.2021
Option # 4 – 1225	83,500	USD 46.5m	30.06.2019										30.04.2021

Quarterly yard instalments for CLEANBU1)

Remaining CAPEX in USDm	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20	Total
Cleanbu # 1	-	34	-	-	-	-	-	-	-	34
Cleanbu # 2	-	34	-	-	-	-	-	-	-	34
Cleanbu # 3	-	-	34	-	-	-	-	-	-	34
Cleanbu # 4	-	5	-	5	-	33	-	-	-	42
Cleanbu # 5	9	-	-	5	-	-	-	33	-	47
Cleanbu # 6	-	5	5	-	5	-	-	-	33	47
Total remaining capex NB's	9	77	39	9	5	33	-	33	33	237

Number of vessels in operations – by end of quarter

Source: Company 1) Yard instalments only, excluding additions, supervision cost and up-storing

	Pricing method	Overview of services
Administrative services & business management (G&A)	CEO and CFO: Cost+10 %. Administrative services: Cost+5% Services outsourced to Manila: Cost+5% * Bonus charged separately	▪ Accounting, treasury, legal, IT services, rent and office services. Services partially outsourced to Manila in cost-efficient model ▪ Management (CEO + CFO part time) ▪ External expenses related to auditors etc Costs reported as G&A ▪
Dry bulk commercial operations	Commercial Management & Operations (Oslo & Singapore): Cost+7.5% *1.25% fixture fee on dry spot fixtures	▪ Dedicated team of 4-5 persons covering chartering and business development of the combination carrier business ▪ Dry-bulk spot chartering performed by persons within Klaveness' dry-bulk chartering and trading operations Commercial operations ▪ ▪ Commercial management cost has historically been extracted prior to payment of hire to the vessels, i.e. TCE equivalents are reported net of commercial management cost. From Q2 2018 the fee will be reported as G&A.
Technical management	Technical management: Fixed fee per vessel	Maintenance and repair incl. drydock supervision, supplies and provisioning, insurance, procurement of ▪ spares, IT and administration. Crewing fee part of opex ▪ ▪ Fee is reported as part of OPEX
Project and newbuild supervision	Project management (Oslo): Cost+7.5%. On-site supervision: Cost+5%	Site supervision and project management services for the newbuilds ▪ ▪ Vessel design and development expenses, technical discussions and negotiations with shipbuilders /sellers Costs reported as part of delivered cost for vessels under construction ▪

Transparent pricing model in accordance with OECD principles. Fees are fixed annually based on a review of the cost base

Income statement ('000 USD) Comprehensive income statement ('000 USD)

		Unaudited	Unaudited	Unaudited	Unaudited
	Notes	Q3 2018	Q3 2017	2018 YTD	2017 YTD
Continuing operations
Freight revenue	$\overline{2}$	29 208		58 987
Charter hire revenue	2		13 4 38	13 2 53	31077
Total revenues, vessels		29 208	13 4 38	72 240	31 077
Voyage expenses	2	(15816)		(30828)
Net revenues from operations of vessels		13 3 9 2	13 4 38	41 4 12	31 077
Operating expenses, vessels		(5719)	(5257)	(15729)	(15695)
Group administrative services	10	(832)	(326)	(2594)	(865)
Tonnage tax		(27)	(29)	(103)	(75)
Other operating and administrative expenses		(28)	(77)	(144)	(153)
Operating profit		6786	7749	22 842	14 2 88
Ordinary depreciation	5	(4110)	(4412)	(12383)	(12, 480)
EBIT		2676	3337	10459	1808
Finance income	8	669	361	2970	892
Finance costs	8	(2034)	(1384)	(5259)	(4178)
Profit before tax from continuing operations		1312	2314	8 1 7 0	(1478)
Income tax expenses	11
Profit after tax from continuing operations		1312	2314	8 1 7 0	(1478)
Profit after tax from discontinuing operations	3				57
Profit for the year		1312	2314	8 1 7 0	(1421)
Attributable to:
Equity holders of the parent company		1312	1618	7312	(1374)
Non-controlling interests			696	858	(47)
Total		1312	2314	8 1 7 0	(1421)

Proposal Combi Financials Container Appendix

	Unaudited	Unaudited	Unaudited	Unaudited
USD '000	Q3 2018	Q3 2017	2018 YTD	2017 YTD
Profit/ (loss) of the period	1312	2314	8 1 7 0	(1421)
Other comprehensive income to be reclassified to profit or loss
Net movement fair value on interest rate swaps	291	(4)	1943	(334)
Net other comprehensive income to be reclassified to profit or loss	291	(4)	1943	(334)
Other comprehensive income/(loss) for the period, net of tax	291	(4)	1943	(334)
Total comprehensive income/(loss) for the period, net of tax	1602	2 3 1 0	10 113	(1755)
Attributable to:
Equity holders of the parent company	1602	1616	8921	(1541)
Non-controlling interests		694	1 1 9 2	(214)
Total	1602	2 3 1 0	10 113	(1755)

Group administrative and commercial services:

For Q3 2017 and 2017 YTD commercial management fee of USD 661k and USD 1,765k were included in charter hire revenue, while the commercial management fee has been included in the Group administrative expenses in the 2018 financials. Total administrative and commercial fees have for the respective periods been as follows:

USD'000	Q3 2018	03 2017	2018 YTD	2017 YTD
3&A fee	982	326	1 582	865
Commercial management fee*	(150)	661	1 012	1765
Total Group administrative services	832	987	2 5 9 4	2630
in the contract the constant of the contract of the contract of the model of the model of the constant interest

		Unaudited	Unaudited
ASSETS	Notes	30 Sep 2018	31 Dec 2017
Non-current assets
Deferred tax asset	11	16
Vessels	5	170 472	179 785
Newbuilding contracts	$\overline{6}$	54 164	37751
Long-term receivables from related parties	10	٠	13788
Financial assets		3764	912
Total non-current assets		228 416	232 236
Current assets
Inventories		5 6 9 4	726
Trade receivables and other current assets		11719	1893
Receivables from related parties	10	133	7638
Cash and cash equivalents		41 439	51 538
Total current assets		58 984	61795
TOTAL ASSETS		287 400	294 032

Statement of financial position ('000 USD) Statement of financial position cont' ('000 USD)

	Unaudited	Unaudited
EQUITY AND LIABILITIES Notes	30 Sep 2018	31 Dec 2017
Equity
Share capital 9	3849	1 2 9 8
Share premium	48 878	47 698
Other reserves	1609
Retained earnings	80 587	103 876
Equity attributable to equity holders of the parent	134 923	152873
Non-controlling interests		20 441
Total equity	134 922	173 314
Non-current liabilities
Mortgage debt	87729	94 765
$\frac{7}{7}$ Other long-term liabilities to group companies	36 000
$\overline{1}$ Financial liabilities	92	1509
Deferred tax liability 11	59	59
Total non-current liabilities	123 880	96333
Current liabilities
Short-term mortgage debt 7	19 04 9	20 549
Trade and other payables	8059	2959
Current debt to related parties 10	555	762
Current debt to shareholders	1079
Tax liabilities	218	114
Total current liabilities	28 960	24 3 84
TOTAL EQUITY AND LIABILITIES	287 763	294 032

		Unaudited	Unaudited	Unaudited	Unaudited
	Notes	Q3 2018	Q3 2017	2018 YTD	2017 YTD
Profit before tax		1312	2 3 1 4	8 1 7 0	(1421)
Tonnage tax expensed		27	29	103	75
Ordinary depreciation	5	4 1 1 0	4412	12 3 8 3	12 480
Amortization of upfront fees bank loans		36	52	145	206
Financial derivatives unrealised loss / gain (-)		(480)	(69)	(2345)	204
Interest income		(180)	(143)	(625)	(1054)
Interest expenses		1972	1 2 8 5	5 0 1 6	3625
Taxes paid for the period			٠
Change in receivables		(4747)	(1757)	(3 268)	394
Change in current liabilities		1 3 0 0	(305)	(1319)	(36)
Change in other working capital		280	(273)	(700)	(76)
Interest received		180	143	625	1054
A: Net cash flow from operating activities		3810	5688	18 18 5	15 4 5 1
Acquisition of tangible assets	5	(236)	(1012)	(1783)	(2358)
Installments and cost on newbuilding contracts	6	(661)	(5241)	(16413)	(30665)
Acquisition of subsidiaries, net of cash				863
Acquisition of non-controlling interests		۰	٠	(622)	٠
B: Net cash flow from investment activities		(897)	(6253)	(17955)	(33023)

Cash flow statement ('000 USD) Cash flow statement cont' ('000 USD)

Proceeds from mortgage debt		۰		36890
Transaction costs on issuance of loans		۰		(372)
Repayment of mortgage debt	(2887)	(2887)	(8662)	(18895)
Interest paid	(1972)	(1285)	(4293)	(4344)
Paid in capital for approved not registered capital increase	1079		1079	$\overline{a}$
Capital increase		$\overline{a}$	12 000	6500
Settlement of receivables related parties		-		(9000)
Payments made by increase of loans to related parties	$\overline{\phantom{0}}$	$\overline{a}$	۰	10 3 65
Group contribution/dividend		٠	(9958)	(10876)
Dividends to non-controlling interests	$\overline{\phantom{a}}$	۰	(495)	(702)
C: Net cash flow from financing activities	(3780)	(4172)	(10329)	9566
Net change in liquidity in the period $(A + B + C)$	(867)	(4737)	(10100)	(8006)
Net foreign exchange difference
	(867)	(4737)	(10100)	(8006)
Cash and cash equivalents at beginning of period	42 306	63 989	51 538	67 259
Cash and cash equivalents at end of period	41 439	59 253	41 439	59 253
Net change in cash and cash equivalents in the period	(867)	(4737)	(10100)	(8006)

	Notes	1H 2018	1H 2017
Continuing operations
Operating revenue, vessels	2, 3	55 994	28 046
Voyage expenses	2	(15765)
Net operating revenue		40 229	28 046
Operating expenses, vessels	3	(18428)	(19464)
Group administrative services	8	(1442)	(1330)
Tonnage tax	9	(108)	(80)
Other operating and administrative expenses		(241)	(94)
EBITDA		20 010	7079
Ordinary depreciation	4	(10657)	(10571)
mpairment loss (-) / reversal	4,5
EBIT		9353	(3492)
Finance income		2871	1416
Finance costs		(6048)	(6189)
Profit before tax from continuing operations		6 1 7 5	(8265)
ncome tax expenses	9
Profit after tax from continuing operations		6 1 7 5	(8265)
Discontinued operations
Profit/(loss) after tax for the year from discontinued operations		$\blacksquare$	(119)
Profit for the year		6 1 7 5	(8383)
Attributable to:
Equity holders of the parent company		5 1 9 8	(6826)
Non-controlling interests		977	(1557)
Total		6 1 7 5	(8383)

Income statement ('000 USD) Comprehensive income statement ('000 USD)

USD '000	Notes	1H 2018	1H 2017
Profit/ (loss) of the period		6 1 7 5	(8383)
Other comprehensive income to be reclassified to profit or loss
Net movement fair value on interest rate swaps		641	(298)
Net other comprehensive income to be reclassified to profit or loss		641	(298)
Other comprehensive income/(loss) for the period, net of tax		641	(298)
Total comprehensive income/(loss) for the period, net of tax		6816	(8681)
Attributable to:
Equity holders of the parent company		5625	(7124)
Non-controlling interests		1 1 9 1	(1557)
Total		6816	(8681)

		Unaudited	Audited
ASSETS	Notes	1H 2018	2017
Non-current assets
Deferred tax asset	9	3 1 9 9	3 1 8 2
Vessels	4	284 916	290 874
Newbuilding contracts	5	53 503	37751
Financial assets		1974	957
Total non-current assets		343 592	332 764
Current assets
Inventories		6382	1 2 1 5
Trade receivables and other current assets		9 2 4 3	4532
Receivables from related parties		159	7559
Cash and cash equivalents		46 972	55 648
Total current assets		62756	68 954
TOTAL ASSETS		406 348	401 718

Statement of financial position ('000 USD) Statement of financial position cont' ('000 USD)

		Unaudited	Audited
EQUITY AND LIABILITIES	Notes	1H 2018	2017
Equity
Share capital		1817	1817
Share premium		6939	6939
Other reserves		459	35
Retained earnings		180 348	182 282
Equity attributable to equity holders of the parent		189 563	191 073
Non-controlling interests		31 108	22 086
Total equity		220 672	213 159
Non-current liabilities
Mortgage debt	6 6	104 506	109 105
Bond loan		36 466	35 973
Financial liabilities		14 2 69	16 404
Deferred tax liability		59	59
Total non-current liabilities		155 300	161 541
Current liabilities
Short-term mortgage debt	6	19 549	20549
Trade and other payables		9749	5 3 9 2
Current debt to related parties		782	894
Tax liabilities	٩	297	183
Total current liabilities		30 377	27 018
			401 718
TOTAL EQUITY AND LIABILITIES		406 348

	Notes	1H 2018	1H 2017
Profit before tax from continuing operations		6 1 7 5	(8265)
Profit before tax from discontinuing operations		$\sim$	(119)
Profit before tax		6 1 7 5	(8383)
Tonnage tax expensed		108	80
Ordinary depreciation	4	10657	10571
Amortization of upfront fees bank loans		260	305
Financial derivatives unrealised loss / gain (-)		(2512)	(1136)
Gain /loss on foreign exchange		451	771
Interest income		(357)	(279)
Interest expenses		4881	4674
Change in receivables		2063	2456
Change in current liabilities		4246	915
Change in other working capital		(5167)	(870)
Interest received		357	279
A: Net cash flow from operating activities		21 163	9380

Acquisition of tangible assets	(3441)	(1 349)
Installments and cost on newbuilding contracts Acquisition of subsidiaries, net of cash	(15752) (652)	(25424)
B: Net cash flow from investment activities	(19844)	(26 772)

Cash flow statement ('000 USD) Cash flow statement cont' ('000 USD)

Proceeds from mortgage debt		36 890
Transaction costs on issuance of loans	$\sim$	(372)
Repayment of mortgage debt	(5774)	(31008)
Repayment of bond loan		(21099)
Interest paid	(4881)	(4674)
Cash proceeds from issuing of shares non-controlling interests	11999	6500
Group contribution/dividend	(10181)	(3962)
Dividends to non-controlling interests	(495)	(702)
C: Net cash flow from financing activities	(9333)	(18427)
Net change in liquidity in the period $(A + B + C)$	(8014)	(35818)
Net foreign exchange difference	(661)	26
	(8675)	(35792)
Cash and cash equivalents at beginning of period	55 648	102 981
Cash and cash equivalents at end of period	46972	67 189
Net change in cash and cash equivalents in the period	(8675)	(35792)