Akastor — Interim / Quarterly Report 2017

Oct 25, 2017

Third Quarter Results 2017

Kristian Røkke and Leif Borge Fornebu | October 25, 2017

Highlights

Condensed Consolidated Income Statement

	Third Quarter			YTD
NOK million	2017	2016	2017	2016	2016
Operating revenues and other income	1 433	1 130	3 249	3 686	4 975
Operating expenses	(1 379)	(1 035)	(3 124)	(3 788)	(4 884)
Operating profit before depreciation, amortization and impairment (EBITDA)	54	95	126	(102)	91
Depreciation and amortization	(156)	(186)	(458)	(521)	(688)
Impairment	(93)	-	(117)	(66)	(473)
Operating profit (loss)	(194)	(90)	(449)	(689)	(1 071)
Net financial items	(161)	(177)	(554)	(743)	(1 174)
Profit (loss) before tax	(355)	(266)	(1 003)	(1 432)	(2 245)
Tax income (expense)	114	81	251	329	293
Profit (loss) from continuing operations	(241)	(185)	(751)	(1 103)	(1 953)
Net profit (loss) from discontinued operations	696	25	1 074	(256)	670
Profit (loss) for the period	455	(160)	323	(1 359)	(1 282)

The Akastor Portfolio

NET CAPITAL EMPLOYED OF NOK 7.7 BILLION NOK million

NET CAPITAL EMPLOYED OF NOK 7.7 billion

Slide 4

Third Quarter Results 2017 25 October 2017

Capital Structure

Net debt of NOK 2 353 million as of third quarter

• − Gross Debt of NOK 2 536 million, of which financial lease NOK 1 439 million and bank debt NOK 1 097 million
• − Cash of NOK 183 million
• Liquidity reserve of NOK 1.6 billion of which undrawn credit facilities NOK 1.4 billion

FUNDING

	SIZE	MATURITY	MARGIN
REVOLVING	USD 147 million	July 2019	1.65%–4.5%
REVOLVING	NOK 1 005 million	July 2019	1.65%–4.5%
BRAZIL FACILITY	BRL 77 million	May 2022	8.5% average cost

MINIMUM EBITDA COVENANT*

2017	EBITDA	2018	EBITDA
Q3	175	Q1	325
Q4	225	Q2	425

* last twelve months EBITDA, adjusted for non-recurring items like restructuring costs and sales gains

MHWirth

Revenues of NOK 1 113 million in the quarter

⁻ Impacted by settlement agreement for three out of seven drilling packages to Jurong shipyard with approx. NOK 500 million

EBITDA of NOK -21 million in the quarter including;

• ⁻ Negative effect from restructuring costs NOK 21 million and write down of inventory NOK 311 million
• ⁻ Positive effect from the settlement agreement with Jurong shipyard NOK 225 million
• Order intake of NOK 1 000 million
• NCOA down NOK 33 million to NOK 1 086 million

Revenue and EBITDA

---------- 42 20 15 8 JU Semi Fixed platforms Drillship 19 34 12 20 5-10 >20 0-5 10-20 INSTALLED BASE (85 UNITS) by age (years) by type BUSINESS SPLIT YTD BASED ON REVENUE Projects and Products 46 % DLS/service 54 %

Slide 6

© 2017 Akastor

Third Quarter Results 2017 25 October 2017

AKOFS Offshore

• EBITDA of NOK 62 million in the third quarter
• AKOFS Seafarer remains idle
• Skandi Santos at near full utilization in the quarter
• Aker Wayfarer is currently mobilizing for the 5+5 year contract with Petrobras, expected to commence in the fourth quarter

Revenue and EBITDA

VESSEL PROGRAM

Other Holdings

• Step Oiltools, Cool Sorption and First Geo: Total EBITDA of NOK 1 million
• Reduced provision for onerous lease commitments for office leases with EBITDA effect of NOK 28 million
• Effect from hedges not qualifying for hedge accounting of NOK -1 million

Revenue and EBITDA

NOK million

Additional information

Condensed Consolidated Income Statement

	Third Quarter			YTD
NOK million	2017	2016	2017	2016	2016
Operating revenues and other income	1 433	1 130	3 249	3 686	4 975
Operating expenses	(1 379)	(1 035)	(3 124)	(3 788)	(4 884)
Operating profit before depreciation, amortization and impairment (EBITDA)	54	95	126	(102)	91
Depreciation and amortization	(156)	(186)	(458)	(521)	(688)
Impairment	(93)	-	(117)	(66)	(473)
Operating profit (loss)	(194)	(90)	(449)	(689)	(1 071)
Net financial items	(161)	(177)	(554)	(743)	(1 174)
Profit (loss) before tax	(355)	(266)	(1 003)	(1 432)	(2 245)
Tax income (expense)	114	81	251	329	293
Profit (loss) from continuing operations	(241)	(185)	(751)	(1 103)	(1 953)
Net profit (loss) from discontinued operations	696	25	1 074	(256)	670
Profit (loss) for the period	455	(160)	323	(1 359)	(1 282)

Condensed Consolidated Statement of Financial Position

NOK million	30.09.2017	31.12.2016
Deferred tax asset	797	600
Intangible assets	1 417	1 731
Property, plant and equipment	4 297	5 198
Other non-current assets	138	104
Equity accounted investees and other Investments	598	213
Non-current interest-bearing receivables	15	51
Total non-current assets	7 263	7 897
Current operating assets	3 521	4 250
Current interest-bearing receivables	8	15
Other current assets	39	-
Cash and cash equivalents	183	487
Assets classified as held for sale	-	212
Total current assets	3 751	4 964
Total assets	11 013	12 861
Equity attributable to equity holders of Akastor ASA	5 413	5 580
Total equity	5 413	5 580
Deferred tax liabilities	7	15
Employee benefit obligations	345	380
Other non-current liabilities and provisions	347	445
Non-current borrowings	2 025	1 494
Total non-current liabilities	2 725	2 334
Current operating liabilities and provisions	2 365	3 209
Current borrowings	510	1 560
Liabilities classified as held for sale	-	177
Total current liabilities	2 875	4 947
Total liabilities and equity	11 013	12 861

© 2017 Akastor Slide 11 Third Quarter Results 2017 25 October 2017

Key Figures

AKASTOR GROUP (continuing operations)

Amounts in NOK million	Q3 16	Q4 16	Q1 17	Q2 17	Q3 17	YTD 2017
Operating revenue and other income	1 130	1 288	943	873	1 433	3 249
EBITDA	95	193	53	18	54	126
EBIT	(90)	(382)	(96)	(159)	(194)	(449)
CAPEX and R&D capitalization	31	15	15	15	30	60
NCOA	1 552	954	1 268	1 228	1 162	1 162
Net capital employed	9 144	7 682	8 333	8 250	7 749	7 749
Order intake	766	937	643	746	1 149	2 538
Order backlog	7 466	7 624	7 295	7 112	6 373	6 373
Employees	2 396	2 244	2 178	2 067	2 043	2 043

Split per Company

MHWIRTH

Amounts in NOK million	Q3 16	Q4 16	Q1 17	Q2 17	Q3 17	YTD 2017
Operating revenue and other income	831	800	627	550	1 113	2 291
EBITDA	91	59	55	-	(21)	35
EBIT	23	(293)	9	(71)	(160)	(222)
CAPEX and R&D capitalization	3	8	3	8	16	27
NCOA	1 393	1 091	1 250	1 119	1 086	1 086
Net capital employed	3 846	3 200	3 338	3 200	3 079	3 079
Order intake	604	789	471	614	1 000	2 085
Order backlog	1 490	1 481	1 325	1 409	1 299	1 299
Employees	1 849	1 738	1 648	1 535	1 470	1 470

Split per Company

AKOFS OFFSHORE

Amounts in NOK million	Q3 16	Q4 16	Q1 17	Q2 17	Q3 17	YTD 2017
Operating revenue and other income	190	344	186	187	193	566
EBITDA	49	196	33	37	62	133
EBIT	(45)	(3)	(48)	(46)	(25)	(119)
CAPEX and R&D capitalization	28	7	12	7	6	25
NCOA	150	121	192	221	225	225
Net capital employed	4 880	4 378	4 372	4 307	3 994	3 994
Order intake	48	28	6	(4)	9	11
Order backlog	5 719	5 900	5 672	5 439	4 858	4 858
Employees	167	113	106	113	173	173

Split per Company

OTHER HOLDINGS

Amounts in NOK million	Q3 16	Q4 16	Q1 17	Q2 17	Q3 17	YTD 2017
Operating revenue and other income	137	155	143	151	142	436
EBITDA	(45)	(63)	(35)	(19)	13	(42)
EBIT	(68)	(86)	(58)	(41)	(8)	(107)
CAPEX and R&D capitalization	-	1	-	-	7	8
NCOA	10	(258)	(175)	(112)	(149)	(149)
Net capital employed	419	104	624	744	677	677
Order intake	139	129	173	143	146	462
Order backlog	228	224	272	269	218	218
Employees	380	393	424	420	400	400

© 2017 Akastor Third Quarter Results 2017 25 October 2017 Slide 16

Copyright and disclaimer

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Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Akastor ASA and Akastor ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Akastor ASA. oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although Akastor ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. Akastor ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither Akastor ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.