EXMAR NV — Interim / Quarterly Report 2014

Jul 31, 2014

31/07/2013 - 5.45 pm Regulated information

The Executive Committee of EXMAR today reported preliminary unaudited results for the first semester 2014.

Highlights of recent developments are:

• Significant Capital Gains on the sale of older LPG tonnage and strong LPG rates still going forward
• Strengthening of the Balance Sheet with USD 114 million unsecured Bond successfully placed end of June to finance new offshore and LNG projects
• LNG portfolio contributing in accordance with its respective charters
• Strong quarter for engineering and consultancy services from EXMAR OFFSHORE COMPANY in Houston

Change in Accounting Policy

As announced in our first quarter results, the Company is applying the new accounting standards IFRS 10 and IFRS 11 as of 1st January 2014. As a result, the consolidation method applied to joint ventures has changed and the comparative figures for 2013 have been restated. All the joint ventures in which the company has an interest have now been accounted for using the equity method and the contribution by such joint ventures is now reported in the income statement under the line "Share of profit (loss) of equity accounted investees". For information purposes, the Company included the consolidated income statement as if EXMAR would have continued to apply proportionate consolidation for its joint ventures for the first semester 2014. For more details about the impact of the first-time adoption of IFRS 10 and IFRS 11, we also refer to note 1 "Accounting policies" and note 34 "Interest in joint ventures" of our consolidated financial statements for the year ended 31st December 2013.

In addition, EXMAR has applied a new depreciation policy for its LNG fleet as of 1st January 2014. The economic life for the Group's LNG vessels has been extended from 30 to 35 years. This change in accounting estimate is reflected as from 1st January 2014 and comparative figures have not been restated. Depreciation cost relating to LNG vessels is therefore lower by USD 1.6 million for the first semester of 2014.

		Application IFRS 10 & 11		Proportionate Consolidation
Consolidated income statement according IFRS	First Semester	First Semester	First Semester	First Semester
(in million USD)	2014	2013	2014	2013
		restated
Turnover	97,9	93,3	213,4	227,1
EBITDA	5,4	-5,7	81,1	101,6
Depreciations	-3,9	-3,8	-23,6	-27,8
Operating result (EBIT)	1,5	-9,5	57,5	73,8
Financial Result:	11,6	29,5	-4,4	17,2
- Of which Change in Fair Value of Financial Derivatives	2,2	21,9	2,2	27,1
Share in the result of equity accounted investees	40,0	70,6	0,0	-0,2
Result before taxes	53,1	90,6	53,1	90,8
Income taxes	-1,4	-0,4	-1,4	-0,6
Consolidated result after taxation	51,7	90,2	51,7	90,2
- Share of the group in the result	51,7	90,2	51,7	90,2
Information per share (in USD per share)	First Semester	First Semester	First Semester	First Semester
	2014	2013	2014	2013
		restated
Weighted average number of shares during the period	56.761.495	56.310.839	56.761.495	56.310.839
EBITDA	0,10	-0,10	1,43	1,80
EBIT	0,03	-0,17	1,01	1,31
Consolidated result after taxation	0,91	1,60	0,91	1,60
Contribution to the consolidated operating result (EBIT)	First Semester	First Semester	First Semester	First Semester
of the various operating divisions (in million USD)	2014	2013 restated	2014	2013
LNG	2,5	-4,2	18,5	15,5
Offshore	4,5	1,8	5,1	3,2
LPG	-4,6	-6,1	32,8	55,8
Services and Holding	-0,9	-1,0	1,1	-0,7
Consolidated operating result	1,5	-9,5	57,5	73,8

Key figures are:

All figures mentioned in this press release have been prepared under IFRS (International Financial Reporting Standards) and have not been reviewed by the statutory auditor

31/07/2013 - 5.45 pm Regulated information

The Group had a consolidated result after tax for the first semester of 2014 of USD 51.7 million (USD 90.2 million for the year 2013; including the USD 54.2 million on the sale of 50% of EXMAR LPG to TEEKAY LNG PARTNERS). The result of the Group has been positively influenced by the capital gain realized on the sale of older LPG tonnage (approximately USD 24.5 million for the first semester of 2014) and the capital gain realized on the sale of real estate (approximately USD 1.5 million). The Group also recorded for the first 6 months of 2014 a non–cash unrealised profit of USD 2.2 million on the change in fair value of its derivative instruments (USD 21.9 million in the first half of 2013).

LNG

The LNG fleet recorded an operational result (EBIT) of USD 18.5 million during the first six months of the year. All LNG's and LNGRV's in which EXMAR has an ownership stake are in service and have contributed during this first half under their respective time-charters.

Floating Liquefaction

The construction of the floating liquefaction unit Caribbean FLNG at Wison Heavy Industry's shipyard in Nantong, China is progressing as planned. The project is on budget and schedule and the Caribbean FLNG barge is due to be launched for final outfitting and completion of (pre-) commissioning activities while afloat at the shipyard. Start of operations is scheduled from second half of 2015. The financing of the unit should be fully signed during the summer.

Leveraging its first mover advantage in the field of FLNG, EXMAR is also working on several other opportunities worldwide. Following the strategic partnership between EXMAR and EDF Trading (EDFT) in 2013, to jointly develop LNG opportunities in North America, both parties are continuing to develop and study several potential projects.

For its Floating liquefaction project in British Columbia, Canada EXMAR is currently negotiating with the various and potential new stakeholders of BC LNG, to develop the first floating unit in Canada. Negotiations are progressing well. In addition to those two projects, EXMAR is also pursuing a variety of other floating liquefaction opportunities that are in various stages of development.

Floating regasification

Building on the conceptual advantages of the barge based FLNG and in order to meet the "quick-to-market" requirements of the growing number of LNG import projects, EXMAR in joint venture with PACIFIC RUBIALES ENERGY, ordered a 25,000m³ floating storage and regasification unit in February 2014. The unit is currently being constructed by Wison Offshore and Marine and is expected to be delivered to the joint venture by mid-2016. The marketing of this FSRU with prospective clients is ongoing.

Small Scale LNG and LNG Bunkering

EXMAR continues to explore small scale LNG shipping opportunities as these can provide solutions to the shipping requirements of the numerous LNG projects under development.

Following the strategic partnership with the Antwerp Port Authority, both partners have completed the technical studies. The parties are currently working to further aggregate commercial demand for LNG as a ship fuel, with the aim of synchronizing the delivery of the LNG bunkervessel with that market demand.

Transportation

EXPLORER suffered an engine room fire in the Indian Ocean disabling the propulsion system as a result of which the vessel was required to be towed to Dubai for gas freeing and repairs. There was no loss of life and no injuries occurred. Repairs are expected to be completed by early September however the financial implications are limited as most of the loss of hire as well as the repairs will be covered by our insurances.

EXCEL is employed offshore Alaska by ConocoPhillips until November 2014.

No dry-docks are foreseen on the LNG fleet during the rest of 2014.

For the second half of 2014 we expect the vessels to contribute in line with the first semester under their respective charter.

31/07/2013 - 5.45 pm Regulated information

OFFSHORE

The operating result (EBIT) of the first semester of the offshore activities amounted to USD 5.1 million.

The accommodation barges KISSAMA, NUNCE and OTTO 5 continue operating offshore Cameroon, Angola and Nigeria respectively. They have contributed fully to the results in the first half of the year and will continue to contribute fully to the results until the end of 2014.

Under the tariff fee on the OPTI-EX® the Company received a total contribution of about USD 2 million. The Company believes that tariff fee will continue to be received in the second half of this year however this is subject to the normal production interruption due to maintenance and LLOG's plan production increase for additional new wells.

The level of engineering, consultancy and design services remains strong, consistent with the positive trend observed currently in the offshore market. The strong results in the second quarter are partly due to the incentives payments made by LLOG for the delivery of the DELTA HOUSE semisubmersible production platform.

The Company continues to pursue opportunities in the Floating Production Unit segment through its OPTI® design and is currently active in various tenders for Floating Production Storage and Offloading Units.

LPG

The LPG fleet recorded an operational result (EBIT) of USD 32.8 million during the first six months of the year. EBIT for the 1st semester was affected by 83 dry-docking days (25 days in first half 2013). The result is positively impacted by the capital gains realised on the sale of EEKLO (38,000 m3 - 1995 built), TEMSE (38,000 m3 - 1994 built) and FLANDERS TENACITY (85,000 m3 - 1996 built). The capital gain realised on the sale of those three vessels is approximately USD 22.3 million for EXMAR's share in EXMAR LPG. The announced sale of FLANDERS HARMONY (85,000 m3 - 1993 built) did not materialise as expected in the second quarter of 2014, however the deposit for the sale of the vessel has been released in favour of EXMAR LPG and is reflected in the first semester results (USD 1.8 million for EXMAR's share). A new buyer has been found for the vessel and she will be delivered to her new owner in the first half of August 2014. The capital gain that will be recorded by EXMAR in the third quarter amounts to approximately USD 9.3 million for its share in the vessel.

EXMAR LPG (the joint venture with TEEKAY LNG PARTNERS) has currently 10 Midsize Gas Carriers under construction at Hyundai Mipo and Hanjin Heavy Industries. These new buildings will contribute to the renewal of the fleet as well as to the strategic growth of EXMAR LPG in the Midsize segment. WAASMUNSTER and WARINSART have been already delivered in the first half of this year.

Since May EXMAR LPG has had commercial control over BW TOKYO (83,300 m³ - 2009 built) which has been fixed for a 2 years time charter to a first class customer.

Time-Charter Equivalent (in USD per day)	First Semester 2014	First Semester 2013
Midsize (35,418 m³)	23,842	21,912
VLGC (78,500 m³)	40,545	21,643
Pressurized (3,500 m³)	7,843	7,820
Pressurized (5,000 m³)	8,512	8,731

Midsize – The MGC segment, backed by a consistently firm VLGC but also LGC market and coupled with limited vessel availability, remained firm during the first half of 2014. Whereas Indian LPG movements remain an important cornerstone, a high activity level in Atlantic Ocean and North Sea continues to offer a steady stream of employment opportunities for Midsized LPG Carriers. The orderbook for fully-refrigerated 24 – 40,000 m³ tonnage currently stands at 23 vessels, which represents about 30% of today's existing segment's capacity on the water. Fleet coverage for the balance of 2014 is 91%.

31/07/2013 - 5.45 pm Regulated information

VLGC – The VLGC market has reached and is maintaining historically high levels. The recent freight upturn has been mainly driven by the arbitrage between US and Asian product prices, with the increased availability of product out of US Gulf, as well as other western loading areas remaining a major swing factor for the VLGC markets due to increasing tonne-miles. Consistent all time high spot levels have supported increased Time-Charter activity for medium to even long-term deals.

Fleet coverage for the balance of 2014 is 100%, of which 60% at fixed rate.

Pressurized – The small pressurized markets have remained under pressure for most of the past six months, due to weak petrochemical demand and signs of overcapacity for the markets both East and West of Suez, while at the same time a series of newbuilding vessels are due to enter the market during the coming months. All these factors reflect a downward pressure for the small pressurized vessel markets. Fleet coverage for the balance of 2014 is 65%.

SERVICES AND HOLDING

The contribution of the Services and Holdings activities (EXMAR SHIPMANAGEMENT, BELGIBO, TRAVEL PLUS) to the operating result (EBIT) amounts to USD 1.1 million. This includes the capital gain realised on the sale of real estate of about USD 1.5 million.

As previously announced, the Company has successfully raised a NOK 700 million unsecured bond end of June. The amount has been swapped to USD 114 million at an all-in rate of 5.72%. The proceeds of the bond will be used for the development of new LNG and Offshore infrastructure projects in the coming months.

The Company continues to structure actively a Master Limited Partnership to be listed in the USA before the end of the year.

Antwerp, 31st July 2014 The Executive Committee