KN Energies AB — Earnings Release 2016

Jan 31, 2017

AB KLAIPĖDOS NAFTA UNAUDITED FINANCIAL RESULTS OF 2016

31th January 2017

AB KLAIPĖDOS NAFTA WEBINAR– PRESENTATION OF THE UNAUDITED FINANCIAL RESULTS OF 2016

Marius Pulkauninkas Acting General Director

CONTENT

• About the Company
• Highlights
• Financial results
• Other information

ABOUT THE COMPANY

MISSION, VISION, VALUES

HIGHLIGHTS

AB Klaipėdos nafta renewed it's brand. As of 22 December 2016, AB Klaipėdos Nafta launched a renewed Companies logo – KN.

The legal status of AB Klaipėdos Nafta (further KN) has not changed.

• Change in the Board of the Company. On 1st of December 2016 Rytis Ambrazevičius resigned from Board of the Company. On 30 of December 2016 Giedrius Dusevičius was elected to the duties of independent Board Members of the Company until the term of office of the acting Board of the Company.
• International composition of Board. The Supervisory Council adopted the decision to elect Bjarke Palsson to the duties of independent Board Members of the Company to the current vacancy from 24 January, 2017.
• Change in the Management of the Company. After Mantas Bartuška resignation in the end of 2016 acting General Director of the AB Klaipėdos nafta became Marius Pulkauninkas, Director of Finance and Administration Department.

On the 2nd January of 2017 LNG reloading service from FSRU was held for the first time.

LNG carrier vessel "Coral energy" was the first small scale LNG carrier loaded in LNG terminal. It was the first LNG reloading service from FSRU type terminal dedicated to LNG small scale services market.

Nasdaq Baltic Market Awards

On 26th January 2017 Nasdaq announces the winners of the Baltic Market Awards 2016.

KN was awarded in 4 categories.

• The Company sold shares of UAB LITGAS. On 3 th October 2016 the Company and Lietuvos energija, UAB have signed sale - purchase agreement of UAB LITGAS 33.33 per cent shares owned by the Company. Transaction amount – EUR 4.35 million.
• Claim regarding the damages from the breach of the competition law. KN received documents from the Vilnius Regional Court regarding a claim filed by UAB "KROVINIŲ TERMINALAS to the Company and AB "ORLEN Lietuva" for damages from the breach of the competition law. Claim for the amount of almost EUR 6 million.

FINANCIAL RESULTS

• KN petroleum product transshipment – the highest since 2011. 7.338 thousand tons of petroleum products in Klaipėda and Subačius oil terminals have been reloaded during the 2016.
• Petroleum product transshipment from Orlen Lietuva AB – the highest since 2005. 4.852 thousand tons of petroleum products sent from Orlen Lietuva refinery have been reloaded in Klaipėda oil terminal during the year 2016.
• LNG re-gasificaion volume growth by 3.2 times in 2016. 14.611 thousand MWh have been re-gasified and supplied to the natural gas transmission system.

15

STRUCTURE OF SALES REVENUE AND EBITDA BASED ON OPERATING SEGMENTS (UNAUDITED)

Revenue of 2015, MEUR

Revenue of 2016, MEUR

17.5

-0.4

BUSINESS FACTORS:

AB ORLEN Lietuva increased utilization capacity in 2016, therefore reloaded 18 per cent more oil products in through KN terminal.

Transit petroleum products transshipment grew up by 8.8 per cent in 2016. Although in the second half of previous year due to political reasons the crude oil supply to Byelorussia refineries has been reduced that affected the slowdown

MEUR	2015	2016
Revenue	37.3	34.0
Net profit	14.7	10.0
EBITDA	22.7	17.5

BUSINESS FACTORS:

In connection with the increased fuel consumption in country the amount of stored obligatory reserve of oil products has increased accordingly in 2016.

Transshipment in Subačius oil terminal amounted to 93.9 thousand tons in 2016.

Sales revenue from the commercial storage oil products contract amounted to EUR 0.6 million.

MEUR	2015	2016
Revenue	2.6	2.8
Net profit	0.9	0.8
EBITDA	1.7	1.8

BUSINESS FACTORS:

During 2016 16 LNG carriers have been accepted, which have delivered 1,000.6 thousand tons of LNG;

In 2016 LNG terminal users (total 3): LITGAS UAB, Lietuvos dujų tiekimas UAB, Achema AB.

MEUR 2015 2016 Revenue 69.9 67.0 Net profit 7.0 3.4 Net profit (normalized)* 1.8 4.0 EBITDA 13.2 9.7

Re-gasification, thousand MWh

*As a result of the lower consumption capacities of the natural gas in 2016 total revenue received are lower than it was set according to regulations. Based on the profit calculation methodic of the regulated activity the normalized unaudited preliminary profit for the year 2016 is EUR 4.0 million.

• Klaipėda oil terninal LNG terminal
• Subačius oil terminal
• LNG small scale

FINANCIAL FIGURES (UNAUDITED)

MEUR	2015	2016	Change, %
Sales Revenue	109.7	103.8	-5.4%
Gross profit	29.1	20.9	-28.2%
EBITDA	37,1	28.6	-22.9%
Profit before taxation (EBIT)	24.1	15.3	-36.5%
Net profit	22,0	13.9	-36.8%
Gross profit margin	26.5%	20.1%	-
EBITDA margin	33.8%	27.6%	-
Net profit margin	20.1%	13.4%	-
Return on equity (ROE)	11.9%	7.1%	-
Return on assets (ROA)	9.6%	5.8%	-
Profit per share (EPS), EUR/share	0.058	0.037	-36.2%
Average number of shares	380,606,184	380,606,184	-

Assets, MEUR

• Cash and cash equivalents
• Other current assets

Equity and liabilities, MEUR

• Financial liabilities
• Total equity

OTHER INFORMATION

SHAREHOLDERS AND SHARES

Since 2003 the shares of the Company are listed on NASDAQ OMX Vilnius stock exchange:

• ISIN code LT0000111650
• Abbreviation KNF1L

As at 31 December 2016 all the shares of the Company were owned by 1,993 shareholders (as at 31 December 2015 – 1,847).

Shareholder's name (company's name, address, company code of registration)	31st of December 2016		31st of December 2015
	Number owned shares (unit)	Part of authorized capital (%)	Number owned shares (unit)	Part of authorized capital (%)
The Republic of Lithuania, represented by the Ministry of Energy of the Republic of Lithuania	275,241,290	72.32	275,241,290	72.32
Concern AB Achemos grupe	38,975,150	10.24	38,975,150	10.24
Other (each owning less than 5%)	66,389,744	17.44	66,389,744	17.44
Total:	380,606,184	100.00	380,606,184	100.00

TRADING IN KNF1L SHARES ON NASDAQ VILNIUS STOCK EXCHANGE IN 2016

KNF1L SHARE PRICE, NASDAQ VILNIUS AND BALTIC BENCHMARK GI INDEXES COMPARISON IN 2016

ORGANIZATIONAL STRUCTURE

Supervisory board members:

Agnė Amelija Petravičienė Romas Švedas Eimantas Kiudulas

Audit committee members:

Linas Sasnauskas Eimantas Kiudulas Kasparas Žebrauskas

Board of the Company members:

Mindaugas Jusius Dainius Bražiūnas Mantas Bartuška Giedrius Dusevičius (since 30th December 2016) Bjarke Palsson (since 24th January 2017)

MANAGEMENT OF THE COMPANY

Marius Pulkauninkas Acting General Manager

Osvaldas Sabaliauskas Deputy General Manager

Genadijus Andrejevas Director of Technical Department

Darius Šilenskis Director of Oil Commerce Department

Gediminas Vitkauskas Director of the Oil Terminal Department

Tadas Matulionis Director of the LNG Terminal Department

THANK YOU

AB Klaipėdos nafta

Registered address - Burių str. 19, LT-91003; Klaipėda Lithuania

Tel. +370 46 391772

Fax +370 46 311399

www.kn.lt