KN Energies AB — Interim / Quarterly Report 2016

May 3, 2016

SC Klaipedos nafta results for the 1st quarter 2016

3 th May 2016

INFORMATION ABOUT THE COMPANY

FINANCIAL RESULTS FOR 1ST QUARTER 2016

OTHER INFORMATION

INFORMATION ABOUT THE COMPANY

Company name	• Stock Company Klaipedos nafta
Company code	• 110648893
1. Authorized share capital	3. 2. • EUR 110,231,170
Registered address	• Buriu str.19, P.O. Box 81, 91003 Klaipeda-C, Lithuania
Mailing address	• Baltijos ave. 40, LT-93239, Klaipeda, Lithuania
Telephone	• +370 46 391772
Fax	• +370 46 311399
4. E-mail	5. • info@oil.lt
Website	• www.oil.lt, www.sgd.lt
Legal – organisational form	• Stock company
Date and place of registration	• 27 September 1994, State Enterprise Centre of Registers

Mission, vision, values

Diversified activity of the Company

Oil terminal LNG terminal

Subacius fuel base

LNG small scale

LNG consultations New projects

Oil terminal characteristics

Railway

2 tracks for light oil products - LFO (total 60 tank-cars)

2 tracks for heavy oil products - HFO (total 64 tank-cars)

One of the track is universal: can load both HFO and LFO

Two four-track railway trestles provide a possibility to discharge or load 124 tankcars simultaneously.

Storage tank farm

Total 28 tanks

450 thousand cbm storage capacity

Biological Waste Water Treatment Facilities

Waste water collected and treated annually up to 400 cub. m thousand (160 m³ /h)

2 Jetties

Depth: 14 m Length: 270 each Harbour entrance depth: 14.5 m Tanker batch: up to 100,000 t with 12.5 m allowable draught

Auto tankers loading system

Service to import gasoline and diesel by tankers for the Lithuanian market needs 4 loading points at the same time

LNG terminal infrastructure

• LNG floating storage and regasification unit FSRU,170,000 thousand cbm
• Jetty 450 m length
• Pipeline 18 km
• Gas metering station in Kiskenai, Klaipėda distr.
• Jetty FSRU 18 km Gas metering station FSRU Lessor: Höegh LNG Limited LNG Jetty with equipment Connecting pipeline with main gas pipeline

Subacius fuel base infrastructure

• Park of storage tanks (66 units, 338 thousand cbm), adapted for storage of light oil products;
• Rail trestle (simultaneously handle 14 rail tanks);
• Modern loading station of auto tank-cars;
• Other necessary equipment (modern laboratory, mobile fire extinguishing equipment, sewage cleaning equipment and etc.).

FINANCIAL RESULTS FOR THE 1 st QUARTER 2016

MEUR	2015 Q1	2016 Q1	Change, %
Sales Revenue	26.6	30.6	15%
Gross profit	6.6	8.9	35%
EBITDA	8.5	10.9	28%
Profit before taxation	5.2	7.6	46%
Net profit	4.5	6.9	53%
Gross profit margin	24.8%	29.1%	-
EBITDA margin	32.0%	35.6%	-
Net profit margin	16.9%	22.5%	-
Return on equity (ROE)*	6.8%	24.0%	-
Return on assets (ROA)*	5.4%	18.8%
Profit per share (EPS), EUR/share	0.012	0.018	50%
Average number of shares	380,606,184	380,606,184	-

* Ratios are calculated for the last 12 month period.

Structure of Revenue & EBITDA based on operating segments

EBITDA Q1 2015, MEUR

EBITDA Q1 2016, MEUR

MEUR	Q1 2015	Q1 2016
Revenue	9.9	11.8
Net profit	3.8	4.1
EBITDA	6.1	6.2

Facts of periods comparison:

• Orlen Lietuva AB total transshipment volumes increased by 54 per cent;
• Transit heavy oil products transshipment flows increased by 73 per cent;
• Transshipment of light oil products from Byelorussia increased by 43 per cent.

862 1,329 559 928 31 37 0 500 1.000 1.500 2.000 2.500 thousand. t Q1 2015 Q1 2016 Others Transit (Byleorussia, Russia oil products) Export (Orlen Lietuva, AB) 2,294 1,452

Transshipment, thousand tons

Revenue & EBITDA

AB Klaipėdos nafta oil product transshipment Q1 2014-2016

Facts of periods comparison:

• Compared to 1st quarter 2015, in 1st quarter 2016 the transshipment of light oil products of ORLEN Lietuva AB increased by 59 per cent (318 thousand t.)
• 1st quarter 2016 all transshipment of ORLEN Lietuva AB amounted 58 per cent of all terminal transshipment flows (in comparison 1st quarter 2015 – 59 per cent);
• Compared to 1st quarter 2015, in 1st quarter 2016 the transshipment of transit (Byelorussia) heavy oil products increased by 73 per cent or by 315 thousand tons.

MEUR	Q1 2015	Q1 2016
Revenue	0.6	0.7
Net profit	0.2	0.3
EBITDA	0.4	0.5

Facts of periods comparison:

• 1 st quarter 2016 the transshipment in Subacius fuel storage base amounted 26 thousand tones (2015 – 47 thousand tones).
• 1 st quarter 2016 sales revenue from the Gunvor contract amounted EUR 160 thousand.

Revenue EBITDA

Revenue & EBITDA

Average storage volume, thousand tons

MEUR	Q1 2015	Q1 2016
Revenue	16.2	18.1
Net profit	0.6	2.8
EBITDA	2.1	4.2

*The LNG terminal activity profit is regulated in terms as set by the laws. Actually foreseen the net profit for the LNG activities for the year 2016 shall amount EUR 4.5 million. Additionally received amount shall be dedicated for the LNG terminal required expenses for the coming financial periods.

Facts:

• During 1 st quarter 2016 5 LNG carriers accepted, which delivered 311.7 thousand tons LNG;
• 5,088 thousand MWh natural gas re-gasified and supplied to the gas transmission system (+263.7%);
• 1 st quarter 2016 LNG terminal users: LITGAS UAB, Lietuvos dujų tiekimas UAB, Achema AB.

Assets, EUR thousands

• Non-current assets comprise 69.7 per cent of total assets (31-03-2016);
• Total equity amounted to 78.6 per cent of total assets (31-03-2016);
• Total assets has increased by 8.4% and comprise EUR 258,952 thousand.

Equity and liabilities, EUR thousands

LNG small-scale reloading station investments

LNG small-scale reloading station project development events:

• On the 12th February 2016 the EPC (Engineering, procurement and construction works) contract was signed with the consortium, consisting of Lithuanian – German company PPS Pipeline Systems GmbH and Czech company Chart Ferox, a.s.

Key highlights of EPC contract:

• Investments in 2016-2017 foreseen EUR 27.7 millions;
• It is planned that the partial operation of the reloading station will commence in 15 months after the date of entering into effect of the contract and all the works will be completed in autumn of 2017.
• The planned maximum capacity of the LNG small-scale reloading station is about 5,000 m3;

Oil terminal investment projects

The infrastructure expansion plans in the Company's oil terminal territory:

Company's investments, EUR thousand

OTHER INFORMATION

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

• ISIN code LT0000111650
• Abbreviation KNF1L

As at 31 March 2016 all the shares of the Company were owned by 1,903 shareholders (on 31 December 2015 – 1,847)

Shareholder's name (company's name, address, company code of	31st of March 2016		31st of December 2015
registration)	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 (Gediminas Ave. 38/2, Vilnius, 302308327)	275,241,290	72.32	275,241,290	72.32
Concern SC Achemos grupe (Jonalaukis village, Jonava district, 156673480)	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 January - March 2016

KNF1L share price and Nasdaq Vilnius indexes comparison in January – March 2016

• January 5 th 2016. Klaipėdos nafta AB and the Swissregistered company Verum Plus AG has signed a long term transshipment contract on provision of heavy fuel oil products transhipment services in Company's terminal. The term of the Contract is until 31 December 2016, with an option to extend it for one more year.
• February 4 th, 5 th 2016. The Company has signed Terminal Usage Agreements with Lietuvos dujų tiekimas UAB and Achema AB. Both contracts is valid until the 30th of September 2016.

• February 12th 2016. Consortium of PPS Pipeline Systems GmbH and Chart Ferox, a. s and SC Klaipėdos nafta concluded EPC (Engineering, procurement and construction works) contract whereby the Consortium undertook to complete all the works according to the contract on a lump sum amount of 27.7 mln. EUR excluding VAT.

• March 8 th 2016. The extraordinary general meeting of shareholders approve the decision of the Board of Klaipedos Nafta AB to implement liquefied natural gas distribution station investment project for the total price not exceeding EUR 27,700 thousand (without VAT).

• March 21st 2016. Company has submitted the application and related documents to Nasdaq Vilnius AB regarding the listing of Company shares in the Main List. April 4 th 2016 Nasdaq Vilnius AB listed Company's shares in to the Main List.
• April 26th 2016 ordinary general meeting of shareholders of the Company was held which approved the audited financial statements for the year 2015 and appropriation of profit (loss). EUR 17,6 million allocated for the dividends.

• May 2 nd 2016. SC Klaipedos nafta published Corporate social responsibility report. It is prepared for the first time and publicly announced Company's as social responsibility activities.

• Publicness. Klaipedos nafta AB published investors calendar and will further report Company's interim results.

• LNG Cluster. Company signed LNG Cluster founding and joint operational contract. LNG cluster unifies science, studies and business potential for common activity.
• Support for LNG studies. Klaipedos nafta AB will finance 8 LNG terminals engineers bachelor study places.

	Q1 2015	Q1 2016		Change
			+/-	%
Average number of employees in categories	369	366	-3	-0.8%
1) Managers	37	36	-1	-2.7%
Specialists	133	153	20	15.0%
Workers	199	177	-22	-11.1%

	Q1 2015	Q1 2016		Change
			+/-	%
Average gross monthly salary2)	1,469	1,658	189	12.9%
1) Managers	3,339	3,684	345	10.3%
Specialists	1,578	1,661	83	5.3%
Workers	1,071	1,266	195	18.2%

Remarks:

• 1) The Company's managers include: General Manager, Deputy Manager, Heads of Departments and their deputies, Heads of Deputies;
• 2) The average monthly salary is calculated in accordance to average monthly wage calculation procedure as stated in the State companies' employees' average monthly salary calculation procedure approved by the Lithuania Government on 23 August 2002, resolution No. 1341 and their chnages.

Members of the Board of the Company

Rytis Ambrazevičius

Independent Member of the Board of the Company. Elected as the Board member by the Supervisory Board on 24 October 2011. The Supervisory renewed the mandate on 29 April 2014 for 4 years or until the time, when the new Board is elected ant starts acting.

Mindaugas Jusius

Independent Member of the Board of the Company. Elected as the Board member by the Supervisory Board on 24 October 2011. The Supervisory renewed the mandate on 29 April 2014 for 4 years or until the time, when the new Board is elected ant starts acting.

Dainius Bražiūnas

Member of the Board of the Company. Elected as the Board member by the Supervisory Board on 25 August 2014 until the term of office of the acting Board of Company.

Mantas Bartuška Member of the Board of the Company, General Manager. Elected as the Board member by the Supervisory Board on 25 September 2014 until the term of office of the acting Board of Company.

There is no permanent Chairman of the Board elected, therefore, the Chairman of the Board is elected from the Board members every meeting by ad hoc principle.

Management of the Company

Mantas Bartuška General Manager

Gediminas Vitkauskas Director of the Oil terminal department

Osvaldas Sabaliauskas Deputy General Manager

Tadas Matulionis Director of the LNG terminal department

Marius Pulkauninkas Director of Finance and Administration Department

Darius Šilenskis Director of Oil Commerce department

Genadijus Andrejevas Director of Technical Department

Thank you for attention

Klaipedos nafta AB

Registered address - Buriu str. 19, LT-91003; Klaipeda Lithuania

Mailing address - Baltijos ave. 40, LT-93239, Klaipeda, Lithuania

Tel. +370 46 391772

Fax +370 46 311399

www.oil.lt, www.sgd.lt