KN Energies AB — Investor Presentation 2016

Mar 22, 2016

AB Klaipedos nafta

Audited financial results for the year ended 31st December 2015

21st of March, 2016

Welcome to AB Klaipedos nafta webinar held for the first time – Presentation of the audited financial results for the year 2015

Mantas Bartuška General Manager

Marius Pulkauninkas Director of Finance and Administration Department

Agenda

• 1. Company's activities
• 1. Audited Financial results of the Company for 2015
• 1. Oil terminal financial results
• 1. LNG terminal financial results
• 1. Subacius fuel storage base financial results
• 1. LNG small-scale reloading station results
• 1. Dividends
• 1. News
• 1. Q&A

AB Klaipedos Nafta – an Oil and LNG terminals' operator

50+ years of oil terminal operations LNG terminal operation

State fuel reserves – Subacius fuel storage

LNG small-scale reloading station

project LNG transportation vessel project

Other LNG terminal projects

MEUR	2014	2015	Change, %
Sales revenue	39.8	109.7	176%
Gross profit	13.2	29.1	120%
EBITDA	16.6	37.1	123%
Profit before taxation (EBT)	9.1	24.1	165%
Net profit	9.3	22.0	137%

Financial ratios

	2014	2015	Change, %
Gross profit margin	33.1%	26.5%	-
EBITDA margin	41.8%	33.9%	-
Net profit margin	23.3%	20.1%	-
Return on equity (ROE)	5.4%	11.9%	-
Earnings per share (EPS), EUR/share	0.024	0.058	141.7%

Profit (loss) items Balance sheet items

MEUR	2014	2015	Change, %
Total non-current assets	189.2	180.1	5%
Total current assets	32.7	58.7	80%
Total assets	221.9	238.8	8%
Equity	174.7	196.8	13%
Long term liabilities	31.3	31.4	0%
Short term liabilities	15.9	10.6	-33%
Total Equity and liabilities	221.9	238.8	8%

Structure of Revenue & EBITDA based on operating segments

37.3 109.7 69.9 2.6 0 20 40 60 80 100 120 Total

Revenue 2015, MEUR

EBITDA 2014, MEUR

EBITDA 2015, MEUR

MEUR	2014	2015
Sales revenue	31.8	37.3
Net profit	10.1	14.5
EBITDA	16.6	22.5

Key highlights:

• In 2015 the essential increase of the oil products transshipment resulted from the increase of the transshipment flows to ORLEN Lietuva AB;
• In 2015 the Company succeeded in attracting light oil products flows from Byelorussia.

Transshipment, thousand tons

AB Klaipedos nafta transshipment of oil products in 2013 – 2015

8

MEUR	2014	2015
Sales revenue	2.2	2.6
Net profit	0.7	0.9
EBITDA	1.5	1.8

Key highlights:

• Reloading volume growth in Subacius fuel storage base more than 3,6 times (total 172 thousand tons)
• First commercial oil products storage contract in 2015

Average storage volume, thousand tons

192

MEUR	2014	2015 financial	2015 normalized*
Sales revenue	5.8	69.9	64.7
Net profit	-1.5	7.0	1.8
EBITDA	-1.4	13.2	8.0

Revenue & EBITDA margin

Key highlights:

• During 2015 5 LNG carriers accepted, which delivered 318.6 thousand tons LNG;
• 4,559 thousand MWh natural gas re-gasified and supplied to the gas transmission system;
• This activity started to be carried out on 27 November 2014.

*According to the NCC methodic the regulated unaudited net profit amounts to approximately EUR 1.8 million. As a result of the larger consumption of the natural gas and additionally received procedural interest and fines, total received amount of regulated income in unaudited data in 2015 in is higher by EUR 5.2 million than it was calculated in accordance to the regulation of NCC. According to the regulation additionally received amount shall be dedicated for the LNG terminal required expenses for the coming financial periods.

	Re-gasification, MWh	Number of LNG cargos
12 month of 2015	4,559	5
9 month forecast of 2016	12,020	12

TEUR	2014	2015
Sales revenue	-	-
Net result	-18	-367
EBITDA	-18	-402

LNG small-scale reloading station project development events:

• In March 2015 the technological concept of the project (territory and technology alternatives) was completed and presented to the Board;
• In June 2015 the tender for selection of the contractor for performing the Klaipeda LNG distribution station EPC was commenced;
• On 10 July 2015 the European Commission approved the support for funding the project, amounting to EUR 6 million;
• On 12 February 2016 the EPC contract was signed with the consortium, consisting of Lithuanian – German company PPS Pipeline Systems GmbH and Czech company Chart Ferox, a.s. Contract on a lump sum amount of 27.7 mln. EUR excluding VAT.

Key highlights:

• Investments in 2016-2017 foreseen EUR 27,7 millions.
• The planned maximum capacity of the LNG small-scale reloading station is about 5,000 m³ ;
• 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.

Dividends

On 25th of January, 2016 the Board of the Company has approved The corporate strategy of the Company for the year 2016-2020 and Dividend Policy

• Purpose - to define dividends calculation, payment and declaration processes.

Dividend policy objectives

• Plan - 50% of the net profit for dividends.

Proposal for shareholders to allocate net profit of 2015 for dividends EUR 17.6 million:

	2015
Dividends, MEUR	17.6
% of net profit	80%
Dividends per share, EUR	0.046
Share yield (dividend-price ratio)	11.8%

The decision to allocate >50% (as to Dividends policy) to the dividends based on such arguments:

• Revenues and activities for 2016 planned at the same level as 2015, sufficient working capital expected for 2016 operation;
• Sufficient cash reserve for planned investments in 2016;
• In 2016 received all LNG terminal overdue funds
• The risk of cash collection from LNG activities has been solved.

Today, on 21st March 2016, The Company has applied to Nasdaq Baltic to be included into the Baltic Main List.

The Baltic Main List is a line-up of all the blue-chip companies listed on the Tallinn, Riga and Vilnius stock exchanges. To be eligible for inclusion, a company must have:

• 3 years of operating history;
• market cap of not less than EUR 4 million;
• reporting according to International Financial Reporting Standards;
• Free shares float of 25% or worth at least EUR 25 million.

We are proud to make such a move and we believe that:

• the Company will be more visible to investors;
• the shareholders wealth will be increased;
• vigorous and effective communication regarding the Company's activities will be achieved.

Q&A

AB Klaipedos nafta
Registered address
Buriu str. 19, P.O. Box 81,
91003 Klaipeda-C,
Lithuania
Mailing address
Baltijos ave. 40,
LT-93239, Klaipeda,
Lithuania
Tel. +370 46 391772
Fax +370 46 311399
www.oil.lt, www.sgd.lt

THANK YOU FOR YOUR ATTENTION!