KN Energies AB — Investor Presentation 2017

Jul 31, 2017

AB KLAIPĖDOS NAFTA UNAUDITED FINANCIAL RESULTS FOR THE 6 MONTHS OF 2017

31st July 2017

AB KLAIPĖDOS NAFTA (KN) WEBINAR – PRESENTATION OF THE UNAUDITED FINANCIAL RESULTS FOR THE 6 MONTHS OF 2017

Marius Pulkauninkas Chief Financial Officer (CFO)

CONTENT

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

ABOUT THE COMPANY

HIGHLIGHTS

HIGHLIGHTS OF THE 2ND QUARTER OF 2017

Credit Agreement with the NIB.

The Company has concluded the Credit Agreement with the Nordic Investment Bank (NIB) regarding granting the credit of up to EUR 20,400 thousand euros to finance liquefied natural gas reloading station's and the 1st stage of Klaipėda oil terminal expansion projects.

Increasing Competitiveness.

The Board has approved the decision to sign the agreements with contractors, who will carry out the development works of Klaipėda Oil Terminal Light oil storage tanks Park and build new tanks for oil products.

28.04.2017 08.06.2017 13.06.2017 27.06.2017

The Allocation of Liquefied Natural Gas Terminal Capacities.

AB Klaipėdos Nafta has signed agreements with three LNG terminal users, i.e. UAB LITGAS, UAB Lietuvos dujų tiekimas and AB Achema, who have been allocated the part of terminal capacities from the 1 st of October, 2017 until the 30th of September, 2018.

Additional Capacities.

The additional 960,000 MWh LNG terminal capacities will be allocated to UAB Lietuvos dujų tiekimas during the period from the 1st of July, 2017 until the 30th of September, 2017.

Evaluation

•In the conference of transport sector "Business Management 2017", which was organized by "Verslo žinios", AB Klaipėdos nafta was awarded as the Leader of Transport Sector.

Awards

•The Blue Baltics project, which is coordinated by AB Klaipėdos nafta, builds on the LNG value chain in the Baltic Sea and encourages the use of clean fuel. The project, which unites 4 countries (Lithuania, Sweden, Estonia ir Germany), has been evaluated for its positive environmental impact. The Blue Baltics project in the Baltic Sea Forum Awards (Berlin) became a leader in the category of "Infrastructure".

FINANCIAL RESULTS

REVENUE, EBITDA, NET PROFIT (UNAUDITED) 53.9 55.8 57.3 52.3 50.0 60.0

11

1 st half of 2016, MEUR

Total 2 nd half of 2016, MEUR

1 st half of 2017, MEUR

3.9

EBITDA for the 2

4.7

Total 9.0

EBITDA for the 1 st half of 2016, MEUR

EBITDA for the 1 st half of 2017, MEUR

KLAIPĖDA OIL TERMINAL RESULTS FOR THE 6 MONTHS OF 2017

Transhipment, thousand tons

Export (Orlen Lietuva, AB)

Transit (Russia, Byelorussia oil products)

Others

MEUR	H1 2016	H2 2016	H1 2017
Revenue	21.8	12.2	16.2
Net profit	8.7	1.3	5.0
EBITDA	12.8	4.7	9.1

BUSINESS FACTORS:

During the 1 st half of 2017 it was reloaded 12.0 per cent more oil products compared to the 2 nd half of 2016.

Comparing the 1 st half of 2016 and the same period of 2017 the transhipment reduced by 26.3 per cent. It depends on:

the reduce in transit cargos from Belorussia refineries in connection with reduction of crude oil supply into these refineries.

During the 1 st half of 2017 the transhipment into road tankers increased even in 52 per cent. The increase was caused by the modernization of the Company's oil terminal light oil product tanks park.

SUBAČIUS OIL TERMINAL RESULTS FOR THE 6 MONTHS OF 2017

Average storage volume, thousand tons

MEUR	H1 2016	H2 2016	H1 2017
Revenue	1.4	1.4	1.1
Net profit	0.6	0.2	0.2
EBITDA	1.1	0.7	0.7

BUSINESS FACTORS:

The storage quantities of oil products has reduced in the 1 st half of 2017 that accordingly has affected sales revenues.

Transhipment in Subačius oil terminal amounted to 41 thousand tons in the 1 st half of 2017 (1 st half of 2016 – 56 thousand tons).

LNG TERMINAL RESULTS FOR THE 6 MONTHS OF 2017

Re-gasification and reloading, thousand MWh

*In preliminary calculations the LNG profit is estimated to EUR 3.2 million. The additionally received amount of revenue (or lack of income) will be dedicated for compensation of the LNG terminal necessarily expenses for the coming financial periods.

MEUR	H1 2016	H2 2016	H1 2017
Revenue	34.1	32.9	35.0
Net profit*	2.6	0.8	3.0
EBITDA	5.8	3.9	6.3

BUSINESS FACTORS :

During the 1 st half of 2017 six LNG carriers have been accepted, which have delivered 269.8 thousand tons of LNG.

In 2017 LNG reloading service from FSRU was held for the first time. Two LNG small carriers have been accepted, which reloaded 11 thousand tons of LNG.

ASPECTS OF REGULATION:

The activity of LNG terminal is regulated and has the set price cap. The revenue and profit of LNG activity does not depend on re-gasification, therefore, there are differences between financial and regulated profit and revenue.

THE BIGGEST INVESTMENTS TO PROJECTS IN THE 1ST HALF OF 2017, EUR MILLION

* LFO – Light Oil Products

FINANCIAL FIGURES (UNAUDITED)

MEUR	H1 2016	H2 2016	H1 2017	Change, %, H1 of 2017 to H1 of 2016	Change, %, H1 of 2017 to H2 of 2016
Sales Revenue	57.3	46.5	52.3	-8.7%	12.6%
Gross profit	15.3	5.5	11.1	-27.7%	101.8%
EBITDA	19.5	9.0	15.2	-21.9%	69.6%
Profit before taxation (EBIT)	12.8	2.3	8.3	-35.6%	250.2%
Net profit	11.7	2.1	7.4	-37.0%	256.7%
Gross profit margin	26.7%	11.8%	21.1%
EBITDA margin	34.0%	19.3%	29.1%
Net profit margin	20.4%	4.5%	14.1%
Return on equity (ROE)*	12.5%	7.2%	5.0%
Return on assets (ROA)*	10.0%	5.7%	3.9%
Profit per share (EPS), EUR/share	0.031	0.005	0.019
Average number of shares	380,606,184	380,606,184	380,606,184	-	-

* The return on equity (ROE) and return on assets (ROA) were calculated by dividing the net profit (losses) of the last twelve months by the average of equity or asset values at the beginning and the end of the reference year.

Assets, MEUR BALANCE SHEET (UNAUDITED)

Equity and liabilities, MEUR

Total equity Financial liabilities Other non-current and current liabilities

QUESTIONS & ANSWERS

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