MPC Container Ships ASA

Investor Presentation • May 31, 2018

Q1 2018 – Earnings Presentation

DISCLAIMER

THIS PRESENTATION HAS BEEN PRODUCED BY MPC CONTAINER SHIPS ASA ("MPCC") EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR APPROVED BY ANY PUBLIC AUTHORITY OR STOCK EXCHANGE.

THIS PRESENTATION MAY INCLUDE CERTAIN FORWARD-LOOKING STATEMENTS, ESTIMATES, PREDICTIONS, INFLUENCES AND PROJECTIONS WITH RESPECT TO ANTICIPATED FUTURE PERFORMANCE AND AS TO THE MARKET FOR PRODUCTS OR SERVICES WHICH MAY REFLECT VARIOUS ASSUMPTIONS MADE BY THE MANAGEMENT OF MPCC. THESE ASSUMPTIONS MAY OR MAY NOT PROVE TO BE CORRECT AND NO REPRESENTATION IS MADE AS TO THE ACCURACY OF SUCH STATEMENTS, ESTIMATES, PROJECTIONS, PREDICTIONS AND INFLUENCES. THESE STATEMENTS AND FORECASTS INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRCUMSTANCES THAT WILL OCCUR IN THE FUTURE.

THE INFORMATION AND OPINIONS CONTAINED IN THIS PRESENTATION ARE SUBJECT TO CHANGE WITHOUT NOTICE AND, EXCEPT AS REQUIRED BY LAW, MPCC ASSUMES NO RESPONSIBILITY OR OBLIGATION TO UPDATE PUBLICLY OR REVIEW ANY OF THE INFORMATION CONTAINED HEREIN.

THIS PRESENTATION DOES NOT CONSTITUTE AN OFFERING OF SECURITIES OR OTHERWISE CONSTITUTE AN INVITATION OR INDUCEMENT TO ANY PERSON TO UNDERWRITE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SECURITIES IN MPCC OR ANY AFFILIATED COMPANY THEREOF.

AGENDA Q1 2018 – Earnings Presentation

1) Introduction

• 2) Financials: Q1 2018
• 3) Fleet & Operational Update
• 4) Outlook
• 5) Appendix

MPC CONTAINER SHIPS ASA – AT A GLANCE

INTRODUCTION

• Established in April 2017 to take advantage of attractive market fundamentals – MPCC is now the #1 owner of feeder container ships up to 3,000 TEU globally
• Acquired 68 feeder containerships between 1,000 3,000 TEU at attractive levels (40% avg. discount to newbuilding parity) and with high specification
• Listed on the Main Board of Oslo Bors with a market cap of USD ~512m
• Well capitalized with moderate leverage of 32% and solid equity ratio of 66%
• No legacy issues
• Low cash break-even and attractive cash yield at current market rates – significant further upside potential in asset values and charter rates
• Strong execution capabilities and experienced management
• Sponsor and initiator MPC Capital AG (part of the MPC Group) with substantial equity commitment of USD 52m

CORPORATE STRUCTURE

68 feeder containerships

DEVELOPING A MARKET LEADING CONTAINER FEEDER COMPANY

VESSEL ACQUISITIONS & CAPITAL MARKET ACTIVITIES

HIGHLIGHTS Q1 2018

	 Total revenue of USD 28.3m (up from USD 13.2m in Q4 2017)
	 EBITDA of USD 7.6m (up from USD 0.3m in Q4 2017)
Q1 2018	 Net profit of USD 0.5m (up from USD – 2.1m in Q4 2017)
Financials	 Operating cash flow of USD 4.8m
	 Total assets of USD 628m, cash position of USD 76m
	 Moderate leverage of 32%, equity ratio of 66%
	 30 vessels taken over in Q1 2018, 59 vessels taken over as of 31/03/2018
	3,247 ownership days and 2,958 trading days in Q1 2018 (utilization of 96%1  )
Q1 2018	 Average TCE of USD 9,352 per day
Operations	 Average OPEX of USD 4,810 per day
	 Average EBITDA per vessel of USD 2,342 per day
	 4 vessels finished dry docking and 5 vessels initiated dry docking in Q1 2018

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HIGHLIGHTS Q1 2018

• Portfolio of 68 vessels acquired at ~40% discount to newbuilding parity
• USD 75m in equity and USD 100m in bond proceeds raised in Q1 2018
• Post balance sheet date:
• Full listing at Main Board, Oslo Bors
• Non-recourse debt facility of USD 50m (up to USD 300m)
• 4 vessels acquired, bringing the fleet to 68 vessels
• MPC Container Ships is the #1 owner of feeder container vessels up to 3,000 TEU
• Market parameters for feeder container vessels have continued their recovery in the first quarter of 2018:
• Charter rates are up 12% for 2,750 TEU vessels in Q1 2018
• Secondhand prices are up 21% for 2,750 TEU vessels in Q1 2018
• Newbuilding prices are up 6% for 2,750 TEU vessels in Q1 2018
• The idle container ship fleet has come down to below 2%, from 7% in early 2017
• Continued rebalancing of supply and demand in the container market projected for 2018 and 2019
• Particularly favourable market fundamentals in the feeder segment due to strong intra-regional growth rates and moderate fleet growth

Market development

Corporate development

AGENDA Q1 2018 – Earnings Presentation

1) Introduction

2) Financials: Q1 2018

3) Fleet & Operational Update

4) Outlook

5) Appendix

PROFIT AND LOSS: ACTUALS Q1 2018 VS. Q4 2017 Financials: Quarterly Report Q1 2018

CONSOLIDATED PROFIT AND LOSS

		Q1 2018	Q4 2017
		ACTUAL	ACTUAL
Operating revenues		28.3	13.2
Commissions		-1.0	-0.5
Vessel voyage expenditures		-1.2	-1.5
Vessel operation expenditures		-15.6	-9.1
Ship management fees		-1.2	-0.7
Gross Profit		9.1	1.3
Administrative expenses		-1.4	-1.3
Depreciation and impairment		-4.9	-2.0
Other expenses		-0.4	-0.2
Other income		0.3	0.5
Operating result (EBIT)		2.7	-1.7
Finance income		0.7	1.8
Finance costs		-2.8	-2.2
Profit/Loss before tax (EBT)		0.5	-2.1
Income tax expenses		0.0	-0.1
Profit/Loss for the period		0.5	-2.2
EBITDA	USDm	7.6	0.3
Consolidated vessels (end of period)		52	29
Ownership days		3,247	1,739
Trading days		2,958	1,575
Utilization1		96%	95%
Time charter revenue	USD per trading day	9,352	7,901
EBITDA	USD per ownership day	2,342	195
OPEX	"	4,810	5,255
EPS (diluted)	USD	0.007	-0.051

NOTES: Q1 2018 ACTUALS

• The company has taken over 30 vessels in in Q1 2018 to grow its fleet in operation from 29 vessels to 59 vessels
• Q4 2017 and the Q1 2018 results are not directly comparable due to different fleet size and impacts from start-up and take-over costs
• Average TCE has increased from USD 7,901 per day in Q4 2017 to USD 9,352 per day in Q1 2018
• Average OPEX have decreased from USD 5,255 per day in Q4 2017 to USD 4,810 per day in Q1 2018
• Average EBITDA has increased from USD 195 per day in Q4 2017 to USD 2,342 per day in Q1 2018

Financials: Quarterly Report Q1 2018

BALANCE SHEET: ACTUALS 31/03/2018 VS. 31/12/2017

CONSOLIDATED BALANCE SHEET NOTES: 31 MARCH 2018

	31 Mar. 2018	31 Dec. 2017
	ACTUAL	ACTUAL
Assets	627.9	451.1
Non-current Assets	540.8	281.2
Vessels	511.6	207.1
Prepayments on vessels	0.0	57.8
Joint ventures	29.1	16.4
Current assets	87.1	169.9
Inventories	2.9	1.7
Trade and other receivables	8.8	3.9
Cash and cash equivalents	75.5	164.3
Equity and liabilities	627.9	451.1
Equity	415.7	340.5
Share capital	92.3	77.2
Capital reserves	319.2	261.3
Retained earnings	-1.9	-2.5
Other comprehensive income	1.5	0.1
Minority interest in equity	4.6	4.4
Non-current Liabilities	199.5	102.1
Interest bearing loans	199.5	102.1
Current Liabilities	12.7	8.5
Provisions	3.8	3.2
Trade and other payables	5.4	4.0
Other current liabilities	3.5	1.3

Equity ratio	66.2%	75.5%
Leverage	31.8%	22.6%

• Balance sheet changes between 31/12/2017 and 31/03/2018 are influenced by vessel acquisitions and funding steps
• Total assets of USD 628m
• Cash position of USD 76m
• Equity ratio of 66%
• Leverage of 32%

Financials: Quarterly Report Q1 2018

CASH FLOW: ACTUALS Q1 2018

CONSOLIDATED CASH FLOW

NOTES

Financing cash flow composition: Equity issues Net proceeds	USD 72.9m
Bond issue Net proceeds	USD 97.5m
Investing cash flow composition:
Vessel purchase prices	USD -319.2m / 30 vessels
thereof deposits paid in Q4 2017	USD 57.8m
Vessel sales (to JV)	USD 20.0m / 2 vessels
JV investment	USD -12.7m / 3 vessels
Capitalized dry docking/initials	USD -10.3m
Operating cash flow composition:

Profit of the period	USD 0.5m
Depreciation	USD 4.9m
Change in Net Working Capital	USD -0.7m

AGENDA Q1 2018 – Earnings Presentation

1) Introduction

2) Financials: Q1 2018

3) Fleet & Operational Update

4) Outlook

5) Appendix

FLEET OVERVIEW Fleet and Operational Update

in USD m

CURRENT FLEET OF 68 VESSELS FLEET COMPOSITION – BY TEU CLUSTER

FLEET COMPOSITION – BY TRADE

CURRENT EMPLOYMENT STATUS Fleet and Operational Update

CHARTER COVERAGE BY COUNTERPARTY¹ CHARTER COVERAGE RATIO

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OWNERSHIP AND TRADING DAYS Fleet and Operational Update

CONSOLIDATED VESSELS

DEVELOPMENT OF CHARTER RATES AND OPEX Fleet and Operational Update

CONSOLIDATED FLEET

1) Time Charter Equivalent (TCE):

Time charter revenue divided by trading days during a reporting period. Trading days are ownership days net of commercial and technical off-hire

AGENDA Q1 2018 – Earnings Presentation

1) Introduction

• 2) Financials: Q1 2018
• 3) Fleet & Operational Update

4) Outlook

5) Appendix

STRONG MARKET POSITION IN THE FEEDER CONTAINER SEGMENT

OWNERS OF FEEDER CONTAINER VESSELS

		On-The-Water	Non-operating owner TEU
Rank	Managing Owner	Ships
1	MPC Container Ships	68	134,079
2	A.P. Moller	60	123,584
3	MSC	54	112,264
4	PIL	67	96,706
5	Arkas Shipping	48	90,333
6	Wan Hai Lines	53	88,692
7	Lomar Shipping	45	88,679
8	Borealis Maritime	33	76,985
9	SITC	52	73,419
10	Leonhardt & Blumberg	43	68,699
11	Peter Dohle	36	63,385
12	Evergreen Marine	32	51,960
13	RCL	38	51,158
14	Schulte Group	22	47,180
15	Salam Pacific	46	45,724
16	Reederei Nord	22	45,406
17	Schoeller Holdings	22	44,417
18	Sea Consortium	26	38,287
19	Pelayaran Meratus	39	38,066
20	Vroon	35	37,274
21	Costamare Shipping	17	32,912
22	KMTC	23	32,204
23	Tanto Intim Line	39	29,091
24	CMA CGM	15	28,665
25	Yang Ming Marine	16	27,636
26	Asiatic Lloyd	21	25,703
27	Temas Line	30	25,013
28	Namsung Shipping	20	22,593
29	Vega-Reederei	22	22,535
30	Ningbo Ocean Shipping	17	21,992

TRENDS & CHALLENGES

• Consolidation in the container liner industry
• New regulations IMO 2020
• Digitalization backlog putting pressure on liners' capex resources
• New accounting standard for leases IFRS 16
• Protectionist tendencies & implications for world trade flows

OPPORTUNITIES

• Growing the company in a phase where many market players are still burdened with legacy issues
• Establishment of a leading container tonnage provider with attractive and flexible financing possibilities
• Additional value to be generated from scale and platform ideas
• Benefitting from economies of scale
• Strategic partnerships with charterers to tackle industry challenges, e.g. off balance sheet solutions and capex requirements

MPCC is the largest non-operating owner of feeder container ships globally

HIGH UPSIDE IN EARNINGS POTENTIAL

MPC CONTAINER SHIPS ASA – OUTLOOK

OUTLOOK

MPCC Vision: "Create the market leading container feeder company positioned to get maximum interest from the capital markets and offer unique and flexible service to its customers"

STRATEGY

Strategy:

• Assets / Growth:
• Explore further asset acquisitions via the secondhand market (subject to pricing and NB parity)
• Evaluate alternative growth options, e.g. M&A and ship-for-share transactions
• Yield: Low cost break-evens provides for solid dividend potential in future
• Scale: Economies of scale in financing, strategic partnerships and operations

Operations:

• Technical implement measures to advance operational efficiencies (e.g. spare part pools, dry docking contingents, further improve OPEX)
• Commercial:
• Further extent charter coverage and implement chartering strategy on portfolio basis
• Explore strategic partnerships with industry players

Corporate:

• Capital market evaluate measures to improve trading volumes, increase analyst coverage etc.
• Maintain moderate leverage

AGENDA Q1 2018 – Earnings Presentation

1) Introduction

• 2) Financials: Q1 2018
• 3) Fleet & Operational Update
• 4) Outlook

5) Appendix

CAPITAL MARKET SNAPSHOT

SHARE PRICE AND VALUATION

TRADING INFORMATION

Ticker	MPCC
Segment	Oslo Stock Exchange, Oslo
ISIN	NO0010791353
Trading currency	NOK
Shares outstanding	77,003,000
Market cap. 30 May 2018	USD 512m
Average trading volume (30-day)	55,000 shares

MARKET UPDATE – POSITIVE MOMENTUM IN RATES AND ASSET VALUES

TC RATES (IN USD/DAY)

DISCOUNT TO NEWBUILDING PARITY

SECONDHAND ASSET VALUES (IN USDM)

SUPPLY AND DEMAND BALANCE IMPROVING IN THE WHOLE CONTAINER SHIPPING MARKET

SUPPLY: FLEET DEVELOPMENT

ORDER BOOK AT HISTORIC LOW

FREIGHT RATES STABILIZING

EVEN MORE FAVORABLE SUPPLY/DEMAND DYNAMICS FOR THE FEEDER SEGMENT Trade deployment of feeder tonnage (1-3k TEU)

FEEDER TONNAGE CONCENTRATED IN INTRA-REGIONAL TRADES

• 75% of feeder tonnage deployed in intra-regional trades
• Intra-regional trades have high entry barriers for larger tonnage due to port restrictions, frequency requirements, inflexibility and commercial constraints
• Charter market recovery to be expected in segments best protected by cascading, e.g. regional feeder trades
• Intra-regional trades have outperformed other trading regions since 2011 and are projected to continue doing so, e.g. Intra-Asia with highest growth projections over the next 2 years (CAGR > 6%)

FLEET EMPLOYMENT 1,000 – 1,700 TEU

VESSEL EMPLOYMENT DETAILS

No.	Vessel	Stake	Cluster	Charterer	Rate (\$pd)	Q2 '18	Q3 '18	Q4 '18	Q1 '19	Q2 '19
1	AS LAURETTA	100%	1000 gls	SITC	8,000
2	AS LEONA	100%	1000 gls	Heung-A	7,250
3	AS LAETITIA	100%	1000 grd	CMA CGM	7,950
4	AS LAGUNA	100%	1000 grd	Maersk Line	6,000
5	AS FATIMA	100%	1300 gls	Pool	7,470
6	AS FENJA	100%	1300 gls	COSCO	7,500
7	AS FIONA	100%	1300 gls	Wan Hai Lines	8,900
8	AS FLORA	100%	1300 gls	TCL	8,900
9	AS FLORIANA	100%	1300 gls	Pool	7,470
10	AS FRIDA	100%	1300 gls	Wan Hai Lines	9,000
11	AS FABIANA	100%	1300 grd	Pool	9,100
12	AS FABRIZIA	100%	1300 grd	Pool	9,100
13	AS FAUSTINA	100%	1300 grd	Pool	9,100
14	AS FEDERICA	100%	1300 grd	Pool	9,100
15	AS FELICIA	100%	1300 grd	Pool	9,100
16	AS FILIPPA	100%	1300 grd	Pool	9,100
17	AS FIORELLA	100%	1300 grd	Pool	9,100
18	AS FLORETTA	100%	1300 grd	Pool	9,100
19	AS FORTUNA	100%	1300 grd	Pool	9,100
20	AS FRANZISKA	100%	1300 grd	Pool	9,100
21	AS FREYA	100%	1300 grd	RCL	9,500
22	AS RAFAELA	100%	1500 gls	Yang Ming	7,950
23	AS RAGNA	100%	1500 gls	Pool	7,160
24	AS RICCARDA	100%	1500 gls	Pool	7,160
25	AS ROBERTA	100%	1500 gls	Wan Hai Lines	10,500
26	AS ROMINA	100%	1500 gls	Pool	7,160
27	AS ROSALIA	100%	1500 gls	Pool	7,160
28	AS CARELIA	100%	1700 grd	Hapag-Lloyd	9,300
29	AS CYPRIA	100%	1700 grd	CMA CGM	9,400
30	AS SABRINA	100%	1700 grd	Maersk Line	14,430
31	AS SAMANTA	100%	1700 grd	Maersk Line	14,430
32	AS SARA	100%	1700 grd	Maersk Line	14,430
33	AS SAVANNA	100%	1700 grd	Maersk Line	14,430
34	AS SERAFINA	100%	1700 grd	Maersk Line	14,430
35	AS SERENA	100%	1700 grd	MCC	9,650
36	AS SOPHIA	100%	1700 grd	MCC	9,650
37	AS SUSANNA	100%	1700 grd	Maersk Line	14,430
38	AS SVENJA	100%	1700 grd	Maersk Line	14,430

FLEET EMPLOYMENT 2,000 – 2,800 TEU

VESSEL EMPLOYMENT DETAILS

No.	Vessel	Stake	Cluster	Charterer	Rate (\$pd)	Q2 '18	Q3 '18	Q4 '18	Q1 '19	Q2 '19
39	AS ANGELINA	100%	2200 grd	Seaboard	7,600
40	AS PAULINE	100%	2500 gls	Evergreen	8,650	Take-over	after TC
41	AS PENELOPE	100%	2500 gls	Sinotrans	8,700	Take-over	after TC
42	AS PALATIA	100%	2500 grd	COSCO	10,450
43	AS PAOLA	100%	2500 grd	CMA CGM	8,800
44	AS PATRIA	100%	2500 grd	Seaboard	11,200
45	AS PAULINA	100%	2500 grd	CMA CGM	12,000
46	AS PETRONIA	100%	2500 grd	CMA CGM	9,750
47	AS PALINA	80%	2500 grd	CMA CGM	12,250
48	AS PETRA	80%	2500 grd	CMA CGM	9,000
49	AS PETULIA	50%	2500 grd	Seaboard	11,400
50	AS CALIFORNIA	100%	2800 gls	Maersk Line	8,500
51	AS CAMELLIA	100%	2800 gls	CMA CGM	10,500
52	AS CAROLINA	100%	2800 gls	Maersk Line	7,750
53	AS CLARA	100%	2800 gls	Hapag-Lloyd	8,950
54	AS CLARITA	100%	2800 gls	ZISS	9,250	11,500
55	AS CLEMENTINA	100%	2800 gls	MCC	8,850
56	AS COLUMBIA	100%	2800 gls	Sinokor	9,500	11,600
57	AS CONSTANTINA	100%	2800 gls	Heung-A	9,250
58	SEVILLIA	100%	2800 gls	COSCO	9,650
59	SICILIA	100%	2800 gls	TS Lines	10,700
60	AS CARINTHIA	50%	2800 gls	Wan Hai Lines	10,500
61	CARDONIA	50%	2800 gls	Milaha Maritime	9,000
62	CARPATHIA	50%	2800 gls	Milaha Maritime	9,000
63	CIMBRIA	50%	2800 gls	OOCL	9,100
64	CORDELIA	50%	2800 gls	APL	9,250
65	AS CARLOTTA	100%	2800 grd	Hamburg-Süd	9,250	11,500
66	AS CHRISTIANA	100%	2800 grd	Hamburg-Süd	9,250	11,500
67	AS CLEOPATRA	50%	2800 grd	MSC	10,650
68	AS PATRICIA	50%	2800 grd	SITC	8,500

Current gross blended TC rate (total fleet): USD 9,700 per day