Nordic Shipholding — Earnings Release 2016

May 25, 2016

May 25, 2016

NORDIC SHIPHOLDING A/S
Company Announcement: 04/2016

Published via NASDAQ OMX on May 25, 2016

Q1 Result 2016

Summary

The comparison figures for period ended 31 March 2015 are stated in parenthesis.

For the 3 months ended 31 March 2016, the Group generated a profit after tax of
USD 1.5 million, compared to USD 2.7 million in the same quarter last year.
The average daily TCE rate earned by the vessels in the Handytankers Pool was
below the forecasted daily rate, and also lower than the rates earned during
the same period in 2015, whilst the LR1 vessel (Nordic Anne) tracked the
forecasted daily rate.

The softer tanker market led to a decline in gross revenue primarily from the
vessels in the Handytankers Pool, and TCE earnings dropped to USD 8.5 million
(USD 9.2 million) in Q1 2016.

EBITDA decreased to USD 4.2 million (USD 5.2 million) due to the reduction in
TCE earnings and higher vessel operating cost in Q1 2016.

Expenses relating to the operation of vessels in Q1 2016 increased to USD 3.8
million (USD 3.4 million). The higher vessel operating cost is mainly due to
increased expenditure on spares and repairs of vessels.

The Group did not make any impairment nor reversal of impairment during the
quarter.

During Q1 2016, depreciation amounted to USD 1.8 million (USD 1.7 million).
After accounting for depreciation, interest expenses and other finance
expenses, the result after tax in Q1 2016 was USD 1.5 million (USD 2.7
million).

Under the loan agreement, cash in excess of USD 6.0 million will be used to pay
down the loan facility. As in the previous four quarters, this cash sweep
mechanism was activated in Q1 2016 and USD 2.7 million was used to pay down the
loan, in addition to the regular loan amortisation.

As a consequence of the cumulative earnings and repayment on loans, the equity
increased from USD 33.2 million to USD 45.6 million and the equity ratio
improved from 24.2% to 34.3% between 31 March 2015 and 31 March 2016.

For the quarter ended 31 March 2016, cash flow generated from operations was
USD 3.8 million (USD 5.2 million) mainly from the distributions earned by the
Handytankers Pool and time-charter income received for Nordic Anne, offset by
payment of periodic interest expenses on the term loan. In Q1 2016, the Group
invested USD 0.2 million (USD 0.2 million) in dry-docking and made a partial
repayment of USD 4.0 million (USD 2.1 million) on the term loan facility.

Cash and cash equivalents stood at USD 6.3 million (USD 7.4 million), a
reduction of USD 1.1 million from 31 March 2015.

The Board has decided to withdraw the 5 vessels from the Handytankers Pool.
The Board believes that pool earnings can be optimized by being a member of a
smaller and more focused pool as the Company will have a greater influence on
the way the pool is operated. The first vessel is expected to be redelivered
to the Group on/around 25 May 2016 with the remaining 4 vessels to be
redelivered to the Group within the 90 days’ redelivery window.

3 of the vessels will enter the UPT Handy Pool and 2 vessels will be employed
in the Hafnia Handy Pool.

Despite the current softer sentiments on the tankers’ market, the outlook for
2016 - as based on the respective commercial managers’ forecasts - remains
unchanged, and as indicated in the 2015 Annual Report. For 2016, the Group
expects the TCE revenue from the 5 product tankers in the pool and the
time-charter income from Nordic Anne to be in the region of USD 33.0 million –
USD 36.0 million. The EBITDA (earnings before interest, tax and depreciation)
is expected to be in the range of USD 17.0 million – USD 20.0 million while
result before tax is expected to be between USD 7.0 million – USD 9.0 million.
This outlook for 2016 does not take into account any further reversal of
impairment loss nor any write-downs of vessels’ carrying value.

For further information please contact:

Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00