Nordic Shipholding — Earnings Release 2017

Aug 26, 2017

Half Year Report - 1 Half 2017

August 26, 2017

NORDIC SHIPHOLDING A/S
Company Announcement: 06/2017

Published via NASDAQ OMX on August 26, 2017

H1 Result 2017

Summary

The comparison figures for period ended 30 June 2016 are stated in parenthesis.

The softer tanker market continued into Q2, resulting in a decrease in TCE
revenue to USD 12.6 million (USD 16.4 million) in H1 2017. For the 6 months
ended 30 June 2017, the Group incurred a loss after tax of USD 1.0 million
compared to a profit after tax of USD 2.5 million in the same period last year.
The reduction in profit of USD 3.5 million is mainly due to the lower tanker
Time Charter Equivalent (“TCE”) revenue from the vessels deployed in the two
pools. The loss of earnings arising from the dry-docking of Nordic Hanne in
June 2017 also contributed to the decrease.

Expenses relating to the operation of vessels in H1 2017 was marginally lower
at USD 7.5 million (USD 7.6 million) compared to the same period last year.

EBITDA fell to USD 4.1 million (USD 7.7 million) primarily due to the reduction
in TCE revenue in H1 2017.

The Group did not make any impairment nor reversal of impairment during the
first half of the financial year.

After accounting for depreciation, interest expenses and other finance
expenses, the loss after tax in H1 2017 was USD 1.0 million (profit after tax
of USD 2.5 million).

Under the loan agreement, cash in excess of USD 6.0 million will be used to pay
down the loan facility. As the cash balance did not exceed USD 6.0 million,
there was no cash sweep for the period under review (cash sweep of USD 2.7
million), in addition to the regular loan amortisation.

Between 30 June 2016 and 30 June 2017, equity decreased from USD 46.6 million
to USD 38.4 million as a result of the cumulative loss during the period.
Consequently, the equity ratio decreased from 35.8% to 32.8% between 30 June
2016 and 30 June 2017.

During the financial period, cash flow generated from operations was USD 3.6
million (USD 5.1 million) mainly from earnings by the two pools and
time-charter income received for Nordic Anne, offset by payment of periodic
interest expenses on the term loan. During this period, the Group invested USD
1.1 million (USD 0.2 million) in dry-docking and also made scheduled repayments
of USD 3.3 million (USD 5.2 million, including a USD 2.7 million cash sweep) on
the term loan facility.

Cash and cash equivalents stood at USD 4.0 million (USD 6.4 million), a
reduction of USD 2.4 million from 30 June 2016.

For 2017, the 5 handysize vessels are expected to remain commercially deployed
in the UPT Handy Pool and Hafnia Handy Pool respectively. The current time
charter for the LR1 vessel will expire in November 2017 (if the charterer does
not exercise its one-year extension option). The Company will explore
employment options during H2 this year.

The relatively weak tanker market continued to extend into Q3 2017. Based on
the respective commercial managers’ updated forecasts, the Board has revised
downwards the forecast for 2017 previously indicated in the 2016 Annual Report.
The EBITDA (earnings before interest, tax, depreciation and amortisation) is
expected to be in the range of USD 6.0 million – USD 9.0 million, a reduction
from USD 8.0 million – USD 11.0 million. The result before tax is expected to
be between USD -3.5 million – USD -1.5 million, decreased from USD -1.0 million
– USD 1.0 million. This outlook for 2017 does not take into account any
impairment of vessels’ carrying values.

The Board will look at growth and consolidation opportunities that are
accretive to the Company.

For further information please contact:

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