Nordic Shipholding — Earnings Release 2016

Mar 31, 2017

March 31, 2017

NORDIC SHIPHOLDING A/S
Company Announcement: 01/2017

Published via NASDAQ OMX on March 31, 2017

Nordic Shipholding A/S – Annual Report 2016

Chairman Knud Pontoppidan comments:

“Nordic Shipholding’s 2016 performance was in line with the revised guidance
disclosed in Q3 2016. Despite the weak freight market which stretched over
mainly the last 3 quarters, the Group posted a modest profit of USD 0.3 million
for 2016. However, a one-time recognition of an impairment of
USD 5.1 million – being part of the USD 5.8 million impairment reversed in 2015
– led to a loss of
USD 4.8 million for the year.”

Summary

Nordic Shipholding A/S incurred a net loss after tax of USD 4.8 million in 2016
due to a weakening in the market that started in Q2 2016 continued through the
rest of the financial year and a one-off impairment of USD 5.1 million on the
handysize vessels deployed in the various pools. The result was in line with
the revised expectations as indicated in Q3 2016 Interim Report. Excluding
this one-off impairment of USD 5.1 million (2015: reversal of impairment of USD
5.8 million), the Group generated a modest profit of USD 0.3 million for 2016
(2015: USD 7.8 million).

The Board of Directors of Nordic Shipholding A/S has approved the Annual Report
for 2016 on
March 31, 2017.

2016 in brief:

-- The Group with its six vessels, continues to be a tonnage provider in the
product tanker segment in 2016. The five handysize tankers were
successfully and without any loss of time transferred to the UPT Handy Pool
(Nordic Agnetha, Nordic Amy and Nordic Ruth) and Hafnia Handy Pool (Nordic
Pia and Nordic Hanne). The 73,000 dwt LR1 Nordic Anne is fixed on a 3-year
time-charter which will expire in November 2017.

-- Gross revenue earned by the 6 vessels reached USD 35.7 million, which
resulted in a TCE revenue of USD 27.7 million and an EBITDA of USD 10.8
million. Equity totalled USD 39.4 million and equity ratio reached 32.7%.

-- The weaker performance as compared to FY2015 was primarily due to lower
than forecasted daily TCE income from the vessels deployed in the various
handysize pools. The TCE revenue from the 3-year time-charter locked in
for Nordic Anne tracked the forecasted daily rate.

-- After accounting for depreciation and financial income and expenses, the
Group generated a modest profit of USD 0.3 million. However, an impairment
of USD 5.1 million recognised in Q3 2016 resulted in an after tax loss of
USD 4.8 million for the full year.

-- In the first quarter of 2016, the cash sweep mechanism under the loan
agreement was activated. Excess cash amounting to USD 2.7 million was used
to pay down the loan in addition to the USD 5.0 million regular loan
amortisation.

-- The actual financial performance for 2016 was in line with revised
expectations of the Board, as indicated in Q3 2016 Interim Report.

Forecast for 2017:

-- Based on current estimates and barring unforeseen circumstances, the Group
is forecasting to breakeven or to post a modest profit (not taking into
account any reversal or write-down of impairment).

-- The 5 handysize vessels will 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 current plan is to continue deploying
the vessel in the time charter market. The projected TCE revenue from the
5 product tankers in the pools and the income from the LR1 vessel are
expected to be in the region of USD 25.5 – USD 28.5 million.

-- After accounting for operating expenditure budgeted by the respective
technical managers, the Group expects EBITDA (earnings before interest,
tax, depreciation and amortisation) to be in the range of USD 8.0 – USD
11.0 million.

-- The result before tax is expected to be between USD -1.0 – USD 1.0 million.
This outlook for 2017 does not take into account any write-downs of
vessels’ carrying values.

-- The Group is expected to meet the various covenants imposed under the loan
agreement during this period.

The Board will look at growth and consolidation opportunities that are
accretive to the Company. The Company believes that the experience and
expertise of the Board, coupled with the financial strength of the majority
shareholder will result in compelling opportunities.

For further information please contact:

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