Saga Pure — Interim / Quarterly Report 2018

Aug 31, 2018

Q 2 201 8 REPORT

CONTENTS

FINANCIAL INFORMATION

Highlights > Responsibility Statement > Consolidated condensed statement of comprehensive income > Consolidated condensed statement of financial position > Consolidated condensed cash flow statement > Consolidated condensed statement of changes in equity > Notes to the financial statements >

HIGHLIGHTS

KEY FIGURES

NOK 1000	Apr-Jun 2018	Apr-Jun 2017	Jan-Jun 2018	Jan-Jun 2017
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Operating revenues	33 339	9 437	19 072	51 982
Operating profit (-loss) before depreciation (EBITDA) (1)	28 415	5 643	32 724	42 358
Operating profit/(-loss) (EBIT) (2)	27 682	4 964	31 259	41 041
Net profit/(-loss)	27 223	5 182	30 320	41 409
Total comprehensive income	27 223	-37 819	29 913	18 613
Value adjusted equity per share (NOK) (3)	1,65	3,01	1,65	3,01
Basic and diluted earnings per share NOK	0,10	0,02	0,11	0,15

(1) EBITDA can be calculated from the statement of income by deducting interest income, interest expenses and depreciation from the profit/(loss) before taxes.

(2) EBIT can be calculated from the statement of income by deducting interest income and interest expenses from the profit/(loss) before taxes.

(3) Value adjusted equity has been calculated through application of market value for assets and liabilities traded in quoted markets, and book value for other assets and liabilities. As traded assets and liabilities are carried at fair value in the balancesheet, the VAE per share equals total equity excluding non-controlling interests per outstanding share.

RESULTS

Saga Tankers Group ("The Group") reports a net total comprehensive income for the second quarter 2018 of NOK 27.2 million. (NOK 29.9 million for first half year of 2018).

EBITDA for the second quarter was NOK 28.4 million. (NOK 31.3 million for first half year of 2018).

Earnings per share (EPS) for the second quarter were NOK 0.10. (NOK 0.11 for first half year of 2018).

The Group had an income of NOK 33.3 million in the second quarter. 4.9 million relatesto lease and operation of real estate, whilst 28.4 million stems from assets available for sale .

The average number of outstanding shares in the quarter was 266,149,831.

The Group's condensed unaudited financial statements for the second quarter of 2018 are enclosed.

Current Investments

The Group currently holds investments classified as financial assets available for sale with a fair value of NOK 373.1

million. The fair value of the investments by the end of second quarter is as follows:

SD Standard Dr. Plc NOK 176 million Pareto Bank ASA NOK 129 million Vistin Pharma ASA NOK 60 million Other investments NOK 8 million

Changes in market-value for these investments resulted in a gain of 28.4 million for the second quarter, some of which was realized through the sale of shares in Pareto Bank ASA.

Unrealized profits on available for sale assets until end of 2017 have been classified as other comprehensive income. Unrealized gain or loss from these investments has as of the first quarter of 2018 been classified as gain or loss directly on the profit and loss in accordance with the amendments of IFRS 9. Accumulated reserves as of end of 2017 has been reclassified from other comprehensive reserves to ordinary retained earnings in the equity without recycling trough profit and loss.

The investment in SD Standard Drilling Plc during first quarter is further described in note 3.

The Group has a cash holding of NOK 64.5 million at the end of second quarter.

Outlook

The Group has a solid investment portfolio and a strong balance sheet, enabling the company to continue to pursue attractive investment opportunities within the framework of industries it operates.

The Group expects the current market volatility to continue going forward, providing opportunities to create value through investments in assets, equity or debt.

FORWARD-LOOKING STATEMENTS

Matters discussed in this report may constitute forward looking statements. The forward looking statements in this report are based on various assumptions, many of which are based upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies, which are difficult to predict and beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

Oslo, 30 August 2018

The Board of Directors

RESPONSIBILITY STATEMENT

We confirm, to the best of our knowledge, that the financial statements for the period 1 January 2018 to 30 June 2018 have been prepared in accordance with IFRS, as adopted by the EU, and give a true and fair view of the Group and the Company's consolidated assets, liabilities, financial position and results of operations. Furthermore, we confirm that the Report of the Board provides a true and fair view of the development and performance of the business and the position of the Group and the Company, together with a description of the key risks and uncertainty factors that the Company is facing.

Oslo, 30 August 2018

The Board of Directors

Martin Nes Chairman

Yvonne Litsheim Sandvold Board member

Øystein Stray Spetalen Board member

Kristin Hellebust Board member

CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

NOK 1000	Apr-Jun 2018	Apr-Jun 2017	Jan-Jun 2018	Jan-Jun 2017
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Other Income	4 918	4 385	11 750	10 121
Net gain/(-loss) from available for sale assets	28 421	5 053	7 322	41 861
Other gains/(-losses)	-	-	-	-
Operating revenues	33 339	9 437	19 072	51 982
General administrative expenses	4 931	3 790	9 326	10 104
Depreciation (note 5)	733	678	1 465	1 318
Net loss/(-gain) from available for sale assets	-	-	-	-
Operating expenses	5 664	4 468	10 791	11 421
Operating profit/(-loss)	27 676	4 969	8 281	40 561
Interest income	3 6	613	7 0	1 165
Interest expense	-496	-396	-1 010	-797
Other financial items	7	-4	407	480
Net financial items	-453	213	-532	848
Share of profit from associates (note 3)	-	-	22 570	-
Taxes	-	-	-	-
Net profit/(-loss)	27 223	5 182	30 320	41 409
Change in available-for-sale assets	-	-43 001	-	-22 313
Exchange difference currency translations	-	-	-407	-484
Other comprehensive income	-	-43 001	-407	-22 797
Total comprehensive income	27 223	-37 819	29 913	18 613
Attributable to:
Non-controlling interests	176	298	1 536	1 321
Shareholders' interests	27 048	-38 117	28 377	17 292
Basic and diluted earnings per share NOK	0,10	0,02	0,11	0,15
Average number of shares in the period	266 149 831	266 149 831	266 149 831	266 149 831
Number of shares outstanding at period end	266 149 831	266 149 831	266 149 831	266 149 831

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

NOK 1000	30.06.2018	31.12.2017
	(unaudited)	(audited)
ASSETS
Non-current assets
Available-for-sale financial assets (note 4)	373 146	230 152
Fixed assets (note 5)	91 584	92 611
Associates (note 3)	-	139 323
Total non-current assets	464 730	462 085
Current assets
Other current assets	1 209	2 511
Cash and equivalents	64 506	27 084
Total current assets	65 716	29 594
TOTAL ASSETS	530 446	491 679
EQUITY AND LIABILITIES
Equity
Share capital	2 661	2 661
Own shares	-	-
Other equity	859 577	859 577
Total paid-in-capital	862 239	862 239
Accumulated losses	-420 361	-503 798
Other components of equity	-2 648	52 413
Non-controlling interests	19 615	26 218
Total equity	458 845	437 071
LIABILITIES
Non-current liabilities
Long-term interest bearing debt	61 000	42 000
Deferred tax	241	241
Total non-current liabilities	61 241	42 241
Current liabilities
Short-term interest bearing debt	4 000	4 000
Tax payable	2 2	3 6
Other current liabilities and accruals	6 338	8 332
Total current liabilities	10 360	12 368
Total liabilities	71 601	54 609
TOTAL EQUITY AND LIABILITIES	530 446	491 679

CONSOLIDATED CONDENSED CASH FLOW STATEMENT

NOK 1000	Jan-Jun 2018	Jan-Jun 2017	Jan-Dec 2017
	(unaudited)	(unaudited)	(Audited)
Profit before tax	30 320	41 409	56 987
Profitshare from associates	-22 570	-	-4 006
Depreciation (note 5)	1 465	1 318	2 711
Net loss/(-gain) from AVA asset	-7 322	-41 861	-54 621
Other losses/(-gains)	-	-	-
Foreign exchange losses/(gains)	-401	-480	-480
Interest paid	448		1 571
Interest received	-34		-1 833
Income tax paid	-14	-45	-14
Increase/decrease receivables and prepayments	1 301	-703	-1 885
Increase/decrease payables and accruals	-1 994	139	2 387
Net cash flow from operating activities	1 199	-223	817
Investment in AVA Financial assets	-46 425	-37 249	-98 698
Divestment in AVA Financial assets	64 427	72 935	86 697
Net divestment/(-investment) trading	135	-	-
Dividens received	8 084	-	-
Net cash effect disposal of subsidiaries	-	-	-
Interest received	3 4		1 833
Investment in fixed assets	-438	-1 225	-5 809
Net cash flow from investing activities	25 816	34 461	-15 978
Repayments of long term borrowings	-5 000	-2 000	-4 000
Drawdown long term borrowings	24 000		-
Drawdown short term borrowings	-		-
Interest paid	-448		-1 571
Dividends paid to non-controlling interests	-8 139	-	-
Acquisition of own shares	-	-	-
Distributions to controlling interests	-	-	-391 240
Net cash flow from financing activities	10 413	-2 000	-396 811
Net change in cash and cash equivalents	37 428	32 238	-411 972
Cash and equivalents at beginning of period	27 084	439 060	439 060
Net cash in merger at carryover basis	-	-	-
Net foreign exchange differences (unrealised)	-6	-5	-5
Cash and equivalents at end of period	64 506	471 293	27 084

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Jan-Jun 2018 (Unaudited)
						Exchange
	Issued	Own	Other	Accumulated	Available for sale	difference currency	Non controlling
NOK 1000	capital	shares	equity	losses	reserve	translations	interests	Total
Equity as of 31 December
2017 - as previously
reported	2 661	-	859 577	-503 799	54 654	-2 241	26 218	437 071
Changes in accounting
principles IFRS 9 - Note 1				54 654	-54 654
Equity as at 1 January 2018	2 661	-	859 577	-449 144	-	-2 241	26 218	437 071
Net profit/(-loss)	-	-	-	28 783			1 536	30 320
Other comprehensive
income	-	-	-			-407		-407
Total comprehensive
income	-	-	-	28 783	-	-407	1 536	29 913
Dividens to non
controlling interests							-8 139	-8 139
Equity per ending balance
30 June 2018	2 661	-	859 577	-420 361	-	-2 648	19 615	458 845
Jan-Dec 2017 (Audited)
						Exchange
					Available	difference	Non
NOK 1000	Issued capital	Own shares	Other equity	Accumulated losses	for sale reserve	currency translations	controlling interests	Total
Equity as at 1 January 2017	286 733	-20 583	987 329	-558 149	90 917	-2 164	23 685	807 768
Net profit/(-loss)	-	-	-	54 350			2 533	56 883
Other comprehensive
income	-	-	-		-36 263	-78		-36 340
Total comprehensive
income	-	-	-	54 350	-36 263	-78	2 533	20 543
Cancellation of own shares	-20 583	20 583	-	-	-	-	-	-
Dividends/repayment to
shareholders	-263 488	-	-127 752	-	-	-	-	-391 240
Equity per ending balance
31 December 2017	2 661	-	859 577	-503 799	54 654	-2 241	26 218	437 071

NOTES

NOTE 1 – BASIS FOR PREPARATION

The Company's condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as approved by the EU and requirements in the Norwegian Securities Trading Act. This condensed interim financial statement for the first quarter is adopted by the Board of Directors on 30 August 2018.

The accounting policies adopted in the preparation of the condensed interim financial statements are consistent with those presented in the Annual Report of 2017, with the exception of Available for sale financial assets are measured at fair value. Changes in fair value are now booked directly on the profit and loss, whereas former booked as other comprehensive income provided that no impairment is present. This is in accordance with the amendments in IFRS 9, and the anticipated changes has been described in the annual report. Reserves from other comprehensive income has as of 1 January 2018 been reclassified from Other comprehensive income reserves, to retained earnings in the equity as illustrated in the consolidated statement of changes in equity. These reserves has therefore not been, nor will ever be, recycled over the profit & loss.

Foreign currency

The financial statements are presented in NOK. NOK is also the functional currency for all the subsidiaries in the Group.

NOTE 2 – OPERATING SEGMENTS

The management monitors the net income from investments in financial assets and liabilities, and the revenues from lease and operation of property on a separate basis.

	Jan-Jun 2018	Jan-Jun 2017	Jan-Dec 2017
NOK 1000
Net income financial assets	7 322	41 861	54 621
Revenues from lease and operation of property	11 250	9 959	18 357
Other income	500	162	1 001

NOTE 3 – ASSOCIATES

NOK 1000	SD Standard Drilling Plc
Carrying amount, 31 December 2017	139 323
Share of profit from associates (gain on reclassification)	22 570
Reclassified to Available-for-sale financial assets*	-161 893
Carrying amount, 30 June 2018	-

* The Group held 20.22 % of the outstanding shares in SD Standard Drilling Plc as per end of 2017. On the basis of the significant influence the Group through its ownership could impose, the investment was acknowledged as an associated company. During first quarter of 2018, SD Standard Drilling Plc has completed an equity issues. Although the Group has participated in the issuance, the Group only holds 18.375 % of the outstanding shares at the end of first quarter. The Group has assessed that it now longer imposes significant influence towards the investment. Based on this assessment the investment has been reclassified from Associated to Available-for-sale financial assets.

NOTE 4 – AVAILABLE-FOR-SALE FINANCIAL ASSETS

		30 Jun 2018	31 Dec 2017
NOK 1000
At 1 January		230 152	298 480
Additions		46 425	98 698
Unrealized gain/(loss)		-22 501	-
Impairment		-	-3 388
Increase/(Decrease) in value recognized as other comprehensive income		-	-36 263
Reclassified as associates		-	-132 525
Reclassified from associates due to dilution and loss of significant influence		161 893	36 223
Disposals		-42 822	-31 074
Total		373 146	230 152
Available-for-sale financial assets include the following:
	Fair value hierarchy	30 Jun 2018	31 Dec 2017
Listed shares	Level 1	365 557	224 936
Non-listed shares	Level 2	7 589	5 216
Total		373 146	230 152

The entire change in available-for-sale financial assets during the quarter relates to financial instruments that fall within the level 1 category of the fair value hierarchy. The fair value hierarchy is described below.

Fair value hierarchy

The group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.
• Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data, for example discounted cash flow technique.

The financial assets are denominated in NOK and are measured at fair value. Listed shares are valued at values quoted in active markets as of 30 June 2018.

NOTE 5 – FIXED ASSETS

			Capitalized
		Machinery &	costs - work in
	Bulidings	equipement	progress	Land	Total
2018
NOK 1000
Aquisition cost, opening balance 01.01.18	97 259	4 436	3 8	199	101 931
Acquisitions during the period	133	306	-	-	438
Diposals during the period	-	-	-	-	-
Aquisition cost at 30.06.18	97 391	4 742	3 8	199	102 370
Accumulated depreciation, opening balance
01.01.18	-7 961	-1 360	-	-	-9 321
Depreciation	-923	-542	-	-	-1 465
Accumulated depreciation disposed assets	-	-	-	-	-
Accumulated depreciation at 30.06.18	-8 884	-1 902	-	-	-10 786
Net book value at 30.06.18	88 508	2 839	3 8	199	91 584

			Capitalized
		Machinery &	costs - work in
	Bulidings	equipement	progress	Land	Total
2017
NOK 1000
Aquisition cost, opening balance 01.01.17	91 529	4 357	3 8	199	96 122
Acquisitions during the period	5 730	7 9	-	-	5 809
Diposals during the period	-	-	-	-	-
Aquisition cost at 31.12.17	97 259	4 436	3 8	199	101 931
Accumulated depreciation, opening balance
01.01.17	-5 441	-1 169	-	-	-6 609
Depreciation	-2 520	-192	-	-	-2 711
Accumulated depreciation disposed assets	-	-	-	-	-
Accumulated depreciation at 31.12.17	-7 961	-1 360	-	-	-9 321
Net book value at 31.12.17	89 298	3 075	3 8	199	92 611

NOTE 6 – 20 LARGEST INVESTORS

	Of total
03.07.2018 NAME	shares
1 *ØYSTEIN STRAY SPETALEN	64,94 %
2 TORSTEIN INGVALD TVENGE	3,76 %
3 APOLLO ASSET LIMITED	3,49 %
4 PARK LANE FAMILY OFFICE AS	2,71 %
5 TANJA A/S	2,16 %
6 BORGEN INVESTMENT GROUP NORWAY AS	1,88 %
7 EUROCLEAR BANK S.A./N.V.	1,80 %
8 BJØRN BAKKEN	1,56 %
9 UTHALDEN AS	1,46 %
1 0 PORTIA AS	1,39 %
1 1 TIGERSTADEN AS	1,28 %
1 2 DNB NOR MARKETS, AKSJEHAND/ANALYSE	1,06 %
1 3 WIECO AS	0,96 %
1 4 SKØIEN AS	0,75 %
1 5 BJØRN HÅVARD BRÆNDEN	0,71 %
1 6 STATE STREET BANK AND TRUST COMP	0,66 %
1 7 KRISTIAN HODNE AS	0,66 %
1 8 SILVERCOIN INDUSTRIES AS	0,65 %
1 9 VALHALL INVEST AS	0,61 %
2 0 BJØRN OLSEN	0,45 %
Total	92,94 %

* Controlled by board member Øystein Stray Spetalen.

SAGA TANKERS ASA Sjølyst Plass 2 0278 Oslo

INVESTOR RELATIONS Phone: +47 23 01 49 14 e-mail: espen.lundaas@sagatankers.no

www.sagatankers.com