SESODA — Investor Presentation 2021

Nov 26, 2021

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2021 Sesoda Corporation November 26, Investor Presentation 2021

Investor Presentation www.sesoda.com.tw

Disclaimer

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We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. The financial numbers herewith are based on International Financial Reporting Standards(IFRS). Cumulative consolidated numbers have been reviewed by the CPA.

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Company Profile Build factory in Suao, where is rich in limestone, then began production with pure Soda Ash

1957, Sesoda Corporation was established in collaboration with the government’s chemical industry projects. Total Employees Main Businesses

Total Employees

164 Average Seniority

• Potassium Sulfate (SOP)

• Soda Ash and other trading

products

14.27 years

• Bulk vessel shipping

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Potassium Sulfate(SOP) Potassium Sulfate is a high-grade potassium fertilizer containing high Sulfur, high Potassium and low Chlorine.

Capacity

14 production lines with an annual capacity of 140,000mt. Main product is Potassium Sulfate(SOP), by-products include Hydrochloric Acid(HCl) and Liquid Calcium Chloride (CaCl2). Sales Strategy

• 98% of the output is for exports.

• Diversification of export markets avoids the pitfall of concentrating on one single market.

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Market Update

SOP growing by 2~3% p.a. According to IFA & other market data , global Potash sales is around 76 million tons in 2020; SOP about 8 million tons, growing by at least 2-3% annually. Chinese authorities imposes regulations requiring additional inspection on fertilizer, incl. SOP, exports Since the 2019’s removal of fertilizer export tariff, the most critical measures were implemented on Oct. 15, 2021, by the General Administration of Customs, aiming for the stable fertilizer supplies domestically. China’s move to curb fertilizer exports will surely be felt around the world. How big an impact this will have on the global SOP market is to be closely watched.

Unprecedented price heights for MOP, SOP &container rate

• Strong demand for potash accelerated its pricing since April 2021. This strong demand & upward pricing trend are expected to continue well into Q1 2022, especially with MOP’s tight supply globally.

• Ocean freight rates are at all time “record levels” on most routes in the world. Port congestion, lack of empty containers & container space, shortage of truck drivers and labors have become the norm. - Starting late summer, SOP selling prices started to increase to reflect price escalation of MOP & other raw materials, and market situation. Overall, SOP demand has been steady for the company, though skyrocketed raw material pricing and container rate have eaten away its margins.

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Moving forward

The SOP market is expected to continue to grow well into 2022. To equalize the impact from the still very high raw material pricing, especially MOP, and container rate, the company will focus more on attaining break bulk orders.

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Soda Ash and Other Trading Products

• The series of products include Soda Ash and Sodium Bicarbonate, among other trading products, contribute to around 13% in sales revenues ; which offered stable contribution to sales revenues and profits previously.

• Price had been increasing gradually by freight rates up, unstable shipping volumes and rising raw materials at H12021. Regional supply been a significant reduction to prompted prices to skyrocket in a short period after a Policy Implementation of China, dual control system of total energy consumption and energy Intensity, at 3Q2021.

• The price fluctuations and supply instability will continue for a period, it will be cautious to maintain turnover and profit contribution in 2022.

Operational Overview

Covid-19

Sea shipping has been a global problem which affected by covid-19 in 2021. it cause material price up and enlarge the risk and manage difficulty of trading. Competitors Challenges from China and Price variation sharply and supply Turkey unsteady are key factors of sales management in 2022. Sales volume was restraint by Downstream customers are price up sharply and unsteady hesitating to high prices. supply.

Outlook

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Economic development would be dependent about price variation, shipping situation and supply volume. We can only optimistically expect that the demand in various industries will gradually stabilize in 2022. Other than working more closely with suppliers to earn the steady supply, also work closely with customer to manage the trading risk and sales volume.

Shipping Sesoda Steamship Corporation is 100% owned subsidiary

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15 Bulk vessels

Currently, we have 15 handy-size (28,000DWT~40,000DWT) vessels in operation. Our shipping business accounts for approximately 36% of the company's total revenue until the 3rd quarter of this year.

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Short or Long terms

Basically, all vessels are chartered either by short or long terms to balance seasonal and business cycle impacts!

Outlook

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Generally the hire level for handy-size is more stable than other bulkers such as Capesize/Panamax.

Profits in shipping business are increasing due to COVID-19 lockdown & Port congestion. Index of BHSI increased 139% up to now. All our ships renewed in this year are all benefited. However, cost of crew are also increased, this will be a long-term affection. We forecast there’s a little bit modification after the sharp increase in 2nd half of 2021. However, there’s remain a support on handy-size market in 2022 as we believe the global economy will be slowly recovering from impact of Covid-19.

Financial Reports

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Statements of Comprehensive Income

Selected Items from Statements of Comprehensive Income	2021 Q1~Q3	2020 Q1~Q3
Net Revenue	3,215	3,068
Gross Margin	28%	20%
Operating Expenses	520	440
Operating Margin	12%	6%
Non-Operating Items	16	(57)
Net Income to Shareholders of the Parent	329	101
Company	10%	3%
Net Profit Margin	1.32	0.4
EPS(NT Dollar)	6%	2%

⚫ In NT$ millions unless otherwise noted

• ⚫ The weighted average number of shares outstanding were 249 m shares at 9/30/21. ⚫ ROE is based on aver it attributable to shareholders of rent com n age equ y pa pa y.

Balance Sheets Selected Items from Balance Sheets 2020.9.30 Cash & Marketable Securities Accounts & Notes Receivable Inventories Long-term Investments NET PP&E Others Total Assets Current Liabilities Non-current Liabilities Total Liabilities Total Shareholders’ Equity 828 477 351 666 9,528 213 12,063 2,342 3,949 6,291 5,772 ⚫In NT% millions. 2021.9.30 877 625 477 619 8,960 327 11,885 2,872 3,281 6,153 5,732 Amount % 7 6 4 5 75 3 100 25 27 52 48 Amount % 7 4 3 6 79 1 100 19 33 52 48

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Statements of Cash Flows
Selected item from
Statements of Cash Flows 2021 Q1~Q3 2020 Q1~Q3
Beginning Balance 923 721
Cash from operating activities 492 510
Capital expenditures (181) (156)
Cash dividends - (169)
Short-term borrowings 100 516
Long-term debts (390) (598)
Investments and Others (70) 4
Ending Balance 828
874
⚫ In NT% millions.
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Q&A

Sesoda Corporation TEL ： 02-27047272 WEB SITE ： http://www.sesoda.com.tw

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THANK YOU! Green Promise, Sustainable Development Sesoda Corporation