Solstad Offshore ASA — Interim / Quarterly Report 2020

Feb 25, 2021

4th Quarter Report 2020

Propelling global energy markets. Into the future.

The Contents

fro he C E O Le t ter t m	0 4
th Qu 4 ter H ig h l ig hts ar	0 6
F ina ia l Su nc mm ary	0 8
Op t ion l Up da te era a	1 4
Ma ke Ou loo k t t r	1 6
En Tra it ion erg ns y	1 8
Su fu l Re tru tur ing cc es s s c	2 0
S ta tm t o f t he Bo d en ar	2 2
F ina ia l S ta tem t nc en	2 4
No tes	3 2
Su ta ina b i l ity s	4 2
Ou G lo ba l Fo tp int r o r	4 4

The Company

Solstad Group ("the Company") is a world leading owner and operator of offshore service vessels.

As per December 2020 the Company have nearly 3 300 highly skilled employees with 10 offi ces globally and operate a versatile fl eet of modern offshore vessels.

The Company successfully completed its operational and fi nancial restructuring October 2020.

Our vision is to further enhance our postition as a reliable world-leading offshore shipping company acknowledged as a supplier of excellence by our people, clients and other stakeholders.

Targeting zero emission by 2050 we are so far on track with 20% reduction in CO2 emissions achieved since 2008, adjusted for activity level.

Frontpage photo: Håkon Sunde

Letter from the CEO

Fourth quarter 2020 saw the completion of the restructuring process and we now have our eyes set fi rmly on the future.

I would like to thank everyone involved in securing the balanced outcome: Solstad employees, our shareholders, creditors and advisors. I am pleased with the result: a restructured balance sheet, strengthened cash position, positive equity and a simplifi ed legal structure. With a green light to sell and recycle the oldest part of our fl eet, we are shaping up Solstad for the next chapter and focus on the opportunities on the horizon.

While the restructuring agreement marks a new beginning, some things thankfully remain the same: the people, the modern fl eet and the quality operations we take pride in.

The Covid-19 pandemic continues to have a huge impact on markets and operations. Again, I am pleased to see that people step up, take responsibility and deliver. Thank you to everyone for your patience, understanding and hard work, onboard the vessels and across the Solstad organisation. We are pleased to report that we have not experienced major Covid-19 related disruptions to daily operations, and continue to implement measures to keep it that way.

The markets on the other hand continue to be challenging and our 4Q 2020 numbers refl ects the low activity. In particular the North Sea winter season has been slow. This also continues into 1Q 2021. Looking beyond Q1, activity levels in offshore wind continue to grow and we see some early signs of recovery within Oil&Gas. That being said, as an industry we continue to make life hard for ourselves by competing at unsustainable rate levels. Even in a scenario with more normalized activity levels, oversupply remains an issue. Further consolidation and recycling of vessels are needed. An active involvement from the main banks is essential to make this happen.

Looking ahead, priority number one is to deliver on the restructuring agreement. However, at the same time we also have to make sure that the company and the industry stay relevant for the future. To me that is about taking an active role in the ongoing energy transition by increasing our presence within renewable energy in general and within offshore wind in particular. We must also maintain our focus on reducing emissions towards the ultimate target of zero emissions in 2050 to remain attractive both as a supplier and employer.

Think globally, adjust locally continues to be an important tenet for Solstad. Our fl eet is sized for global operations, and we will continue to leverage our presence in the global offshore energy market. Solstad´s ability to deliver on local content requirements in important markets such as Australia, Brazil and the UK as well as Norway will be important as we pursue new opportunities.

The future is very exciting and holds many opportunities. In Solstad we will continue to be an important actor in the oil & gas industry while using our skills, experience and reach to play an active part in the energy transition towards a greener future.

Lars Peder Solstad CEO

4th Quarter Highlights

• Successful restructuring of the Company was approved by an extraordinary general meeting on 20 October 2020
• This report is refl ecting the changes to the Company following the closing of the restructuring.
• Equity strengthen with MNOK 12,212 compared to previous quarter and booked equity end of year of MNOK 4,200
• Liquidity strengthen with MNOK 1,358 compared to previous quarter and year end cash position of MNOK 2,412
• The effects of a lower oil price are that E&P companies are rescrutinizing their spending plans and postponing or canceling projects resulting in reduced utilization in the quarter
• Revenues for the fourth quarter of 2020 was MNOK 1,175 vs MNOK 1,247 in 2019, while EBITDA adjusted for the fourth quarter was MNOK 204 vs MNOK 265 in 2019
• EBITDA adjusted for 2020 was MNOK 1,293 vs MNOK 1,411 in 2019
• The COVID-19 pandemic and the decline in the offshore activity will affect the Company's revenues, utilization and increased cost, also going forward

Key Financials

(NO K 1, 000 )	202 0 01.1 0-31 .12	201 9 01.1 0-31 .12	202 0 01.0 1-31 .12	201 9 01.0 1-31 .12	201 8 01.0 1-31 .12
Rev enu e	1,17 5	1,24 7	5,02 6	5,24 5	4,91 0
EBIT DA adju sted	204	265	1,29 3	1,41 5	1,00 5
EBIT	-280	-893	-2,1 74	-1,19 6	-3,9 87
Profi t be fore Tax	11,4 34	-1,2 53	7,23 2	-3,1 29	-5,8 88
Cas h an d eq uiva lent s	2,41 2	1,13 4	2,41 2	1,13 4	1,35 1
Net king ital wor cap	-796	-26, 264	-796	-26, 264	-24, 654
Equ ity	4,20 0	-3,8 35	4,20 0	-3,8 35	-851
Net inte rest bea ring deb t*	-19, 367	-30, 990	-19, 367	-30, 990	-28, 727
Ord er b ack log	5,20 0	8,20 0	5,20 0	8,20 0	6,80 0

*Including recognized debt relating to IFRS 16 Leases (Note 9)

Financial Summary

Operating income for 4Q 2020 amounted to MNOK 1,175 compared to MNOK 1,247 in 4Q 2019. Revenues for Year to date 2020 was reduced with MNOK 219 (MNOK 5,026 vs MNOK 5,245 in 2019).

• Operating expenses in 4Q 2020 amounted to MNOK 1,104, of which MNOK 901 are classifi ed as vessel operating expenses. Compared to 4Q 2019 operating expenses increased by MNOK 110 driven by an extraordinary one-off restructuring cost of MNOK 109.
• Adjusted for this extraordinary one-off restructuring cost both vessel operating cost and administrative expense has been stable compared to 4Q 2019.
• Additional cost related to the COVID-19 pandemic has year to date 2020 amounted to approximately MNOK 100.
• Operating result before depreciation was MNOK 70 in 4Q 2020 compared to MNOK 252 in 4Q 2019.
• Administrative expenses for 4Q 2020 was MNOK 203 (MNOK 109 Adjusted for restructuring in 4Q 2020), compared to MNOK 105 for 4Q 2019.
• Ordinary result before taxes for 4Q 2020 ended positive with MNOK 11,442 compared to negative MNOK 1,084 for 4Q 2019.
• EBITDA adjusted ended at MNOK 204 in 4Q 2020 compared to MNOK 265 for 4Q 2019. EBITDA adjusted Year to date 2020 of MNOK 1,293 vs MNOK 1,411 in 2019.
• Total booked equity at the end of the period was positive MNOK 4,200

During 4Q 2020 the currency exchange rate for USD versus NOK has weakened. This resulted in a positive unrealized currency effect relating to the Company's assets and debt of MNOK 533. In addition due to the restructuring we have realized currency loss of MNOK 246.

As a result of the successful restructuring net fi nancial income is in 4Q 2020

positive with MNOK 11,699 mainly driven by debt to equity conversion.

Impairment charges totaling MNOK 72 were incurred in the quarter mainly related to write down of non-strategic scrapping fl eet. Impairment of the shares in Normand Maximus of MNOK 295 in 4Q 2020. Interest cost for 4Q 2020 is negative of MNOK 257.

Capital Structure

Net interest-bearing debt was at MNOK -19,367 (MNOK -30,990), with the reduction mainly explained by restructuring effect as described in the restructuring section and in Note 9.

Total current assets at the end of the quarter were MNOK 3,839 (MNOK 2,830 per 4Q 2019), of which cash and cash equivalents amounted to MNOK 2,412 (MNOK 1,134). This includes the unutilized super senior credit facility of MNOK 1,468 to strengthen the Company's liquidity post restructuring. Total current liabilities were NOK 4,635 (MNOK 29,094), giving net working capital of MNOK -796 (MNOK -26,264). NOK 3 d M

The Group's equity as of 31 December 2020 was MNOK 4,200, which represents 16% of the total balance sheet (-13% at 31 December 2019).

Total non-current assets at the end of the quarter were MNOK 22,198 (MNOK 27,003. The reduction is explained by ordinary depreciation, impairments, divestments and foreign exchange movements. 8 on,

Cash Flow and Cash Position

During 4Q 2020, the overall cash position of the Company increased from MNOK 1,134 to MNOK 2,412. The Net cash fl ow from operations was positive with MNOK 26 for 4Q 2020. Net cash fl ow from investments was negative by MNOK 43 mainly relates to regulatory docking of vessels. Net interest paid to lenders was MNOK 107, and net installments paid to lenders were MNOK 13. In addition there were negative currency effect of MNOK 29 due to NOK/USD exchange rate.

Sale of vessels

Following the successful restructuring of the Company a part of the restructuring agreement is to right-size the fl eet to ensure that Solstad has a competitive fl eet for the future.

Of the Company's total fl eet 37 vessels are to be marketed for sale and sold over a period of time. Per February 2021 the Company have now completed sales of 3 out of the 37 vessels that will be divested.

Reinstated debt - face value vs fair value

As part of the successful restructuring of the Company the majority of the Company's old debt was refi nanced. About one third of the previous debt was converted to equity, while two thirds returned as reinstated debt.

Derecognition of old debt and recognition of new debt have been handled in accordance with IFRS 9. At initial recognition new debt is measured at fair value, which is lower than nominal value. This results in a gain (fi nancial income, MNOK 1,066) at initial recognition and will be offset by increase in interest expenses over the loan period. The gain will be amortized and presented as interest expenses over the period until fi nal maturity of the loans. Over the loan period, the effect on P&L and equity is zero.

Risk

The Company is exposed to market, commercial, operational and fi nancial risks that affect the assets, liabilities, available liquidity and future cash fl ows. Given the diffi cult market situation within the offshore industry the last years, the Company considers that these risks have increased compared to previous years. There is established a risk mitigation framework based on identifying, assessing and managing risks. The Board monitors the overall risk factors for the Group.

Market and operational risks are changes in demand for and prices of the services provided by the Company, and potential adverse effects of the provision of such services. The market has further deteriorated with the impact of COVID-19 virus and affecting oil prices in all regions where the Group operates and has negatively impacted the earnings and utilisation of the Group's fl eet. A continuing postponement of a recovery of the market will impact future earnings and utilisation of the Group's fl eet going forward. Also, the counter-party risk has increased, and contracts may be cancelled or not renewed if a sustained challenging market situation continues. The Company has implemented a wide range of measures to minimize the risk to people and operations from the COVID-19 pandemic, including social distancing, travel restrictions, excessive testing of marine crew and working from home. The company has so far avoided signifi cant disruption COVID-19 related to its operations and will continue to enforce proper measures to minimize the risk level. The Company continually evaluates measures to reduce risk exposure as mentioned above.

The challenging times and uncertain market conditions will impact the coming quarters, and this is part of Solstad's ongoing risk assessment going forward.

The Company is exposed to interest rate and currency risk, primarily through fi nancing and contracts. Interest rate risk is partially mitigated by hedging contracts, while currency risk is reduced by having debt in the same currency as charter agreements. For further details, reference is made to section "Finance" and Annual Report 2019 Note 1, 2, 4 and 28 and the risk section of the Prospectus from the Company published on 19 October 2020. ex ris t o "Fin ospectus fro

As advised in our 3Q report there is a dispute with Saipem om payment of the termination fee amounting to USD 44,3 million related to the early termination of the time charter for "Normand Maximus". As a consequence of the early termination, Saipem were to pay a termination fee in the amount of USD 44,3 million in December 2020. Saipem has forwarded a counterclaim, and the termination fee due from Saipem to Normand Maximus Operations Limited has not been paid to date. Normand Maximus Operations Limited is pursuing the full claim for the termination fee legally. The termination fee has not been recognized in 4Q 2020. ere wit ted terminati y Sa

Normand Maximus Limited as bareboat charterer of the vessel, has since the termination of the time charter with Saipem, been in dialogue with Maximus Limited as owner of "Normand Maximus" and Maximus Limited's fi nanciers, to fi nd a long term solution for the lease fi nancing of Normand Maximus following Saipem's early termination of the time charter, and solve liquidity issues resulting from the non-payment of the termination fee. The discussions are ongoing. The lease fi nancing has customary default provisions for lease fi nancings. These i.a entitles Maximus Limited to require Normand Maximus Limited to buy the vessel and/or exercise other rights and remedies under the lease fi nancing if a solution is not found. In the current markets there is a risk that Normand Maximus Limited as bareboat charterer of the Normand Maximus will not be able to fi nance such a purchase or other claims. As all obligations of Normand Maximus Limited are guaranteed by Solstad Offshore ASA, this could have a material adverse effect on Solstad Offshore ASA's fi nancial situation. charte L ximus following on-payment default prov s and/or lution not In curre rer Max

• PSV Sea Forth awarded a term contract with a UK Operator to support their assets in the UK North SeaThe contract is for an initial one year fi rm period, with two optional years included.

• Normand Energy will support a project for a Client in the Pacifi c Ocean with an estimated duration of 5 months.
• Normand Jarstein has secured a contract with a Norwegian subsea contractor for a project in West Africa. In addition, Normand Jarstein has been awarded a contract with a UK based oil company.
• The Company has been awarded a contract with a large international contractor for the CSVs Normand Navigator, Normand Frontier and Normand Australis. The three vessels will be utilized for projects on the east coast of India. The contract will commence early Q1 2021 and have a combined potential duration of approximately 450 vessel days.
• Normand Frontier has been awarded another contract with a large international contractor after completion of the project in India for a duration up to 3 months.

Award highlights in the quarter

Thomas Olsson Thomas

• Agreement of contract extension for the CSV Normand Commander. Bahia Grande LN S.A. has exercised their option to extend the contract with another 3 years, the contract is now fi rm until October 2026.
• PSV Normand Surfer has been awarded a long-term contract with a leading North Sea Operator for an estimated total duration of around 550 days.
• PSV Normand Swift entered into a Frame Agreement with ExxonMobil Exploração Brasil Ltda for the provision of supply vessel services supporting their exploration activities in Brazil, the Frame Agreement is for 3 years fi rm
• CSV Normand Maximus has entered into a contract to support operations for a Client in Latin America.The estimated duration is 5 months
• Inpex Operations Australia Pty have extended the contracts for Normand Scorpion and Normand Sirius fi rm operational period will now continue until August 2023 with additional options available to Inpex thereafter

Subsequent Events

Sale of vessels

Subsidiaries of the Company has sold the PSVs Sea Angler (built 2007), Sea Bass (built 2008) and Sea Turbot (built 2008). Delivery of the vessels to the new owner took place February 4th, 2021. The sale of the vessels will result in an immaterial accounting effect for 1Q '21 report.

Contract highlights after quarter end

• Signed contract with MHI Vestas for hire of the CSV Normand Fortress to support their W2W operations at the Triton Knoll windfarm in UK.
• Company has signed a contract for the CSV Normand Cutter with Global Marine Group, contract is 120 days plus options thereafter

4th Quarter 2020

Operational Update

The Company operates a fl eet of modern offshore vessels.

The overall utilization for the operational fl eet in 4Q 2020 was 80% (80% in 2019), the subsea CSV fl eet had a utilization of 72% (81%), AHTS fl eet 84% (74%) and 83% (84%) for the PSV fl eet.

Subsea & Renewable Energy

Throughout the quarter the CSV segment had 25 vessels in operation and the utilization was 72%.

One vessel (Normand Fortress) started reactivation after more than 4 years in layup.

During 4Q several of the vessels relocated to now geographical regions. 3 vessels started mobilization to India, one vessel was mobilized to Brazil one vessel departed to Mexico and one vessel mobilized to West Africa. The majority of these vessels sailed from North Sea.

Around 30% of the revenue in CSV segment is generated from Renewable Energy.

Non-strategic fl eet

Solstad today has a fl eet of 126 vessels, a part of the fi nancial and operational restructuring fi nalized in October 2020, was also to revitalize the fl eet and divest part of the fl eet that would form part of the future Solstad.

This part of fl eet is the smallest, less modern vessels and has been in layup for a long period of time. The part of the fl eet that will be divested is 37 vessels of which 14 are classifi ed as scrapping candidates with a shorter divestment timeframe. The rest of the non-strategic fl eet will be divested over longer a period of time.

AHTS & PSV

During Q4-2020 the Global AHTS /PSV segment had 48 vessels in operation.

The segment has a global footprint and majority of the vessels are strategically on term contracts with oil and gas majors and has delivered safe and effi cient operations worldwide.

6 of the Companys vessels had engagement in the Kara Sea/Russia that were completed during 4Q.

AHTS Normand Drott and Normand Prosper returned to the North Sea after a well performed project in South Africa.

Normand Skimmer started on a 5 year contract with a major client in Australia.

* excluding vessels in layup

Market Outlook

The Oil & Gas markets are still very much affected by the consequences of the signi fi cant drop in energy prices early 2020.

• In addition, the Covid pandemic adds uncertainty to how and when the offshore activity will increase to a meaningful level again.
• Activity linked to production will probably be less affected than activity linked to exploration and maintenance.
• Within offshore-wind it is a different picture. Investments are forecasted to increase year by year going forward and could give a signifi cant activity increase, both in Europe and other areas.
• The offshore fl eet, in general, is larger than the markets can consume, even under a normalized activity level. A large number of vessels have to be taken permanently out of the market to improve the supply and demand balance.
• The ship-owning side is still very fragmented and to get a better balance in the market the oldest, less modern, less fuel-effi cient vessels needs to be taken permanently out of the market.

Renewable Energy

The increase in activity level with offshore wind continues and it represents a range of vessel needs. Tendering activity is active with several medium and long term opportunities for the CSV fl eet in Northern Europe and Asia Pacifi c. We expect activity within renewable energy to improve the overall market balance for construction vessels.

Subsea

Tendering activity indicates a slight increase in activity in subsea oil and gas for 2021 and we expect this increase to continue into 2022 and 2023.

Activity levels has been affected by Covid 19 and unstable energy prices. It is still uncertain when the market balance can be expected to recover.

PSV & AHTS

During Q4 we have seen a slight increase in tendering activity in the North Sea – especially on the UK-sector, Brazilian operators (both Petrobras and IOC's) are actively tendering for both PSV's and AHTS also in 2021, and tendering is also increasing in Australia.

Asia and Africa still suffers from low activity, and balance between supply and demand is still not in Owners favour, a situation that is expected to remain for 2021.

CSV

Propelling global energy markets. Into the future. Solstad.com

Energy Transition

Renewable energy is becoming an increasing part of the energy mix.

Investments in development of offshore-wind parks are signi fi cant and in Europe it nearly equals the E&P investments in Oil & gas.

New Opportunities

This represent opportunities for Solstad, as we are active within Offshore-wind and Oil&Gas. In 2020, about 10% of the company revenues came from offshore- wind.

We expect to increase that number signifi cantly going forward, while we also explore opportunities within other renewable sources such as fl oating solar parks and wave power technologies.

The EU aim for 60GW offshore wind within 2030 and 360GW within 2050 which

estimates required investments of nearly EUR 800bn to meet the 2050 target Note 1) based on EU objectives for EUR 800bn and 300GW between now and 2050 Source: Rystad Energy & European Commission

Global installed offshore wind

capacity 2020e-30e

Annual capex 2020e-30e assuming

EUR 2.67 m1)

per MW

4th Quarter 2020

Successful restructuring

Successful restructuring of the company approved by an extraordinary general meeting October 20th, 2020.

• A NOK 0.2 billion reduction of Right-of use assets due to termination of vessels recognized according to IFRS 16.
• A net NOK 9.4 billion reduction of Debt to credit institutions due to de-recognition of existing debt and recognition of reinstated debt based on nominal values.
• An additional NOK 1 billion reduction of Debt to credit institutions due to Fair value measurement of recognized debt according to IFRS 9.
• A NOK 0.2 billion reduction of Debt to credit institutions due Fair value measurement of Associated Subscription Rights (Warrants)
• A NOK 1.3 billion reduction of Other current liabilities due to lease liabilities and interest relief converted to equity.
• A NOK 1.5 billion increase in deposits, cash, etc relating to new equity and Working Capital Facility.
• The total effect on equity is NOK 12 billion.

Key improvements in "New" Solstad

NEW

OL D
NOK 32, 4bn ss d ebt gro
App 130 Ves sels rox.
Avg e fl e et a ge 1 5 ye erag ars
NOK 1.0 bn l iquid ity
4 rin g-fe d si los a nd m SPV 's nce any

NOK 20,6bn gross debt

Approx 90 Vessels

Avgerage fl eet age 9 years

NOK 2.5bn liquidity

One consolidated group with free fl ow of liquidity

Thomas Olsson

Harald Espedal Chairman

Thorhild Widvey Director

Ellen Solstad Director

Ingrid Kylstad Director

Lars Peder Solstad CEO

Peder Sortland Director

Frank O. Reite Director

Statement from the Board

We confi rm that the consolidated accounts for the period January 1 to December 31, 2020 are to the best of our knowledge, prepared in accordance with IAS 34.

The bi-annual report and the fi gures used for the quarterly reporting give a fair and true value of the enterprise and group's assets, debts, fi nancial position and result which, in its entirety, gives a true overview of the information in accordance with § 5-6 fourth paragraph of the Securities Trading Act.

Skudeneshavn 25.02.2021

Condensed statement of comprehensive income

(NOK 1,000)

	202 0 01.1 0-31 .12	201 9 01.1 0-31 .12	202 0 01.0 1-31 .12	201 9 01.0 1-31 .12	No te
Ope rati ng i nco me	1,17 4,78 9	1,24 6,71 3	5,02 5,63 0	5,24 4,88 1	2,3, 4
Ves sel o ting pera exp ens es	-900 ,922	-889 ,585	-3,5 09,4 86	-3,5 53,0 81
Adm inist rativ e ex pen ses	-203 ,469	-104 ,993	-476 ,829	-417 ,962
Tota l op ing erat exp ens es	-1,1 04,3 90	-994 ,578	-3,9 86,3 15	-3,9 71,0 43	4
Ope rati lt be fore dep reci atio ng r esu ns	70,3 99	252 ,135	1,03 9,31 5	1,27 3,83 8	3
Ord inar y de iatio prec n	-285 ,571	-356 ,507	-1,3 58,3 45	-1,4 46,5 17	5
Imp airm ent	-72, 386	-752 ,162	-1,8 95,0 40	-1,0 31,9 02	5,6
Net gain / los sal e of ets s on ass	-14	13,0 49	-28, 896	12,7 84
Ope rati lt ng r esu	-287 ,571	-843 ,484	-2,2 42,9 67	-1,19 1,79 7
Res ult f Joi nt V entu rom res	-5,9 20	-59, 238	27,3 23	-44 ,787	7
Res ult f ocia ted ies rom ass com pan	13,9 21	9,33 3	41,4 23	40,7 66	7
Tota l oth er it ems	8,00 1	-49, 905	68,7 46	-4,0 21
Inte inc rest ome	-7,2 43	2,75 1	6,24 3	14,8 27
Rea lised in/ - loss cur renc y ga	-245 ,536	-31, 487	-240 ,107	-17,2 41
Unr eali sed in/ - loss cur renc y ga	532 ,645	189 ,875	-180 ,349	-120 ,737
Inte rest cha rges	-257 ,102	-370 ,774	-1,4 38,7 26	-1,6 44,5 10
Net fi na ncia l cha / -in rges com e	11,6 99,0 59	18,9 76	11,2 83,0 83	-7,2 65	8
Net fi na ncin g	11,7 21,8 23	-190 ,658	9,43 0,14 4	-1,7 74,9 26
Ord inar sult bef taxe y re ore s	11,4 42,2 53	-1,0 84,0 48	7,25 5,92 3	-2,9 70,7 45
Tax rdin lt es o ary resu	-8,0 98	-169 ,199	-23, 914	-158 ,549	10
Res ult	11,4 34,1 55	-1,2 53,2 47	7,23 2,00 9	-3,1 29,2 94
Oth rehe nsiv e in er c omp com e:
Exc han ge d iffer n tra nsla ting enc es o fore ign ratio ope ns	521 ,459	15,2 84	,243 547	54,0 87
Actu aria l ga in/ lo ss	5,92 1	42,1 65	5,92 1	42,1 65
Oth rehe nsiv e in er c omp com e	11,9 61,5 35	-1,19 5,79 7	7,78 5,17 3	-3,0 33,0 42
Res ult a ttrib utab le to :
Non troll ing inte rest -con s	6,63 4	-1,0 07	13,1 22	264
Maj ority sha re	11,4 27,5 21	-1,2 52,2 40	7,21 8,88 6	-3,1 29,5 58
Earn ings sha per re	43.4 6	-4.3 0	29.0 4	-10. 74
Oth rehe nsiv e in er c omp com e attri buta ble t o:
Non troll ing inte rest -con s	6,63 4	-1,0 07	13,1 22	264
Maj ority sha re	11,9 54,9 01	-1,19 4,79 1	7,77 2,05 0	-3,0 33,3 06
Oth rehe nsiv e in r sh er c omp com e pe are	9 45.5	-4.1 0	31.2 6	-10. 41
EBI TDA adj uste d	203 ,678	265 ,142	1,29 2,99 1	1,41 0,69 4	3,4
Ave ber of s hare s (1 ,000 ) rage num	121, 945	291 ,407	249 ,042	291 ,407

Condensed statement of fi nancial position

(NOK 1,000)

ASSETS

Fixed Assets: Intangible assets Tangible fi xed assets Right-of-use assets Investment in assosiated companies and Joint VenturesFinancial fi xed assets Total fi xed assets Current Assets: Stocks Accounts receivables Other receivables Market based shares Deposits, cash, etc Total current assets Assets held for sale

TOTAL ASSETS

202 0	201 9 No
31.1 2	31.1 2
7,49 9	69,9 61
19,7 54,0 87	22,6 01,6 38	5
2,21 2,85 4	3,77 1,90 6	6
114, 380	386 ,405	7
109 ,017	173 ,153	4
22,1 97,8 36	27,0 03,0 62
165 ,330	177, 226
839 ,628	889 ,032
411, 410	621 ,546
11,1 00	8,21 5
2,41 1,90 5	1,13 4,02 8	9
3,83 9,37 3	2,83 0,04 6
26,8 03	0	5
26,0 64,0 12	29,8 33,1 08
250	2
,445 3,93 3,64 7	4,60 2,78 -8,4 40,8 94
15,8 14	2,69 1
4,19 9,90 6	-3,8 35,4 20
83,3 88	77,9 39
12,3 72	12,1 72	9
17,1 33,0 27	4,48 4,32 9	9
17,2 28,7 87	4,57 4,43 9
3,49 9,89 7	27,6 32,5 28	9
1,13 5,42 2	1,46 1,56 1
4,63 5,31 9	29,0 94,0 89
21,8 64,1 06	33,6 68,5 29
26,0 64,0 12	29,8 33,1 08

EQUITY AND LIABILITIES

Equ ity:
Paid -in e quit y
Oth quit er e y
Non troll ing inte rest -con s
Tota l eq uity
Liab ilitie s:
Lon g-te rovi sion rm p s
Oth er lo ng-t deb t erm
Deb t to cred it ins titut ions
Tota l lon g-te rm d ebt
Cur rent liab ilitie s:
Cur tion of l m d ebt rent -ter por ong
Oth nt lia biliti er c urre es
Tota l cu t lia bilit ies rren

Total liabilities

TOTAL EQUITY AND LIABILITIES

Statement of cash fl ow

(NOK 1,000)

CASH FLOW FROM OPERATIONS

Res ult b efor e ta x
Tax ble es p aya
Ord inar y de iatio d w rite dow prec n an ns
Gai n (-) / los s lo ng-t ets erm ass
Inte rest inc ome
Inte rest exp ens e
Term inat ed l eas es
Non h re fi na effe cts -cas nce
Effe ct o f ch e in sion ets ang pen ass
Cha in v alue of fi cial inst ents nge nan rum
Unr eali sed in/ - loss cur renc y ga
Cha in s hort -ter ceiv able d pa yab les nge m re s an
Cha in o ther rual nge acc s
h fl o w fr Net rati cas om ope ons

CASH FLOW FROM INVESTMENTS

202 0 31.1 2	201 9 31.1 2
7,25 5,92 3	-2,9 70,7 45
-35, 649	-35, 634
3,25 3,38 6	2,47 8,41 9
321 ,975	50,2 76
-6,2 43	-14, 827
1,43 8,72 6	1,64 4,51 0
439 ,559	0
-11,7 13,2 86	0
7,69 5	-38, 304
-170 ,239	-107 ,062
113, 922	125 ,283
242 ,583	272 ,565
-372 ,523	-394 ,414
775 ,829	1,01 0,06 7
385 -57,	-48 ,471
-406 ,800	-363 ,662
1,01 4,17 0	73,6 4
64,1 36	28,4 29
6,24 3	8,50 5
36	0
620 ,401	-301 ,559
70,3 55	-
-461 ,777	-490 ,706
-157 ,973	-165 ,79
1,46 7,96 2	972 ,972
-1,0 77,1 55	-1,2 44,8 16
-158 ,588	-928 ,34
40,2 36	2,51 4
1,23 7,64 2	-219 ,832
1,13 4,02 8	1,35 1,34 6
2,41 1,90 5	1,13 4,02 8

Net h fl ow fro m in tme nts cas ves
Rea lizat ion of s hare d ho lding s an s
Rec eive d in tere sts
t of Pay long -ter ceiv able men m re s
Con side ratio le of fi xe d as sets (ve ls) n sa sse
Pay t of peri odic inte men ma nan ce
Inve stm ent in ta ngib le fi x ed a sset s

CASH FLOW FROM FINANCING

Paid -in c apit al
Paid lea ses
Paid inte rest s
Draw dow n lo ng-t deb t erm
Rep of lo deb ent ng-t t aym erm
Net h fl o w fr fi na ncin cas om g
Effe ct o f ch es i n fo reig cha rate ang n ex nge s
Net cha in c ash nge

Cash at balance sheet date

Statement of changes in equity

(NOK 1,000)

	Sha re capi tal	Trea sury shar es	Sha re ium prem	Othe r paid -in capi tal	Othe r chan ges	Othe uity r eq	Tota l majo irty shar es	Non cont rolli ng inte rest s	Tota l equ ity
Equ ity 0 1.01 .202 0	583 ,065	-281	3,69 8,35 0	321 ,648	401 ,259	-8,8 42,1 52	-3,8 38,1 11	2,69 1	-3,8 35,4 20
Res ult	-	-	-	-	-	7,21 8,88 6	7,21 8,88 6	13,1 22	7,23 2,00 9
Actu aria l ga in/ loss (-)	-	-	-	-	-	5,92 1	5,92 1	-	5,92 1
Tran slat ion adju stm ents	-	-	-	-	,243 547	-	,243 547	-	,243 547
Oth er hen sive com pre inco me	0	0	0	0	547 ,243	7,22 4,80 7	7,77 2,05 0	13,1 22	7,78 5,17 3
Sha apit al re c dec reas e	-582 ,773	281	-	-	-	582 ,492	0	-	0
Tran sfer of p aid- in ital cap	-	-	-3,6 98,3 50	-321 ,648	-	4,01 9,99 9	0	-	0
Sha apit al re c incr e by eas of d vert ion ebt con	48,0 75	-	131, 723	-	-	-	179 ,798	-	179 ,798
Sha apit al p riva t re c plac nt eme	26,5 06	-	43,8 49	-	-	-	70,3 55	-	70,3 55
Equ ity 3 1.12 .202 0	74,8 73	0	175 ,572	0	948 ,502	2,98 5,14 5	4,18 4,09 2	15,8 14	4,19 9,90 6
Equ ity 3 1.12 .201 8	583 ,065	-281	3,69 8,35 0	321 ,648	347 ,172	-5,8 03,0 53	-853 ,099	2,42 7	-850 ,672
IFRS 16 imp lem enta tion effe ct	-	-	-	-	-	37,2 69	37,2 69		37,2 69
Equ ity 0 1.01 .201 9	583 ,065	-281	3,69 8,35 0	321 ,648	347 ,172	-5,7 65,7 84	-815 ,83	2,42 7	-813 ,403
Res ult	-	-	-	-		-3,1 29,5 58	-3,1 29,5 58	264	-3,1 29,2 94
Actu aria l ga in/ loss (-)	-	-	-	-	-	42,1 65	42,1 65	-	42,1 65
Tran slat ion adju stm ents	-	-	-	-	54,0 87	-	54,0 87	-	54,0 87
Oth er hen sive com pre inco me	0	0	0	0	54,0 87	-308 7,39 3	-3,0 33,3 06	264	-3,0 33,0 42
Oth djus tme nts er a	-	-	-	-	-	11,0 25	11,0 25	-	11,0 25
Equ ity 3 1.12 .201 9	583 ,065	-281	3,69 8,35 0	321 ,648	401 ,259	-8,8 42,1 52	-3,8 38,1 11	2,69 1	-3,8 35,4 20

Notes

Notes to condensed statement of comprehensive income and statement of fi nancial position

(NOK 1,000)

Note 1 - General

Solstad Offshore ASA (SOFF) has its head offi ce in Skudeneshavn, Norway. The main activities of the company are operation and ownership of offshore service and construction vessels. The Group is listed on Oslo Stock Exchange. The quarterly accounts are prepared using the same accounting principles as last year's accounts and in compliance with IAS 34 Interim Financial Reporting.

The Company has implemented IFRS 16 Leases as of January 1, 2019. The nature and effects of the implementation are disclosed in the notes below. Further reference is made to Note 1 to the 2018 Annual accounts.

The interim accounts are prepared on the assumption of a going concern.

Note 2 - Operating income

The Group's revenues mainly derives from offering vessels and maritime personnel to customers world wide. Basically all contracts with customers are contracts with day rate. Contract with day rate is contract where income is eared on a day-by-day basis, based on an agreed day rate with the customer. Revenue from contracts with day rate is recognized accordingly.

The agreed day rate is divided into a service element and a lease element. The service element includes the maritime services provided to navigate the vessel according to the customers requirements, while the lease element is the estimated rental of the vessel (equipment).

Some of the contracts also includes victualling and onshore project management. Victualling is meals and bedding provided to the customers personnel onboard the vessel. The Group also provides ordinary management services, such as technical services, crewing, incurance and commercial management for vessels not owned by the Group. Revenue on services, mentioned above, are recognized over time, as the performance obligation is satisfi ed over time.

201 9 01.0 1-31 .12	202 0 01.0 1-31 .12	201 9 01.1 0-31 .12	202 0 01.1 0-31 .12
2,08 4,45 4	2,01 1,31 3	376 ,294	479 ,820
27,6 16	27,2 68	6,43 8	2,69 6
116, 828	93,1 11	26,0 09	22,1 23
4,25 3	3,32 9	-
46,2 30	78,8 55	36,1 28	10,2 23
2,27 9,38 2	2,21 3,87 7	444 ,868	514 ,863
2,96 5,50 0	2,81 1,75 3	801 ,846	659 ,926
5,24 4,88 2	5,02 5,63 0	1,24 6,71 3	1,17 4,78 9

Ser vice ele t fro ontr act with day rate men m c
Man t Fe age men e
Vict uall ing
Proj ect t man age men
Oth er
Rev e fro m C ont ract ith c enu s w urso mer s
Lea sing from ith d trac ts w ate con ay r
Tota l op erat ing inco me

Con trac t ba lanc e	31.1 2.20 20	31.1 2.20 19
Trad ceiv able s fro hart e re m c ers	839 ,628	889 ,032
Con trac t as sets	-	-
Con trac t lia biliti es	-	34,7 10

Note 3 - Reporting per segment

Internally the Group reports and monitors it's operation in the following segments:

• AHTS/PSV, anchorhandling- and platform supply vessels

• Subsea, construction vessels operating subsea construction and renewable contracts

Figures are exclusive share result from Joint Ventures.

Q4 2020 Q4 2019 AHTS/PSV Subsea Total AHTS/PSV Subsea Total Revenue from contracts with customers 267,285 247,903 515,188 290,365 154,503 444,868 Lease element from contracts with day rate 329,495 330,107 659,602 353,349 448,496 801,845 Total operating income 596,780 578,010 1,174,789 643,714 602,999 1,246,713 Crew expenses 336,060 166,992 503,052 413,030 138,722 551,752 Other expenses 290,261 281,619 571,880 215,539 183,870 399,409 Total operating expenses 626,321 448,611 1,074,932 628,569 322,592 951,161 Bunkers 11,172 18,286 29,458 30,447 12,969 43,416 Operating result before depreciations -40,713 111,112 70,399 -15,302 267,438 252,136 Excess and less values freight contracts - 2,814 2,814 21,629 6,726 28,355 Net result from Joint Venture - -60,566 -60,566 - 16,097 16,097 Adjusted operating result before depreciations -40,713 53,358 12,645 6,327 290,261 296,588

	Yea da te Q 4 2 020 r to			Yea da te Q 4 2 019 r to
	AHT S/PS V	Sub sea	Tota l	AHT S/PS V	Sub sea	Tota l
Rev e fro ontr acts wit h cu stom enu m c ers	1,23 6,35 1	977 ,851	2,21 4,20 2	1,37 5,51 3	903 ,869	2,27 9,38 2
Lea lem from ith d ent trac ts w ate se e con ay r	1,31 6,50 2	1,49 4,92 7	2,81 1,42 9	1,42 1,95 9	1,54 3,54 1	2,96 5,50 0
Tota l op erat ing inco me	2,55 2,85 2	2,47 2,77 8	5,02 5,63 0	,2,7 97,4 72,	2,44 7,41 0	5,24 4,88 2
Crew exp ens es	1,36 4,28 9	662 ,287	2,02 6,57 6	1,52 0,21 5	748 ,245	2,26 8,46 0
Oth er e xpe nse s	939 ,208	871 ,148	1,81 0,35 6	911 ,511	646 ,443	1,55 7,95 4
Tota l op erat ing exp ens es	2,30 3,49 7	1,53 3,43 5	3,83 6,93 2	2,43 1,72 6	1,39 4,68 8	3,82 6,41 4
Bun kers	89,6 73	59,7 10	149 ,383	78,2 83	66,3 46	144 ,629
Ope fore rati lt be ng r esu
dep reci atio ns	159 ,682	879 ,633	1,03 9,31 5	287 ,463	986 ,376	1,27 3,83 9
Exc and les lues frei ght trac ts ess s va con	44,6 90	17,7 72	62,4 62	102 ,379	36,0 82	138 ,461
Net lt fro m Jo int V entu resu re	-	-27, 323	-27, 323	-	44,7 87	44,7 87
Adj d op ing lt be fore uste erat resu dep reci atio ns	204 ,372	870 ,082	1,07 4,45 4	389 ,842	1,06 7,24 5	1,45 7,08 7

Note 4 - EBITDA

	202 0 01.1 0-31 .12	201 9 01.1 0-31 .12	202 0 01.0 1-31 .12	201 9 01.0 1-31 .12
Tota l op erat ing Inco me	5,02 5,63 0	1,24 6,71 3	5,02 5,63 0	5,24 4,88 1
Tota l op erat ing exp ens es	-1,1 04,3 90	-994 ,578	-3,9 86,3 15	-3,9 71,0 43
EBI TDA	70,3 99	252 ,135	1,03 9,31 5	1,27 3,83 8
Lea ses	6,46 5	-	6,46 5	-
Res truc turin st g co	108 ,887	-	108 ,887	-
Exc and les lues frei ght trac ts ess s va con	2,81 1	60,4 96	62,4 62	138 ,461
Net lt fro m Jo int V entu resu re	-5,9 20	-59, 238	27,3 23	-44 ,787
Net lt fro ciat ed c anie resu m a sso omp s	13,9 21	9,33 3	41,4 23	40,7 66
Acc rual los nts ivab le s ac cou rece	7,11 5	2,41 6	7,11 5	2,41 6
EBI TDA adj uste d	203 ,678	265 ,142	1,29 2,99 1	1,41 0,69 4

In connection with the merger with Rem Offshore, Farstad Shipping and Deep Sea Supply, the purchase price alloction analysis identifi ed several long-term freight contracts where the daily rates were higher or lower than the market rate at the time of acquisition. A part of the purchase price was thus allocated to these excess / less values and capitalized. In line with the fulfi llment and revenue recognition of freight contracts, the capitalized excess / less value is derecognized. The adjustment has no cash effect, and thus comes as an addition to booked freight income when calculating EBITDA.

Note 5 - Fixed assets

	Ves sels	mai nten anc e	Oth er	Tota l
Ope ning bal e 01 .01. 202 0 anc	21,8 24,3 14	666 ,179	111, 144	22,6 01,6 38
Add ition s	38,4 14	404 ,009	-	442 ,423
Tran sfer red	16,0 03	-	-41, 909	-25, 906
for s Ass et h eld ale	-10, 666	-	-16, 138	-26, 803
Disp ls osa	-1,1 16,4 38	-	-	-1,1 16,4 38
Tran slat ion adju stm ent	64,9 12	-28, 025	-4,4 96	29,6 36
Dep reci atio n	-905 ,928	-280 ,983	-12, 979	-1,1 99,8 90
Imp airm ent	-1,1 91,7 25	-958	-2,3 58	-1,1 95,0 40
Clo sing bal e 31 .12. 202 0 anc	18,7 18,8 87	760 ,223	33,2 65	19,5 09,6 19

Vessels are depreciated over 20 years to a residual value equal to 50% of the original cost. Initially residual value is set to 50% of cost price, expected cost of sale deducted, and adjusted for age and changes in broker valuations. The assumption is that the broker values decline by 2.5% per year, until the vessel is 20 years old. Other assets are depreciated at rates of 10-25%.

The Company is in a process of selling an onshore training facility. The asset is classifi ed as held-for-sale in Condensed Statement of Financial Position. Total book value is MNOK 16.

In Q1 2021 the Company have sold tree PSV's the assets is classifi ed as held-for-sale in Condensed Statements of Financial Position. Total book value is MNOK 10.7.

Note 5 - Fixed assets (continued)

Impairment testing of vessels

Summary

The Company has performed impairment testing of the fl eet in accordance with IAS 36. Indicators such as slow market recovery and declining price/ book ratio form, according to IAS 36, the need for revaluation of the Company's assets.

Based on value-in-use-calculations the Company has recognized an impairment of MNOK 72.3 in 4Q 2020. Total impairment of fi xed assets recognized year to date 4Q 2020 is MNOK 1,195.

Impairment testing

Impairment testing (value-in-use-calculation) was performed for all vessels where book value exceeds 65% of broker value. Broker value is set as an average of 3 acknowledged, independent brokers. Each vessel is considered a separate cash generating unit. The value-in-use-calculations are based on budget and the long-term forecast for 2021-2024.

The main assumptions used in the computations are charter rates, utilization, escalation of expenses, operational area, interest rate, weighted average cost of capital (WACC) and performance per Q4 2020 compared to forecast.

Discounting rate

The discounting rate is based on a common WACC for the Company. The cost of equity is derived from the 10-year interest rate for state bonds (risk-free interest rate), the Company's own market risk premium and an unlevered beta. The debt element of the discounting rate is based on the risk-free interest rate, plus the Company's average margin for secured debt, as well as a premium equivalent to the difference between risk-free interest rate and the bank's lending rates. The discounting rate used for Q4 2020 is 9%.

Revenue assumptions

For vessels having fi rm contracts, revenue is based on the current contracts. For vessels without fi rm contracts, and for vessels where the fi rm contract expires during the period, revenue is based on historical data. For the fi rst period it is expected that the day rates for the PSV- and AHTS segment will remain low. From 2025 to 2027 it is assumed a gradual increase of revenue to a level which correspond to the average rates for the past 7-10 years. It is expected that the markets are normalized within 2027.

Infl ation

Escalation of revenue is expected to be marginal for the coming year. Hence, it is used a low (<1%) or no infl ation of revenue in 2020. Operating cost is adjusted for infl ation by 2%. Infl ation of revenue correspond to cost from 2025.

Residual values

Estimated residual values used in the value-in-use-calculations are set using the same principle as for the ordinary depreciations. Initially the value is set to 50% of cost price, expected cost of sale deducted, and adjusted for age and changes in broker valuations. The assumption is that the broker values decline by 2.5% per year, until the vessel is 20 years old.

Note 6 - Right-of-use assets

	t-of- Righ use
	Ves sels	Offi ce	Tota l	se l iabi litie Lea s
Ope ning bal e 01 .01. 202 0 anc	3,52 1,30 9	250 ,597	3,77 1,90 6	4,28 4,28 3
Oth djus tme nts er a	-	22,6 13	22,6 13	-
Add ition s	3,39 3	-	3,39 3	-
Disp ls osa	-55 1,29 7	-	-55 1,29 7	-1,3 19,0 49
Tran slat ion adju stm ent	49,0 00	-15, 819	33,1 81	34,9 27
Dep reci atio n	-109 ,552	-12, 924	-122 ,475	-
Imp airm ent	-700 ,000	-	-700 ,000	-
Inte rest exp ens e	-	-	-	275 ,858
Lea ents se p aym	-	-	-	-461 ,777
Clo sing bal e 31 .12. 202 0 anc	2,21 2,85 4	244 ,467	2,45 7,32 2	2,81 4,24 2

Impairment testing of Right-of-use assets

Based on value-in-use-calculations the impairment remains at MNOK 700 recognized in 3Q 2020. Further reference is made to Note 5 Fixed Assets.

Guarantee

As set out in our 3Q report, Normand Maximus Limited is in dialogue with Maximus Limited as owner of "Normand Maximus" with a view to fi nd a long term solution for the lease fi nancing of Normand Maximus following Saipem's early termination of the time charter for Normand Maximus. As a consequence of the early termination, Saipem were to pay a termination fee in the amount of USD 44.3 million in December 2020. The termination fee due from Saipem to Normand Maximus Operations Limited has not been paid to date as Saipem is claiming to have a claim against Normand Maximus Operations Limited for alleged breach of charter, which approximately equals the termination fee. Normand Maximus Operations Limited is pursuing the claim for the termination fee as appropriate. The termination fee will be recognized in the 2021 fi nancials.

Normand Maximus Limited as bareboat charterer of the vessel, has since the termination of the time charter with Saipem, been in dialogue with Maximus Limited as owner of "Normand Maximus" and Maximus Limited's fi nanciers, to fi nd a long term solution for the lease fi nancing of Normand Maximus following Saipem's early termination of the time charter, and solve liquidity issues resulting from the non-payment of the termination fee. The discussions are ongoing. The lease fi nancing has customary default provisions for lease fi nancings. These i.a entitles Maximus Limited to require Normand Maximus Limited to buy the vessel and/or exercise other rights and remedies under the lease fi nancing if a solution is not found. In the current markets there is a risk that Normand Maximus Limited as bareboat charterer of the Normand Maximus will not be able to fi nance such a purchase or other claims. As all obligations of Normand Maximus Limited are guaranteed by Solstad Offshore ASA, this could have a material adverse effect on Solstad Offshore ASA's fi nancial situation.

Summary new accounting policies

Right-of-use-assets

Right-of-use-assets are recognized at cost, less depreciation and impairment losses at the commencement of the lease. The cost of the assets includes the recognized lease liabilities, initial direct costs, and lease payments made prior to commencement. Straight-line depreciations are used, unless the Company is reasonably certain to obtain ownership ower the vessel at the end of the leasing period. The assets are subject to impairment under the same priciples as other assets.

Lease liabilities

Lease liabilities are recognized at the commencement of the lease measured at the present value of lease payments over the lease period. The lease payments includes both fi xed and variable lease payments. If an purchase option is likely to be exercised, the option price is included. Variable lease payments that do not depend on an index are recognized as expense in the period when the payment trigger occurs.

When calculating present value of the lease the incremental borrowing rate at the beginning of the lease is used, if the implicit rate is unavailable. Subsequently, the amount of the lease liability is increased to refl ect the accretion of interest and reduced for lease payments made. The liability is remeasured if modifi cations or changes to the lease terms occur.

38

Note 7 - Investment in Associated Companies and Joint Ventures

The Group had the following shares in joint ventures (JV) and associated companies (AC) at balance sheet date:

AC	JV
Sols tad Offs hore Cre wing Ser vice Phi lipp ines (25 %)	Nor d In stal ler S A (5 0 % ) man
Max imu s Li mite d (2 5 % )

	AC	JV	Tota l
Ope ning bal anc e	293 ,846	92,5 59	386 ,405
Sha f res ult y to d ate re o ear	41,4 23	27,3 23	68,7 46
Add ition s	-	-	-
Disp ls osa	-	-	-
Imp airm ent	-294 ,745	-	-294 ,745
Oth djus tme nts er a	-39, 396	-6,6 30	-46, 026
Clo sing Ba lanc e	1,12 8	113 ,252	114 ,380

Other adjustments includes received dividends and currency effects.

Note 9 - Interest bearing debt

The reinstated debt to credit institutions is recognized at its fair value. The interest rate for the refi nanced debt has at initial recognition been compared to current market terms according to IFRS 9. For the reinstated debt the Company concludes that the interest rate is below current market terms. Using the estimated market rate when measuring fair value of the reinstated debt a MNOK 1,066 reduction is observed. The difference between nominal- and fair value will be amortised, and presented as interest expense, over the period until fi nal maturity of the loans. The below table sets out the difference between nominal- and fair value at initial recognition, the amortization for the period and the remaining balance at reporting date.

Initi al re nitio n 20 .10.2 020 cog	-1,0 66,6 39
Amo rtise d co st o f fai lue adju stm ent (*) r va	54,6 15
Fair val djus nt 3 1.12 .202 0 tme ue a	-1,0 12,0 25

*Amortised cost is precented as part of Interest charges in the Comprehensive Income Statements

	202 0	201 9
	31.1 2	31.1 2
Lon g te rm d ebt	17,1 45,3 99	4,49 6,50 1
Cur rent tion of l term deb t por ong	3,49 9,89 7	27,6 32,5 28
Fair Val djus tme nt ue a	1,01 2,02 5	-68 ,182
Bala boo ked fi na cost nce nce	121, 870	63,5 73
bt (* ) Tota l int t be arin g de eres	21,7 79,1 92	32,1 24,4 20
Ban k de it pos	2,41 2,46 9	1,13 4,02 8
Net inte rest bea ring deb t	19,3 67,2 87	30,9 90,3 93

Long term debt is divided by 33% NOK and 67% USD. At the end of the quarter, fi xed interest agreement loans were entered into for around 7% of interest bearing debt.

Current portion of long term debt includes MNOK 2,534 reclassifi cation of lease obligation for Normand Maximus.

In the 2019 comparative fi gures long term debt of about MNOK 25,000 was in accordance with IFRS classifi ed as Current portion of long term debt, due to the standstill agreements with the banks and bond holders where the covenant waiver period was less than 12 months.

*Inclusive recognized debt relating to IFRS 16 Leases MNOK 2,814 (MNOK 4,284), whereof MNOK 0 (MNOK 1,219) are leases from related parties, and debt to related parties MNOK 0 (MNOK 258).

Note 8 - Refi nancing effects

Successful restructuring of the company approved by an extraordinary general meeting October 20th, 2020, with the following major effects on the accounts.

• A NOK 0.2 billion reduction of Right-of use assets due to termination of vessels recognized according to IFRS 16.
• A net NOK 9.4 billion reduction of Debt to credit institutions due to de-recognition of existing debt and recognition of reinstated debt based on nominal values.
• An additional NOK 1 billion reduction of Debt to credit institutions due to initial Fair value measurement of recognized debt according to IFRS 9.
• A NOK 0.2 billion reduction of Debt to credit institutions due Fair value measurement of Associated Subscription Rights (Warrants)
• A NOK 1.3 billion reduction of Other current liabilities due to lease liabilities and interest relief converted to equity.
• A NOK 1.5 billion increase in Deposits, cash, etc relating to new equity and Working Capital Facility.
• The total effect on equity is NOK 12 billion.

Note 6 - Right-of-use-assets (continued)

Contracts with renewal options

The Company determines the lease term as the non-cancellable part of the lease. In addition any periods covered by an option for extended lease that is reasonably certain to be exercised are included.

Note 10 - Tax expense

The Group's tonnage taxed companies have decided to exit the Norwegian Tonnage Tax Regime with effect from January 1st 2016. Amended tax returns for the period 2016-2018 have been fi led with Norwegian Tax Authorities. Based on the tax assessments received the Group has a loss carried forward of about NOK 12 billion. The corresponding deferred tax asset is not recognized in the accounts.

Taxes on ordinary result relates to local taxation outside Norway.

Note 11 - Subsequent events

The Company has sold the PSVs Sea Angler (built 2007, 5 450 BHP), Sea Bass (built 2008, 5 450 BHP) and Sea Turbot (built 2008, 5 450 BHP).

Delivery of the vessels to the new owner took place Thursday February 4th, 2021. The sale of the vessels will result in an immaterial accounting effect for Q1 2021.

Note 12 - Alternative performance measurement defi nitions

Solstad Offshore ASA has included the below Alternative Performance Measures (APM), which are commonly used in the business, as they are used internally by management to understand the Group's financial performance. Hence, it is deemed that the APM's also will provide useful information to the reader.

Operating margin - Operating result before depreciation in percentages of total operating income

EBITDA - Operating result before depreciation.

EBITDA adjusted - Operating result before depreciation and impairment adjusted for Joint Ventures, Associated Companies, excess values charter parties from mergers, leases and other non-cash related items

Adjusted Operating result before depreciations - Operating result before depreciation adjusted excess values charter parties from mergers and result from Joint Ventures

Earning on equity - Result before tax, in percentage of average equity, including minority interests

-

-

-

-

-

-

Earning on capital employed - Operating result plus interest income and result from associated company divided by average book shareholders' equity and interest-bearing debt

Current ratio - Current assets divided by current liabilities

Equity ratio - Booked equity including minority interests in percentage of total assets

Earnings per share - Result for the period for the Group divided by weighted average number of shares at the end of the reporting period, adjusted for treasury shares

Comprehensive income per share – Comprehensive income for the period for the Group divided by weighted average number of shares at the end of the reporting period, adjusted for treasury shares

Equity per share - Shareholders' equity divided by outstanding number of shares at the end of the reporting period

Working capital – Current assets less current liabilities, excluding current portion of long-term debt

Interest-bearing debt – Current and long-term interest-bearing liabilities

Net interest-bearing debt – Interest-bearing liabilities less bank deposits

Sustainability

Every aspect of sustainability needs attention, but some are more relevant to us and our stakeholders than others.

A thorough materiality analysis has provided us with way to focus our efforts by highlighting the most crucial elements of what sustainability means to both Solstad and our employees, clients, investors and other stakeholders.

The three UN sustainability goals we have selected are 8, 13 and 14 to ensure we focus on areas where we have an impact.

Energy management certifi ed

Solstad is one of very few shipping companies in the world that is ISO50001 Energy Management certifi ed. This shows our commitment to managing our energy use and thereby reducing emissions and cost. Through the program Solstad Green OperationsTM we have reduced fl eet fuel consumption and emission of about 20% over the last 12 years.

CO2 Target

Solstad has defi ned a pathway towards zero emissions by 2050. So far, we are on track with 20% reduction in CO2 emmissions achieved since 2008 (adjusted for activity level).

Target for 2021: a further 3% reduction

Specifi c measures to reduce another 20% in the next decade is in the making.

Battery & shore power

Solstad is an industry leader when it comes to use of of battery hybrid and shore power systems to reduce CO2 emissions. By Q2 2021 most of the Norwegian based fl eet is hybride sized or have shore power connection systems. More than 10.000 tons of CO2 is saved every year du to these measures. • Vessels with shore power installed: 8 • Vessels with installed with Battery-Hybrid system: 8 (Q2)

0 % 20 % 40 % 60 % 80 % 100 %

1 049 867

CO2 TONS SAVED

8 VESSELS INSTALLED BATTERY-HYBRID SYSTEM

Our Global Footprint

Asia Pacifi c

1 AHTS | 6 PSV | 5 CSV Oil & Gas, Renewable Energy, Cable

SingaporeSingapore

Offi ces

Solstad Offshore ASA

Nesavegen 39 4280 Skudeneshavn Norway

Postal address: P.O. Box 13 4297 Skudeneshavn Norway Telephone: +47 52 85 65 00 Email: contact@solstad.com

www.solstad.com