J. Lauritzen A/S Investor Update Annual Report 2014

Transcription

1 J. Lauritzen A/S Investor Update Annual Report 2014 February and March Oceans of know-how

2 AGENDA Key messages on financials Lauritzen Bulkers Lauritzen Kosan Other business interests Financing CAPEX Outlook Oceans of know-how

3 more difficult and challenging than expected - An improvement in the latter part of 2014 was expected but never occured - Instead, 2014 saw a perfect storm and the storm has not subsided, yet Markets Key messages on 2014 String of negative events dented the expected improvement in dry bulk Disappointing demand growth for smaller gas carriers in 2014 H2 Oil price decrease causing effective increase in carrying capacity Asset values under pressure since 2014 Q3 Business areas Completion of strategic adjustments initiated in August 2013 Strenghtened organisation and business development initiatives LB: Activity (ship-days) down 4% - number of fixtures on par with 2013 LK: Activity (ship-days and fixtures) down 9% USD m Net interest bearing debt and cash USD m Financials LTV 65% on fleet maintained NIBD 37% of vessel market values at December 2014 Unsatisfactory results but consistent with very difficult year Impairment losses and provisions of USD (161)m on dry bulk fleet reflecting low rate expectations Financing Substantial refinancing accomplished Post-delivery financing secured for own newbuildings ordered early Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Net interest bearing debt (Left) Tank/shuttle tank (discont.) Cash incl. unused facilites (Right)

4 2014 Net results of USD (165.7)m in line with latest expectations - EBITDA from dry bulk and gas carriers up on 2013, however H2 turned out increasingly disappointing - Special items (impairment losses and provisions, in particular) reduce net results EBITDA per quarter (total) in USDm Income statement (10) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q USDm EBITDA Lauritzen Bulkers (12.1) 6.4 Lauritzen Kosan Not allocated a.o. (8.7) (9.0) Continued operations Discontinued activity (tank & shuttletank) EBITDA Comparing 2014 to 2013 EBITDA improved USD 8.0m to USD 15.3m Lauritzen Bulkers up USD 18.5m to USD 6.4m Lauritzen Kosan down USD 10.2m to USD 17.9m Depreciation improved USD 7.4m to USD (56.0)m Special items improved USD 17.2m to USD (118.9)m Finance net down USD 9.7m to USD (40.4)m Discontinued operations up USD 66.8m to USD 18.7m Net results up USD 118.9m to USD (165.7)m Sale of assets (7.6) 13.6 Depreciation (63.4) (56.0) Joint ventures (6.0) (0.9) Operating income (EBIT) before special items (69.7) (28.1) Special items (136.1) (118.9) Net financial items (30.7) (40.4) Results before tax (236.6) (187.4) Tax Discontinued operations incl minorities (48.1) 18.7 Profit/(loss) for the year (284.6) (165.7) 4

5 Special items - One-off items: Sale of claims, settlements or sale of vessels due to defaults - Impairment losses and provisions Break-down of special items USDm One-off revenue from sale of claims and 1 claim settlements Sale of vessels as a consequence of 2 counterparty defaults Impairment loss on vessels and 3 vessels under construction (133.0) (85.1) Provisions for onerous contracts - (60.1) Impairment loss on vessels owned by joint ventures (4.7) (15.8) Special items, net (136.1) (118.9) Condensed income statement with special items in operating profit USDm EBITDA 8.9 (13.1) Sale of assets (7.6) 24.0 Depreciation and impairment losses (196.4) (141.2) Joint ventures (10.7) (16.7) Operating income (205.9) (147.0) Net financial items (30.7) (40.4) Results before tax (236.6) (187.4) /Q2: Includes revenue from sale of claim relating to STX Pan Ocean default (No. 4/2014) /Q4: Profit from sale of two capesize dry bulk carriers previously employed to STX Pan Ocean (No. 9/2014) /Q4: Deterioration of dry bulk market. Impairment test based on reduction in our freight rate estimates, current contract cover and risk assessment of longer-term charter parties (No. 10/2014) Please refer to note 2.2 of the Consolidated Financial Statements in the 2014 Annual Report for further details 5

6 August 2013-plan implemented: Cash up and total assets down - Cash and committed facilities totaled USD 284m at year-end Up USD 130m on 2013 as planned Key messages Fixed assets at USD 952m Down USD 233m (20%) on 2013, mainly due to sale of assets and impairment losses Solvency at 47.4% Book value of fleet (save for capes) on par with brokers December 2014-valuations (ref. next slide) Key figures unsatisfactory: ROIC of (14.3)%, and NIBD/EBITDA at 17.5 continued operations, only Cash at USD 184m, however: Undrawn committed credit facilities of USD 99.7m brings cash and unused credit facilities to a total of USD 284m at year-end 2014 Does not include DKK 100m overdraft facility CAPEX commitment relating to owned newbuildings USD 139m Off-balance commitments related to chartered fleet was USD 779m (gross), up USD 49m (gross) Further details on slide 21 Balance sheet USDm Fixed assets 1, Vessels, property and equipment 1, Investments in joint ventures Other non-current assets Current assets Assets held for sale Cash * Total assets 1,877 1,208 JL share of equity Minority share 1 0 Non-current liabilities Current liabilities Solvency 39.4% 47.4% ROE (35.8%) (25.3%) NIBD/EBITDA ** Investments (vessels only) Divestments (vessels only) ROIC ** (15.3%) (14.3%) Notes: * Does not include USD 99.7m in undrawn committed facilities year-end 2014 (2013: nil) ** Continuing operations only 6

7 Fleet LTV 65% on average at year-end 2014 (65% at year-end 2013) - Values on average down 9% on December 2013 and down 7% on June Dry bulk carriers down 15% (on Dec. 2013) and down 12% (on June 2014) - Gas carriers down 2% (on Dec. 2013) and down 2% (on June 2014) Average age in years and vessel values in USDm by end December 2014 owned fleet USD m Years Average age 7.4 years NIBD 37% of market values - Handysize Capesize Semi-refrigerated Fully-pressurised Ethylene 0 Dry bulk carriers Gas carriers Book Value Debt Market Value Vessel average age (RHS) Note: Fleet, debt (secured in vessels), book values and market values are per year-end Totals may differ due to rounding. Book values excl. dockings, etc. Debt excl. value of hedging, formation costs, etc. 7

8 - Strong presence in Handysize dry bulk - Controls a fleet of more than 100 primarily handysize and supramax dry bulk carriers Handysize & Supramax Cape size Significant volume of transactions in the handysize segment generates information and market knowledge in LB Extensive market knowledge utilised in spot trading: Take time-limited additional shipping risk and generate additional earnings 2 owned vessels on 11-year time charter No cover no capes Strategic focus: Cash generation In principle, no new active shipping risk Strategic ambition to employ same approach in supramax Import regions (cargo discharge, 2014) Cargo mix (2014) 0% 20% 40% 60% 80% 100% Energy Metals Minerals Agricultural products Africa Asia Oceania Europe North America South America Construction materials 8

9 - Increasing the focus on spot trading: Improving the ability to generate value in fluctuating markets - Expected activity in 2015: 90 handysize vessels and 25 supramax vessels on average (85 and 17 in 2013) Activity Controlled fleet averaged 107 vessels in 2014 (In 2013: 112 vessels) Core fleet (owned, part-owned and long-term chartered vessels) and pool vessels on average 79 vessels (In 2013: 87) Short-term chartered fleet for the spot trading acitivities averaged 28 vessels in 2014 (In 2013: 24) Increasing focus on spot trading Growth expected in the short-term chartered fleet for the spot trading Core fleet to further decrease (from 77 vessels at year-end 2014 and 86 at year-end 2013) Activity (avg. no. of ships) Fleet at year-end 2014* Cover ** Total >> Handysize Supramax Capesize Total Total Owned Part-owned B/B in T/C in *) Pool, etc New buildings Capesize Supramax Handysize 17% 15% 19% 38% 56% % 0% 25% 50% 75% Handysize Capesize Supramax Total (RHS) Note: * Not including time-charters with a duration of less than 12 months Note: ** At the beginning of the year CoAs included in the cover with expected requirement 9

10 Dry Bulk outlook: 2014 Q4 weaker than expected 2015 looks challenging - Weak Chinese imports, high inventories, falling commodity prices and less port congestion lead to reduced rates - Decrease in bunker prices causes an effective increase in carrying capacity Weak markets to continue Market conditions turned out to be considerably more difficult in 2014 than originally expected We expect the demand growth for transportation of dry bulk commodities to be slightly lower than in 2014 (5½% in 2015 was 6% in 2014) World fleet (dry bulk) Age profile and order book for the handysize segment relatively better than the for the larger vessel segments Supply growth expected to increase in 2015 compared to 2014, albeit only marginally (5-6% in 2015 was 5% in 2014) Business environment to remain challenging throughout 2015 Spot market rates USD/day Index 18, ,000 14, ,000 10, ,000 6, , , Average of the 6 T/C Routes for Baltic Supramax Index (LHS) Average of the 6 T/C Routes for the Baltic Handysize Index (LHS) Baltic Exchange Dry Index (RHS) Age profile and order book 100% 80% 60% 40% 20% 0% Capesize Supramax Handysize 25 years or more years 0-15 years Orderbook % Source: Own analysis based on data from Clarkson Research Services 10

11 - Reliable, high quality provider of safe and flexible transportation in smaller gas carriers - Controls a fleet of 39 vessels specialised for transportation of petrochemicals and liquefied petroleum gases Fully-pressurised (F/P) Semi-Refrigerated (S/R) Ethylene Industrial shipping of petrochemicals and LPG in smaller size gas carriers (3-10,000 cbm) Strong brand backed by years of solid performance and confirmed by high client retention rate Strategy rooted in strict focus on complying with requirements: To be able to trade for any client anywhere Focused on operational efficiency, technical excellence and ability to provide service at lowest possible cost Import regions (cargo discharge, 2014) Cargo mix (2014) 0% 20% 40% 60% 80% 100% Ethylene Other Butadiene LPG Propylene Africa Asia Oceania Europe North America South America 11

12 - Expected activity in 2015: 36 vessels on average (39 in 2013) - Fleet mainly employed on Contracts-of-Affreightment (CoAs), renewed annually Activity Controlled fleet averaged 39 vessels in 2014 (In 2013: 43 vessels) Total activity expected to decrease to approx 36 vessels on average in 2015 Focus on reliable performance and technical exellence 27 vessels technically managed in-house by Lauritzen Kosan Vessels inspected 124 times by oil majors during 2014 Activity (avg. no. of ships) Fleet at year-end 2014 Cover ** Total >> Semi-refrigerated Ethylene Fully-pressurised Total (RHS) New buildings Total Fully-pressurised Ethylene Semi-refrigerated Total Owned Part-owned B/B in T/C in *) Pool, etc Ethylene S/R F/P 25% 33% 47% 54% 60% 75% % 25% 50% 75% 100% Note: ** At the beginning of the year. CoAs included in the cover with expected requirement 12

13 Small gas carriers: set-back in 2014H may be the turning point - Price decrease on oil and related commodities in 2014H2 had negative impact on demand in short term - Based on expected stabilisation of energy and petrochemical prices Outlook points to a recovery Supply projected to grow by approx 6% Fully-pressurised and larger semi-refrigerated tonnage (> 10,000 cbm) continuing to flow into the market Demand growth is expected to grow slightly faster. Based on: Less maintenance and outage of refining and petrochemical plants (as well as stabilisation of energy and petrochemical prices) Rate improvements expected to a limited extent in 2015 Spot rates Small gas carriers: Age profile and orderbook ,000 USD/month 100% 80% 60% 40% % 0% Age distribution FP Age distribution SR/FR 25 years or more yearr 0-14 years Order book (F/P) cbm (S/R) cbm (ETH) cbm Sources: Own analysis based on data from Fearnleys and Clarkson Research Services 13

14 Other business activities Axis Offshore (accommodation and support vessels) Joint venture with HitechVision JL investment commitment maximum USD 66m JL ownership 33.6% (50% voting rights) Axis Offshore Pte. Ltd. key figures 2014 JL share USDm EBITDA 26.1 Net profit Total assets Equity Dan Swift on T/C to Petrobras until end 2016 Q2 Axis Nova expected ready for operation in Summer 2015 with option to postpone delivery throughout 2015 Axis Vega expected ready for operation in Spring 2016 Hafnia Tankers Other investments Dry bulk At year-end 2014, co-ownership in J/Vs controlling 10 handysize vessels and two supramax vessels Co-ownership in a J/V controlling two orders on handysize vessel newbuildings Gas carriers Co-ownership in a J/V owning 3 ETH gas carriers employed by Lauritzen Kosan Lauritzen Tankers sold its fleet of MR tankers to Hafnia Tankers in 2013 (delivery completed 2014 Q1) At year-end 2014, JL held 5.6% of the shares in Hafnia Tankers Ltd. 12 February 2015, Hafnia Tankers announced a USD 34m underwritten private placement of new shares in connection with their acquisition of four LR1 product tankers Hafnia Tankers is an international pure-play product tanker company. The shares are quoted on the Olso OTC-list 14

15 Financing - 77% of bank debt originally maturing in refinanced during Increased amount of total commitments now as revolving credit facilities Outstanding debt and total commitment in USDm Repayment profile in USDm Term loans Term loans ECA backed Revolving credits (drawn) Bonds unsecured Undrawn revolving credits Repayment Bullit bank loans Bullit bonds Expiry of undrawn revolving credits Note: Charts shows data as per year-end Numbers shown are forecast. Numbers can change e.g. in case of sale of a vessel, prepayment, reduction or increase in use of revolving facilities, etc. Totals may differ due to rounding. Bond debt at hedged value less JL s own bond holding. Totals may differ due to rounding. 15

16 CAPEX, financing and deliveries - Post-delivery bank financing for owned newbuildings secured Total CAPEX Remaining payments on newbuildings Owned USD m Part-owned JL share (dry bulk) * USD m Part-owned JL share (Axis Offshore) ** USD m Financing (owned newbuildings) Committed financing *** USD m Deliveries Owned newbuildings Handysize (dry bulk) # 2 2 Supramax (dry bulk) # Part-owned newbuildings Handysize (dry bulk) # 2 2 Accomodation and Support Vessels (Axis Offshore) # Note: Totals may differ due to rounding. * Amounts shown are the equity commitment expected to be called from JL. J/V will procure financing directly ** Amounts shown are the commitment expected to be called from JL. Actual amount may differ and will e.g. depend also on amount of capital raised directly by Axis Offshore *** Committed amount (maximum). Actual amount may be lower and depend on market value of vessels at delivery. 16

17 Earnings guidance for 2015 FY - Market conditions and business environment expected to be at least as challenging as in The perfect storm has not subsided, yet Baltic Dry Index 2,500 2,300 2,100 1,900 1,700 1,500 1,300 1, Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 EBITDA USD (20)m USD 30m (in 2014: USD 15m) Contribution from dry bulk spot trading expeced to increase compared to 2014 Sensitivity +/- USD 15m, based on +/- USD 1000/day in Lauritzen Bulkers, and +/- USD 500/day in Lauritzen Kosan, Respectively Guidance as per 25 Feb Bunker oil (fuel) High sulphur USD/tons Operating income before special items lower than 2014 Special items (reversal of provisions) USD 27m Lower financial costs and depreciations compared to Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Net results USD (70)m USD (20)m (in 2014: USD (166)m) Currency and interest rate fluctuations as well as effects from sale of assets, if any, may also impact the results Source: Bloomberg 17

18 Concluding remarks - Strategic adjustments initiated in mid-2013 completed - Markets are challenging thus new measures under consideration 2015 earnings and thus cash generation expected to be unsatisfactory low However: USD 284m liquidity at year-end 2014 Will repay JLA 01 Solid 47% equity ratio at year-end 2014 Prudent 65% LTV at December 2014 Post-delivery bank financing for own new buildings secured Markets are highly challenging Dry bulk market at a 29 year-low Small gas carriers: Poor spot markets causing waiting days Asset values under pressure We will continue our work to improve our business Lauritzen Bulkers: Increase value creation from spot trading Lauritzen Kosan: Build relations. Optimise technical performance 18

19 Contact details Investor relations Jacob Winthereik Financial Investor Relationship Manager Phone: Web: Press & Media Jens Søndergaard Senior Vice President, Strategic Planning & Executive Communications Phone: Web: 19

20 Appendix Charter commitments and charter obligations Business unit comparison Corporate bonds issued by J. Lauritzen A/S Management Ownership Lauritzen Fonden Contact details Glossary Disclaimer 20 Oceans of know-how

21 Charter obligations and committed charter income - Charter obligations increased USD 49m y-o-y. Average number of vessels increased by 6 y-o-y. Operational lease liabilities (time charter and bare boat contracts) at year-end 2014 Bulkers Kosan Total (continuing operations only) USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) < 1 Year Year Year Year Year > 5 Year Total At year-end 2014 JL had purchase options on 21 dry bulk carriers (2013: 18 dry bulk carriers) Contractual committed charter income (time charter and bare boat contracts) at year-end 2014 Bulkers Kosan Total (continuing operations only) USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) < 1 Year Year Year Year Year > 5 Year Total Note: Above does not include income from contracts of affreightment (COAs). Please refer to notes 3.2 and 2.3 of the Consolidated Financial Statements in the 2014 Annual Report for further details 21

22 Corporate bonds issued by JL JLA 01: NOK 700m JL 10.5% 2010/2015 JLA 02: NOK 500m JL FRN 2012/2017 Issuer: J. Lauritzen A/S ISIN: NO Type: Senior Unsecured Bond Coupon p.a.: Fixed 10.5% Issue date: 05 May 2010 Maturity date: 05 May 2015 Amount: NOK 700m, gross (JL holding NOK 296.5m at year-end 2014) Interest payment: Annual Listing: Oslo Stock Exchange Issuer: J. Lauritzen A/S ISIN: NO Type: Senior Unsecured Bond Coupon p.a.: Floating rate 8.25% + NIBOR 3 mths Issue date: 24 October 2012 Maturity date: 24 October 2017 Amount: NOK 500m, gross (JL holding NOK 29m at year-end 2014) Interest payment: Quarterly Listing: Oslo Stock Exchange Price Bps / spread (rhs) / price (lhs) 90 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 1,600 1,400 1,200 1, Price Bps. 1, , / price 2012/ spread (rhs) jan jul jan jul jan-15 Source: Oslo Stock Exchange, Bloomberg 22

23 Management and Board of Directors of J. Lauritzen A/S - Experienced, independent and professional team Executive Management Jan Kastrup-Nielsen President & CEO, J. Lauritzen A/S External board membership: Danish Ship Owners Association, Avance Gas Holding Ltd. With JL from , 2000-today, executive management since 2009, COO since 2011, CEO since February 2013 Birgit Aagaard-Svendsen Executive Vice President & CFO, J. Lauritzen A/S External board memberships: DSEB (chairman), Otto Mønsted A/S, The West of England Ship Owners Mutual Insurance Association, Chairman of the Danish Committee on Corporate Governance JL s CFO since 1998 (MoB in JL-Fondet) Board of Directors Bent Østergaard, Chairman (Member of the BoD since 2003) N President of Lauritzen Fonden & LF Investment Aps Chairman of BoD (selected): DFDS A/S, NanoNord A/S, Cantion A/S Other board memberships (selected): Comenxa A/S, Desmi A/S Ingar Skaug, Vice Chairman (Member of the BoD since 1998) A N Former CEO of Wilh. Wilhelmsen ASA Other board memberships (selected): DFDS A/S, Petroleum Geo-Services ASA Jesper T. Lok (Member of the BoD since 2014) CEO, Falck Emergency Other board memberships: Danish Crown Niels Heering (Member of the BoD since 2001) A N Partner & chairman of the BoD in Gorrissen Federspiel (law firm) Chairman of BoD (selected): NTR Holding A/S, Ellos A/S Other board memberships (selected): Scandinavian Private Equity Partners A/S Marianne Wiinholt (Member of the BoD since 2011) Executive Vice President & CFO, DONG Energy A/S Other board memberships: None A Peter Poul Lauritzen Bay (Member of the BoD since 2003) Management Consultant at Accenture Descendant of the founder of Lauritzen Group Other board memberships: J. Krebs & Co. A/S Supporting Committees: Audit committee (members are marked with A ) Nomination and Remuneration Committee (members are marked with N ) Employee elected members of the Board of Directors: Søren Berg, Ulrik Danstrøm and Søren Roschmann 23

24 J. Lauritzen A/S is 100% owned by the Lauritzen Foundation (Lauritzen Fonden) - Lauritzen Fonden: An experienced owner, focused on shipping secures long-term sustainability The Lauritzen Foundation is a commercial foundation and as such a self-governing institution in Danish Law The Lauritzen Foundation is regulated by the Danish Act on Commercial Foundations The Foundation is under supervision by the Danish Ministry of Justice and the Danish Ministry of Business and Growth (Formerly JL-Fondet) LF Investment Aps (formerly Vesterhavet A/S) 100% J. Lauritzen A/S 100% DFDS A/S 42.8% Lauritzen Bulkers Lauritzen Kosan 24

25 Lauritzen Fonden was established in 1945 by the brothers Ivar and Knud Lauritzen and their sister Anna Lønbjerg-Holm. It was established in connection with the 50 years anniversary of Dampskibsselskabet Vesterhavet. Vesterhavet was founded by their father Ditlev Lauritzen in Chairman Board of Directors; Jens Ditlev Lauritzen (great grandchild of the founder of J. Lauritzen) The objectives of the Foundation are (e.g.): To work for the prestige of Denmark by promoting and developing Danish shipping, especially international shipping, and Danish enterprises in general To support studies and projects of a technical, commercial or other nature in shipping, trade and industry, agriculture and other sectors To support the education/training of young people in Denmark and abroad To work towards vessels, workshops and other workplaces, offices and housing operated by the companies, especially those associated with the Foundation, being healthy, bright and well-maintained and that they should be organised so as best to promote job satisfaction, and to provide support for the personnel and institutions working for such purposes, especially in the shipping sector To provide support for institutions, associations and people who, all in all, look after the interests of the shipping sector and people employed therein, especially such institutions and associations set up by those in the Lauritzen Group or its companies, or have supported, have an interest in or been associated with, and possibly seek to associate them to other humanitarian institutions that are not self-supporting, and also to set up and operate humanitarian institutions that operate in line with the above To provide support for institutions, associations and people who are working to encourage awareness and esteem of Danish cultural activities, especially including corporate culture, education/training, self-improvement and character training of the young, studies into disease prevention, especially prophylaxis To provide support for institutions, associations and people who are working to promote Nordic and international relations, also of a purely humanitarian nature To provide support for institutions, companies, associations and people whose aims and work the Board feels it is proper to support To provide support for people who have done service in one of the Foundation s or the Lauritzen Group companies and to such people s successors Read more about Lauritzen Fonden at 25

26 Glossary Bulk vessel: Vessels transporting large cargo quantities, e.g. coal, iron ore, steel, grain, gravel, oil, etc. Bunker: Fuel for vessels. Capesize: Dry bulk carrier of more than approximately 80,000 dwt; too large to pass through the Panama Canal. Cbm: Cubic meter. CoA: Contract of Affreightment. Contract between shipping company and charterer concerning the freight of a predetermined volume of goods within a given period of time and/or at given intervals. DP: Dynamic Positioning. Special equipment on board that in conjunction with bow thrusters and main propellers enable the ship to position itself in a fixed position in relation to the seabed. Dwt: Dead Weight Tons. International unit of measurement that indicates the loading capabilities in metric tonnes of the particular vessel, including the weight of crew, passengers, stores, bunkers etc. Supramax (incl. Handymax), dry cargo: Dry bulk carrier of between approximately 40,000 and 65,000 dwt. Handysize, dry cargo: Dry bulk carrier of between approximately 10,000 and 40,000 dwt. IMO: International Maritime Organization A maritime organization under the UN, LPG vessels: Liquefied Petroleum Gas. Vessels used to transport ammonia and liquid gases (ethane, ethylene, propane, propylene, butane, butylenes, isobutene and isobutylene).the gases are transported under pressure and/or refrigerated. Nautical Mile: Distance unit measure of 1,852 meters. Offshore vessel: Vessel serving the offshore oil industry. Panamax, dry cargo: Dry bulk vessel with the maximum dimensions for passing through the Panama Canal (width of metres and length of metres) of approximately 60,000 80,000 dwt. Petrochemical gases: Industrial processed gases such as ethylene, propylene, butadiene and VCM. Time Charter (TC): Under time charters, vessels are chartered to customers for fixed periods of time at rates that are generally fixed. The charterer pays all voyage costs. The owner is responsible for payment of all vessel operating expenses (manning, maintenance, repair, docking) and capital costs of the vessel. Time Charter Equivalent (TCE): Gross freight income less voyage-related costs (bunkers, harbor fees, etc.) Ton-nautical mile: Unit of measurement indicating the volume of cargo and how far it has been transported. 26

27 Disclaimer This presentation contains forward-looking statements concerning J. Lauritzen A/S ( J. Lauritzen, JL or the Group ) and its financial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning J. Lauritzen s potential exposure to market risks and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. There are numerous factors that could affect J. Lauritzen A/S future operations and could cause J. Lauritzen A/S results to differ materially from those expressed in the forward-looking statements included in this presentation. All forward-looking statements contained in this presentation are expressly qualified by the cautionary statements contained or referenced to in this statement. Undue reliance should not be placed on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. J. Lauritzen does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information or future events other than required by applicable law. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. Some of the statistical and graphical information contained in the presentation is supplied from the Clarkson Research Services Limited ( CRSL ) database and other sources. CRSL has advised that (i) some information in CRSL s database is derived from estimates or subjective judgments, (ii) the information in the databases of other maritime data collection agencies may differ from the information in CRSL s database, (iii) whilst CRSL has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures and may accordingly contain errors, (iv) CRSL, its agents, officers and employees cannot accept liability for any loss suffered in consequence of reliance on such information or in any other manner, and (v) the provision of such information does not obviate any need to make appropriate further enquiries. Any use of such data and graphical information appear with reference to Clarkson Research Services Limited While the information in the presentation is believed to be accurate, no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of this presentation or any other written or oral information transmitted or made available to any person or its advisors in connection with any investigation of the Group and no responsibility or liability is or will be accepted by the Group or any of their respective affiliates and representatives. In particular, no representation or warranty, express or implied, is or will be given as to the achievement or reasonableness of any statements, estimates and projections with respect to the anticipated future performance of the Group and the market for the Group s products and services. 27