Q2 CEO Jon Christian Syvertsen CFO Fredrik Platou 1 30.08.2010 Shippingklubben
Corporate & management structure Frontline Management Commercial man. agreement Songa Julie, Saga Chelsea Saga Unity Saga Tankers ASA Techn. man. Agreement Julie, Agnes, Unity & Chelsea Songa Ship Management Accounting Rental Offices Arne Blystad AS Saga Chelsea AS Saga Agnes AS Saga Julie AS Saga Unity AS = Third party companies = Blystad affiliate Saga Tankers ASA Frontline Management AS Songa Shipmanagement Ltd 30.08.2010 Shippingklubben 2
Agenda 2Q 2010 Highlights Financial review Market update Drydocking update Outlook Q&A 3
Q2 Highlights Completion of private placement of 59.2 million shares at NOK 12 per share raising gross proceeds of NOK 710.4 million and subsequent listing on the Oslo Stock Exchange on 18 June Successful delivery of all vessels to the company earnings from day one Songa Julie (TBN Saga Julie) Saga Agnes Saga Chelsea Saga Unity TC-equivalent of USD 45,200 p.d. on spot trading vessels Setting up the company, systems and agreements. Planning of dry dockings. 4
Financial Highlights USD 1000 2Q 2010 Gross freight revenue 13 579 Operating (TC) revenue 7 704 Operating profit before depreciation (EBITDA) 4 784 Operating profit (EBIT) 3 319 Net profit/-loss 2 785 Basic and diluted earnings per share (USD) 0.04 Cash and cash equivalents 29 870 5
Income statement USD 1000 2Q 2010 1Q 2010 YTD 2010 Gross freight revenues 13 579-13 579 Voyage related expenses 5 875-5 875 Operating TC revenues 7 704-7 704 Operating expenses vessels 2 134-2 134 Employee benefit expenses 124-124 Administrative expenses 662-662 Depreciation 1 465-1 465 Operating expenses 4 385-4 385 Operating profit 3 319-3 319 Interest income 46-46 Interest expense 646-646 Other financial items 67-67 Net financial items -533 - -533 Q2 main figures Weighted avg. TCE p.d. USD 42,800 Weighted avg TCE p.d. spot vessels USD 45,200 Weighted avg. OPEX pd USD 12,100 Profit/-loss before tax 2 785-2 785 Taxes - - - Net profit/-loss 2 785-2 785 Other comprehensive income - - - Total comprehensive income 2 785-2 785 Basic and diluted earnings per share (USD) 0.04 Average number of shares in the period 71 717 501 Number of shares outstanding at period end 78 888 559 6
Balance sheet USD 1000 2Q 2010 1Q 2010 ASSETS Non-current assets Vessels and other assets 253 293 - Total non-current assets 253 293 - Current assets Other Current assets 12 521 - Cash and cash equivalents 29 870 180 Total Current assets 42 391 180 TOTAL ASSETS 295 684 180 EQUITY AND LIABILITIES Equity Share capital 13 301 167 Share premium 141 327 1 Retained earnings 2 785 - Total equity 157 413 168 Non-current liabilities Long-term interest-bearing debt 118 364 - Net pension liabilities 77 - Total non-current liabilities 118 441 - Current liabilities Current portion of long-term debt 16 422 Other current liabilities and accruals 3 407 12 Total current libilities 19 829 12 TOTAL EQUITY AND LIABILITIES 295 684 180 7
Voyages in the quarter ( 3 spot vessels ) Julie Chelsea Unity 8
Market : Short term pain Seasonal downturn Presently trading at WS50 / $11.000 / day in TC FFA : WS 58 ( sept ) Contango oil price curve should support storage Scrapping 2010 : of 60 remaining SH vessels only 30 are sailing. Assume no trading after end 2010 VLCC market dependent on US imports Source: Fearnleys 9
01.01.2004 01.07.2004 01.01.2005 01.07.2005 01.01.2006 01.07.2006 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 01.07.2009 01.01.2010 01.07.2010 Long term prospects seem sound Long haul demand drivers still intact Dependent on healthy United States & China imports in order to consume vessels deliveries in 2011 and 2013 25 20 15 10 5 0 China crude oil imports still strong US crude imports continue its recovery to pre-financial crisis levels US crude input to refineries (mb/d) trending back to 5 yrs average Monthly import, million tonnes Source: Bloomberg Source: Barclays Capital 10
Drydockings / periodic surveys Saga Chelsea (China) Saga Unity (Dubai ) Songa Julie (Singapore) Saga Agnes (Singapore) $ 1.8m 22 + 10 d Dep Aug 20 $ 1.4m 13 d Dep Aug 17 11 d (E) Dep Sept 10 20 d (E) Dep Sept 8 11
Strategy for growth Purchase secondhand VLCC`s built 2003 and younger. Finance (incl WC) : 50% new equity + 50% bank financing Protect dividend flow from existing fleet Charter out one more vessel at $40k / day + No significant hedging of interest rates, bunkers or freight Important factor for future growth: Equity market for accretive capital increases 12
Q&A 13