4QTO 31 DECEMBER

TTS GROUP ASA

INTERIM REPORT

2016

TTS Group continues delivering positive operating results, however

disturbed by impairments

TTS has successfully stabilized key business divisions and are proceeding well with its

internal improvement program. The group has in all quarters of 2016, continued the

positive trend from 2015. We are starting to benefit from the positive effects of our

improvement program. Combining our ambition to maintain and grow market position

and our continued focus on synergies and operational efficiency with a goal to reduce

year-on-year operating cost with MNOK 100 across the Group, we expect to maintain

our positive margins in a challenging market.

We have an order backlog that covers more than 80% of the expected new-build

turnover for 2017. This gives a good basis for our 2017 operations. We expect reduced

activity in 2017 compared to 2016, particularly due to short-term challenges within the

car carrier and heavy lift segments. Although the market for Container/Bulk/Tank also

remains challenging, we expect stable turnover in the 100% owned units, but somewhat

reduced activity in the 50% owned Chinese companies. The market for ship-lifts remains

strong. For the services sector, we see a large potential for further development of both

the spare parts sales and the general service activity.

Business unit Offshore continues to deliver marginally positive operating results in the

fourth quarter, which confirms the improvement from an operating loss of MNOK 50 last

year to a positive break even this year. We still expect a weak offshore market in the

foreseeable future, and have reduced the TTS Group's exposure towards the Offshore

sector, which today represents around 7 percent of our turnover.

Business unit Multipurpose General Cargo has experienced a low order intake in 2016.

The turnaround of the heavy lift market and the development of the offshore wind

installation market takes longer time than previously expected. Due to this, the business

unit has reported impairment of MNOK 118, of which inventories MNOK 20, fixed assets

MNOK 16 and goodwill MNOK 82. To reduce the cost base for the business unit and

adapt the operations to the current market, we plan a ramp down of our German

manufacturing setup. We announce a restructuring program for the unit. This will add

restructuring cost of around MNOK 30, which will hit the first quarter 2017 result.

We continue our efforts to develop a more flexible organization that can shift resources

between segments, and thereby be better suited to scale activity by market changes.

Despite a challenging market for marine equipment, we have a strong market position

with a global presence, and a comprehensive and diversified product portfolio. Together

with committed competent colleagues, this creates a strong platform for future growth

when the market improves.

TTS GROUP

MNOK 2016 2015 2016 2015

Turnover 758 842 3 087 3 051

EBITDA ** 13 29 113 155

Order intake 446 937 2 398 2 733

Order backlog * 2722 4 015 2 722 4 015

EPS (NOK) Total -1,11 -1,07 -1,17 -0,55

Q4 Full year

** 2016 EBITDA includes a negative inventory impairment in the Multipurpose/General cargo segment of MNOK 20

** 2015 EBITDA includes a positive one off effect from consolidating TTS Hua Hai of MNOK 104 (Q2/15), a negative inventory

impairment in the Offshore segment of MNOK 20 (Q3/15), and a negative impact from restructuring allocation in Offshore of

MNOK 18 (Q4/15).

* Order backlog includes 50% of backlog from equity consolidated investments in China

4th quarter turnover reduced 10% from 2015, particularly due to

reduced activity in Offshore and RoRo/Cruise/Navy

Continued improvement in underlying operations, with an underlying

EBITDA year to date of MNOK 133, compared to MNOK 89 in 2015 **

Impairment in Multipurpose/General cargo of MNOK 118 due to

weakened market expectations

Good visibility for 2017 turnover

FINANCIAL PERFORMANCE

The 4th quarter turnover MNOK 758 was on level with 3rd quarter, but 10% lower than 4th quarter 2015, with the Offshore and RoRo/Cruise/Navy segments being the largest contributors to the reduced turnover.

Operating profit (EBITDA) in the 4th quarter was MNOK 33, excluding the impairment of inventory in Multipurpose / General cargo, which confirms a trend with a positive EBITDA in the area between MNOK 25 and 40 in 2016.

The full year underlying** EBITDA for 2016 was MNOK 133, a significant improvement compared to the same period underlying*** EBITDA for 2015 of MNOK 89.

The Earnings before interest and tax (EBIT) in 4th quarter 2016 was MNOK -94, hit by impairment of fixed assets (MNOK 16) and goodwill (MNOK 82) in business unit Multipurpose / General cargo.

** 2016 Excluding inventory impairment MNOK 20

*** 2015 Excluding positive one off effect MNOK 104 from THH consolidation, and negative impact of Offshore restructuring and inventory impairment MNOK 38

TOTAL ASSETS AND NET INTEREST-BEARING DEBT

Total assets at the end of 4th quarter 2016 was MNOK 2 216, a decrease of MNOK 810 compared to the end of 2015 and MNOK 305 compared to 3rd quarter 2016.

Net working capital at the end of the 4th quarter was MNOK 124, an increase of MNOK 45 from 3rd quarter, of which MNOK 70 relates to increase in the 50/50 owned subsidiaries in China, partly offset by a reduction in the 100% owned entities.

Net interest-bearing debt at the end of the 4th quarter was MNOK 294, an increase of MNOK 40 from 3rd quarter. The effect of the consolidation of THH and TTS-SCM represents a total reduction of the reported net interest-bearing debt of MNOK 99.

The equity at the end of the 4th quarter was 27,3%. Including the convertible bond debt the equity was 31,6%.

TTS has covenants for both equity ratio and EBITDA related to its debt and bonding facilities with Nordea and DNB. The debt- and bonding facilities were renewed in 4th quarter 2016. The subordinated debt matures in 2nd quarter 2017. The group has started the process to refinance/prolong the subordinated convertible bond loan in 1st quarter 2017.

ORDER BACKLOG

The order intake for 4th quarter 2016 was MNOK 446, a decrease of 52% compared to the unusually high MNOK 937 in 4th quarter 2015. The largest decrease is in business units RoRo/Cruise/Navy and Container/Bulk/Tank.

The order backlog* at the end of 4th quarter reached NOK 2,7 billion (4,0 billion), of which approximately NOK 1,8 billion is expected to be turned into revenue in 2017. Consequently, about 80 % of the expected revenue from new build activity in 2017 is expected to be covered by existing contracts.

Order-cancellations year to date is MNOK 198 in fully consolidated companies, of which MNOK 77 in 4th quarter. Cancellations in equity-consolidated investments in China was MNOK 126 in 2017.

*including 50% of the order backlog of MNOK 138 (323), in equity consolidated investments in China Expected turnover from the Services segment is not included in the reported order backlog

RORO, CRUISE, NAVY

MNOK 2016 2015 2016 2015

Turnover 127 176 555 641

EBITDA 0 13 15 62

Order backlog 652 941 652 941

Q4 Full year

CONTAINER, BULK, TANK

MNOK 2016 2015 2016 2015

Turnover 302 298 1 138 973

EBITDA ** 24 24 64 141

Order backlog * 1 403 2 090 1 403 2 090

Q4 Full year

* Order backlog includes 50% of order reserve in equity consolidated investments in China

** One of effect from consolidating TTS Hua Hai included in full year 2015 of MNOK 104

RORO/CRUISE/NAVY

The business unit reports a decrease in turnover and margin compared to last year. The reduction of margin is an effect of changes in the product mix, as well as losses on a few specific projects.

The order backlog at the end of the quarter was MNOK 652, a reduction of MNOK 49 from last quarter, and MNOK 289 lower than at the end of 4th quarter 2015. Going forward, the Group expects lower new orders and risk of delays from the customer side on existing orders in the market for car carriers. Although this is replaced by higher activity in the market for RoPax and Cruise, we expect a significantly lower turnover in this segment in 2017.

CONTAINER/BULK/TANK

The business unit reports an EBITDA in line with the same quarter last year. Change of consolidation method from the equity method to full consolidation of the 50% owned company THH from 2nd quarter 2015, explains the major part of the reported difference in revenue and margin when comparing full year 2016 with 2015. Consolidated turnover and EBITDA from THH 2016 (2015) represent MNOK 837 (667) and MNOK 58 (48) respectively. Reported EBITDA in Q2 2015 further included one-off effects of MNOK 104.

Reduced utilization of the Jiangnan steel fabrication plant in China (a company 40% owned by THH) continues to give negative contribution from equity-consolidated investments. For 4th quarter 2016 (2015) the net contribution from equity consolidated investments was MNOK -3 (MNOK 3). Total 2016 (2015) contribution was MNOK -20 (MNOK 6).

The weak market for winches in South-Korea has led to a reduced order intake in 2016 compared to 2015. In China however, THH had an order intake in 4th quarter of around MNOK 170, which is in line with 4th quarter 2015.

MULTIPURPOSE, GENERAL CARGO

MNOK 2016 2015 2016 2015

Turnover 72 50 322 259

EBITDA * -19 -6 -24 -13

Order backlog 205 573 205 573

Q4 Full year

* 2016 EBITDA includes an inventory impairment of MNOK 20 (Q4/16).

OFFSHORE

MNOK 2016 2015 2016 2015

Turnover 59 90 226 359

EBITDA * 2 -22 4 -102

Order backlog 150 219 150 219

Q4 Full year

* 2015 EBITDA includes an inventory impairment of MNOK 20 (Q3/15) and a restructuring allocation of MNOK 18 (Q4/15).

MULTIPURPOSE/GENERAL CARGO

The business unit’s 4th quarter 2016 EBITDA excluding impairments is close to zero, a marginal improvement from the same quarter last year. The weak EBITDA margin is due to customer-initiated delays in project deliveries, combined with a slow market.

The 2016 order intake was low. We expect the turnaround of the heavy lift market as well as the development of the offshore wind installation market will take longer time than previously expected. Due to this, the business unit has reported impairment of MNOK 118, of which inventories MNOK 20, fixed assets MNOK 16 and goodwill MNOK 82.

To reduce the cost base for the business unit and adapt the operations to the current market, we plan a ramp down of the German manufacturing setup. We announce a restructuring program for the unit. This will add restructuring cost of around MNOK 30, which will hit the 1st quarter 2017 result.

OFFSHORE

The business unit delivers an EBITDA around zero for the fourth consecutive quarter, a

result of the continuing adaption of capacity and cost to the market. From the peak in 3rd

quarter 2014, the number of full time employee equivalents has been reduced by around

70%.

The offshore market is still weak, with generally low visibility and demand, combined with

fierce price competition, and we expect the market to remain challenging throughout

2017 and into 2018. However, the business unit has managed to enter into new

contracts with acceptable margins.

SHIPYARD SOLUTIONS

MNOK 2016 2015 2016 2015

Turnover 66 79 298 216

EBITDA 2 12 36 17

Order backlog 335 204 335 204

Q4 Full year

SERVICES

MNOK 2016 2015 2016 2015

Turnover 126 147 533 591

EBITDA 4 21 42 76

Q4 Full year

SHIPYARD SOLUTIONS

The 4th quarter results from the business unit is somewhat below the same quarter last year. Total 2016 EBITDA has improved both for Syncrolift, increased from MNOK 13 to MNOK 17 and for Liftec, increased from MNOK 4 to MNOK 8. This confirms a solid market position in the niche market for shiplifts, transfer systems and other logistics solutions for the production industry.

A profit of MNOK 9 from sale of the office/warehouse utilized by TTS Syncrolift AS in 2nd quarter is included in full year result.

TTS Syncrolift, which is a leading ship lift provider, continues its positive trend from previous quarters, with stable positive earnings and order intake.

In 1st quarter 2017, TTS signed an agreement to sell Liftec. The agreed value of the transaction is a gross base price of MEUR 5,8 including net cash, payable at closing, and an earn-out of maximum MEUR 1,8 over the next three years if specific targets are met. The transaction is expected to be completed within the end of February 2017.

SERVICES

Both turnover and EBITDA for the business unit Services in 4th quarter 2016 is

somewhat reduced compared to 4th quarter 2015, influenced by the low charter rates in

several shipping markets.

Although the service market still remains influenced by low ship charter rates and

increased competition, particularly within heavy lift equipment, we see a large potential

for further development of both spare parts sales and servicing based on TTS' worldwide

services network and the substantial installed base of TTS equipment.

The shipbuilding market has experienced significant reduction of activity, with strong competition and price pressure. However, within certain segments, demand and activity are still good. TTS Group is well diversified across market segments, geographical presence and product portfolio. TTS benefits from this position, which gives the company a strong market position in a challenging market.

Short term, the low level in the new-building activity is expected to affect TTS turnover negatively. We see a risk of postponements and cancellations in most business units. In addition to the weak offshore market, we particularly see short-term challenges within the car carrier and heavy lift segments. Although the market for Container/Bulk/Tank also remains challenging, we expect stable turn over in the 100% owned units, but somewhat reduced activity in the 50% owned Chinese companies. The market for ship-lifts remains strong. For the services sector, we see a large potential for further development of both the spare parts sales and the general service activity.

To reduce the cost base for Business unit Multipurpose General Cargo and adapt the operations to the current market, we plan a ramp down of our German manufacturing setup. In February, we announce a restructuring program for the unit. This will add restructuring cost of around MNOK 30, which will hit the first quarter 2017 result.

Long term, a positive development of the market is expected in line with increased demand for seaborne transport. TTS Group has a strong ambition to, as a minimum; maintain its share of the overall market.

At the end of the quarter, the order backlog was NOK 2,7 billion, of which approximately NOK 1,7 billion is expected to be turned into revenue in 2017. This means that about 80% of the expected revenue from new-build activities in 2017 is covered by existing contracts. Expected turnover from the business unit Services is not included in the Group's reported order backlog.

TTS Group has a well-established market position as one of the three largest suppliers within its market segments. The company’s strong position in China provides a good foothold in the world's largest shipbuilding market, which accounts for 40% of the global shipbuilding. In its further development of a robust strategy on "stand alone" basis, TTS Group focuses on customer base, improving operations, increasing flexibility and reducing cost in order to meet the market competition and increase profitability.

TTS GROUP

AMOUNTS IN NOK 1 000

Unaudited Audited Unaudited Unaudited

PROFIT AND LOSS ACCOUNT Note YTD 31.12.2016 YTD 31.12.2015 Q4 2016 Q4 2015

Turnover from projects 2 3 086 706 3 051 243 759 028 842 101

Total operating turnover 3 086 706 3 051 243 759 028 842 101

Raw materials and consumables used 1 955 972 1 939 679 471 683 491 446

Other operating costs 999 732 1 072 468 271 371 324 782

Result from JV ( - is income) 17 970 -115 889 2 561 -2 670

EBITDA 113 032 154 984 13 413 28 543

Depreciation 43 444 58 134 9 159 27 503

Other depreciation/write-downs 98 647 64 843 98 648 55 670

Operating profit -29 059 32 007 -94 394 -54 630

Financial income 48 415 38 442 15 354 2 889

Financial expense 73 141 85 771 10 207 42 029

Net finance -24 726 -47 329 5 147 -39 140

Profit/loss before tax -53 785 -15 322 -89 247 -93 770

Tax 6 31 819 24 841 -1 872 2 594

Net result continued business -85 605 -40 163 -87 375 -96 364

Net result divested business 0 0 0 -0

Net result * -85 604 -40 163 -87 375 -96 364

Attributable to equity holders of the company 4 -100 827 -48 674 -96 350 -92 946

Attributable to non-controlling interests 15 223 8 511 8 976 -3 419

NET RESULT FOR THE YEAR

Net result for the period -85 604 -40 163 -87 375 -96 364

Currency effects -58 924 102 983 33 719 -15 884

Total comprehensive income -144 528 62 820 -53 656 -112 249

Attributable to equity holders of the company -143 534 23 229 -77 304 -111 887

Attributable to non-controlling interests -994 39 592 23 648 -362

Earnings per share (NOK) -1,17 -0,55 -1,11 -1,07

Diluted earnings per share (NOK) -1,17 -0,55 -1,11 -1,07 Average number of shares used as calculation basis

for diluted EPS (000) 86 493 86 493 86 493 86 493

* 2016: Net result affected by MNOK - 118 from impairment of assets BUMPG

* 2015: Net resultat affected by MNOK + 66 from consolidation effects (+104 in BUCBT) and impairment effects (- 38 in BUOFF)

TTS GROUP

Note Unaudited Audited

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Intangible assets 6, 7 709 762 886 850

Tangible assets 8 94 338 134 521

Financial assets 9 72 316 84 975

Sum anleggsmidler 876 416 1 106 346

Inventories 10 143 135 414 157

Total receivables 5 1 021 352 1 091 790

Bank deposits/cash 12 175 784 413 210

Total current assets 1 340 271 1 919 157

Total assets 2 216 688 3 025 503

Share capital 3 9 527 9 527

Other equity 429 052 624 980

Non-controlling interests 166 004 220 059

Total equity 604 583 854 566

Provisions 6 47 981 51 581

Long term interest bearing debt 12 271 750 0

Long term liabilities 319 731 51 581

Current interest bearing debt 12 198 307 522 812

Current liabilities 5 1 094 066 1 596 545

Total current liabilities 1 292 373 2 119 357

Total liabilities 1 612 104 2 170 938

Total equity and liabilities 2 216 688 3 025 503

NOK 1 000 Share capital Treasury shares

Share premium

reserve Other equity

Shareholders

equity

Non controlling

interest Total equity

Equity as of 1.1.2016 9 527 -12 149 378 475 612 634 505 220 060 854 565

Comprehensive income - - - -143 534 -143 534 -994 -144 528

Share option cost - - - 670 670 670

Equity transactions with non controlling interests - - - - - -53 061 -53 061

Equity Closing balance 9 527 -12 149 378 279 686 438 579 166 004 604 583

NOK 1 000 Unaudited Audited

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

EBITDA 113 032 154 984

Change in net current assets -239 922 -155 153

Cash from operations (A) -126 890 -169

Aquisition and sale of non-current assets 5 786 220 112

Other investing activities 0 -23 950

Cash from investments (B) 5 786 196 162

New loans and repayment -15 079 122 931

Payments to shareholders * -53 061 -

Net interest paid -31 609 -53 565

Cash from financing ( C) -99 750 69 365

Change in cash (A+B+C) -220 854 265 358

Cash position OB 413 210 130 602

Effect of exchange rate changes on cash -16 572 17 250

Cash position CB 175 784 413 210

* includes payment of dividend to minority shareholders in TTS Hua Hai Co.Ltd.

New standards, amendments and interpretations not yet adopted by TTS:

IFRS 9

IFRS 9 replaces the existing guidance in IAS39, and is effective from the annual reporting beginning after 1 January 2018. The fair value hedge structure applied by TTS Group is set within the framework of IAS39. TTS is currently assessing the potential impact of IFRS 9, but do not expect any major change or impact on the consolidated financial statements.

As per 31 December 2016 the market value of FX-derivatives qualifying as fair value hedges is negative by MNOK 43.

IFRS 15

IFRS 15 provides a renewed basis for defining revenue recognition principles, affecting both nature, timing, amount and uncertainty of revenue and cash flow arising from an entity's contracts with customers.

IFRS 15 is effective from the annual reporting beginning after 1 January 2018.

TTS is currently assessing the impact from IFRS 15, both related to revenue recognition and impact on customer contracts. The new definition is expected to postpone revenue and margin recognition from customer projects within the RoRo/Cruise/Navy, Offshore, Multipurpose/General Cargo, and Shipyard Solutions segments.

The new definitions are expected to have a marginal impact on revenue and margin recognition coming from the segments reflecting our Container/Bulk/Tank, Services and Other.

IFRS 16

IFRS 16 principally require lessees to recognize assets and liabilities for all leases.

IFRS 16 is effective from the annual reporting beginning after 1 January 2018.

TTS is currently assessing the impact from IFRS 16. As set out in note 6 to the annual report 2015, committed nominal lease payments at the end of 2015 was MNOK 269, of which MNOK 55 has been paid in 2016.

Based on the current structure of lease contracts, a 10% discount rate and 3,5% annual increase in nominal leases, our lease assets and lease liabilities as per 1 January will increase by approximately MNOK 160.

NOTE 1. GENERAL INFORMATION

Reporting entity

TTS Group ASA is registered and domiciled in Norway, and the head office is located in Bergen.

The consolidated financial statements cover TTS Group ASA including its subsidiaries. There has been no change in consolidated companies from Q3-2016 to Q4-2016. During 1st half of 2016, TTS Group established new subsidiaries, which is a part of the overall Service Network expansion. The new subsidiaries are located in Dubai (United Arab Emirates), and in Antwerp (Belgium).

As of 2nd quarter 2015, changes in the joint venture agreement related to the jointly owned 50/50% company TTS Hua Hai Co Ships Equipment Co Ltd. in China, required TTS to change its consolidation method from the equity method to full consolidation. Operation in TTS SCM commenced as of 2nd quarter 2015, and the company is fully consolidated into TTS accounts.

Jointly controlled and associated companies are accounted for using the equity method.

The Board of Directors approved the consolidated financial statements for the year ended 31 December 2015 on 19 April 2016.

The annual report 2015 including the consolidated financial statements for the TTS Group, the separate financial statements for TTS Group ASA and the auditors' opinion from KPMG, are available at our website www.ttsgroup.com

Basis of preparation

TTS Group’s financial reports are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

The unaudited consolidated financial statements for 4th quarter 2016 have been prepared in accordance with IAS 34 Interim Financial Statements. The interim accounts do not include all the information required for a full financial statement and should therefore be read in connection with the consolidated financial statements of 2015.

The accounting principles applied are the same as those described in the consolidated financial statements of 2015.

This condensed consolidated 4th quarter interim report of 2016 was approved by the Board on 14 February 2017.

Judgments, estimates and assumptions

The preparation of the interim report requires the use of judgments, estimates and assumptions that affect the application of accounting principles and the reported amounts of assets and liabilities, income and expenses. Actual future outcome may differ from these estimates.

In preparing these consolidated interim financial statements, the key assessments made by the management in applying the Group’s accounting principles and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the financial year that ended 31 December 2015.

Turnover EBITDA Turnover EBITDA Turnover EBITDA Turnover EBITDA Turnover EBITDA

RoRo, Cruise, Navy 2016 127 0 126 5 158 -1 143 11 555 15

2015 176 13 146 18 160 16 160 15 641 62

Container, Bulk, Tank 2016 302 24 275 18 291 18 270 4 1138 64

2015 298 24 292 6 318 111 72 2 980 141

Offshore 2016 59 2 38 0 59 -3 70 5 226 4

2015 90 -22 99 -48 92 -8 79 -24 359 -102

Multipurpose, General Cargo 2016 72 -19 78 0 101 -1 71 -5 322 -24

2015 50 -6 78 -4 38 1 94 -4 259 -13

Shipyard Solutions 2016 66 2 90 8 72 18 69 7 298 36

2015 79 13 44 1 43 0 51 4 216 18

Services 2016 126 4 131 11 138 14 138 13 533 42

2015 147 21 146 21 161 20 136 13 591 76

Corporate / Other 2016 6 0 2 -2 2 -14 4 -8 14 -24

2015 3 -14 1 -6 0 -2 2 -7 6 -27

Total 2016 758 13 741 41 822 33 766 26 3087 113

2015 842 29 805 -12 811 138 593 1 3051 155

2014 734 142 549 2 617 -10 554 -28 2453 105

Q4 Q3 Q2 Q1 Full year / YTD

NOTE 2. SEGMENT INFORMATION

TTS Group reports on the following segments.

RoRo/Cruise/Navy (BURCN)

Container/Bulk/Tank (BUCBT)

Offshore (BUOFF)

Multipurpose/General cargo (BUMPG)

Shipyard Solutions (BUSYS)

Services (BUSER)

BURCN delivers complete cargo handling solutions to RoRo, PCTC, cruise and navy

vessels, including terminal loading and passenger systems. Product range includes external and internal ramps, covers and doors, liftable decks, passenger gangways and linkspan systems.

BUCBT delivers complete cargo handling solutions to the container, tanker and bulk

vessels. Product range includes 10-40 t winches, 15-50 t cranes and specialized hatch covers designs.

BUOFF delivers support solutions to the offshore based oil industry and the supporting

service industry. Product range includes 15-50 t offshore cranes, 40-400 t active heave compensated cranes, mooring winches, internal and external covers and doors.

BUMPG delivers supporting solutions to the vessels which is designed to operate in the

multipurpose or general cargo market, requiring specialized operating capabilities. Product range includes 40-2200 t heavy lift cranes, side loading systems, hatch covers and mooring winches.

BUSYS includes shiplift and transfer systems, as well as complete production lines to

the yard industry. Product range includes ship lift system, ship transfer systems, multiwheelers and translifters.

BUSER includes service and after sales for all segments within TTS. This enables TTS

to offer service and after sale worldwide for the full range of its products.

YTD 31.12.2016 YTD 31.12.2015 Q4 2016 Q4 2015

Net income available to shareholders -100 827 -48 674 -96 350 -92 946

Effect of dilution - - - -

Diluted net income available to shareholders -100 827 -48 674 -96 350 -92 946

Weighted average number of shares outstanding 86 493 86 493 86 493 86 493

Effect of dilution - - - -

Diluted numbers of shares 86 493 86 493 86 493 86 493

Earnings per share (NOK) -1,17 -0,55 -1,11 -1,07

Diluted earnings per share (NOK) -1,17 -0,55 -1,11 -1,07

31.12.2016 31.12.2015

Current receivables 42 834 49 067

Current liabilities -11 871 -8 781

30 963 40 285

Balance sheet items to/from Joint Ventures

Net receivables (+) / liabilities (-) to/from Joint Ventures

NOTE 3. SHARE CAPITAL AND EQUITY

As per 31 December 2016 TTS Group ASA has issued 86 605 660 shares, each with a face value of NOK 0.11 giving a share capital of total NOK 9 526 623.

TTS Group ASA holds 112 882 own shares.

No options or other equity instruments have been awarded in 2016.

At period closing there are 19.184.090 conversion rights related to the subordinated

convertible bond. In addition, senior employees’ holds 475.000 share options with a

strike price of 4.75.

NOTE 4. EARNINGS PER SHARE

Earnings per share (EPS) is based upon the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments. Instruments that have a positive intrinsic value has been included in dilution effects.

NOTE 5. RELATED PARTIES

Note 21 and accounting principles section 2.2 in the consolidated financial statements of 2015 describe the principles related to elimination of transactions between group subsidiaries. Eliminated transactions have no significance for the financial position and profit for the period.

The Group has carried out various transactions with subsidiaries and joint ventures. All the transactions have been carried out as part of the ordinary operations and at arm’s length prices.

Closing price at Oslo Stock Exchange per 31 December 2016 was NOK 3.78.

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Gross deferred tax asset1 29 680 43 221

Gross deferred tax liability1-46 350 -51 581

-16 670 -8 360

1) Gross deferred tax asset is recognized as intangible assets and gross deferred tax liability is recognized as provisions

Net deferred tax asset (+) / liability (-)

NOTE 6. TAX

TTS Group is taxable in more than one jurisdiction based on its operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, the Group may pay tax within some jurisdictions even though it might have an overall loss or have tax losses exceeding taxable profit at the consolidated level.

Deferred tax

Deferred income tax reflects the impact of temporary differences between the amount of assets and liabilities recognized for financial purposes and such amounts recognized for tax purposes. The net recognized deferred tax consists of the following:

Recognized deferred tax asset primarily relates to tax losses in the Norwegian and German companies, as well as short term tax differences from the Chinese companies. The criteria that have been utilized to estimate that future taxable profit can be utilized have been unchanged during the year.

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015 31.12.2016 31.12.2015

Net book value, beginning of period 701 807 564 464 141 821 67 918

Acquisition - 140 692 - 98 497

Divestment - - - -

Additions - 4 390

Depreciations/Amortizations - - -18 610 -24 557

Impairment -82 269 -28 050 - -16 625

Foreign currency differences -43 739 24 701 -18 928 12 199

Net book value, end of period 575 799 701 807 104 283 141 821

Other intangible assetsGoodwill

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

TTS Group tests the value of goodwill and other intangible assets annually or at the end of each reporting period if any indication that the assets may be impaired.

TTS shares are freely traded at Oslo Stock Exchange. Closing price of last trading date in December 2016 was NOK 3,78 per share, indicating a nominal trade value of TTS of MNOK 327.

Book value of equity at 31 December 2016 was MNOK 439 excluding minority interest.

At the end of the current reporting period, TTS Group has not identified any changes in the overall financial market that give basis for a significant change in the average cost of capital.

The CGU "NMF", which was acquired in the 3rd quarter of 2012, encompass the activities within the legal entities TTS NMF GmbH - Germany, and TTS SCM - China. EBITDA in the 4th quarter 2016, excluding impairments, is around zero, a marginal improvement from the same quarter last year. The weak EBITDA margin reflects customer-initiated delays in project deliveries, combined with a slow market, which reduces overall utilization. Low charter rates combined with available unutilized tonnage from other marine sectors have delayed or cancelled investment prospects in new tonnage relevant to the CGU, which is reflected in a low order intake during 2016. TTS expects that the turnaround of the heavy lift market, as well as the development of the offshore wind installation market will take longer time than previously expected. Consequently, the book value of goodwill allocated to the CGU has been impaired by MNOK 82 in 4th quarter 2016.

An additional impairment of fixed assets by MNOK 16, and inventories by MNOK 20, in the CGU in 4th quarter 2016 reflects a reduction of short-term/mid-term utilization of resources.

During the past two years, the CGU "Offshore Solutions" in TTS has experienced substantial losses, combined with a low order intake. Changes in the segment structure combined with market conditions which remain challenging, gave basis for impairment of goodwill in 2015. The market development in 2016 is still weak. The book value of intangible assets in BUOFF is approximately MNOK 10 with a planned straight-line depreciation of close to MNOK 4 per year.

The CGU "Liftec" is a well-recognized supplier within the European niche market for translifters based on the activities within the legal entity TTS Liftec Oy. Based on market outlook and margins at yearend 2015, an impairment of goodwill of MEUR 2 (~MNOK 19) was allocated to the 4th quarter 2015. As of 2 February 2017, TTS Group has entered into a sales agreement of the shares in TTS Liftec OY. The sale is expected to give basis for a gain allocated to 1st quarter 2017. The gain reflects the company's improved performance and market development during 2016 compared to expectations at year-end 2015.

The CGU "Marine AB" has over the past years delivered improving turnover, and acceptable project margins. In 2016, we see a decrease in turnover and margin compared to last year. The reduction of margin is an effect of changes in the product mix, as well as losses on a few specific projects. Going forward, the Group expects lower new orders and risk of delays on existing orders in the market for car carriers. Although this is replaced by higher activity in the market for RoPax and Cruise, we expect a significantly lower turnover in this segment in 2017. Even after taking reduced market expectations into account, the expected future net cash flows from the CGU support that value in use exceeds book value.

TTS Group considers that there are no major events, changes in assumptions or other new information indicating a change in the valuation of goodwill or other intangible assets from year-end 2015 in the other business segments. Estimates related to future market expectations could have material impact on the impairment test.

Overview of goodwill and other intangible assets (excl. deferred tax asset) are as follows:

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Net book value, beginning of period 134 521 160 897

Acquisition - 2 979

Divestment - -

Additions 6 334 9 634

Depreciations/Amortizations -24 757 -29 318

Impairment -16 378 -20 098

Foreign currency differences -5 382 10 427

Net book value, end of period 94 338 134 521

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Net book value, beginning of period 84 975 102 582

Acquisition - 66 006

Divestment - -

Reclassification - -81 876

Share of profit (+) / loss (-) -17 970 1 007

Share of dividend received - -

Foreign currency differences 5 311 -2 744

Net book value, end of period 72 316 84 975

NOTE 8. NON-CURRENT ASSETS

NOTE 9. EQUITY ACCOUNTED INVESTMENTS

As per 31 December 2016, equity accounted investments include TTS Bo Hai Machinery Co Ltd. in which TTS Group ASA holds 50% of the shares, and Jiangnan TTS Ships Equipment Manufacturing Co Ltd. in which TTS Hua Hai Ltd. holds a 40% share portion. Both units are reported as part of the Container/Bulk/Tank segment. Losses in 2016 relates to the running operation of the steel production factory in Jiangnan.

TTS recorded an MNOK 16 impairment of fixed assets in the Multipurpose/ General Cargo segment in 4th quarter 2016. Higher cost of producing standardized heavy lift equipment in European high-cost countries has a negative impact on competitiveness, and hence on equipment utilization. The impairment reflects an expected reduction of utilization of the production equipment in Hamburg.

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Inventories, incl non current 183 707 439 515

Obsolescence -40 572 -25 358

Total inventories 143 135 414 157

NOTE 11. CHANGE OF CONTROL IN 50/50 OWNED COMPANIES

Governing agreements for the 50/50 owned company, TTS Hua Hai Ships Equipment Ltd Co. were changed in 2nd quarter 2015, and lead to THH being fully consolidated as from 2nd quarter 2015. Please find additional information on the 2015 effects in TTS Annual report 2015, note 27.

In 4th quarter 2016, TTS recorded an MNOK 20 obsolescence accrual of inventory in the Multipurpose/General Cargo segment. The accrual is a consequence of reduced potential to utilize parts of the inventory towards ongoing projects.

NOTE 10. INVENTORIES

Bank loan covenants 1Q 2017 - 3Q 2017 4Q 2017 1Q 2018 - 4Q 2018

NIBD*/ EBITDA

** maximum 4,25 4 3

Equity***

minimum 24 % 24 % 25 %

Minimum liquidity reserve MNOK 50 MNOK 50 MNOK 50

* NIBD = Net interest bearing debt, excluding subordinated convert ible bond loan, and including 50% of cash from 50% owned consolidated subsidiaries

** EBITDA from 100% owned companies + 50% of EBITDA from 50% owned consolidated subsidiaries, adjusted for one-t ime effects, including impairment, restructuring, gainsfrom

sale of businesses and changes of accounting regulat ions

*** Equity, including subordinated convert ible bond loan

AMOUNTS IN NOK 1 000 31.12.2016 31.12.2015

Bank deposits in fully owned companies 76 679 77 490

Bank deposits in 50/50 owned companies 99 105 335 720

Bank deposits 175 784 413 210

On 19 December 2016, TTS Group ASA entered into an agreement with Nordea and DNB on new financing agreements for credit and guarantee facilities, which represents an extension of the agreements the company had at the beginning of the prior fiscal year. The extended agreements expire on 1 January 2019. The credit facility in the agreement is 1 073 MNOK, consisting of:

MNOK 173, term loan facility (DNB)

MNOK 100, term loan facility (Nordea)

MNOK 200, multi-currency overdraft facility (Nordea)

MNOK 600, guarantee facility (Nordea MNOK 465, DNB MNOK 135)

The term loan facilities are classified as long term debt as per 31 December 2016. Overdraft facilities is classified as short-term debt.

The debt covenants per 4Q/2016 are not changed:

Accumulated EBITDA for 2016 > MNOK 100 Equity ratio > 25% (nominal value of remaining bond-

debt is to be included in the basis of calculation)

Minimum liquidity reserve (MNOK 50)

NOTE 12. FINANCIAL RISK MANAGEMENT

The Group's objectives and principles of financial risk management are consistent with what is stated in the consolidated financial statements for the fiscal year 2015. On 17 December 2015, the bondholders agreed to an extension of the subordinated debt until 18 April 2017. The TTS General Assembly approved the extension 5 January 2016. The amendments mainly involves a 15-month extension of the maturity date from 18 January 2016 to 18 April 2017, and a change of fixed coupon rate from 8% to 12%p.a. Changes also include minor amendments to conversion and redemption provisions. Terms and conditions in the renewed agreement have been evaluated according to IAS 39. Based on the evaluation the renewed agreement is considered a prolonging of the prior bond debt agreement. There has been no execution related to the subordinated bond facility during 2016. The nominal amount and conversion price of the convertible bond loan is unchanged from 4th quarter 2015 and is MNOK 95.3, giving right to 19.184.104 shares upon full conversion. The subordinated convertible bond debt is classified as short term debt as per 31 December 2016. The group has initiated a process to refinance/prolong the subordinated convertible bond loan in 1st quarter 2017.

An overall description of debt facilities, and additional information regarding financial risk management is available as part of the notes to the annual report 2015.

At end of 4th quarter 2016 TTS Group meet the set covenants.

TTS Korea has prolonged its prior credit facilities with Kookmin Bank in Korea, of which MNOK 25 was drawn. The credit facility is classified as short-term debt.

At the end of 4th quarter 2016, TTS Group has drawn MNOK 173 out of the total MNOK 173 loan facility with DNB. TTS group has drawn MNOK 178 of the total MNOK 300 loan and overdraft facilities with Nordea.

Consolidation of TTS Hua Hai and TTS SCM has significant effects on the cash flow and presented cash in the balance. Cash within the 50/50 companies is not available to other companies within TTS

Group.

The debt covenants from 1Q 2017 are:

NOTE 13. SUBSEQUENT EVENTS

Major events reported to Oslo Stock Exchange after 31st December 2016

On 2 February 2017, TTS signed an agreement with the Danish company Novatech ApS to sell TTS Liftec Oy. Revenues in 2016 was MEUR 12, with an EBITDA of MEUR 0.9. The agreed value of the transaction is a gross base price of MEUR 5,8 including net cash, payable at closing, and an earn-out of maximum MEUR 1,8 over the next three years if specific targets are met. In accordance with the company's bank loan agreements, 50% of the proceeds from the sale of TTS Liftec Oy will be applied as down payment on existing term loans.

Additional information on subsequent events is available at www.newsweb.no – ticker TTS.

Shareholders per 31.12.2016 Shares Share portion

SKEIE TECHNOLOGY AS 1) 22 655 763 26,2 %

RASMUSSENGRUPPEN AS 11 512 506 13,3 %

SKEIE CAPITAL INVESTMENT AS 1) 4 203 361 4,9 %

BARRUS CAPITAL AS 3 465 005 4,0 %

HOLBERG NORGE 3 292 500 3,8 %

PIMA AS 3 015 044 3,5 %

SKAGEN VEKST 2 411 069 2,8 %

CIPI LAMP UCITS SWEDBANK SMB 2 232 886 2,6 %

MERTOUN CAPITAL AS 1 769 598 2,0 %

DANSKE BANK AS 1 564 417 1,8 %

ITLUTION AS 1 475 261 1,7 %

KRISTIANRO AS 1 102 287 1,3 %

SKANDINAVISKA ENSKILDA BANKEN AB 1 011 552 1,2 %

AVANT AS 1 000 000 1,2 %

AVANZA BANK AB 947 153 1,1 %

RBC INVESTOR SERVICES BANK S.A. 800 000 0,9 %

NORDNET BANK AB 757 869 0,9 %

PHAROS INVEST I AS 682 000 0,8 %

GLASTAD INVEST AS 668 000 0,8 %

SIX-SEVEN AS 551 250 0,6 %

TRYM SKEIE 1) 323 140 0,4 %

SKEIE CONSULTANTS AS 1) 300 000 0,3 %

SKEIE ALPHA INVEST AS 1) 250 000 0,3 %

Other 20 614 999 23,8 %

86 605 660 100,0 %

1) Shares ow ned or controlled by members of the Skeie family.

Bondholders as per 31.12.2016

Conversion

rights

Share portion if

fully diluted

MP PENSJON PK 6 036 217 5,7 %

SKEIE TECHNOLOGY AS 1) 3 912 474 3,7 %

Skandinaviska Enskilda Banken AB NOM 1 685 110 1,6 %

DANSKE BANK A/S NOM 1 252 515 1,2 %

SKEIE CONSULTANTS AS 1) 1 207 243 1,1 %

AKERSHUS FYLKESKOMM. PENSJONSKASSE 804 828 0,8 %

TAMAFE HOLDING AS 1) 804 828 0,8 %

MERTOUN CAPITAL AS 804 828 0,8 %

SKEIE CAPITAL INVESTMENT AS 1) 704 225 0,7 %

Other 1 971 822 1,9 %

19 184 090 18,1 %

1) Shares ow ned or controlled by members of the Skeie family.

Folke Bernadottes vei 38P.O. Box 3577 FyllingsdalenNO-5845 Bergen, Norway

Organization:NO 932 142 104

TTSGROUP.COM

TTS Group ASA