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Qatar Gas Transport Co. (QGTS.QA)

CMP QAR 24.80 Target QAR 29.29 Potential Upside 18.1%

MSCI GCC Index 414.01 Qatar Exchange 6,920.12

Key Stock Data Sector Transport Reuters Code QGTS.QA Bloomberg Code QGTS QD Equity Net Out. Shares (bn) 0.554 Market Cap (QAR bn) 13.734 Market Cap (USD bn) 3.775 Avg. 12m Vol. (mn) 2.085 Volatility (30 day) 35.671 Volatility (180 day) 49.775

Stock Performance (%) 52 week high / low (QAR) 31.20 / 14.20

1M 3M 12M Absolute (%) 0.8 4.2 -15.6 Relative (%) -2.7 -0.8 25.5

Shareholding Pattern (%)

Qatar Shipping Company 15.00 Qatar Navigation 15.00 Government 17.00 Corporate 3.00 Public 50.00

Nakilat and Qatar Exchange

Executive Summary Established in 2004, Qatar Gas Transport Company’s (Nakilat) principal business activities include transportation of liquefied natural and petroleum gas. It also operates, manages and leases carriers, vessels & ships, towage & sea port services and ship repair & maintenance. Nakilat has a fleet of 25 wholly owned, 29 jointly owned LNG carriers and 4 jointly owned LPG ships. Delivery of carriers leads to a healthy financial performance in 1H09 Nakilat reported QAR 498.56 million as income from its wholly owned vessels in 1H09 benefiting from the commissioning of 11 wholly owned vessels in the first half. In addition, share of profits from joint ventures almost doubled to QAR 80.22 million in 1H09. Interest & dividend income also more than doubled to QAR 19.66 million during the same period. However, at the same time, income from marine & agency services declined 8.4% to QAR 14.25 million, while profit shared from Islamic banks decreased 9.3% at QAR 38.50 million in 1H09. Despite this period, total income multiplied nearly six-fold to QAR 654.35 million during 1H09. With expanded operations total expenses jumped to QAR 191.18 million from QAR 21.93 million in 1H08. However, healthy operating performance, which offset the rising expenses, resulted in more than five-fold rise in operating profits to QAR 463.17 million. Furthermore, the company reported fair value hedging gains from joint ventures of QAR 30.68 million. However, the company’s healthy operating performance was somewhat offset by interest expenses to the tune of QAR 260.27 million during the first six months of 2009. Accordingly, Nakilat’s net profit increased 147.8% to QAR 233.38 million. Its adjusted annualised EPS increased from QAR 0.34 to QAR 0.84 in 1H09.

Outlook and valuation The global shipping industry is expected to benefit from the increased acceptance of natural gas as an alternative and cleaner fuel. The growth dynamics of the LNG sector in Qatar is expected to remain strong as the country eyes a production target of over 77 million tonnes by 2012. Further, Qatar holding the world’s third largest gas reserves and its continuous focus on strengthening its transportation sector is poised to be amongst the most benefited. Nakilat with a fleet of 25 wholly-owned, 29 jointly-owned LNG carriers and 4 jointly-owned LPG ships is well placed to leverage the development activities in the country. The company’s focus on expanding organically along with venture into ship-building segment in the coming years promises higher growth, moving ahead. With Qatar playing an important role in meeting the rising world-wide demand for LNG, the company’s earnings visibility looks more distinct and supports the call for it being an attractive investment opportunity at present level. To determine the fair value of Nakilat, we have used the DCF valuation method. Currently, Nakilat’s stock is trading at a P/E multiple of 31.13x and 18.42x on 2009E and 2010E earnings, and at a P/B multiple of 2.16x and 1.93x on 2009E and 2010E BVPS, respectively. Meanwhile, the stock has risen 14.8% since January as against a gain of 0.5% by the Qatar Exchange. However, considering the global crisis, we revise our earlier target price of QAR 31.37 (as on September 17, 2008) downwards to QAR 29.29, which exhibits an upside of 18.1% from its closing price of QAR 24.80 (as on August 27, 2009). Accordingly, we maintain our OVERWEIGHT rating on Qatar Gas Transport Co.

QAR Million 2007A 2008A 2009E 2010E 2011E Total Income 165.23 287.15 1,349.20 2,297.67 2,683.68 EBITDA 129.98 241.61 1,172.82 1,943.07 2,235.42 Net Profit 89.51 129.06 441.10 745.49 908.68 Adjusted EPS (QAR) 0.16 0.23 0.80 1.35 1.64 Total Assets 15,998.62 24,477.58 29,635.23 31,855.33 33,506.47 RoAE (%) 2.1 2.2 7.2 11.1 12.0

OVERWEIGHT

Background Established in 2004, Nakilat is a Qatari shipping company and is one of the important entities of the LNG supply chain in Qatar. It went public in 2005 by floating an IPO and is 50%-owned by its founding shareholders and 50% by the public. It is listed on the Qatar stock exchange.

Its principal business includes transportation of liquefied natural and petroleum gas. Additionally it is also involved in operating, managing & leasing carriers, vessels & ships, towage & sea port services and ship repair & maintenance. The Nakilat fleet consists of 25 wholly owned and 29 jointly owned LNG carriers and 4 jointly owned LPG ships.

S&P and Moody’s maintained a strong rating on Nakilat in an increasingly deteriorating market. The company has a senior secured debt rating and the subordinated secured debt rating of ‘A+’ and ‘A’ and ‘Aa2’ and ‘Aa3’ by S&P and Moody’s, respectively.

Qatar is well-positioned to export LNG with their ongoing projects and huge gas reserves to most major natural gas consuming markets, including North American, European and Asian markets by 2010. Nakilat, with an efficient fleet size as a midstream company, is poised to provide a vital link with upstream companies to major markets.

Shipping Routes for Nakilat

Vital midstream link in Qatar LNG supply chain Nakilat to support Qatar LNG exports to major consuming countries Setting up a ship repair yard to expand revenue base

Source: Nakilat During 2007, to reduce the country’s dependence on foreign players for its repair and conversion of large ships, the fabrication of offshore structures, or the construction of high value small ships requirements, and exploiting opportunities to develop Qatar’s industrial base, Nakilat forayed into ship-building segment by setting up a state-of-the-art ship repair yard partnering with Qatar Petroleum (QP). The yard will be developed in a five-phase strategy. Phase Activity Phase 1 Repair and conversion of very large ships (e.g. LNGCs, VLCCs) Phase 2 Repair of medium-sized ships (e.g. 20,000 dwt to 80,000 dwt)

Phase 3 Fabrication and maintenance of offshore structures (and components for land-based petrochemical plant)

Phase 4 Construction of high value small ships (<120m length) Phase 5 Repair of small ships (< 20,000 dwt) Source: Nakilat

Phases 1 and 2 are scheduled to commence operations in early 2010 with construction work currently on schedule and targets for Phase 3 and 5 will be determined upon completion of the feasibility study in 2009, while Phase 4 is scheduled to be completed by December 2009.

Board of Directors • Chaired by HH Abdullah

Bin Khalifa Al Attiyah • Mr. Faisal Mohammed Al

Suwaidi – Vice Chairman • Mr. Yassin Ali Ahmad Al

Binali • Mr. Ali Mohammed Al

Hammadi • Mr. Nasser Mohammed Al

Nuaimi • Mr. Salem Butti Al Nuaimi • Mr. Najib Khalifa Al Sada Source: Zawya

Business Model

Subsidiaries/Associates/Investments of Nakilat Nakilat has a number of subsidiaries, associates and affiliates

SUBSIDIARIES/ASSOCIATES/INVESTMENTS COUNTRY % SHARE

Nakilat Incorporation Qatar 100.00 Nakilat Shipping (Qatar) Qatar 100.00 Nakilat Marine Services Marshall Islands 100.00 QGTC Nakilat Holding Corporation Marshall Islands 100.00 QGTC Nakilat Investments Marshall Islands 100.00 Nakilat Agency Company Qatar 95.00 Nakilat - Keppel Offshore and Marine Qatar 80.00 Nakilat Svitzerwijsmuller Qatar 70.00 Nakilat Fujji Qatar 60.00 Teekay Nakilat III Marshall Islands 50.10 OSG Nakilat Corporation Marshall Islands 50.00 Gulf LPG Transport Company Qatar 40.00 J5 Nakilat Japan 30.00 Maran Nakilat Company Cayman Islands 30.00 Peninsula LNG Transport Marshall Islands 30.00 Teekay Nakilat Corporation Marshall Islands 30.00 India LNG Transport Company Malta 20.00

Source: Zawya

Growing organically through wholly owned subsidiaries and joint ventures

Nakilat

Nakilat is into LNG transportation and plays a significant part in Qatar’s LNG supply chain

Jointly developed a 5 phase strategy to develop ship building yard to cater to need of ship building and repair in Qatar

Continuously increasing its fleet size to become the largest LNG transporter in the world

ME economy anticipated to grow 2% in 2009 Qatar to enjoy one of the highest growth rates in 2009 and 2010 Gas sector emerged as the biggest contributor to Qatari GDP in 2008 LNG becoming the driving force, forecast to account for 40% of international gas trade by 2020

Industry Scenario According to estimates by the International Monetary Fund (IMF), the world economy will recede 1.4% during 2009 as a result of the continued economic slowdown. This is contrary to the positive growth rates of 5.1% and 3.1% registered for 2007 and 2008, respectively. However, the trend is likely to reverse with the growth rebounding to 2.5% in 2010. The Middle East region’s GDP, which registered a healthy real growth of 5.7% and 6.3% during 2006 and 2007, respectively, is expected to slow from 5.2% in 2008 to 2.0% in 2009 before expanding 3.7% in 2010. The GCC states that witnessed an economic boom at the beginning of the decade, fuelled by high oil prices, increased efforts for attracting private/foreign investments and expansionary fiscal policies by the governments, grew at 5.4% in 2007 and 6.4% in 2008. However, depressed by the global financial turmoil and subsequent weak oil prices, contraction of global demand and trade-related activity, liquidity crunch, lower tourism and remittances, the GCC countries are anticipated to grow at a mere 1.3% in 2009, before recovering to 4.2% in 2010 on improving market dynamics. After witnessing a 4-year average real growth of 11.4% for 2005-08, in 2009, as per the IMF, Qatar’s GDP is expected to grow 18%, up from 16.5% in 2008. The reason for such a strong performance is that the country is set to almost double its production of liquefied natural gas (LNG) to more than 62 million tonnes by the end of this year. Despite many economies slipping into a recession on account of the global financial crisis, economists are forecasting that Qatar will enjoy one of the highest growth rates this year and next. However, this does not mean that the country has been fully insulated from the severe contagion effect of the global financial crisis. As per the latest estimates by the Qatar Statistical Authority (QSA), the country’s GDP at current prices dropped 17.5% QoQ in 1Q09, was up a marginal 0.3% during 4Q08. The main reason for this slowdown was the contractionary impacts of the international financial crisis in major export markets and a substantial knock-on effect on demand for Qatar’s hydrocarbon-related exports. Steep falls in hydrocarbons prices have also dented current price estimates of GDP. Moreover, the country’s budget for fiscal year 2009-10 with oil prices of USD 40 per barrel, estimates a total budgetary income to QAR 88.7 billion in 2009-10, down 14.1%, leaving a projected deficit of QAR 5.8 billion.

GDP at current prices (QAR billion) and growth

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Source: Qatar Statistical Authority As a result of the rapid growth in the country’s liquefied natural gas (LNG) output, the gas sector was the biggest contributor to the economy in 2008 surpassing the oil sector for the first time. According to QSA, the gas sector’s share of the GDP hit a record high of QAR 112.61 billion compared with QAR 100.17 billion for the crude sector. Further, during 1Q09, the country’s gas (QAR 17.40 billion) segment accounted for 24.5% of its total GDP, while oil (QAR 11.44 billion) contributed 16.1% to the total. However, the country’s 2020 plan aims to make Qatar ‘zero’ dependent on the hydrocarbons sector, because the extraordinary reliance on oil and gas puts the economy at the mercy of external shocks. Hence, the country aims to become a financial, educational and health hub for the region. Volatile prices and increasing environmental concerns related to oil, has seen the world switch over to natural gas resulting in a substantial increase in gas demand. While, global proved reserves of natural gas increased by 7.97 trillion cubic meters (tcm) in 2008 to 185.02 tcm and the reserve to production (R/P) ratio increased to 60.4 years, total natural gas consumption went up by 2.5% to approximately 3.02 tcm from 0.29 tcm in 2007. According to Cedigaz, an international association dedicated to natural gas information, in 2008, world gas trade continued to rise steadily registering a growth of 3.0%. However, the global LNG trade declined 0.5% to 225.7 bcm in 2008, but it accounted for nearly 24.2% of the total gas trade and 7.4% of the total natural gas supply. Organization of the Petroleum Exporting Countries (OPEC) members accounted for almost half of the world’s proven natural gas reserves and nearly 40% of the world LNG exports. LNG is becoming the driving force, and is estimated to account for more than 40% of the international trade in gas, by 2020. Industry experts forecast a natural gas demand growth of 68% between 2008 and 2050, an average of 1.1% per annum. According to Waterborne Energy, increase in actual supply of LNG traded on global markets could range from 0.18 tcm to 0.19 tcm by the end of the year on the back of various capacity expansions coming on-stream.

Estimated USD 196 billion worth of oil & gas projects are being undertaken across the GCC nations Qatar to account for nearly 30% of the world’s LNG supply by 2012 QP approved QAR 222.7 billion for its oil & gas development scheme during 2008-2012

The gas industry in Qatar achieved a high level of integration starting from production, processing, and liquefaction operations, to gigantic tanker ships, and reception terminals, giving it a competitive advantage to maintain commitments with importers. According to the BP Statistical Review of World Energy 2009, with Qatar’s gas reserves estimated to have reached 25.46 tcm in 2008, becoming the third largest gas reserves in the world after Russia (43.3 tcm) and Iran (29.61 tcm). Collectively, the Middle East (ME) has the world’s biggest gas reserves with 75.91 tcm followed by Europe, making the Arab world a crucial link in the global gas trade. Apart from this, ME natural gas recorded the largest production growth (6.6%) last year accounting for a 12.4% share of the world output, up from 12.1% in 2007. Furthermore, industry watchers forecast that project demand for gas in the GCC to grow at 6.66% annually from 2007 to 2012, while oil demand is expected to grow at nearly 3% during the same period. Currently, an estimated USD 196 billion worth of oil and gas projects are being undertaken all over the GCC. Several large-scale projects are now underway to boost capacity of existing gas fields in Qatar, the UAE and Saudi Arabia as these states collectively account for up to 81% of the total gas supply in the GCC. With regard to expansion in the LNG sector, 2008 was a year of delays. Most of the facilities scheduled to come online in 2009 were originally planned to begin operations in 2008. Hence, 2009 will see a handful of significant boosts in global LNG production capacity. Qatar is pushing ahead with projects to attain its production target of over 77 million tonnes in 2012. Presently, Qatar’s oil production capacity stands at around 800,000 barrels per day, even as it produces 39 million tonnes of LNG. The country’s actual gas output is expected to surge to nearly 45 million tonnes this year and around 70 million tonnes in 2010. Going forward, Qatar will account for nearly 30% of the world’s LNG supply by 2012. Meanwhile, according to research by British gas specialist BG Group, global LNG production is set to jump to 275 million tonnes a year (mt/y) by 2011 from about 175 mt/y in 2008, but demand may outstrip supply between 2012 and 2015. Of the world’s total additional LNG production capacity of 95.3 mt/y to come on-stream between 2009-12, nearly half, or 46.8 mt/y, is being built in Qatar. While total liquefaction capacity is projected to record an unprecedented growth of 50% between 2009 and 2013, there will be a shortage of new capacity in the period after 2013 unless new projects are approved in 2009-2010. Qatar maintained its position as the world’s biggest LNG producer since it overtook Indonesia in 2006. The country’s production comes from two major LNG companies, Qatar LNG Co. (Qatargas) and Ras Laffan LNG Co. (RasGas), both of which are majority owned by QP. Presently, Qatargas has production capacity of 9.6 mt/y at its three trains, while trains 4 and 5 that are currently under development will add a further 15.6 mt/y. Producing a total of 10.09 million tonnes of LNG in 2008, the company expects to produce 42 mt/y in the longer term with additional phases planned in collaboration with Shell and ConocoPhillips. On the other hand, RasGas operates six LNG trains with 28.5 mt/y of production capacity. Further, RasGas plans to start its Train 7 in late 2009 and with this, production capacity is expected to reach 37 mt/y. Meanwhile, QP has approved QAR 222.70 billion for its oil and gas development scheme during 2008-2012 to bring the total capital pumped into the North Field and other hydrocarbon projects to more than QAR 500.00 billion. Of these investments, around QAR 104.00 billion will be pumped into refining and gas-to-liquids (GTL) projects, the natural gas sector will receive QAR 63.00 billion, QAR 25.00 billion will be allocated for industries, QAR 19.70 billion for crude oil and around QAR 11.00 billion for petrochemicals.

Qatar Exports (2004-2007)

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LNG Exports - Destination Countries (2007)

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42.8%

Spain Japan South Korea India Belgium Others

Source: Qatar Statistical Authority

LNG made up for 22.8% of total exports in Qatar during 2007 LNG carrier size and technology grow in tandem with industry expansion LNG infrastructure security market forecast to grow to USD 3.9 billion in 2014 LNG short-term charter rates dips to USD 25,000 a day in May 2009

According to figures released by the QSA, in 2007, Qatar’s total exports were recorded at QAR 151.03 billion, up 23.8% from QAR 122.40 billion in 2006. Of these, LNG made up for 22.8% lower than 35.2% contribution in 2006. Total LNG exports reached QAR 34.50 billion, a decline of 20.0% from QAR 43.12 billion in 2006. In terms of destinated markets for LNG, maximum exports were routed to South Korea, accounting for 42.8% or QAR 14.76 billion, followed by Japan (25.7% - QAR 8.88 billion) and India (12.5% - QAR 4.33 billion). Industry experts believe that over the short-term Qatar will reach new customers in the UK, US, Mexico, China, and Kuwait. It is also expected that long term customers from Japan and Korea will continue to extend their business and rely on Qatari LNG for their long-term needs. By 2015, Qatar’s distribution network will comprise of Asia receiving 30%, Europe 35% and the US receiving 25%. By 2012, revenues from LNG exports is expected to exceed USD 27 billion.

LNG Ships –

Essential Part of the LNG Chain

Natural Gas Production

Liquefaction Plant

LNG Ships

LNG Receiving and Regasification

Terminal

Distribution

Natural Gas Consumers

Sellers Buyers

Source: Energy Group Inc. Shipping is considered as a critical link in the LNG value chain and constant technological advancements has improved the carrier design and size, enabling a more efficient transport of natural gas to markets throughout the world. LNG carrier size and technology have kept pace with the expansion of the industry. Traditionally, large long-haul carriers were mainly in the size range of 138,000-145,000 CBM. However, the Q-Flex class of LNG carrier has capacity of 200,000 CBM, while Q-Max class comes in at 240,000 CBM. Such developments including increased ship size, onboard reliquefaction units, slow-speed diesel engines, twin propellers and rudders, largest ship-board LNG tanks ever built, the latest in hull antifouling protection and improved fire-protection systems, resulted in a 20-30% reduction in transportation costs. As per a recent report by the United Nations Conference on Trade & Development (UNCTAD), LNG shipments are estimated to have increased 7.3% between 2006 and 2007, with growth being mainly driven by the additional capacity provided by liquefaction and purification facilities that started up in 2006 as well as those that were completed in 2007 (like in Nigeria and Equatorial Guinea). There were 294 LNG tankers in the world at the end of 2008. Further, with the number of LNG terminals nearly tripling and the frequency of LNG tanker shipments increasing considerably, the next few years will witness global LNG infrastructure grow at a faster pace . The LNG infrastructure security market is forecast to grow to USD 3.9 billion in 2014 from USD 1.2 billion in 2007. However, the first six months of this year were depressing for LNG ship owners as many vessels were left to idle, forcing freight costs to record lows amid a global economic downturn. According to Poten & Partners, charter rates for LNG tankers on short-term hauls declined 17% in 2008 because of an increase in new vessels. Rates to rent LNG tankers fell to about USD 46,600 a day for steam turbine vessels of 138,000 to 150,000 cubic meters in capacity. Furthermore, the situation worsened in 1Q09 as LNG short-term charter rates plunged to USD 25,000 a day in May 2009 from USD 40,000-50,000 per day for most of 2008, and compared with a peak of around USD 80,000 a day in September 2007. A record 54 ships were delivered to the LNG fleet last year, and an estimated addition of 45 to be delivered this year will add to the difficulty at a time of weaker consumption.

Qatar inking several deals to sustain its leadership in the LNG supply market New liquefaction projects coming online to provide impetus to LNG shipping

World fleet size by principal types of vessel, 2005-2008* (Beginning-of-year figures, in thousands of dwt)

Principal types 2005 2006 2007 2008 % Change

07- 08 Oil tankers 336,156 354,219 382,975 407,881 6.5 Bulk carriers 320,584 345,924 367,542 391,127 6.4 Ore/bulk/oil 9,695 7,817 5,614 4,284 -23.7 Ore/bulk 310,889 338,107 361,928 386,842 6.9 General cargo ships 92,048 96,218 100,934 105,492 4.5 Containerships 98,064 111,095 128,321 144,655 12.7 Other types of ships 48,991 52,508 62,554 68,624 9.7 Liquefied gas carriers 22,546 24,226 26,915 30,013 11.5 Chemical tankers 8,290 8,919 8,823 8,236 -6.7 Ferries and passenger ships 5,589 5,649 5,754 5,948 3.4 Other 12,566 13,714 21,062 24,427 16.0 Total 895,843 959,964 1,042,326 1,117,779 7.2 Source: UNCTAD secretariat report 2008 * Vessels of 100 GT and above

Unlike crude oil, most LNG is sold on the basis of long-term contracts at fixed prices, usually of 10-15 year duration with agreed pricing formulae. As a result of difficulties of cutting off natural gas production, high cost of LNG infrastructure and relatively small number of countries with regasification capability, the producers demands legally committed buyers of set volumes at established prices before producing LNG. At this end, Qatar is ramping up efforts to grab maximum deals to sustain its leadership in the LNG supply market. Expanding its global supply netwok and penetrating the growing East European gas market, Qatar agreed to supply 1 mt/y of LNG to Poland, making it the first GCC nation to supply LNG to eastern-Europe. Qatargas will export LNG to Poland-based PGNiG Group starting 2014 under a 20-year supply agreement. The LNG will be transported by tankers to a terminal to be built by PGNiP in Poland to receive the imported gas and distribute it across its network. In August 2009, the country was in talks with Turkey for a pipeline to carry natural gas to Turkey and a LNG supply accord. Besides, another Gulf state has emerged as a customer for Qatari gas. Though Kuwait possesses 1.78 tcm of gas reserves, it is currently negotiating to import 500 million cubic feet a day in the form of LNG for five years. Additionally, the country is exploring other destinations as the UK market is anticipated to be oversupplied by 2014. Accordingly, Qatargas is considering re-selling gas put aside for Britain in Asia, Europe or the US. Going forward, the US is expected to emerge as the largest customer of Qatargas and Rasgas, as it is set to more than 20 million tonnes of LNG by 2012. In October 2008, Qatar signed an agreement with Petrochina to supply 3 mt/y of LNG for 25 years from the Qatargas 4 project and China National Offshore Oil Corp. (CNOOC) also agreed to purchase 2 mt/y of LNG from Qatar. Further, shrugging-off worries of a falling gas demand, an overtonnaged fleet and a rapidly dwindling orderbook, the LNG shipping industry is likely to embark on a gradual recovery thanks to new liquefaction projects coming online. Also, in recent months an unprecedented number of new LNG import terminals worldwide have been opened for business. Apart from new LNG trains starting production, traders’ booking of LNG vessels for short-term storage are helping to push up daily charter rates to USD 30,000. Besides Qatar, LNG exports will also rise in the second half of 2009 from Indonesia’s Tangguh, Russia’s Sakhalin and Yemen. Further, the industry could also rely on several Australasian projects to help soak up excess shipping supply. In order to increase its reliance on natural gas to ease the burden on other energy sources, China is mulling to set up 10 new LNG import facilities with with terminals currently under construction at Jiangsu, Dalian and Tangshan. Also, India has resumed buying LNG on the spot market in March 2009. In the coming years, as the global economic scenario improves, the LNG industry is anticipated to grow at a faster pace. In such a situation, LNG transportation systems will be vital for effective execution of supply chain integration schemes. Home to three of the top five countries with the biggest natural gas reserves in the world, the GCC provides enormous investment potential for various gas projects. This will subsequently open a wide range of business opportunities across the entire energy value chain. Therefore, Nakilat’s huge investments in acquiring LNG vessels and its foray into the different levels of the value chain will strengthen its leading position as an LNG exporter.

Financial Performance - FY 2008 Revenues Nakilat reported a healthy 73.8% rise in its total income to QAR 287.15 million in 2008 compared to QAR 165.23 million in the previous year. This can be attributed to increases in share of profits from joint ventures and income from marine & agency services amongst commencement of operations of its wholly owned vessels and higher interest & dividend income. As of December 2008, Nakilat had received the delivery of 28 vessels out of the 29 ordered, which positively impacted its top-line performance. As a result of this, the company’s share of profits from joint ventures increased nearly eight-fold to QAR 118.56 million from QAR 14.73 million in 2007. The company also generated an income of QAR 24.65 million from operations of its wholly-owned vessels. Further, income from marine & agency services increased 15.8% to QAR 31.20 million in 2008 from QAR 26.94 million in the previous year. The company’s income from interests & dividends also went up by 19.5% to QAR 22.80 million positively impacting its total income. However, this was partially offset by a 15.8% reduction in profit sharing from Islamic banks to QAR 81.09 million during the year.

Expenses Nakilat’s total expenses increased 66.8% to QAR 59.20 million in 2008 from QAR 35.49 million in the previous year on account of higher general & administrative (G&A) expenses, depreciation charges and amortisation of deferred financing costs. The company’s G&A expenses increased 29.2% to QAR 45.54 million compared to QAR 35.25 million in 2007 as it expanded its business. With the delivery of vessels, the depreciation charged by the company also increased from QAR 0.24 million to QAR 8.27 million in 2008. Further, amortisation of deferred financing cost stood at QAR 5.38 million during the year. Profitability A higher increase in total income compared to total expenses resulted in a 75.7% rise in operating profits to QAR 227.95 million as against QAR 129.73 million in 2007. However, the company incurred an interest expense of QAR 13.88 million in 2008, while fair value hedge loss rose from QAR 39.30 million to QAR 84.21 million in 2008. Accordingly, the company’s net profit expanded at a slower pace of 44.2% to QAR 129.06 million during 2008 compared to QAR 89.51 million in the previous year. Adjusted EPS was reported at QAR 0.23 as against QAR 0.16 in 2007.

Total income rises an impressive 74% in 2008 Total expenses increased 67% in 2008 on higher G&A costs Profitability increased 44% in 2008

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Chart Gallery

Size of the Company The salient features of the balance sheet are:

Nakilat’s total assets increased 32.6% to QAR 29.08 billion in 1H09 compared to QAR 21.94 billion in the comparable period of last year mainly led by a rise in its non-current assets base, reflecting the company’s expansion plans.

During 1H09, Nakilat’s non-current assets base expanded 37.5% to QAR 27.37 billion compared

to QAR 19.90 billion in the comparable period of the last year as its share in the total assets base increased from 90.7% to 94.1% in 1H09. This can be mainly attributed to addition of vessels to the company’s fleet as property & equipment stood at QAR 14.82 billion in 1H09. On the other hand, the company’s carrying value of construction in progress declined 39.0% to QAR 9.27 billion as vessels completed were transferred to property & equipment. However, the increase in property & equipment was partially offset by declines in loans to joint venture companies and investments in joint ventures. While, loans to joint venture companies declined 53.7% to QAR 1.04 billion, investments in them dropped 17.0% to QAR 1.89 billion during the first half.

The company’s total current assets representing a mere 5.9% of the total assets declined 15.9%

to QAR 1.71 billion compared to QAR 2.03 billion in 1H08 as cash & bank balances fell 13.7% to QAR 1.58 billion during the first half of 2009.

On the liabilities side, total liabilities representing 89.7% of the total balance sheet size increased

51.1% to QAR 26.07 billion compared to QAR 17.25 billion in 1H08. Non-current liabilities increased 51.0% to QAR 25.71 billion mainly as the company borrowed additional funds to finance its expansion initiatives. Borrowings accounting for 79.5% of the total balance sheet size witnessed a 45.9% increase to QAR 23.11 billion compared to QAR 15.84 billion in 1H08. As the company did not have any short term repayment plans for its borrowings, current liabilities, represented a mere 1.2% of the total balance sheet and increased from QAR 0.22 billion to QAR 0.36 billion in 1H09.

Nakilat’s shareholders’ equity comprising 21.1% of the total balance sheet in 1H09 reported a

marginal 2.4% increase to QAR 6.15 billion compared to QAR 6.01 billion in 1H08. While there were no additions to the share capital, reserves marginally increased during the first half of 2009. Retained earnings increased 66.5% to QAR 0.49 billion as the company had gradually started operations with the delivery of vessels.

Financial Performance Analysis – 1H09 Nakilat’s financial performance during 1H09 was positively impacted by the commissioning of 11 of its wholly owned vessels. Accordingly, the company reported QAR 498.56 million as income from its wholly owned vessels. In addition, share of profits from joint ventures almost doubled to QAR 80.22 million compared to QAR 40.23 million in 1H08. Interest & dividend income also more than doubled to QAR 19.66 million compared to QAR 9.39 million in 1H08. However, at the same time, income from marine & agency services declined 8.4% to QAR 14.25 million, while profits shared from Islamic banks were lower by 9.3% at QAR 38.50 million in 1H09. Despite this, total income multiplied nearly six-fold to QAR 654.35 million compared to QAR 112.66 million in 1H08. With increase in revenue earning opportunities, associated expenses also rose during the first half. Operating costs related to the wholly-owned vessels stood at QAR 56.84 million in 1H09. In addition to this, G&A expenses grew 25.1% at QAR 27.16 million during 1H09. With addition to the fleet size, depreciation charged rose from QAR 0.22 million to QAR 103.50 million in 1H09. Overall, total expenses increased from QAR 21.93 million to QAR 191.18 million in 1H09. Healthy operating performance resulted in more than five-fold rise in operating profits to QAR 463.17 million compared to QAR 90.74 million in 1H08. Furthermore, the company reported fair value hedging gain from joint ventures of QAR 30.68 million in 1H09 as against QAR 3.80 million in 1H08. However, the company’s healthy operating performance was somewhat offset by interest expenses to the tune of QAR 260.27 million during the first half of 2009. Accordingly, Nakilat’s net profit increased 147.8% to QAR 233.38 million compared to QAR 94.16 million in 1H08. The company’s adjusted annualised EPS increased from QAR 0.34 in 1H08 to QAR 0.84 in 1H09. Further, while annualised RoAA increased from 1.0% to 1.7% in 1H09, annualised RoAE was up from 3.2% to 7.7% in 1H09.

Expansion of fleet supports bottom-line growth in 1H09

Peer Comparison In order to do a peer comparison, we have taken comparable companies in transportation sector across GCC that includes National Shipping Company of Saudi Arabia (NSCSA), Qatar Navigation (Qatar Nav), Qatar Shipping Co. (Q-Ship) and Nakilat.

Financial Performance of Comparable Companies NSCSA Qatar Nav Q-Ship Nakilat 2008 1H09 2008 1H09 2008 1H09 2008 1H09 Ratios: Debt Equity Ratio 0.79 0.92 0.15 0.21 0.23 0.24 3.25 3.80 RoAA (%) 8.5 5.2* 7.8 10.0* 9.3 5.9* 0.6 1.7* RoAE (%) 15.4 10.4* 9.8 12.4* 11.9 8.0* 2.2 7.7* Market Indicators: Adj. EPS (USD) 0.63 0.44* 2.17 2.65* 1.29 0.40* 0.06 0.23* P/E (x) 7.04 10.20 8.08 6.61 6.17 20.13 106.41 29.42 Adj. BVPS (USD) 4.31 4.13 21.32 21.33 9.94 9.81 10.67 11.10 P/BV (x) 1.04 1.08 0.82 0.82 0.80 0.81 2.32 2.23

Current Market Capitalisation (USD Million) 1,407.18 1,407.18 1,263.22 1,263.22

876.93 876.93 3,775.37 3,775.37

(USD Million) Total Income 691.51 221.49 368.49 162.20 400.60 233.64 78.94 179.88 % YoY change 52.2 -31.6 28.9 -2.3 73.8 33.8 73.8 480.8 Operating Profit 227.86 46.35 101.19 39.34 88.71 41.06 62.66 127.32 % YoY change 134.7 -58.0 54.7 -14.4 24.8 -10.1 75.7 410.5 EBITDA 314.71 46.35 122.25 39.34 110.95 55.30 66.42 156.79 % YoY change 88.1 -58.0 48.4 -14.4 24.7 21.1 85.9 527.1 Net Profit 199.89 68.99 156.33 95.50 142.19 43.57 35.48 64.16 % YoY change 77.3 -30.5 30.0 -12.7 -16.7 -57.7 43.6 147.1 Total Assets 2,617.12 2,681.79 1,850.83 1,952.81 1,493.31 1,476.30 6,728.89 7,994.34 % YoY change 25.8 13.6 -13.6 -23.4 -4.3 -21.7 53.0 32.6 Shareholders’ Equity 1,356.82 1,300.61 1,535.40 1,536.55 1,093.88 1,079.54 1,624.69 1,690.07 % YoY change 9.2 3.6 -8.0 -31.9 -15.5 -27.8 1.7 2.4 Source: Zawya, Nakilat’s financial statements

Nakilat to own 54 vessels early next year accounting for 18% of LNG shipping market LPG global transport to help in serving worldwide customers in the most flexible, economical and reliable manner Expanding revenue base by setting up state-of-the-art shipyard

New Projects and Strategies In a bid to increase its control over the LNG supply chain, Nakilat shifted its strategy from entering into joint ventures with large international shipping companies to now fully owning and controlling LNG fleets. In addition to the 29 jointly-owned vessels, Nakilat has 25 wholly-owned LNG carriers. As of March 31, 2009, 11 of the wholly-owned ships have been received from the ship yards and 14 are yet to be delivered. Further, with Qatari gas exports continuing to flourish, Nakilat has embarked on a ship-buying spree that will swell its fleet to 54 vessels by early next year and bring its share of the global LNG shipping market to 18%. Together, Nakilat’s jointly and wholly-owned fleet of 54 vessels represents a total investment of approximately USD 11 billion. Further, as Nakilat plays a vital role in the country’s overall gas exporting strategy, all its ships are immediately chartered for up to 25 years by RasGas or Qatargas, ensuring a risk-free revenue stream.

Ships Delivered to Nakilat in 2009 so far Month (2009) Q-Flex LNG carriers Q-Max LNG carriers

July Al Rekayyat and Al Kharatiyat (216,000 CBM)

May Al Ghashamiya (217,000 CBM) Al Mafyar (266,000 CBM) April Onaiza (210,000 CBM)

March Mesaimeer (216,000 CBM) Mekaines (266,000 CBM) and Al Samriya (263,000 CBM)

February Al Sheehaniya (210,000 CBM) Al Mayeda (266,000 CBM) January Lijmiliya (263,000 CBM) Source: Nakilat * CBM - Cubic Meters

Of the 9 LNG ships that were delivered, Q-Max LNG Al Samriya (263,000 CBM) and Lijmiliya (263,000 CBM) will be used to ship LNG produced by Qatar Liquefied Gas Co. Limited (II) (Qatargas 2) to customers in Europe, while all the other Q-Flex and Q-Max carries received would be used to transport LNG produced by Qatar Liquefied Gas Co. Limited (3) (Qatargas 3) to markets primarily in the US. Considered as new generation of LNG mega-ships, these Q-Flex and Q-Max carriers will result in more efficient transport of the country’s natural gas to markets throughout the world, giving grater economies of scale to the company. In March 2009, Gulf LPG Transport Co. (Gulf LPG), a 50:50 joint venture between Nakilat and Qatar Shipping Co. (Q-Ship) took delivery of the fourth LPG vessel ‘Lubara’, the final ship in a series of Very Large Gas Carriers (VLGC’s). The first three LPG carriers ‘Bu Sidra’, ‘Umm Laqhab’ and ‘Al Wukir’ have already been delivered. As per the terms of a vessel management agreement, Nakilat, through its wholly owned subsidiary, Nakilat Shipping (Qatar) will operate the 82,000 CBM carriers. In January, Gulf LPG along with Mitsui O.S.K. Lines, Ltd. (MOL) of Tokyo formed VLGC pool called ‘LPG Global Transport’ and incorporated LPG Global Transport Management Inc. to manage the pool’s business operations. With an anticipated strong future expansion of global LPG seaborne trade, especially from Qatar, LPG Global Transport will offer enhanced services to LPG charterers creating efficiencies by optimizing voyage costs through efficient deployment of the combined fleet. Meanwhile, expanding its revenue base further, in August 2009, the company announced to go ahead with its plans of marine vessel building activity in the first half of 2010. The state-of-the-art shipyard in Ras Laffan will be built in co-operation with Netherland-based Damen Shipyards Group for which a memorandum of understanding (MoU) was signed in March 2009. The shipyard is designed to produce a wide variety of vessels, such as commercial vessels, including tugs, offshore supply vessels, coastal tankers and ferries; naval and coastguard vessels such as patrol boats and corvettes and luxury yachts. The facility is expected to roll out roughly 15 vessels a year destined for the local as well as the regional markets and beyond. In January, GAIL (India) Ltd. was engaged in talks with Nakilat to buy about 5 million metric tonnes of LNG for its upcoming Dabhol power plant in western India, which will start operations by 2011. In October 2008, Nakilat inked a deal with Qatar Fuel Co. under which the latter will provide marine lubricants and technical services to Nakilat’s fleet of 25 LNG carriers. Woqod would supply both the initial fill volumes required by shipyards prior to delivery of each vessel and the top-up volumes required for operations by the fleet on a global basis. Further, it will also provide marine lubricants to the four LPG carriers owned and operated by Gulf LPG.

Nakilat is continuously adopting innovative financing methods in order to purchase LNG vessels to meet its expansion plans. Despite prevailing financial crisis, in June 2009, the company has raised USD 950 million of debt under its existing financing program from 17 international and regional financial institutions to partly finance the purchase of a fleet of 25 LNG carriers currently being constructed in various South Korean shipyards. Earlier as a part of this financing program, Nakilat raised USD 4.3 billion of debt (the ‘Initial Program Debt’) in December 2006, which was awarded the ‘2006 Middle East LNG Deal of the Year’ by Euromoney Project Finance and the ‘Editor’s Choice Deal of the Year’ by Marine Money International. In August 2008, Nakilat raised USD 1.5 billion of debt (the ‘Tranche II Debt’) as part of the approximately USD 2.5 billion additional debt (the ‘Additional Program Debt’). Finally, this Tranche III debt comprises a USD 803 million senior bank facility with a tenor of 10 years and a USD 146 million subordinated bank facility with a tenor of 10 years. SWOT Analysis

Successfully completed Tranche III debt of USD 950 million

THREATS

Any delay in mega LNG projects in Qatar can impact the future cash flow of the company Prolonged financial and economic crisis can hamper future growth

OPPORTUNITIES

Demand for clean energy increasing globally

Qatar has the largest non-associated gas field in the world

Strategic ventures with QP and international players like ExxonMobil, Total, Conoco Philips and Shell for LNG production to boost company’s business plan

WEAKNESS

Highly leveraged company Most of the vessels are debt financed

STRENGTHS

Consistent financial performance and higher margin Steady cash flow with long-term contract and fixed rate charter Continuously increasing its feet size and is in the process of becoming largest LNG ship owner by 2010

Risks and Concerns:

The current economic downturn has negatively impacted the growth across the world economies. Liquidity crunch across economies in the GCC and lower oil prices have proved detrimental to the budget surpluses enjoyed by them. The overall weak scenario has also resulted in lower level of economic activity across regions, which has in turn affected the trade activities. Going forward, if the economic crisis persists, lower trading volumes can negatively impact the profitability of the companies operating in the sector.

The expansion plans of the company could also face delays in an event of a prolonged financial

crisis.

The company’s sea-borne activities are also prone to threats of pirates and hijacking.

Cost of Equity: 8.95% WACC: 4.85%

Valuation Methodology: We have used DCF valuation method to arrive at the fair value of Nakilat, as discussed below: Assumptions:

(i) Risk free Rate (Rf) of 3.22%, equivalent to one year average yield on 10 year US T-bill. (ii) Unlevered Beta of 0.88 (iii) A terminal growth rate of 2%

Based on the inputs and the Capital Asset Pricing Model (CAPM), we have arrived at a Cost of Equity of 8.95% and a WACC of 4.85%.

DCF Calculations DCF Valuation (FCFF Model)

(in QAR Million) 2009E* 2010E 2011E 2012E 2013E NOPAT 502.49 1,427.86 1,643.39 1,769.30 1,921.53 Add: Depreciation and Amortisation 99.98 515.21 592.03 656.91 710.40 Less: Capex 353.28 2,439.67 2,061.38 1,629.53 1,274.84 Less: Change in Net Working Capital 2.41 52.06 28.39 35.43 41.60 Operating Free Cash Flows to Firm (OFCFF) 246.78 -548.66 145.65 761.25 1,315.50 Free Cash Flow to Firm (FCFF) 246.78 -548.66 145.65 761.25 1,315.50 WACC (Ko) (%) 4.85% 4.85% 4.85% 4.85% 4.85% Present Value / Discount Factor 0.9766 0.9314 0.8883 0.8472 0.8079 Long-Term Growth Rate (g) (%) 2.00% Terminal Multiple [(1 + g) / (WACC - g)] 35.75 Nominal Terminal Value [(FCFF * (1 + g)) / (WACC - g)] 47,025.52 Present Value of Free Cash Flows 241.01 -511.01 129.38 644.89 1,062.84 *2009E excludes 1H09A

Calculation of Equity Value and Fair Value Per Share NPV of Free Cash Flows (during Explicit Forecast Period) 1,567.11 Terminal Value: Residual Cash Flow (FCFF of 2013E) 1,315.50 WACC 4.85% Long-Term Growth Rate (g) 2.00% Divided by Capitalisation Rate (WACC - g) 0.03 Equals Nominal Terminal Value 47,025.52 Implied Multiple of 2013E EBITDA 17.87 Times PV/ Discount Factor 0.81 Present Value of Terminal/Residual Value 37,993.82 Enterprise Value 39,560.93 Implied Multiple of 2013E EBITDA 15.03 Less: Long-term Debts 23,343.58 Less: Market Value of Preferred Shares 0.00 Add: Surplus Cash and Investments 0.00 Equity Value 16,217.35 No. of Outstanding Shares (Million) 553.78 Fair Value Per Share (QAR) 29.29

* figures in QAR Million unless specified

Sensitivity Analysis We have prepared a sensitivity analysis table, showing the probable nominal terminal value, discounted terminal value and enterprise value, given different growth rate assumptions and the WACC. The shaded area represents the most probable outcomes.

Sensitivity Analysis of Nominal Terminal Value (QAR Million) Discount

Factor Long-Term Growth Rate

1.00% 1.50% 2.00% 2.50% 3.00% 2.85% 71,689 98,660 157,238 381,590 -924,005 3.85% 46,564 56,737 72,399 99,632 158,780 4.85% 34,480 39,818 47,026 57,296 73,108 5.85% 27,376 30,671 34,822 40,210 47,487 6.85% 22,699 24,942 24,942 30,973 35,163

Sensitivity Analysis of Discounted Terminal Value (QAR Million)

Discount Factor

Long-Term Growth Rate 1.00% 1.50% 2.00% 2.50% 3.00%

2.85% 63,164 86,928 138,540 336,212 -814,126 3.85% 39,279 47,860 61,071 84,044 133,938 4.85% 27,858 32,170 37,994 46,292 59,067 5.85% 21,193 23,744 26,958 31,129 36,762 6.85% 16,845 18,509 20,516 22,985 26,094

Sensitivity Analysis of Enterprise Value (QAR Million)

Discount Factor

Long-Term Growth Rate 1.00% 1.50% 2.00% 2.50% 3.00%

2.85% 64,866 88,630 140,242 337,914 -812,424 3.85% 40,912 49,493 62,704 85,677 135,570 4.85% 29,425 33,737 39,561 47,859 60,634 5.85% 22,698 25,249 28,462 32,633 38,267 6.85% 18,290 19,954 21,962 24,430 27,539

Investment Opinion Qatar has emerged as a significant hydrocarbon player holding the third largest gas reserves in the world estimated to reach 25.46 tcm in 2008. Further, the demand drivers for gas have found favour from volatile prices and increasing environmental concerns related to oil. This in turn has resulted in demand switching over to natural gas leading to a substantial increase in gas demand. Following this, total natural gas consumption went up by 2.7% to approximately 3,018.6 billion cubic meters (bcm) from 2,937.9 bcm in 2007. According to Cedigaz, world gas trade continued its steady growth registering a 3.0% rise in 2008. Furthermore, on a positive note, industry watchers forecast that demand for gas in the GCC to grow at 6.7% annually from 2007 to 2012. Currently, an estimated USD 196 billion worth of oil and gas projects are being undertaken all over the GCC. Several large-scale projects are now underway to boost capacity of existing gas fields in Qatar, the UAE and Saudi Arabia as these states collectively account for up to 81% of the total gas supply in the GCC. These initiatives are expected to boost export volumes for gas thereby necessiating a need of a well developed shiping industry. The growth dynamics of the LNG sector in Qatar is expected to remain strong as the country eyes a production target of over 77 million tonnes by 2012, which is likley to account for 30% of the world’s LNG supply. The country’s actual gas output is expected to surge to nearly 45 million tonnes this year and around 70 million tonnes in 2010. The shipping industry is considered as a critical link in the LNG value chain. The industry has also been benefiting from constant technological advancements, which has improved the carrier design and size, enabling a more efficient transport of natural gas to markets throughout the world. A new fleet of technologically advanced LNG carriers such as Q-Flex class with a capacity of 200,000 CM, while Q-Max with 240,000 CM as carrying capacity can operate at a 20-30% reducted transportation cost. However, the LNG shipping segment has also been negatively impacted by the global economic crisis, which has resulted in a dip in demand and accordingly exported volumes of gas. The sector has also been impacted by the delivery of new carriers. Consequently, in 1Q09 LNG short-term charter rates plunged to USD 25,000 a day in May 2009 from USD 40,000-50,000 per day for most of 2008, and compared with a peak of around USD 80,000 a day in September 2007. However, as the economic recovery shapes up and liquefaction projects come online, the LNG shipping industry is likely to play a vital role for effective execution of supply chain integration schemes. Also, in the recent months an unprecedented number of new LNG import terminals worldwide have been opened for business. Apart from new LNG trains starting production, traders’ booking of LNG vessels for short-term storage are helping to push up daily charter rates to USD 30,000. Besides Qatar, LNG exports will also rise in the second half of 2009 from Indonesia’s Tangguh, Russia’s Sakhalin and Yemen. Further, the industry could also rely on several Australasian projects to help soak up excess shipping supply. Nakilat holds the advantage of being one of the important entities of the LNG supply chain in Qatar with a fleet of 25 wholly owned, 29 jointly owned LNG carriers and 4 jointly owned LPG ships. With the deliveries of all the ordered carriers likely to be complete by 2010, Nakilat will be one the largest LNG transporter in the world. The company provides a whole range of transportation services including transportation of liquefied natural and petroleum gas, maintenance and leasing. The company’s significant positives include focus on growing organically through wholly owned subsidiaries and joint ventures. The company also expects to provide a vital link in order to cater to the demand of North American, European and Asian markets. Besides this, Nakilat has also forayed into the ship-building segment by setting up a state-of-the-art ship repair yard along with QP, which is indeed going to scale up its revenue earning scope. However, on a negative note, the company is highly leveraged with most of its carriers being debt financed. Despite this, increasing demand for cleaner fuel and vast gas reserves present in Qatar is expected to drive a healthy cash flow for the company. The company’s significant fundamental positives make it an attractive investment opportunity. Currently, Nakilat’s stock is trading at a P/E multiple of 31.13x and 18.42x on 2009E and 2010E earnings, and at a P/B multiple of 2.16x and 1.93x on 2009E and 2010E BVPS, respectively. Meanwhile, the stock has risen 14.8% since January as against a gain of 0.5% by the Qatar Exchange. However, considering the global crisis, we revise our earlier target price of QAR 31.37 (as on September 17, 2008) downwards to QAR 29.29, which exhibits an upside of 18.1% from its closing price of QAR 24.80 (as on August 27, 2009). Accordingly, we maintain our OVERWEIGHT rating on Qatar Gas Transport Co.

Fair Value: QAR 29.29 Investment Opinion: OVERWEIGHT

Financial Statements

Consolidated Balance Sheet (in QAR Million) 2007A 2008A 1H08A 1H09A 2009E 2010E 2011E ASSETS Non-current assets Loans to joint venture companies 1,547.24 587.92 2,241.75 1,037.56 1,057.34 977.27 860.39 Investment in joint venture companies 2,367.20 1,464.44 2,278.20 1,890.01 1,926.04 2,102.18 2,244.65 Available-for-sale-investments 130.05 96.51 168.95 100.87 102.79 142.35 183.23 Construction in progress 9,210.18 17,663.84 15,212.29 9,272.51 7,859.40 6,640.75 5,611.05 Property and equipment 1.34 2,284.48 1.74 14,820.15 16,490.78 19,641.59 22,148.08 Deferred financing costs 171.52 252.91 0 249.22 244.98 237.29 229.85 Total non-current assets 13,427.52 22,350.10 19,902.93 27,370.32 27,681.32 29,741.42 31,277.25 Current assets Cash and bank balances 2,474.94 1,990.32 1,832.38 1,580.82 1,686.23 1,559.02 1,548.07 Trade and other receivables 96.09 134.00 197.59 127.99 265.91 553.13 679.40 Due from joint venture companies 0.05 3.16 4.50 0.85 0.85 0.85 0.85 Inventory 0.01 0.01 0.01 0.91 0.91 0.91 0.91 Total current assets 2,571.10 2,127.48 2,034.47 1,710.57 1,953.91 2,113.91 2,229.23 Total Assets 15,998.62 24,477.58 21,937.40 29,080.89 29,635.23 31,855.33 33,506.47 LIABILITIES AND EQUITY Liabilities Non-current liabilities Borrowings 10,077.42 19,116.73 15,844.29 23,114.01 25,886.61 27,105.63 27,064.78 Fair value of interest rate swaps 1,021.99 5,015.70 1,184.02 2,590.66 2,590.66 2,590.66 2,590.66 Provision for end of service benefits 1.64 3.33 2.22 4.91 5.58 9.35 15.69 Total non-current liabilities 11,101.06 24,135.75 17,030.53 25,709.58 25,886.61 27,105.63 27,064.78 Current liabilities Borrowings 0 114.79 0 229.58 263.59 283.33 968.15 Accounts payable and accruals 191.13 227.65 220.06 125.73 261.17 495.76 592.47 Due to related party 0.03 0.08 0.04 6.22 6.29 6.87 8.04 Total current liabilities 191.17 342.52 220.10 361.52 531.05 785.96 1,568.66 Total liabilities 11,292.22 24,478.26 17,250.62 26,071.11 26,417.66 27,891.59 28,633.44 Equity Share capital 5,536.67 5,537.66 5,537.40 5,537.75 5,537.75 5,537.75 5,537.75 Legal reserve 33.55 46.44 33.53 46.44 90.53 165.08 255.94 Fair value reserve 83.58 50.04 122.48 54.40 54.40 54.40 54.40 Translation reserve 20.17 24.04 20.17 24.04 24.04 24.04 24.04 Retained earnings 135.77 251.93 291.53 485.31 648.92 1,319.87 2,137.67 Equity attributable to equity holders of the Company 5,809.74 5,910.11 6,005.13 6,147.94 6,355.64 7,101.14 8,009.81 Hedging reserve -1,107.00 -5,915.25 -1,322.37 -3,142.83 -3,142.83 -3,142.83 -3,142.83 Minority interest 3.66 4.46 4.03 4.66 4.75 5.43 6.04 Total liabilities & equity 15,998.62 24,477.58 21,937.40 29,080.89 29,635.23 31,855.33 33,506.47

Consolidated Income Statement (in QAR Million) 2007A 2008A 1H08A 1H09A 2009E 2010E 2011E Income Operating income from wholly owned vessels 0 24.65 0 498.56 1,046.98 1,965.80 2,324.06 Share of profits from joint ventures 14.73 118.56 40.23 80.22 168.46 193.73 213.10 Income from marine and agency services 26.94 31.20 15.55 14.25 29.64 32.60 36.51 Profit from Islamic banks 96.35 81.09 42.47 38.50 77.91 76.71 77.72 Interest and dividend income 19.08 22.80 9.39 19.66 19.84 21.82 24.44 Other income 8.13 8.85 5.03 3.16 6.37 7.01 7.85 Total Income 165.23 287.15 112.66 654.35 1,349.20 2,297.67 2,683.68 Expenses Operating costs of wholly owned vessels 0 0 0 -56.84 -119.36 -243.77 -311.44 General and administrative -35.25 -45.54 -21.71 -27.16 -57.02 -110.83 -136.82 Depreciation -0.24 -8.27 -0.22 -103.50 -199.23 -507.52 -584.58 Amortization of deferred financing cost 0.00 -5.38 0.00 -3.69 -7.93 -7.69 -7.44 Total expenses -35.49 -59.20 -21.93 -191.18 -383.55 -869.81 -1,040.29 Operating profit 129.73 227.95 90.74 463.17 965.65 1,427.86 1,643.39 EBITDA 129.98 241.61 90.95 570.35 1,172.82 1,943.07 2,235.42 Interest expense 0 -13.88 0 -260.27 -554.85 -681.36 -733.03 Fair value hedge loss from joint ventures -39.30 -84.21 3.80 30.68 30.68 0.00 0.00 Net profit 90.43 129.87 94.53 233.58 441.48 746.51 910.37 Attributable to: Equity holders of the parent 89.51 129.06 94.16 233.38 441.10 745.49 908.68 Minority interest 0.92 0.81 0.37 0.20 0.38 1.01 1.69 Adjusted EPS 0.16 0.23 0.34* 0.84* 0.80 1.35 1.64

*Annualised

Consolidated Cash Flow Statement (in QAR Million) 2007A 2008A 1H08A 1H09A 2009E 2010E 2011E Cash Flows from Operating Activities Net profit for the year 90.43 129.87 94.53 233.58 441.48 746.51 910.37 Adjustments for: Depreciation 0.24 8.27 0.22 103.50 199.23 507.52 584.58 Amortization of deferred financing cost 0 5.38 0 3.69 7.93 7.69 7.44 Interest expense 0 13.88 0 260.27 554.85 681.36 733.03 Share of profits from joint ventures 24.57 -34.36 -44.03 -110.90 -168.46 -193.73 -213.10 Profit from Islamic banks -96.35 -81.09 -42.47 -38.50 -77.91 -76.71 -77.72 Interest, dividend and other income -27.20 -31.65 -14.42 -22.82 -26.21 -28.83 -32.29 Provision of end of service benefits 0 0 0.58 1.59 1.59 0 0 Provision for doubtful debts 3.60 0.97 0 0.11 0.11 0 0 Operating profit before changes in working capital -4.71 11.28 -5.58 430.51 932.61 1,643.80 1,912.31 Working Capital Changes Trade and other receivables -27.73 -0.46 -87.28 -12.42 -131.91 -287.22 -126.27 Accounts payable and accruals 60.83 30.62 37.59 -36.87 34 235 97 Other current assets 0 -26.47 0 0 0 0 0 Due from joint venture companies 18.94 -1.00 -4.44 2.31 2.31 0 0 Due to related party 0.03 0.01 0.01 6.13 6.21 0.57 1.17 Inventory 0.00 0.00 0.00 -0.91 -0.91 0 0 Cash generated from operations 47.37 13.98 -59.71 388.76 841.84 1,591.74 1,883.92 Interest paid -451.07 -783.76 -318.62 -579.93 -579.93 -681.36 -733.03 Net cash generated from/( used in) operating activities -403.71 -769.78 -378.33 -191.17 261.91 910.38 1,150.90 Cash Flows from Investing Activities Loans to joint venture companies -999.61 -383.53 -644.87 -475.19 -469.42 80.07 116.88 Refund of / (investment in) joint venture companies -341.98 126.96 72.98 -6.64 -461.59 -176.14 -142.47 Dividend income received from joint ventures 19.73 51.65 24.54 22.73 0 0 0 Acquisition of property and equipments -1.17 -20.38 -0.62 -1.24 -1.24 0 0 Investment income received 173.14 114.09 36.80 79.82 80 0 0 Time deposits maturing after ninety days 432.55 670.22 654.76 9.10 9.10 0 0 Construction in progress -5,398.48 -10,059.87 -5,468.48 -3,949.10 -4,599.91 -2,439.67 -2,061.38 Deferred financing costs -3.88 -3.70 -46.56 7.93 7.69 7.44 Net cash used in investing activities -6,119.68 -9,504.57 -5,371.46 -4,320.52 -5,435.31 -2,528.06 -2,079.53 Cash Flows from Financing Activities Proceeds on second cash call 2,766.54 0.99 0.74 0.10 0.10 0 0 Payment for bonds issue costs -9.69 0 0 0 0 0 0 Proceeds from borrowings 4,161.88 10,467.21 5,766.87 4,112.07 4,906.32 1,490.46 917.68 Repayment of borrowings -1,820.76 0 0 0 0 0 0 Expenses incurred on second cash call against capital -2.34 -0.02 -0.02 0 0 0 0 Net cash from financing activities 5,095.62 10,468.18 5,767.58 4,112.17 4,906.42 1,490.46 917.68 Net increase/(decrease) in cash and cash equivalents -1,427.77 193.83 17.79 -399.52 -266.98 -127.21 -10.95 Cash and cash equivalents at the beginning of the year 3,187.15 1,759.39 1,759.39 1,953.22 1,953.22 1,686.23 1,559.02 Cash and cash equivalents at the end of the year 1,759.39 1,953.22 1,777.18 1,553.70 1,686.23 1,559.02 1,548.07

Common – Size Statements

Common-Size Consolidated Balance Sheet 2007A 2008A 1H08A 1H09A 2009E 2010E 2011E ASSETS Non-current assets Loans to joint venture companies 9.7% 2.4% 10.2% 3.6% 3.6% 3.1% 2.6% Investment in joint venture companies 14.8% 6.0% 10.4% 6.5% 6.5% 6.6% 6.7% Available-for-sale-investments 0.8% 0.4% 0.8% 0.3% 0.3% 0.4% 0.5% Construction in progress 57.6% 72.2% 69.3% 31.9% 26.5% 20.8% 16.7% Property and equipment 0.0% 9.3% 0.0% 51.0% 55.6% 61.7% 66.1% Deferred financing costs 1.1% 1.0% 0.0% 0.9% 0.8% 0.7% 0.7% Total non-current assets 83.9% 91.3% 90.7% 94.1% 93.4% 93.4% 93.3% Current assets Cash and bank balances 15.5% 8.1% 8.4% 5.4% 5.7% 4.9% 4.6% Trade and other receivables 0.6% 0.5% 0.9% 0.4% 0.9% 1.7% 2.0% Due from joint venture companies 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Inventory 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total current assets 16.1% 8.7% 9.3% 5.9% 6.6% 6.6% 6.7% Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% LIABILITIES AND EQUITY Liabilities Non-current liabilities Borrowings 63.0% 78.1% 72.2% 79.5% 87.4% 85.1% 80.8% Fair value of interest rate swaps 6.4% 20.5% 5.4% 8.9% 8.7% 8.1% 7.7% Provision for end of service benefits 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total non-current liabilities 69.4% 98.6% 77.6% 88.4% 87.4% 85.1% 80.8% Current liabilities Borrowings 0.0% 0.5% 0.0% 0.8% 0.9% 0.9% 2.9% Accounts payable and accruals 1.2% 0.9% 1.0% 0.4% 0.9% 1.6% 1.8% Due to related party 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total current liabilities 1.2% 1.4% 1.0% 1.2% 1.8% 2.5% 4.7% Total liabilities 70.6% 100.0% 78.6% 89.7% 89.1% 87.6% 85.5% Equity Share capital 34.6% 22.6% 25.2% 19.0% 18.7% 17.4% 16.5% Legal reserve 0.2% 0.2% 0.2% 0.2% 0.3% 0.5% 0.8% Fair value reserve 0.5% 0.2% 0.6% 0.2% 0.2% 0.2% 0.2% Translation reserve 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% Retained earnings 0.8% 1.0% 1.3% 1.7% 2.2% 4.1% 6.4% Equity attributable to equity holders of the Company 36.3% 24.1% 27.4% 21.1% 21.4% 22.3% 23.9% Hedging reserve -6.9% -24.2% -6.0% -10.8% -10.6% -9.9% -9.4% Minority interest 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total liabilities & equity 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Common-Size Consolidated Income Statement 2007A 2008A 1H08A 1H09A 2009E 2010E 2011E Income Operating income from wholly owned vessels 0.0% 8.6% 0.0% 76.2% 77.6% 85.6% 86.6% Share of profits from joint ventures 8.9% 41.3% 35.7% 12.3% 12.5% 8.4% 7.9% Income from marine and agency services 16.3% 10.9% 13.8% 2.2% 2.2% 1.4% 1.4% Profit from Islamic banks 58.3% 28.2% 37.7% 5.9% 5.8% 3.3% 2.9% Interest and dividend income 11.5% 7.9% 8.3% 3.0% 1.5% 0.9% 0.9% Other income 4.9% 3.1% 4.5% 0.5% 0.5% 0.3% 0.3% Total Income 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Expenses Operating costs of wholly owned vessels 0.0% 0.0% 0.0% -8.7% -8.8% -10.6% -11.6% General and administrative -21.3% -15.9% -19.3% -4.2% -4.2% -4.8% -5.1% Depreciation -0.1% -2.9% -0.2% -15.8% -14.8% -22.1% -21.8% Amortization of deferred financing cost 0.0% -1.9% 0.0% -0.6% -0.6% -0.3% -0.3% Total expenses -21.5% -20.6% -19.5% -29.2% -28.4% -37.9% -38.8% Operating profit 78.5% 79.4% 80.5% 70.8% 71.6% 62.1% 61.2% EBITDA 78.7% 84.1% 80.7% 87.2% 86.9% 84.6% 83.3% Interest expense 0.0% -4.8% 0.0% -39.8% -41.1% -29.7% -27.3% Fair value hedge loss from joint ventures -23.8% -29.3% 3.4% 4.7% 2.3% 0.0% 0.0% Net profit 54.7% 45.2% 83.9% 35.7% 32.7% 32.5% 33.9% Attributable to: Equity holders of the parent 54.2% 44.9% 83.6% 35.7% 32.7% 32.4% 33.9% Minority interest 0.6% 0.3% 0.3% 0.0% 0.0% 0.0% 0.1%

Financial Ratios

2007A 2008A 1H08A 1H09A 2009E 2010E 2011E Liquidity Ratios: Current Ratio (x) 13.45 6.21 9.24 4.73 3.68 2.69 1.42 Quick Ratio (x) 13.45 6.21 9.24 4.73 3.68 2.69 1.42 Profitability Ratios: Return on Average Equity (RoAE) (%) 2.1 2.2 3.2* 7.7* 7.2 11.1 12.0 Return on Average Assets (RoAA) (%) 0.7 0.6 1.0* 1.7* 1.6 2.4 2.8 Leverage Ratios: Debt to Equity (D/E) Ratio (x) 1.73 3.25 2.64 3.80 4.11 3.86 3.50 Shareholders' Equity to Total Assets Ratio (x) 0.36 0.24 0.27 0.21 0.21 0.22 0.24 Total Liabilities to Total Assets Ratio (x) 0.71 1.00 0.79 0.90 0.89 0.88 0.85 Current Liabilities to Equity Ratio (x) 0.03 0.06 0.04 0.06 0.08 0.11 0.20 Growth Rates: % YoY Growth in Total Income 144.5 73.8 55.8 480.8 369.9 70.3 16.8 % YoY Growth in Operating Profit 184.1 75.7 65.9 410.5 323.6 47.9 15.1 % YoY Growth in EBITDA 183.6 85.9 66.0 527.1 385.4 65.7 15.0 % YoY Growth in Net Profit 99.7 43.6 73.9 147.1 239.9 69.1 22.0 % YoY Growth in Total Assets 48.5 53.0 65.2 32.6 21.1 7.5 5.2 % YoY Growth in Shareholders' Equity 98.8 1.7 -1.2 2.4 7.5 11.7 12.8 Ratios used for Valuation: Adj. EPS (QAR) 0.16 0.23 0.34* 0.84* 0.80 1.35 1.64 Adj. BVPS (QAR) 10.49 10.67 10.84 11.10 11.48 12.82 14.46 P/E Ratio (x) 153.43 106.41 72.92 29.42 31.13 18.42 15.11 P/BV Ratio (x) 2.36 2.32 2.29 2.23 2.16 1.93 1.71 Current Market Price (QAR)** 24.80 24.80 24.80 24.80 24.80 24.80 24.80

* Annualised ** CMP as on August 27, 2009

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