tankers - norden capital markets day ... ice 105 + ice fspot vs. tc earnings fnumber of cargo types...

TANKERS

Capital Markets Day

Lars Bagge ChristensenSenior Vice PresidentCopenhagen, Denmark

NORDEN – Tankers | 1 Our business is global tramp shipping

Copenhagen, Denmark1 June 2012

AGENDA

Organisation

Strategic focus

Fleet

Performance

Norient Product Pool

Day-to-day chartering

ld lWorldscale points

Trading optimisation

ClientsClients


ORGANISATION

NORDEN

NORDEN and Norient Product Pool

NORDEN is an asset owner and f

Overview

NORDENTank

NPP

Charterer of tonnage

Quality tonnage;DIS and SIN flag

50% owner

Hellerup Singapore Cyprus America

DIS and SIN flagInhouse technical managementApproved by all oil majors

C i l t

Staff breakdown

Commercial management outsourced to Norient Product Pool

In 2005, Norient Product Pool was established

50/50 joint venture29%

12%

12%

Operations

Chartering

AccountingjNPP handles day-to-day employment and operation

Total number of employees 21%14%

12%

g

Management

Control

Freight


p yincluding overseas offices: 58

14%

IMPLEMENTING CURRENT STRATEGY 2011-13

Long term growth in challenging times

Dry Cargo Tankers Joint Overall targets

Growth in cargoes carried of 15%

p.a.

Growth in owned fleet to 25+ units

Tight cost control on shore and at

sea

Higher shareholder return than peers

Growth in contractually secured cargo

volumes of 15% p.a.

Daily earnings above market

ratesIncreased eco/fuel efficiency focus on

all vessels

Global leader in tramp shipping

Joint ventures and strategic alliances

High standards for quality, safety,

etc.

Flexible financial resources to

pursue opportunities

Added value creation as operator

Increasing EBIT in strategy period


NORDEN TANKER FLEET

17 owned vessels and 4 ECO types for delivery in 2013

Vessel type Operated(O ned)* Size (DWT) Typical

length Main cargoes Main trading a easyp (Owned)* ( ) length g areas

2 60-80,000 230 metresFuel oil, heating oil,

gasoline, diesel, naphtha, jet fuel

Europe, US, Caribbean

LR1

naphtha, jet fuel

22 (6+4) 42-60,000 180 metres

Fuel oil, heating oil, gasoline, diesel, naphtha jet fuel

Europe, US, Latin/South

America East of

MR

22 (6+4) 42 60,000 180 metres naphtha, jet fuel, vegoil

America, East of Suez

Fuel oil, heating oil, gasoline diesel Intra/coastal

Handysize

20 (11) 27-42,000 170 metres gasoline, diesel, naphtha, jet fuel,

vegoil

/Europe, Baltic,

Black Sea


* Per 31 March 2012

NORDEN HAS OUTPERFORMED PEERS

In 2011 NORDEN outperformed its peers by 11%, equivalent to 1,500 USD/dayF Focus on:

Experienced staff

Speed and fuel consumption

Peers:OSG

Scorpio

Handysize (USD per day)MR (USD per day)

Costs Torm

D’amico

14.000

16.000

18.000

20.000

14.000

16.000

18.000

20.000

6 000

8.000

10.000

12.000

000

6 000

8.000

10.000

12.000

14.000

-

2.000

4.000

6.000

2009 2010 2011-

2.000

4.000

6.000

2009 2010 2011


2009 2010 2011

NORDEN Average peers

2009 2010 2011

NORDEN Average peers

NORDEN OUTPERFORMS THE MARKET

NORDEN and the 1-year T/CCompetitive advantage from:

NPP’s market position 30.000

Experience and high retention rate

Agile organisational structure26.000

28.000 +17%

Agile organisational structure

Network/knowledge sharing

Fully integrated Company 22.000

24.000

day

Norden Vision/Mission/Values

18.000

20.000

US

D p

er

d14.000

16.000

10.000

12.000

2000 2002 2004 2006 2008 2010


NORDEN MR 1-year T/C

Source: Clarksons

NORIENT PRODUCT POOL

4 Increased market presence

Why do we pool?Vessel composition (number of vessels)

47

28

equals better marketing

Coverage strategy

Economy of scale reduces

Handysize MR LR1

Economy of scale reduces operational costs

Higher asset utilisation by reducing ballast legsy reducing ballast legs

Size matters:Increased scheduling and fl ibilit

Product Tanker Pools

103 flexibility

Focus on several geographical markets

10384 79

51 48 47

25

“Right Steaming” (MOEPS)

2nd largest in MR and Handysize


POOL POINTS

Pool points are based on:

Specifications and characteristics

Group Pool Points

MR – Eco 125

Speed and consumption

Current Market earningsMR 110

MR - Ice 105 + IceSpot vs. TC earnings

Number of cargo types

Ice-class premium

Handysize - Eco 115

Handysize 100Ice class premium

Periodical reviews

Vessels are divided into groups

Handysize - Ice 95 + Ice

g pof sister vessels


DAY-TO-DAY CHARTERING

Overseas offices handle vessels

Day-to-day charteringOffices (Tanker and Norient Product Pool)

in the immediate area

Rolling authority – round the clock charteringg

The sun set in Rio and Annapolis

Office in Singapore resumes responsibility of vesselsresponsibility of vessels

Chartering teams are divided into clean and dirty tankers

Cargo composition

58% i Each charterer has his own area of expertise

Operations42%11%

10%

8%Fuel oil

Gasoil

Gasoline

58% is clean

products

Operations

Focus on optimising voyage logistics and bunker consumption 15%

14%

11%Naphta

Jet fuel

Others


consumption 15%

DAY-TO-DAY CHARTERING - WORLDSCALE

Worldscale provide options

Measured in USD/MT

Same TC equivalent no matter the port

In this case USD 15,600 per day

W168

per day

Worldscale 100 is based on an Aframax vessel

S ll l > W100Smaller vessels > W100

Larger vessels < W100

Transatlantic MR 50,000 W183W186

+18

+15DWT: W168

Vessel depart from Europe with options to call all US East Coast portsEast Coast ports

Europe - US Gulf: W183

Europe – Africa: W186


TRADE EXAMPLE FOR BALTIC CHAMPION

25,500 nautical miles

Capacity utilisation of 88%

Sillamae

Vancouver Ravenna

Port Hueneme

Stockton

Taizhou

Brindisi

Belawan

Panjang


TRADE EXAMPLE FOR BALTIC CHAMPION

Ravenna NovorossiyskGenoa

Levera

KuleviNaples

Tarragona

Cartagena

hBeirut

l kh l

Amchit

El Dekheila


IMPORTANT TRADES

Gasoline from

Gasoil/Diesel from Baltic to Europe

Gasoil/Diesel from USA to Europe

Europe to USA Gasoil/Diesel from Black Sea to Europe

Jet fuel from AG to Europe Naphtha from AG and

India to Japan

Gasoline/gasoil from USA to Latin America and Mexico

p

Palm oil from Indonesia to Europe

Gasoline from India and AG to

Gasoline from Europe to West Africa

India to Japan

Gasoline from Singapore to Australia

India and AG to East Africa

Soybean oil from ECSA to India and Far East

to Australia


REFINERY OUTSOURCING = MORE VESSEL DEMAND

Refinery outsourcing and centralisation lead to a growing share of global oil consumption being transported by sea

Net refinery capacity expected to increase 9.2 mb/d from 2012-2016

Asia and Middle East contribute positively to tonne-mile increases

Net Refinery Capacity Additions 2012-16Seaborne oil out of total consumption2000-2005 2005-2011 mb/d

Oil demand 1.82% 0.65%

Seaborne 4.84% 3.16%

17%

20%2,1

1,5

Middle East

Other Non-OECD

mb/d

15%

0,6

3,2

0,9

FSU

China

Other Asia

2000 2005 2011

0,2

0,1

OECD-Europe

OECD-Pacific


Sources: MSI, IEA Medium Term Oil and Gas Markets 2011

2000 2005 2011 0,6 OECD-North America

REFINERY STATUS ON A MAIN TRADE ROUTE

U.S. Refinery Status

Closures are taking place on the

European Refinery Status

Refineries are closing all over East Coast

Expansions are taking place in the US Gulf

Europe

Today many are temporary, some will become permanent

European Refinery Status (Thousand b/d)U.S. Refinery Status (Thousand b/d)

300 600

-100

-

100

200

300

200

400

600

-500

-400

-300

-200

100

600

-400

-200

-

-700

-600

2011 2012 2013

Closures Temporary at present

-800

-600

2011 2012 2013

Closures Planned closures


Source: Clarksons

Expansions Planned expansionsExpansions Planned expansions

Source: Clarksons

CUSTOMERS

Customer types (Percentage measured in days)

7%

41%

11%

41%

and many more


Oil company Trader Industrial Operator

RECAP

“Product Story”

The right setupTankers

NORDEN asset & TC fleet

NPP enhanced market position Growth in owned fleet

The right people

Long term view and working with rather than against market cycle

owned fleet to 25+ units

Daily than against market cycle

2011: Outperformed peers by 11%, equivalent to USD 1,500 per day

earnings above market

rates

“Oil Major Approved” – “Ticket to Trade”

EBITDA guidance for 2012: USD 25-45m

High standards for

quality, safety, etc.45m y,

Increasing EBIT in strategy


strategy period

Thank you for your attentionANY QUESTIONS?


tankers - norden capital markets day ... ice 105 + ice fspot vs. tc earnings fnumber of cargo types...

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