Leveraging the Cycle 27th Annual Marine Money Week 18 June 2014, New York Disclaimer This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, “will”, “should”, “may”, “continue” and similar expressions. Forward-looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; profit; margin, return on capital, cost or dividend targets; economic outlook and industry trends; developments of the Company’s markets; the impact of regulatory initiatives; and the strength of the Company’s competitors. The forward-looking statements, contained in this document, including assumptions, opinions and views of the Company are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third party sources. The statements provided in this document are solely opinions and forecasts which are uncertain and subject to risks, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. A multitude of factors can cause actual results to differ significantly from any anticipated development expressed or implied in this document. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved and you are cautioned not to place any undue reliance on any forward-looking statement. 2 SCF Group global positioning (June 2014) # 1 Tanker owner by number of vessels # 1 Ice-class tanker owner/operator # 1 Arctic shuttle tanker owner/operator # 1 Aframax tanker owner/operator # 2 Product tanker owner/operator # 3 Global shuttle tanker owner/operator # 3 Ice class LNG owner/operator • 153 vessels of a total of 12.6 million tonnes DWT • Average fleet age 8 years • Over 9 000 seafarers and shore-based personnel • Integrated in-house commercial, technical and project management One of the world’s largest shipping companies providing the full range of seaborne energy solutions with special focus on harsh environment operations Source: Clarkson research, ranked by DWT unless otherwise stated 3 SCF Group – key facts  First incorporated in 1988 – over 25 years of experience as a public company  Joint stock company, operates commercially, 100% shares owned by the Russian Federation  Registered in St. Petersburg, offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, Madrid, Dubai and Singapore  IAS audited accounts history dating back to 1990  Multinational Board of Directors and executive management team, Board level committees chaired by independent directors (since 2008) Financial highlights (IFRS) USD million 2012 2013 1 353.0 1 262.8 365.1 Time Charter Equivalent (TCE) 859.4 872.6 270.6 EBITDA 406.1 382.1 153.6 32.9 (39.2) 58.1 Total Assets 6 448.7 6 408.0 6 563.5 Net Debt 2 672.9 2 680.3 2 675.3 Freight & hire receivable Net profit/(Loss) Q1 2014 4 SCF Group business platform: core elements Revenue breakdown* • • • 36% Crude • • • Products 26% 10% LNG/LPG • • 27% Offshore services/ Other 2013 * Including JVs • • • 60 tankers 7.8 m DWT capacity >50% revenues from fixed rate charters Building presence in higher value added marine segments, 14 LNG/LPG carriers maintaining incl 4 jointly-owned and leadership in 4 under construction crude oil and oil 100% revenues from products long-term charters transportation market Ice-class shuttle tankers Ice-breaking platform supply vessels Marine seismic operations 53 tankers 2.7 m DWT capacity >50% revenue from fixed rate charters 5 SCF Group commercial activities  High credit quality customer base and established relations with international and national oil & gas companies  Balanced business portfolio with no singly client accounting for more than 10% revenues  Global footprint with fleet structure and investment activities optimised for the needs of core customers and for servicing Russian energy exports and offshore projects in Russian Arctic and sub-Arctic areas (30% of fleet ice-class) Geography of operations in Russia: Vysotsk Primorsk Ust-Luga Crude oil/oil products terminals LNG/LPG terminals Services to offshore oil & gas production Nothern Sea Route transit Prirazlomnoye Varandey Sabetta (Yamal LNG)) Novorossiyskк De Kastri Prigorodnoye ((Sakhalin 2) Sakhalin 1 Sakhalin 2 Kozmino Major customers:  Substantial portion of fixed-term fixed-rate contracts to mitigate freight market volatility and provide visibility of future earnings and cashflows  Focus on higher added-value specialised shipping services and deeper integration in oil & gas companies’ value chain 6 SCF Group: crude oil & oil products transportation services  Modern tanker fleet average age 8 years  Full spectrum of vessel types (VLCCs to small tankers)  World’s largest iceclass tanker fleet  World’s largest Aframax tankers fleet  World’s second largest product tankers fleet  Integrated in-house technical/commercial management SCF Group - world’s largest tanker owner (by number of vessels) 7 SCF Group: shuttle tanker operations SCF Group - world’s №1 Arctic and ice-class shuttle tanker operator 8 SCF Group: LNG / LPG transportation services SCF Group – global geography of LNG/LPG operations 9 SCF Group: LNG operations SCF Arctic - world’s oldest LNG carrier in service awarded eligibility under US Coast Guard’s prestigious Qualship 21 program 10 SCF Group: Northern Sea Route (NSR) passages 2010-2013 Vessel “SCF Baltica” (Sannikova Str) “Vladimir Tikhonov” “Mar Adriana” (Sannikova Str) “SCF Amur” “SCF Yenisei” “NS Yakutia” “Viktor Bakaev” (E-W, Sannikova Str) Voyage period 17.08 – 27.08.2010 23.08 – 30.08.2011 26.10 – 02.11.2011 27.08 – 03.09.2012 08.08 – 19.08.2013 23.09 – 06.10.2013 14.10 – 28.10.2013 Destination China Thailand Russia (Far East) Singapore South Korea China Netherlands Vladimir Tikhonov Suezmax tanker – largest vessel to pass through the NSR SCF Group successfully tested NSR feasibility in 2010-2013, paving the way for future transits (2014 booked volumes already exceed 2010-2013 combined) 11 SCF Group R&D program – Arctic shuttle tanker Yermak icebreaker (1898-1963) Sovcomflot Arctic shuttle tanker (concept)  Combination of energy saving technologies and optimal functional capabilities for specific operational requirements  Superior ice breaking capabilities (up to 1.8 m thickness, on par with early to mid-20th century Arctic icebreakers)  Double purpose hull  Full winterization / de-icing Engineering solutions for maritime and off-shore upstream projects development is an important element of SCF Group’s strategy 12 Prospective Arctic LNG carrier and shuttle tanker designs 13 SCF Group 2013-2014 business highlights  Delivery of nine new vessels (1.1 mn tonnes dwt in total) and expansion into new segments of VLCC tankers and ice-class LPG gas carriers, on the back of long-term fixed-rate contracts  Sibur Voronezh and Sibur Tobol 20,600 cbm ice-class LPG gas carriers entered service, under long-term time-charter with petrochemical company SIBUR, to transport LPG from the Ust-Luga terminal in Russia  The Group’s first Very Large Crude Carriers (VLCC) Svet and SCF Shanghai employed under a long-term charter with Petrochina entered service  Two new multifunctional icebreaking supply vessels - Vitus Bering and Alexey Chirikov (Icebreaker Ice 10) – started operations at Sakhalin I, under long-term charter to the project operator Exxon Neftegas Ltd  Delivery of Velikiy Novgorod, 170,200cbm tri-fuel ice-class LNG carrier employed under a 15 year time-charter with Gazprom  Continuation of programme of commercial voyages along the Northern Sea Route - first transit completed by the Group in an East-West direction by ice-class tankerViktor Bakaev 14 SCF Group – access to debt capital through the cycle  History of raising debt capital in the international financial markets dating from 1989 – proven track record and reputation as a quality borrower  Access to multiple sources of debt capital – assetbacked finance, ECA financing, project finance, debt capital markets  Tracking by credit rating agencies since 2005, currently rated by S&P (BB+), Moody’s (Ba2), and Fitch Ratings (BB-)  Debut unsecured USD 800 mn 7-year bond issue in Oct 2010  Current lenders comprise over 30 banks and ECAs: Deal of the year awards 2010, 2011, 2012, 2013 15 SCF Group - competitive strengths  Scale: SCF is one of the world’s largest energy shipping companies, providing a diversified array of marine solutions  Strong track record of safety, innovation and quality, with focus on and unique competence in harsh environment operations  Strong client relationships, based on our willingness to go the “extra mile” in order to cater to our clients’ needs  Sound financial position: total future contracted revenues of over USD 6,7 billion, complemented by proven ability to raise capital through the cycle (USD 1.3 billion bank debt raised in 2012-2013)  Wide pool of marine talent and strong pipeline of officers capable of handling challenging marine conditions best-in-class  Focused strategy, backed by history of successful growth and expansion into new segments, as well as young, modern fleet SCF Group is in prime position to capture growth in servicing offshore upstream projects in harsh environment and Arctic areas and participating in the upturn in the tanker markets 16 Thank you for your attention! www.scf-group.ru 17