annual report 20 13 - clarksons/media/files/rsplatou... · 2014. 12. 1. · founding partner in...

A N N U A L R E P O R T

20 13

THE WORLDACCORDING TORS PLATOU–

PROJECT FINANCE

SHIPBROKING OFFSHORE INVESTMENT BANKING

4KEY FINANCIAL FIGURES

6LETTER FROM THE CHAIRMAN

8RESEARCH – THE FUNDAMENT OF OUR BUSINESS

14OVERVIEW OF OUR BUSINESS AREAS

24CORPORATE GOVERNANCE

34BOARD OF DIRECTORS' REPORT FOR 2013

40CONSOLIDATED FINANCIAL STATEMENTS

49NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

90FINANCIAL STATEMENTS FOR RS PLATOU ASA

95NOTES TO THE FINANCIAL STATEMENTS FOR RS PLATOU ASA

108AUDITOR’S REPORT FOR 2013

TABLE OFCONTENTS–

ANNUAL REPORT 2013

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RS Platou | Annual Report 2013

Figures in NOK 1 000

INCOME STATEMENTS

Revenues - Shipbroking - Offshore - Markets - Finance - UnallocatedEBIT before bonus paymentsBonusesEBIT after bonus paymentsNet financial itemsProfit before taxesNet profit - Net profit for equity holders of Parent - Net profit for non-controlling interestsTOTAL COMPREHENSIVE INCOME

BALANCE SHEETS

Non-current assetsCurrent assetsTotal equityLong-term liabilitiesCurrent liabilitiesTOTAL EQUITY AND LIABILITIES

KEY FIGURES

Equity ratio (%) Book value per share (NOK) Dividend per share (NOK)

PROFITABILITY

EBIT margin after bonus payments (%)Return on equity (%) Ordinary & diluted earnings per share (NOK) No. of shares issued at 31.12 (in 1 000)Weighted average no. of shares outstanding (in 1 000)

ORGANIZATION

No. of employees at 31.12

292 627 532 472 318 371 116 692 390 037 825 100

921 027 288 959 346 151 240 840

62 428 (5 716)

363 215 246 502 116 713 (48 996)

67 717 22 772

(47) 22 818 22 772

39%7.782.50

376

12.7%0%

(0.00) 40 948 40 731

2011

846 002 268 848 331 750 176 191

68 136 1 077

245 636 181 648

63 988 (39 419)

24 569 9 871 3 278 6 593 7 530

290 578 463 259 165 107 106 419 482 310 753 836

22%4.002.00

344

7.6%1%

0.08 41 303 40 915

2012

1 286 710 295 251 355 635 564 313

71 511 -

698 500 379 649 318 851 (4 442)

314 409 218 424

174 322 44 102

241 028

287 174 865 162 316 916

82 647 752 773

1 152 336

28%6.803.00

364

24.8%72% 3.78

46 607 46 144

2013

994 117 346 151 356 998 232 998

65 889 (7 918)

500 596 276 074 224 522 (43 954) 180 568 120 198

102 075 18 123

121 403

249 663 633 852 285 834 124 859 472 822 883 515

32%6.981.50

346

22.6%41% 2.52

40 971 40 495

2010

837 300 313 980

360 843 108 703

63 635 (9 860)

363 840 271 736

92 103 (138 974)

(46 871) (40 907)

(12 244) (28 663)

(65 194)

282 630 602 180 206 648

96 950 581 212 884 810

23%5.081.00

312

11.0%-5%

(0.35) 40 688 35 389

2009

KEY FINANCIAL FIGURES—

5

RS PLATOU GROUP – REVENUE DEVELOPMENT

RS PLATOU GROUP – RETURN ON EQUITY

RS PLATOU GROUP – EBIT

RS PLATOU GROUP – EPS

SHIPBROKING OFFSHORE INVESTMENT BANKING FINANCE EBIT (NOK 1 000) EBIT MARGIN AFTERBONUS PAYMENTS (%)

ROE (%) EPS (ORDINARY & DILUTED, IN NOK)

600 000

400 000

300 000

200 000

100 000

60

40

30

20

10

10

8

6

4

2

0

-2

100

80

60

40

20

0

-20

RS PLATOU GROUP – BUSINESS BOOKED

2013 2012

0%

1%

72%

0.08

3.78

-0.35

2.52

0.00

12.7%7.6%

24.8%22.6%

11%

41%

-5%

2013

2013 2013

2013

1600

1400

1200

1000

800

600

400

200

0

1400

1200

1000

800

600

400

200

2009 2013

2009

2009 2009

2009

2010 2009

2010

2010 2010

2010

2011 2010

2011

2011 20 11

2011

2012 2011

2012

2012 2012

2012

RS PLATOU GROUP – FORWARD BOOK

1 500 000

1 250 000

1 000 000

750 000

500 000

250 000

0

Key Financial Figures


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Photo: S

hutterstock

7

Letter from the Chairman

Continuous improvement efforts are made to advance our service offering and to reaffirm RS Platou as leading global niche player. In 2013, both Shipbroking and Offshore have hired experienced brokers to support their global operations. RS Platou Markets has secured additional underwriting licenses for the US operations to strengthen the relationship with corporate clients and institutional investors. Project Finance has secured a co-operation agreement with CIT, a US leasing firm, to provide finance in sale leaseback transactions.

The financial outlook for 2014 is attractive. Capital markets remain buoyant, and the transaction window is still open for companies and investors. Second-hand shipping tonnage is experiencing enhanced pricing with the expectation of increasing transaction volumes.

RS Platou is committed to continue to serve its clients, and the Board of Directors is dedicated to overseeing the continued development of the Group. I would like to thank all of our clients, employees and shareholders for their support and loyalty during the past year. We sincerely look forward to working with you in the years ahead.

Yours sincerely,

Ragnar HornChairman

Towards the end of 2013, the global economy grew at its highest rate in almost three years, signaling steady but somewhat unpretentious expansion below recent trend lines. At any rate, the improved world economic activity gave impetus for better fundamentals for the shipping industry with reduction in structural overcapacity and improved rates. In all, 2013 must be viewed in a positive light despite mixed financial returns.

MSCI World Index was up 27% in 2013, and judging by the significantly increased activity in equity markets, shipping investors believe in a continued recovery in earnings. Globally, about USD 7 billion of public equity was raised for shipping, of which RS Platou Markets, RS Platou's boutique investment bank, was involved with an impressive USD 3 billion of shipping transaction volumes.

With stable oil prices and global E&P spending predicted to have increased by over 7% in 2013, offshore players experienced another strong year. However, there were variations across segments, and towards the end of the year, rig fixing activity was reduced on the back of higher E&P costs and increased capital discipline by the oil companies.

2013 was a successful year for RS Platou in its focused efforts to become a leading global provider of brokerage and investment banking services to the shipping and offshore industries. Key financial take-aways: ■ NOK 1 514 million in new business booked,

up 62% from 2012 ■ Revenues of NOK 1 287 million, up 52% from 2012 ■ Net income of NOK 174 million (NOK 213 million adjusted

for non-recurring items) ■ Year-end forward book of NOK 1 331 million,

up 12% from 2012

LETTER FROM THE CHAIRMAN

RS PLATOU MARKETS, RS PLATOU'S BOUTIQUE INVESTMENT BANK, WAS INVOLVED WITH AN IMPRESSIVE USD 3 BILLION IN TRANSACTION VOLUME AND CONTRIBUTING WITH 44% OF REVENUES IN 2013, IMPROVED WORLD ECONOMIC ACTIVITY, STABLE OIL PRICES AND ATTRACTIVE ASSET PRICING LEAD TO A SATISFACTORY YEAR.

8


1936

2011

2001

1987

2009

1973

2013

2007

1990

1960

2012

2004

1989

2010

1978

20142008

2000

RSP founded as shipbrokers in Oslo.

Established offices in Dubai and Cape Town and re-established offices in Sydney, Perth and Melbourne. RS Platou Markets Inc. established in New York, United States.

Acquired 34% of Petroadvisor AS (exit in 2008).

Management buy-out.

Established RS Platou Real Estate, RS Platou Markets (Asia) Pte Ltd established in Singapore, RS Platou Hellas and RS Platou LLP established in London.

RS Platou Offshore established.

RS Platou Markets, Inc. received underwriting and research licenses.

RS Platou ASA bought outstanding shares in RS Platou Markets AS, taking the ownership to 90.1%.

RS Platou Finans Shipping AS received license to perform certain investment banking activities.

RS Platou ASA opened up office in Seoul, South Korea.

RS Platou Finans partnered with CIT Maritime Finance in leasing venture.

RS Platou ASA acquired Christiania Shibrokers AS and changed name to RS Platou Tankers AS.Established office in Shanghai.

Acquired Platou Economic Research.

Started offshore broking services.

RS Platou Markets (Asia) Pte. Ltd sold.

Established RS Platou Finans AS.

Singapore office established.

Established office in Rio de Janeiro.

Houston office established.

RS Platou Markets awarded dealmaker of the year and won Deal of the Year 2013 by Marine Money.

RS Platou Finans AS changed name to RS Platou Project Finance AS.

Acquired 100% of Stewart Group Ltd., Aberdeen and London in March, and acquired 50.01% of RSPM previously owned by Glitnir Banki hf in October.

Founding partner in IMAREX (exit in 2006).

KEY EVENTS IN THE GROUP’S HISTORY:

In 2013, RS Platou ASA and Fabritius Gruppen AS formed a Joint Venture to acquire a newbuild in Munkedamsveien 62. The principal motivation is driven by the opportunity to create an encouraging tailored working environment. The building will get 4 floors + basement/parking totaling 5360 sqm. The Platou Group will rent all necessary office space while remaining office space will be sublet in the market.

RS Platou has signed a 12 year lease with two five year options at equal terms. The building with the estate will be owned by a company owned 50% by the RS Platou Group and 50% by Fabritius Gruppen AS. The building will according to current plans be completed in March/April 2015.

THROUGH MORE THAN 75 YEARS OF STEADY BUSINESS, RS PLATOU HAS DEVELOPED FROM A LOCAL SHIP BROKER IN NORWAY TO A GLOBAL PLAYER, OFFERING SHIPPING AND OFFSHORE CUSTOMERS A COMPLETE RANGE OF COMMERCIAL AND FINANCIAL SERVICES.

9

Research – The fundament of our business

THE FUNDAMENT OF OUR BUSINESS

THE RS PLATOU REPORTSince its very first year of its foundation, RS Platou issued its first general review of the Norwegian contracting & sale and purchase market for ships. For many years entitled quite simply “The Norwegian Sale & Purchase Market”, it was published in Norwegian and included an overall picture of contracting, sales and purchasing activities and scrapping in respect of vessels over 500 dwt and other factors of interest relating to the Norwegian shipping market.

Simple as it was, the report filled an important need and kept both the company and the Norwegian shipbroking market in the limelight. In time, to keep abreast of the shipping expansion of both RS Platou and the Norwegian shipping community in general, it became necessary to print the report in both English and Norwegian. In 1964 the decision was taken to publish only in English under the title “The Platou Report”.

This report has changed considerably over the years in both content and appearance, thus mirroring the many changes that have taken place in shipping itself. The Platou Report is the group’s flagship publication. In addition to containing information on the shipping industry, the report now contains information on the offshore market and the renewable energy market in addition to providing up to date information on the world economy, global capital markets and debt syndication and financing.


10

OUR WORLD OF RESEARCH PRODUCTSRS Platou was one of the first brokerage firms to establish an economic research division, as early as the 1960s, seeing it as an integral way of providing a value added service to our clients. Since then we have built system values with strong emphasis on a combination of economic theory, market models and practical shipping and offshore know-how.

Our research products provide the reader with leading edge insights and recommendations on micro and macro level within the world of shipping, oil services and E&P. Today, RS Platou Economic Research, RS Platou Offshore Research and RS Platou Markets provide research to clients of all major shipping and offshore segments, including the underlying commodity markets which drive the demand for transportation and offshore services. This research is communicated to our clients both in written f ormat as well as via presentations.

Our research is grounded both in top-down analyses of global macroeconomic conditions, as well as bottom-up analyses of world energy and steel markets, including the development in trade patterns and demand for offshore services. The shipbuilding and offshorebuilding markets are closely monitored by tracking yard capacity and ordering activity.

RS Platou Markets provides global research on key industry and corporate developments that drive equity and bond markets within our sectors. With flagship products including our Oil Services Quarterly, E&P Quarterly and Shipping Quarterly, we provide investors with unique insight and highly valued recommendations.

RS Platou Markets also manages roadshows, seminars, conferences, and investor trips in cooperation with the other companies in the Group.

MArKet rePortjUly 2013

market rePOrtJUlY 2013

The Platou Report

Issuing company: RS Platou ASA

Department: All departments

Market Report

Issuing company: RS Platou Finans


Market Report

Issuing company: RS Platou Real Estate


OUR ANNUAL REPORTS

OUR CURRENT PUBLICATIONS

11


OUR QUARTERLY PUBLICATIONS

Quarterly Newbuilding Report


Department: Offshore

Comments: For registered clients only

NEWBUILDINGS

LPG CARRIERS ABOVE 10,000 CBM - LNG CARRIERS ABOVE 10,000CBM

TANKERS ABOVE 25,000 DWT

BULKERS ABOVE 70,000 DWT

CONTAINER VESSELS ABOVE 2,000 TEU

1st Quarter 2012

1st quarter 20124th quarter 20113rd quarter 20112nd quarter 2011

NEW ORDERS

LPG 0,10 mill cbm 0,01 mill cbm 0,17 mill cbm 0,42 mill cbm

LNG 2,74 mill cbm 3,05 mill cbm 0,79 mill cbm 1,47 mill cbm

CONTAINERS 0,85 mill teu 0,18 mill teu 0,09 mill teu 0,01 mill teu

TANKERS 2,75 mill dwt 1,60 mill dwt 2,17 mill dwt 3,37 mill dwt

BULK 3,32 mill dwt 3,63 mill dwt 1,87 mill dwt 2,41 mill dwt

TOTAL (Tank/Bulk) 6,07 mill dwt 5,23 mill dwt 4,05 mill dwt 5,78 mill dwt

1st quarter 20124th quarter 20113rd quarter 20112nd quarter 2011

ORDERBOOK

LPG 1,48 mill cbm 1,49 mill cbm 1,31 mill cbm 1,56 mill cbm

LNG 7,12 mill cbm 8,73 mill cbm 9,18 mill cbm 11,33 mill cbm

CONTAINERS 4,22 mill teu 4,25 mill teu 4,04 mill teu 3,65 mill teu

TANKERS 95,22 mill dwt 84,89 mill dwt 74,73 mill dwt 67,37 mill dwt

BULK 168,18 mill dwt 154,33 mill dwt 138,88 mill dwt 120,51 mill dwt

TOTAL (Tank/Bulk) 263,40 mill dwt 239,22 mill dwt 213,61 mill dwt 187,88 mill dwt

Oslo, Apr 17th 2012

Shipping Quarterly

Issuing company: RS Platou Markets AS

Department: Equity Research


Equity research:

Frode MørkedalTel.: +47 22 01 63 [email protected]

Herman HildanTel.: +47 22 01 63 [email protected]

Economic research:

Ole-Rikard HammerTel.: +47 23 11 25 [email protected]

Erik M. AndersenTel.: +47 23 11 25 [email protected] Bjørn BoddingTel.: +47 23 11 25 [email protected] Jørn BakkelundTel.: +47 23 11 26 [email protected] Ole Gustav EriksenTel.: +47 23 11 24 [email protected]

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Shipping Quarterly February 2014

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States, solely for general information purposes to professional investors and in the United States solely to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934, as amended. Each professional investor and major U.S. institutional investor that receives a copy of this report by its acceptance there-of represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.

RS PLATOU MARKETS ASHaakon VII’s gate 10P. O. Box 1474 VikaN-0116 Oslo, Norway

Tel.: +47 22 01 63 00Fax: +47 22 01 63 [email protected]

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Earnings Countdown Quarterly




Head of Research:Analyst: Anders BerglandTel: +47 22 01 63 [email protected]

Analyst: David BhattiTel: +47 22 01 63 [email protected]

Analyst: Alex Gheorghe Tel: +47 22 01 63 [email protected]

Analyst: Herman HildanTel: +47 22 01 63 [email protected]

Analyst: Turner HolmTel: +47 22 01 63 [email protected]

Analyst: Per HaagensenTel: +47 22 01 63 [email protected]

Analyst: Jørgen Andreas LandeTel: +47 22 01 63 [email protected]

Analyst: Terje MauerTel: +47 22 01 63 [email protected]

Analyst: Frode MørkedalTel: +47 22 01 63 [email protected]

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States, solely for general information purposes to professional investors and in the United States solely to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934, as amended. Each professional investor and major U.S. institutional investor that receives a copy of this report by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not consti-tute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.


Tel: +47 22 01 63 00Fax: +47 22 01 63 [email protected]

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Earnings Countdown Quarterly 1Q14 April 2014

Ship FinanceInternationalL I M I T E D

Fertilizer Quarterly




Equity Research

Per HaagensenTel: +47 22 01 63 [email protected]

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Fertilizer Quarterly January 2014




OUR MONTHLY PUBLICATIONS

RS Platou Monthly


Department: Shipbroking

RS Platou Rig Monthly


Department: Offshore

RS Platou Global Support Vessel Monthly



12


Initiating Coverage 28-Apr-14

RS Platou Markets AS Equity Research | Oslo

Haakon VII’s gate 10 P.O.Box 1474 Vika, 0116 Oslo, Norway

Telephone +47 22 01 63 00 Telefax +47 22 01 63 10

[email protected] www.platoumarkets.com

Reg.no: 942 274 238

Analyst: Frode Mørkedal Tel: +47 22 01 63 27 E-mail: [email protected] Next report date: Disclosure:

Analyst: Herman Hildan Tel: +47 22 01 63 53 E-mail: [email protected]

7-27% dividend yield potential! We initiate coverage of Dorian LPG (Dorian) with BUY and USD 6/sh target price based on earnings multiples. The second largest VLGC owner with the largest eco-design fleet offers downside protection from low cash break-even and attractive valuation potential. Depending on US LPG exports, we see potential for USD 0.3-1.1/sh in dividend capacity, supporting current valuation in the low case scenario while offering 27% yield potential in the high case scenario. In sum we view risk/reward attractive in light of the already soaring US LPG exports. BUY and USD 6/sh TP initiated. Fleet: Dorian owns 3 VLGCs and one 5k cbm pressurised vessel on the

water. From the orderbook of 16 VLGCs, 2 will be delivered in 2014, 12 in 2015 and the remaining 2 in 2016, all eco-design.

Balance sheet: Dorian has placed orders for USD 1.25bn and raised USD 470m in equity. We assume 55% leverage (USD 660m) while the remaining USD 120m is bridged by operational cash flow in our estimates. With 17 years repayment profile vs. 18 years on existing vessels, cash break-even is $21,000/day. This includes 4.5% interest cost and $9,000/day opex. We expect $3,300/day ($100k/month) fuel savings, resulting in cash break-even of $18,000/day when comparing to old design. This is substantially below our $29,000/day rate estimate in the low case US LPG export scenario (16-17mtpa).

Valuation: Our NAV estimate of USD 3.4/sh gives P/NAV of 1.15x and 1.07x EV/Assets. Fully invested 8x EV/EBITDA in 2017 on 12 months rolling VLGC rate of ~$32,000/day gives USD 4/sh, current valuation. On our $40,000/day rate assumption in 2016, Dorian is trading at 6.4x while 8x gives USD 6/sh, our target. Our high case scenario for US LPG exports of 29mtpa in 2016 gives VLGC rates of $54,000/day. In this scenario Dorian is trading at 4x in 2016.

Yield potential: We estimate 2016 EBITDA of USD 143-309m in our rate scenarios of $29-54,000/day. After USD 35m of interest and USD 48m of debt repayments, USD 59-226m should remain available to shareholders in dividends, or a 7-27% yield. Our target price reflects 5-20% yield target, with our base case reflecting ~11% yield target.

We initiate coverage of Dorian LPG with BUY and USD 6/sh target price. Low cash break-even supports downside risk while continued soaring US LPG exports could create a fuel efficient cash-cow.

Dorian LPGSector: Marine

Recommendation: BUY (unchanged)Target price (USD): 6.0 (unchanged)

Company descriptionDorian LPG is the leading owner and operator of modern and fuel-efficient VLGCs. Current fleet of 3 VLGCs and 1 pressurised vessel with 16 VLGCs on order (+3 options)

12

14

16

18

20

22

24

26

Jul. 13 Aug.13

Sep.13

Oct. 13 Nov.13

Dec.13

Jan. 14

Share price (NOK) in Dorian LPG relative to key indices

Dorian LPG OSEBX index OSE Transportation

Shareholders Shares VotesScorpio Tankers 30.0 % 30.0 %

Free Float 70.0 % 70.0 %

Changes in estimates (USDm)2013E 2014E

New Old Chg. New Old Chg.Oper. revenue 45 65EBITDA, adj. 19 32EBIT, adj. 7 19Net income, adj. -1 11EPS, adj. (USD) 0.0 0.1

Company data (2013E)Share price (NOK) 24.75No. of shares (m) 213.6Market cap. (USDm) 843Net debt YE (USDm) -133Enterprise value (USDm) 710

Description of adjustments: Sale of assets, agio/disagio and gain/losses on financial instruments

Key figures 2013E 2014E 2015E 2016ERevenue (USDm) 45 65 267 370EBITDA (USDm) 19 32 165 216EBITDA, adj. (USDm) 19 32 165 216EBIT, adj. (USDm) 7 19 132 162Pre-tax profit, adj. (USDm) -1 11 110 127Net income, adj. (USDm) -1 11 110 127EPS, adj. (USD) 0.00 0.05 0.52 0.59OCFPS (USD) 0.0 0.1 0.6 0.8FCFPS (USD) -2.0 -1.6 -2.3 0.8BVPS (USD) 3.3 3.4 3.9 4.5Net asset value (NAV) (USD) 0.0 0.0 0.0 0.0Dividend (USD) 0.00 0.00 0.00 0.00EV/EBITDA, adj. (x) 38.3 32.9 9.4 6.4EV/EBIT, adj. (x) 99.8 55.6 11.7 8.5P/E, adj. (x) n.m. 75.9 7.6 6.6P/OCF (x) n.m. 37.0 6.5 5.1EV/FCF (x) n.m. n.m. n.m. 8.3P/Book (x) 1.2 1.2 1.0 0.9P/NAV (x) n.m. n.m. n.m. n.m.Dividend yield (%) 0.0 0.0 0.0 0.0

Key Assumptions 2013E 2014E 2015E 2016EVLGC spot rate assumption 36,000 38,000 50,000 40,000

Initiating Coverage

Issuing company: RS Platou Markets



Flash 03-Apr-14





Reg.no: 942 274 238

Analyst: Frode Mørkedal Tel: +47 22 01 63 27 E-mail: [email protected] Next report date: 27.03.2014 Disclosure:

Analyst: Herman Hildan Tel: +47 22 01 63 53 E-mail: [email protected]

Even weaker than expected Stolt-Nielsen reported even lower figures than we expected and we were lowest among consensus. All segments except LPG reported weaker results compared with last quarter. A lot of the weakness can be explained by seasonality, however, such as weather-related delays in Houston. In other words, the trend of higher y-y earnings remains intact, in our view.

1Q14 results: EBITDA adjusted for gains came in at USD 86m vs. our USD 95m and consensus expectation of USD 103m.

Weak chemical tankers: As highlighted in our preview, Stolt Tankers reported weaker results q-q, although not as bad as we had fared. EBITDA of USD 40m was lower than USD 46m in 4Q13 but better than our USD 36m expectation. Fog-related delays and weaker utilization hampered results. Management expects the positive volume development seen during 2H13 to resume as the year progresses.

Softer Terminals: Underlying EBITDA was USD 21m when excluding insurance gains of USD 5m from Hurricane Isaac-related damages to the New Orleans terminal. This was down from USD 24m in the prior quarter and our USD 23m assumption. Terminal capacity was higher than expected due to new capacity installed but 89% utilization was lower than expected as it took longer time to commission the tanks. Generally, storage rates are under pressure due to competition.

Tank Containers significantly weaker than expected with EBITDA of USD 20m vs. USD 24m in the prior quarter and our USD 26m estimate. Seasonal lower volumes and shorter hauls explained the weakness, the Company said.

We expect no major change to estimates except accounting for the weaker 1Q14 figures. At EV/EBITDA 8.3x ’14e and P/NAV 0.96x we reiterate Neutral, although based on improved earnings estimates the stock trades on 6x ‘15/16e EBITDA.

Stolt-NielsenSector: Marine

Recommendation: NEUTRAL (unchanged)Target price (USD): 30 (unchanged)

Company descriptionShipping company operating specialized chemical tankers, tank terminals, tank containers and LPG carriers. The Company operates 132 vessels. Listed on OSE under the ticker SNI.

100110120130140150160170180190200

apr. 13 jun. 13 aug.13

okt. 13 des. 13 feb. 14 apr. 14

Share price (NOK) in Stolt-Nielsen relative to key indices

Stolt-Nielsen OSEBX index OSE Transportation

Shareholders Shares VotesFiducia Ltd 45.2 % 45.2 %Odin Forvaltning 7.6 % 7.6 %Stolt Nielsen Ltd 7.0 % 7.0 %Government Pension Fund-Noway 5.7 % 5.7 %Free Float 54.8 % 54.8 %

Changes in estimates (USDm)2014E 2015E

New Old Chg. New Old Chg.Oper. revenue 2 163 2 163 0 % 2 379 2 379 0 %EBITDA, adj. 425 425 0 % 528 528 0 %EBIT, adj. 214 214 0 % 313 313 0 %Net income, adj. 95 95 0 % 192 192 0 %EPS, adj. (USD) 1.6 1.6 0 % 3.3 3.3 0 %

Company data (2014E)Share price (NOK) 177.50No. of shares (m) 58.0Market cap. (USDm) 1 722Net debt YE (USDm) 1 786Enterprise value (USDm) 3 508

Description of adjustments: Sale of assets, agio/disagio and gain/losses on financial instruments

Key figures 2010 2011 2012 2013 2014E 2015E 2016ERevenue (USDm) 1 794 2 029 2 072 2 155 2 163 2 379 2 523EBITDA (USDm) 310 323 363 391 425 528 575EBITDA, adj. (USDm) 300 320 308 362 425 528 575EBIT, adj. (USDm) 150 157 124 164 214 313 356Pre-tax profit, adj. (USDm) 126 107 96 105 116 213 256Net income, adj. (USDm) 95 87 22 54 95 192 235EPS, adj. (USD) 1.58 1.48 0.38 0.93 1.64 3.31 4.06OCFPS (USD) 3.6 4.0 3.5 3.2 5.3 7.1 7.9FCFPS (USD) 6.6 -5.6 -1.9 -1.1 -1.5 1.6 3.0BVPS (USD) 25.7 26.1 25.5 27.1 27.7 30.1 33.1Net asset value (NAV) (USD) 30.2 30.2 30.2 0.0 0.0 0.0 0.0Dividend (USD) 0.50 1.00 1.00 1.00 1.00 1.00 1.00EV/EBITDA, adj. (x) 6.9 7.9 8.4 8.9 8.3 6.6 5.8EV/EBIT, adj. (x) 13.9 16.1 21.1 19.7 16.4 11.1 9.4P/E, adj. (x) 11.9 13.2 45.7 29.6 18.1 9.0 7.3P/OCF (x) 5.2 4.9 5.1 8.7 5.6 4.2 3.8EV/FCF (x) 5.3 n.m. n.m. n.m. n.m. 38.2 19.2P/Book (x) 0.7 0.7 0.7 1.0 1.1 1.0 0.9P/NAV (x) 0.6 0.6 0.6 n.m. n.m. n.m. n.m.Dividend yield (%) 2.7 5.1 5.7 3.6 3.4 3.4 3.4

Key Assumptions 2010 2011 2012 2013 2014E 2015E 2016ESailed-in index 1.17 1.08 1.12 1.25 1.32 1.41 1.49

Flash




Company Update 15-Apr-14





Reg.no: 942 274 238

Analyst: Turner Holm Tel: +47 22 01 63 54 E-mail: [email protected] Next report date: 30.04.2014 Disclosure:

Did someone say slowdown?

AKSO today announced the award of a massive Subsea contract worth NOK 14bn with Total on the Kaombo project in Angola. To reflect the larger than anticipated size of the contract, we are raising 2015e EBITDA by 3%. We reiterate our Buy and NOK 140 Target Price.

Contract details – AKSO will deliver 20 manifolds and 66 trees for Total’s Kaombo project in Angola. Delivery will begin in 2Q15 and run through 2018, though with Total targeting start-up in 2017, we expect the majority of the value to be delivered in the first 3 years. While AKSO likely bid aggressively for the contract, the extra volume should mean accretive incremental margins for the project. We expect Subsea margins to continue trending positively.

It’s big, really big – In a year supposedly characterized by slowing contract awards, AKSO has announced nearly NOK 16bn of Subsea awards in the first 4 months of 2014. Comparatively AKSO booked total Subsea awards of NOK 12bn in 2012. Alone the Kaombo award is bigger than AKSO’s total Subsea revenue in 2013. We estimate AKSO’s Subsea backlog now stands at 2.2x 2014e Subsea revenue.

Pricing gap unjustified – At 4.5x 2015e EV/EBITDA, AKSO trades at a wide gap to its LT average of 6.8x fwd year. Though we recognize the challenging macro setting, the pricing gap looks unjustified given AKSO’s formidable backlog, streamlined structure and diminished risk. Our NOK 140 Target Price reflects ~6x 2015e EV/EBITDA.

Aker SolutionsSector: Energy Equipment & Services

Recommendation: BUY (unchanged)Target price (NOK): 140 (unchanged)

Company descriptionAker Solutions is a leading global supplier of engineering services, products and systems for drilling equipment and subsea solutions, as well as life-cycle solutions.

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Share price (NOK) in Aker Solutions relative to key indices

Aker Solutions OSEBX index OSX index

Shareholders Shares VotesAker Kvaerner Holding AS 40.3 % 40.3 %State Street 8.6 % 8.6 %Aker ASA 6.0 % 6.0 %Govt Pension Fund Norway 3.4 % 3.4 %Free Float 59.7 % 59.7 %

Changes in estimates (NOKm)2014E 2015E

New Old Chg. New Old Chg.Oper. revenue 48,677 48,397 1% 53,652 52,272 3%EBITDA, adj. 5,091 5,065 1% 6,196 6,028 3%EBIT, adj. 3,691 3,665 1% 4,796 4,628 4%Net income, adj. 2,331 2,313 1% 3,205 3,087 4%EPS, adj. (NOK) 8.6 8.5 1% 11.8 11.3 4%

Company data (2014E)Share price (NOK) 94.50No. of shares (m) 270.5Market cap. (NOKm) 25,562Net debt YE (NOKm) 3,612Enterprise value (NOKm) 29,174

Adjustments are made for special operating items, impairment of goodwill, write-downs, agio/disagio and fx hedging derivatives.

Key figures 2010 2011 2012 2013 2014E 2015E 2016ETotal revenue (NOKm) 46,267 36,474 44,922 45,345 48,677 53,652 55,177EBITDA, adj. (NOKm) 3,778 2,688 4,376 3,951 5,091 6,196 6,397EBITA (NOKm) 2,907 2,569 3,535 2,488 3,691 4,796 4,997EBIT, adj. (NOKm) 2,907 1,812 3,210 2,488 3,691 4,796 4,997Pre-tax profit, adj. (NOKm) 2,355 1,316 2,599 1,987 3,339 4,595 4,800Net income, adj. (NOKm) 1,605 1,010 1,890 1,791 2,331 3,205 3,348EPS, adj. (NOK) 5.96 3.75 7.01 6.59 8.57 11.78 12.31OCFPS (NOK) 7.9 14.2 6.6 10.4 12.2 17.8 18.6FCFPS (NOK) 0.1 -1.0 0.5 -3.5 22.8 8.6 9.4BVPS (NOK) 38.4 42.0 44.3 50.1 61.9 69.8 78.2Dividend (NOK) 2.75 3.90 4.00 4.10 4.00 4.00 0.00EV/Sales (x) 0.7 0.6 0.8 0.8 0.6 0.5 0.4EV/EBITDA, adj. (x) 8.1 7.8 8.3 9.6 5.7 4.5 3.5EV/EBITA, adj. (x) 10.6 11.5 11.3 15.3 7.9 5.8 4.5EV/EBIT, adj. (x) 10.6 11.5 11.3 15.3 7.9 5.8 4.5P/E, adj. (x) 16.7 16.8 16.1 16.5 11.0 8.0 7.7P/OCF (x) 12.5 4.4 17.1 10.4 7.8 5.3 5.1EV/FCF (x) n.m. n.m. n.m. n.m. 4.7 11.9 8.8P/Book (x) 2.6 1.5 2.5 2.2 1.5 1.4 1.2Dividend yield (%) 2.8 6.2 3.5 3.8 4.2 4.2 0.0

Key Assumptions 2010 2011 2012 2013 2014E 2015E 2016EOrder backlog (NOKm) 50,865 41,449 56,698 58,132Order intake (NOKm) 47,109 41,327 60,312 61,141Book/bill (x) 1.0 1.1 1.4 1.3

Company Updates




Drillbits & Pieces| 14 March 2014

RS Platou Markets AS Fixed Income | Oslo

Haakon VII’s gate 10 P.O. Box 1474 Vika, 0116 Oslo, Norway



Reg.no: 942 274 238

NE, RIG, Chevron, ORIG, Reliance and SDRL/SDLP

Equity Analyst: Anders Bergland, +47 22 01 63 72, [email protected] Equity Analyst: David Bhatti, +47 22 01 63 42, [email protected]

Noble fleet status report In terms of estimates, NEs FSR was a neutral with insignificant changes, but the report revealed that the Paul Wolf (SS, built 1999,

9,200ft) could see an early termination of its contract with Petrobras, Brazil In addition, the Max Smith (SS, built 1980, 7,000ft), also with Petrobras in Brazil, could see some idle time going forward as its contract

has been terminated (in-line with what we have been modelling as Petrobras has previously indicated early termination) Both these units will hence be available during the second half of 2014 The Clyde Boudreaux (SS, built 1987, 10,000ft) got a 5 month extension with Shell, Australia at USD 515k/d vs. USD 400k/d exp., keeping

the rig busy to Sep 2015 However, we would not view this as reflective of the market for this type of capacity as it is an extension and in Australia Transocean likely to see several UDW units idle near term According to IHS Petrodata, Sedco Energy (SS, built 2001, 7,500ft) is mobilizing to Canary Islands from Ghana, where it will be warm

stacked, but the unit will still likely be marketed Previously, there were talks of this rig being close to securing a 700d job with Maersk in Angola on Block 8 and 23, but this does not

seem to be the case anymore This adds to Transocean’s list of UDW units coming off contract/idle near term. Particularly in the US GoM, the Development Driller I

and II (both SS, built 2005, 7,500ft) and the GSF C.R. Luigs (DS, built 2000, 10,000ft) are idle/will roll off contract by the end of this month

Every incremental quarter of idle time per UDW unit results in an EPS reduction of USD 0.09 and Transocean has 13 units rolling off contract through 2014

News on Chevron’s Indonesia UDW tender expected late March/early April According to industry sources, Chevron will shortly look at commercial terms for the tender (technical submitted first) and will likely

have a bid opening round late this month or early next month Chevron has tendered for a second UDW rig to work off East Kalimantan for 2+1y and Ensco, Diamond, Seadrill, Transocean and Pacific

Drilling have pre-qualified with Diamond offering the highest local content Contract start-up is expected late 2014/early 2015 Ocean Rig Skyros 6y LOA with Total, Angola reportedly firmed up According to industry sources, ORIG has firmed up the LOA with Total for the Ocean Rig Skyros (DS, built 2013, 10,000ft) on Block 32 The rig is now on a 6y firm contract at an average dayrate of ~USD 580k, keeping the rig busy to late 2020

Reliance likely to issue tender for UDW unit in India IHS Petrodata writes that Reliance is planning to issue a Request for Proposals soon for a deepwater unit with unspecified duration and

start-up Q1 2105 This could be a replacement for Transocean’s KG1 (DS, built 2009, 12,000ft) that has been offered to Petrobras, Brazil for its 2,400m

tender (low bidder at USD 440k/d) Seadrill sells West Auriga to Seadrill Partners Seadrill will sell 51% of the West Auriga (DS, built 2013, 10,000ft) to Seadrill Partners (i.e. will retain 49% ownership) at an implied value

of USD 1.24bn This will release ~USD 350m of cash for Seadrill, effectively strengthening its balance sheet further The rig is on a 7y contract with BP in the US GoM (through 2020) at a dayrate of USD 565k Also, Seadrill Partners has issued 10.6m common units at USD 30.6 per unit to fund the transaction. In addition to the issue, Seadrill has

purchased 1.6m units and reduces its ownership share to 53.2%

Source: RS Platou Markets, IHS-Petrodata, Company filings

This report has been prepared and provided by RS Platou Markets AS solely for general information purposes to professional investors and in the United States solely to "major U.S. institutional investors" in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivative or to participate in any trading or investment strategy. The opinions and estimates included herein reflect views and available information as of the dates specified and may have been and may be subject to change without notice. Please note that RS Platou Markets AS may have provided investment banking services to companies mentioned in this report over the last 12 months. For an overview of these companies and for additional important information and disclaimers, see our web-page www.platoumarkets.com in addition to “Important Information” included at the end of this report, starting on page 2.

Drillbits & Pieces




OUR COMPANY REPORTS

Result Previews




Result Reviews




Shipping Brief | 23 April 2014


Haakon VII’s gate 10 P.O. Box 1474 Vika, 0116 Oslo, Norway


[email protected] www.platou.com

Reg.no: 942 274 238

Dry bulk rates off the lows, firmer LNG, new VLGC highs

Equity Analyst: Frode Mørkedal, +47 22 01 63 27, [email protected] Equity Analyst: Herman Hildan, +47 22 01 63 53, [email protected]

Last % 1 day USD/day % 1 day USD/day % 1 day USD/day % 1 day USD/day % 1 day USD/day % 1 day

Spot 939 1.0 9 600 5.8 6 700 2.0 18 600 -1.4 12 600 -32.4 6 500 -7.8

FFA Q2 (14) 1 279 0.7 16 500 2.2 8 800 0.2 22 100 -2.6 17 100 1.2 9 600 -12.7

FFA 2015 1 688 0.8 23 400 0.1 12 800 0.9 28 600 -3.1 15 800 -3.1 14 900 0.7

BDI Capesize Panamax VLCC MEG-East Suezmax WAF-USG MR Triangulated

Source: Baltic Exchange, Marex Spectron, RS Platou Markets estimated tanker earnings with slow steaming. MR triangulated is Cont-USAC-USG-Cont

Dry bulk: Seasonal improvement starting? Firmer spot rates and better sentiment in the FFA market signal that the market may be off the lows. The weak Atlantic market which has pulled down average rates is now slowly improving as the South American grain season finally kicks off. Panamaxes jumped 10% yesterday in the Atlantic, although remains very low overall at $3,600 per day. Capesize rates in the Atlantic have also jumped 33% since last week to $6,100 per day. As we wrote in this space before the Easter break, we expect higher iron ore activity out of Brazil to support the market in the coming weeks.

Tankers: Overhang of tonnage keeps rates steady. VLCC rates have been steady to weak over the holidays. Current VLCC rates MEG-East of W40 equals $18,600 per day, down 9% on the week. Owners’ sentiment in the Middle East Gulf remains on the softer side due to limited cargoes currently in the market. There is a considerable overhang of ships from April into May which is expected to keep the pressure on the rates in the short term. That said, we expect the May cargo program to be busier than last month, and rates should recover in the coming weeks as Asian refiners start gearing up for the end of the maintenance season in June.

LPG: VLGC rates remain at all-time highs. VLGC rates MEG-East stand at $128 per ton according to the Baltic Exchange, or the equivalent of $96,000 per day. However, according to brokers, actual end of May fixtures were concluded at $112 per ton last week, or low $80,000 per day. Similar to a classic shipping market squeeze where tonnage is in short supply, charterers have been forced to book vessels further and further out in time. Interestingly, US Gulf exports have been rather quiet and brokers said cargoes have been covered through product deals rather than shipping fixtures at high rates. Propane prices stand at $882/ton in Tokyo, $768/ton in Rotterdam and $646/ton in Houston (incl. $68/ton handling fee). This gives a Houston-Europe spread of $121/ton and Houston-Tokyo (via Cape) spread of $236/ton. The latter only supports $80,000 per day, hence explains why no cargoes have been booked on this long-haul route. The Houston-Europe spread, however, can support VLGC rates as high as $125,000 per day if all the profit went to shipowners, which is unlikely. In other words, should the arbitrage economics stay unchanged, VLGC rates have likely peaked in the short term. On the back of strong earnings, second-hand ship values are improving. A 2003 built VLGC (Hellas Nautilus) was on subject for sale for USD 64m, a firm price compared with the implied USD 57m valuation used in our NAVs. By lifting the ship value curve by 10%, the NAV of AVANCE goes from $17.2 to $19.6 (P/NAV 1.07x), the BWLPG NAV goes from $9.2 to $10.9 (P/NAV 1.13x) and DORIAN NAV goes from $3.7 to $4.0 (P/NAV 0.99x).

LNG: Firming Atlantic basin sentiment last week has little to show for this week. Brokers report of improved sentiment in the Atlantic basin after 9-10 fixtures a few weeks back reduced the available cold tonnage to around 2 vessels currently. Available spot cargoes are picking up from Spain (re-loads), Australia and Nigeria. Moreover, Tradewinds reported last week that PNG LNG shipments are expected to start mid-2014 rather than the previous October target. On the negative side, Asian spot LNG prices fell from $20/mmBtu end-February to around $15/mmBtu currently, reducing inter basin arbitrage economics and likely making South American buyers more competitive. Although many owners are reluctant to offer steam vessels at $50-55,000/day (TFDE $62-70,000/day) on anything less than on a round trip voyage basis, it is uncertain for how long they can hold out at this level remaining unfixed.

Chart of the Day

Source: RS Platou LNG, RS Platou Markets

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High/low range Avg. 2005-13 2013 2014

This report has been prepared and provided by RS Platou Markets AS solely for general information purposes to professional investors and in the United States solely to "major U.S. institutional investors" in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivative or to participate in any trading or investment strategy. The opinions and estimates included herein reflect views and available information as of the dates specified and may have been and may be subject to change without notice. Please note that RS Platou Markets AS may have provided investment banking services to companies mentioned in this report over the last 12 months. For an overview of these companies and for additional important information and disclaimers, see our web-page www.platoumarkets.com in addition to “Disclaimer” included at the end of this report, starting on page 4.

Shipping Brief




OUR DAILY PUBLICATIONS

Daily Credit


Department: Credit Research


RS Platou Weekly North-sea Spot Market Update



OUR WEEKLY PUBLICATIONS

Week 16 Contents: - AHTS Spot Market

- PSV Spot Market

AHTS SPOT MARKET

FY Ave FY Ave YTD Ave YTD Ave Prior 4 Weeks MA Week Week 1 WeekGBP Rates 2010 2011 2011 2012 4 Weeks % Change 14 15 % ChangeAHTS 10-15,999 BHP 15,021 20,577 11,173 16,245 21,765 -7.31 % 16,250 20,761 27.76 %AHTS 16,000+ BHP 18,513 34,022 14,896 27,011 40,703 0.01 % 40,462 41,806 3.32 %NOK RatesAHTS 10-15,999 BHP 141,795 183,972 101,441 147,650 199,413 -6.58 % 148,847 190,781 28.17 %AHTS 16,000+ BHP 174,737 304,851 135,419 245,628 372,247 0.73 % 369,208 384,872 4.24 %

16 April 2012

WEEKLY NORTH SEA SPOT MARKET UPDATE

North Sea Average Weekly Spot Rates AHTS 10-15,999 BHPNorth Sea Average Weekly Spot Rates AHTS 16,000+ BHP

In general last week was quiet on the spot market with little fresh activity however the market remained semi tight as the majority of vessels remained active with ongoing work. Statoil were the main player in the market by fixing 5 vessels on rig move activity. Average rates for these vessels were between NOK 400.000 to NOK 500.000 per day. The PSV market is still in general very tight due to the current limited choice of high spec vessels. This is expected to remain the case for the coming 3 -4 weeks, possibly further. AHTS market is showing signs of weakening over the next week due to a number of vessels returning from rig moves, so fresh activity is needed if current rate levels are to remain the same.

North Sea AHTS Fixtures per Week vs Spot Rate North Sea AHTS Spot Market - Annual Averages

North Sea AHTS Spot Rate 4 Weeks Moving Average

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Energy Daily



Comments: Starting 2014

13


OUR SECTOR REPORTS

Credit ResearchEirik RøhmesmoTel.: +47 22 01 63 [email protected]

Credit ResearchKristian KristoffersenTel.: +47 22 87 86 [email protected]

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States, solely for general information purposes to professional investors and in the United States solely to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934, as amended. Each professional investor and major U.S. institutional investor that receives a copy of this report by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.



Rig Bond Report April 2014

Cover photo: © Vantage Drilling

Rig Bond Report




Equity ResearchTurner HolmTel: +47 22 01 63 [email protected]

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States. This report and its contents is intended solely for distribution in the United States to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 194, as amended, and may not be furnished to any other person in the United States. Each major U.S. institutional investor that receives a copy of this e-mail by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.



Oilfield Services Sector Report March 2013

Oilfield Services Sector Report




Analyst: Anders BerglandTel: +47 22 01 63 [email protected]

Analyst: David BhattiTel: +47 22 01 63 [email protected]

Rig

Secto

r Rep

ort A

pril 2

01

4

Rig Sector Report April 2014




Offshore Contract Drilling




Head of Fixed IncomeSimen FlaatenTel.: +47 22 01 63 77

Credit ResearchEirik RøhmesmoTel.: +47 22 01 63 57

Credit ResearchKristian KristoffersenTel.: +47 22 87 86 12

Credit TradingEdvard HatleTel.: +47 22 01 63 83

Credit SalesSohaib AliTel.: +47 22 87 86 10

Credit Sales

Tel.: +47 22 01 63 06

Credit Sales

Tel.: +47 22 01 63 52

Credit SalesFredrik W. SandbergTel.: +47 22 01 63 30

Einar WoldTel.: +47 22 87 86 81

Thomas Eilertsen Tel.: +47 22 01 63 21

Kristian YtteborgTel.: +47 22 01 63 78

RS PLATOU MARKETS ASHaakon VII’s gate 10

Tel.: +47 22 01 63 00Fax: +47 22 01 63 10

OSV Bond Report May 2013

OSV Bond Report




Equity Research

Jørgen Andreas LandeTel: +47 22 01 63 95 [email protected]

Seismic Sector Report January 2014

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States, solely for general information purposes to professional investors and in the United States solely to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 1934, as amended. Each professional investor and major U.S. institutional investor that receives a copy of this report by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.



Cover photo: © PGS

Seismic Sector Report




Equity Research

Terje MauerTel: +47 22 01 63 [email protected] Turner HolmTel: +47 22 01 63 [email protected]

Credit Research

Kristian KristoffersenTel: +47 22 87 86 [email protected]

RS Platou Offshore Research

Sven ZieglerTel: +47 23 11 25 [email protected] Bård HøgheimTel: +47 23 11 27 [email protected] Mikal AsplinTel: +47 23 11 27 [email protected]

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States. This report and its contents is intended solely for distribution in the United States to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 194, as amended, and may not be furnished to any other person in the United States. Each major U.S. institutional investor that receives a copy of this report by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.



OSV Global Report February 2014

Cover photo: Courtesy of Gulfmark Offshore”

Global OSV Sector Report




Analyst: Alex Gheorghe, CFATel: +47 22 01 63 47Mobil +47 960 42 [email protected]

This report has been prepared and provided for information purposes only by RS Platou Markets AS, a foreign broker-dealer that is not registered in the United States. This report and its contents is intended solely for distribution in the United States to “major U.S. Institutional investors” in reliance on the exemption from broker-dealer registration provided by Rule 15a-6 of the United States Securities Exchange Act of 194, as amended, and may not be furnished to any other person in the United States. Each major U.S. institutional investor that receives a copy of this e-mail by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. The report does not constitute and will not form part of and should not be construed as a solicitation of any offer to buy or sell any security, commodity or instrument or related derivatives or to participate in any trading or investment strategy. The opinions and estimates included herein reflect the views and available information as of the dates specified and may have been and may be subject to change without notice. For additional information and disclaimers, see “Disclaimer” included at the end of this report.



Norwegian E&P March 2013

Cover Ph

oto

: Kjell O

. Bru

n

E&P Sector Report





14PHOTO: OSLO

Notes to the Consolidated Financial Statements

15

SHIPBROKING23 %

OFFSHORE28 % PROJECT FINANCE

6 %

INVESTMENT BANKING

44 %

OVERVIEW OF OUR

BUSINESS AREAS

—


16

ANNUAL DEVELOPMENT:

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2009

600 000

400 000

200 000

0

40%

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0%

-20%

Photo: S

hutterstock

Revenues (NOK 1 000)EBIT Margin after bonus payments (%)

295 91

REVENUES 2013:(MILLIONS)

OPERATING PROFIT BEFORE BONUS (MILLIONS:

149

NUMBER OF EMPLOYEES:

23%SHARE OF REVENUES, SHIPBROKING

KEY FIGURES:

17

Business Area | Shipbroking

Shipbroking increased business booked with 68% from 2012 to NOK 493 million in 2013. The growth was fuelled by the US and Eurozone economies' ability to rise from the ashes to reassume a leadership role. Through the first half of 2013, the development of the world economy mirrored the disappointing performance of recent years with a resulting weak development of tonnage demand. In contrast to previous years, however, the economy was able to pick up speed on its own during the second half, without a financial crisis triggering extra stimulus from central banks. This gave an upswing in activity coupled with the need to rebuild depleted inventories, causing producing and imports to strengthen. The result was an upturn in trade growth and the main commodity shipping segments all responded with a rebound in freight rates.

Shipbroking's dry cargo and tanker teams have seen a busy year with increased activity and added broker capacity providing for good value creation for RS Platou. With the rebound in freight rates, ordering activity also picked up. Historically the correlation between the two has been strong and when 2013 proved to be no exception, the newbuilding brokers were able to assist clients on multiple newbuilding programs across several segments.

Sale and purchase activity has not seen the same uptick as chartering and newbuilding, however with increasingly more attractive secondhand tonnage, activity saw a moderate improvement towards the end of the year.

In 2013, RS Platou ASA acquired a majority stake in Christiania Shipbrokers AS, now rebranded RS Platou Tankers AS. The team of specialized clean product brokers adds new competence to the existing chartering platform.

The Shipbroking division of RS Platou was established in 1936, and employs over 100 brokers located in Oslo, London, Singa-pore, Houston, Moscow, Shanghai, Piraeus, Geneva, Seoul, Melbourne, Sydney and Perth. The division's prime objective is to be a global player and industrial partner to clients and customers. The Ship broking team has vast experience and an extensive international network. Service excellence continues to be of outmost importance and the teams have for many years strived to maintain their positions as one of the leading brokers in the international shipping market.

The borders between the departments are floating and there is extensive cooperation across the departments due to the similarities of the respective departments’ business and the integrated requirements of the customers. The teams cover all major markets. To complement the brokers’ service to clients, a team of highly skilled post fixture operation staff is dedicated to follow all fixtures throughout the transportation process as well as the settlement of demurrage and claims. RS Platou is also involved in selling vessels for demolition.

BUSINESS AREA

UPTURN IN TRADE GROWTH RESULTED IN REBOUND IN FREIGHT RATES, INCREASING THE ORDERING ACTIVITY. OUR BUSINESS BOOKED INCREASED AS A RESULT WITH ALMOST 70% COMPARED TO 2012.


18

Offshore had business booked of NOK 401 million in 2013, which was approximatley the same as in 2012, reaffirming the strong global position capitalizing on steady business environment. The link between oil and gas companies' income and the level of rig fixing activity was confirmed again in 2013. A small decrease in oil and gas revenues in 2013 produced a predictable decline in fixing activity for offshore drilling rigs. The utilization rate remained well above 90% despite fleet growth. This growth has been strong over the last years and with new areas being developed such as the Arctic, the demand for OSV is not expected to deteriorate. Supply/demand balance for medium and large size AHTS looks interesting, however the balance is fine depending on continuous Brazilian, Arctic and construction related demand. For PSVs, we see the demand being propelled by new modern rig deliveries over the next year. Subsea remain stable, however we expect less speculative newbuilds and related charters.

The chartering activities for Offshore continued to be strong in 2013. The global team reaffirmed its position as the leading OSV broker globally and enhanced presence in several geographical areas. Several newbuilding programs for rigs and OSVs were completed during the year through Offshore's dedicated new-building team. Sale and purchase activity was good, however, there is still more potential for Sales & Purchase activities. We still foresee high end OSV owners to continue disposing old tonnage and reinvest in modern equipment over the next year.

The Offshore department was established in 1973. The decision came after years with growing involvement in the emerging Norwegian oil service industry whereof RS Platou had played a major role since 1965. RS Platou is today recognized as one of the leading global players within offshore broking, with approximatley. 80 brokers located in Oslo, Singapore, Houston, Cape Town, Accra, Moscow, Aberdeen, Dubai and Rio de Janeiro.

RS Platou’s Offshore department has a strong global presence in all main market segments. Activities involve contracting of newbuildings, sale and purchase, chartering and consultancy within the business segments drilling units, offshore support vessels and field development. By working with owners, oil and gas companies, shipyards, designers, class authorities, investors and financial institutions, RS Platou adds value to its clients on a project basis and our extensive communication with owners and oil companies represents a considerable source of business opportunities. The Offshore group has vast expertise in new-building construction and strong relationships with the majority of the world's yards.

CONTINUED STRONG CHARTERING ACTIVITY AND CONTRACTING OF NEWBUILDINGS IN ADDITION TO SALE AND PURCHASE ACTIVITY, REAFFIRMED THE STRONG GLOBAL POSITION OF THE OFFSHORE DIVISION.

BUSINESS AREA

19

Business Area | Offshore

356 201

REVENUES 2013, MILLION:

OPERATING PROFIT BEFORE BONUS, MILLION:

116


28%SHARE OF REVENUES, OFFSHORE:

KEY FIGURES:

ANNUAL DEVELOPMENT:

2010

2011

2012

2013

2009


600 000

400 000

200 000

0

60%

40%

20%

0%

Photo: S

hutterstock


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The year 2013 was an extremely eventful and successful year for the RS Platou Markets Group. The full underwriting license was awarded to our subsidiary RS Platou Markets, Inc., enabling us to target and participate on a sole, lead or joint basis in domestic US capital markets transactions. In addition, the company received its own research license to prepare and distribute its own research to our growing base of US customers.

RS Platou Markets revenues for 2013 were NOK 564 million, an increase of 220% from 2012. Almost 89% of the revenues came from corporate finance transactions, especially within the US shipping sector as the slowing fleet growth had a positive effect on freight rates and asset values. The Norwegian OTC market was also very active in 2013 with billions of dollars raised in equity as risk appetite grew and investors regarded Oslo as a legitimate alternative to other stock markets. RS Platou Markets was one of the largest contributors on the Norwegian OTC market in 2013 and managed and raised approx. 50% of the total amount raised during the year while also continuing to hold the number one spot in market share with regards to the total volume traded.

On the back of our new licenses in the United States and our home court advantage of being in Oslo with the rise of the

Norwegian OTC market, RS Platou Markets participated in 31 equity and debt capital market transactions and 5 M&A transactions during 2013, with a total value of USD 7.4 billion. Some deals of note was the USD 300 million IPO of Scorpio Bulkers Inc. on NYSE in December 2013 (being the first NYSE IPO performed by RS Platou Markets since the receipt of our underwriting license), and the first time issue for Mexican Latina Offshore of senior secured bonds and subsequent tap issue, raising a total of USD 350 million in September 2013. RS Platou Markets was also joint lead manager in the USD 125 million IPO on NYSE of North Atlantic Drilling and Sole Manager in the USD 186 million bond issue in Metro Exploration Holding Ltd, both completed in January 2014.

In February 2014, RS Platou Markets won both “Dealmaker of the Year” and the “Deal of the Year” Industry Award from Marine Money for 2013, for the Scorpio Group transactions in 2013 and the DHT private placement completed in November 2013.

RS Platou Markets became a part for the RS Platou family in 2008. The RS Platou Markets Group is a full service investment bank headquartered in Oslo, Norway with a subsidiary in New York. The RS Platou Markets Group has a broad and diverse global client base and offers a wide range of services including equity and fixed income sales and trading, sector- and company-specific research, corporate access services as well as ECM, DCM and M&A advisory within our core maritime sectors.

Our equity and credit sales and trading team is located in Oslo and New York and offer domestic- and international sales, sales trading, market-making and execution to global institutional investors. Our investment advisory is based on a comprehensive platform of fundamental research through an ongoing global coverage of companies within our core sectors.

Corporate Finance is located in both Oslo and New York and is dealing with sources of funding and the capital structure of global companies in order to increase shareholder values and allocate financial resources. Together with our highly skilled Fixed Income team, we also create optimal capital structures and developing tailor-made financial solutions based on client’s specific requirements as well as providing general corporate advice.

In addition to the sales and investment banking teams, RS Platou Markets has a dedicated team of back office personnel including settlement, accounting and compliance. RS Platou Markets also have a Corporate Access team that host and prepare interactions with key institutional investors in Europe, the US as well as Asia. Activities include company roadshows and client meetings, field trips as well as conferences and seminars.

BUSINESS AREA

RS PLATOU MARKETS INCREASED REVENUES WITH 220% FROM THE YEAR 2012, MOSTLY DUE TO HIGH ACTIVITY WITHIN CORPORATE FINANCE, ESPECIALLY WITHIN THE SHIPPING SECTOR. RS PLATOU MARKETS ALSO WON THE “DEALMAKER OF THE YEAR” AND “DEAL OF THE YEAR” INDUSTRY AWARDS FROM MARINE MONEY FOR 2013.

21

Business Area | Investment Banking

ANNUAL DEVELOPMENT:

2010

2011

2012

2013

2009


564 374

REVENUES 2013:MILLIONS

OPERATING PROFIT BEFORE BONUS (MILLIONS:

70


44%SHARE OF REVENUES, INVESTMENT BANKING:

KEY FIGURES:

600 000

400 000

200 000

0

50%

0%

-50%

-100%

Photo: S

hutterstock


22

CONTINUED POSITIVE DEVELOPMENT IN THE KS MARKET SECURED 2012 BUSINESS LEVELS, WHILE REAL ESTATE PROJECTS DOUBLED IN VOLUME FROM 2012.

BUSINESS AREA Project Finance saw a marginal increase in business booked to NOK 72 million in 2013 compared to NOK 68 million in 2012. The increase is attributable to high transaction volumes within real estate projects. In 2013, RS Platou Finans Shipping successfully placed 3 new projects in the container, offshore and chemical tanker segments with a total investment value of NOK 487 million. The total transaction volume among the four largest “KS Houses” grew by 15% from 2012, continuing a 3-year positive growth trend. Since 2004, RS Platou Finans Shipping has acquired over 180 vessels on behalf of investors with an accumulated total project price of close to USD 4.5 billion. The company is also the corporate manager for 31 projects and a total of 66 vessels. The majority of the portfolio consists of offshore vessels, but as markets recover, the project activity in traditional shipping segments is expected to grow. In 2013, RS Platou Finans Shipping also signed a co-operation agreement with CIT Maritime Finance to become an official deal provider and corporate manager for their ship leasing portfolio.

In 2013, RS Platou Real Estate completed 11 project with an investment value of approximately NOK 2 billion which is a

23

72 32

REVENUES 2013, MILLION:

OPERATING PROFIT BEFORE BONUS, MILLION:

21


6%

SHARE OF REVENUES, PROJECT FINANCE:

KEY FIGURES:

ANNUAL DEVELOPMENT:

2010

2011

2012

2013

2009

60%

40%

20%

0%


doubling in the volume compared to 2012. On this basis, the company has become the second largest syndicate player in the market in 2013. With the total transaction market estimated at approximately NOK 40 billion, RS Platou Real Estate has a 5.0 % market share of the overall market. During 2013, RS Platou Real Estate sold RS Platou Fund Management to Agasti Holding ASA. The sale was triggered by a tightening regulatory framework with the most recent AIFMD Directive, which made it more difficult for mid/small size property funds to operate. RS Platou Real Estate's main focus going forward will be core strategy and scale on its existing platform.

Project Finans has since its establishment in 2004, become one of the world’s major finance companies that specialize on shipping and offshore related financial schemes in the interest of both ship-owners and financial investors. The main objective is to identify attractive investment opportunities which involve the purchase of shipping and offshore related assets along with secured employment, as well as presenting asset play cases when the timing is optimal. The strength of Project Finance lies not

only with the highly qualified staff, but also with the vast shipping related resources available within the RS Platou Group. Project

Finance is an independent company within the Platou Group utilizing the full potential of having close contact with shipbrokers, ship-owners, ship managers, bankers, lawyers and consultants worldwide.

RS Platou Real Estate was established in 2009. The company works with structuring and facilitation of commercial property including traditional syndication, corporate finance, arbitration, project finance, development and restructuring of business premises with a particular focus on Norway and Scandinavia.

100 000

50 000

0

Business Area | Project Finance

Photo: Østensjøveien 27, Oslo. Nominated MIPIM Awards 2014: "Best innovative Green Building"


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CORPORATE GOVERNANCE—

PHOTO: NEW YORK

Notes to the Consolidated Financial Statements

25


26

IMPLEMENTATION OF AND REPORTING ON CORPORATE GOVERNANCEThe Company aims to follow the Norwegian Code of Practice for Corporate Governance, cf. latest version dated 23 October 2012 as amended 21 December 2012 (the “Code”), and the Board has ensured that the Group has implemented sound corporate governance. There are no significant deviations between the Code and Corporate Governance in the Group. Deviations, if any, have been explained under each section. The Code is available at www.nues.no.

Corporate governance deals with issues and principles associated with the distribution of roles between the governing bodies in the Company, and the responsibility and authority assigned to each body. Good corporate governance is distinguished by responsible interaction between owners, the Board and management in a long-term, productive and sustainable perspective.

The Company has adopted ethical guidelines and guidelines for corporate social responsibility in accordance with the Company’s basic corporate values. In line with the Code, a review of the major aspects of RS Platou’s governance structure follows below.

This corporate governance policy (the “Policy”) was revised by the Board at its meeting held on 25 March 2014, and the Policy outlines the key principles, guidelines and practices for corporate governance for the Company.

1. CORPORATE GOVERNANCE PRINCIPLESRS Platou aims to create value for its shareholders through delivering first class brokerage services to its clients, mainly within the shipping and offshore industries.

RS Platou believes there is a link between high quality governance and the creation of shareholder value. Our governance structures and controls help to ensure that we run our business in a profitable manner for the benefit of our shareholders, employees and other stakeholders. Our basic corporate values on how to conduct our business can be summarized as follows:

CONFIDENTIALITYAll employees have a duty, during the term of employment and after termination to, maintain confidentiality towards third persons of all matters the employee has retained knowledge of during the employment, including matters of commercial-, market-, financial and/or internal nature. This also applies to information relating to RS Platou’s clients and their businesses or business associates. The confidentiality does not apply to matters that have been or are made public without the assistance of the employee, nor do the conditions apply to any potential injunctions made by a court or in accordance with law or regulation.

All employees are required to sign a confidentiality agreement that covers the confidentiality between the employee, RS Platou and towards third parties.

INDEPENDENCEWe shall hold the highest standards of ethics in our daily activities.

All employees shall act independently and irrelevant considerations shall never influence the advice or services provided to clients. All employees shall comply with applicable laws and regulations and common practice on a continuous basis. All payments and transfers shall appear in the accounts and systems used and shall be traceable and searchable. No employee shall receive or handle capital that has no named source.

Each employee shall waive any actions that may cause conflict between their own personal economic interests and interests of RS Platou, its customers and other related parties.

LOYALTYThe potential for conflict is inherent in our business. To prevent our loyalty towards clients being questioned, no one shall accept an assignment which may create a conflict of interest. Each employee shall contribute to the safeguarding of RS Platou’s trust and reputation by behaving in an ethical and proper way.

27

Corporate Governance

INTEGRITYRS Platou is committed to provide first class services and advice. No one shall accept an assignment which may comprise the quality of the services provided. No one shall provide services within an area which he or she does not master. Each employee shall act factually, correctly, honestly and in accordance with good business practice. Good business practice is to perform and conduct the relevant work in accordance with ethical and professional principles generally known and practiced by experienced and conscientious persons in the business.

2. BUSINESS ACTIVITIESThe Group’s business activities have been defined in the Articles of Association. The Articles of Association can be found on the Group’s website. The Group’s website also details the Group’s activities, objectives and strategies and in total these should provide both shareholders and the capital markets with an understanding of the current business activities of the Group and likely future development.

§3 of the Articles of Association reads as follows: “The company’s purpose is to provide services within the ship broking and offshore broking markets, and provide other services naturally connected herewith, as well as to provide other services, including project broking, investment banking services and asset management through subsidiaries and/or affiliated companies. The company’s operation includes participation in other companies and projects.”

3. EQUITY AND DIVIDENDSThe Board and the Group management aim at all times at keeping the Company’s equity and other financing adapted to the Company’s objectives, strategy and risk profile. The Group’s operations are of such a nature that modest equity is required to conduct the operations, however, the Board continuously evaluates the equity position of the Group. The Group had total equity of NOK 316.9 million at 31 December 2013. The equity position of the Group and covenants related to the equity position have been presented under the notes to the consolidated financial statements.

RS Platou Markets AS had a total capital adequacy ratio of 14.9% at 31 December 2013. RS Platou Markets AS, including its subsidiary in New York, had a total capital adequacy ratio of 14.59%. The Norwegian authorities’ minimum capital adequacy requirement is 8%.

RS Platou's objective is to yield a competitive return on invested capital to the shareholders through a combination of distribution of dividends and increase in equity values. When evaluating the amount of dividend payable, the Board places emphasis on certainty, foreseeability (especially provided through the Forward Book), the Company's cash position and distributable equity, the requirements for sound and optimal equity capital as well as adequate financial resources to enable future growth and investments, applicable legal or contractual restrictions and the desire to minimize the cost of capital. The Company will pay dividends directly to the the Company's Registrar, which in turn has undertaken to distribute the dividends to the beneficial shareholders as registered in VPS.

To ensure flexibility in the Group’s capital structure and capital management, the Board aims to continually hold authorizations to repurchase own shares and increase the share capital. In general, the Board should hold authorization to acquire own shares with a par value corresponding to 10% of the share capital and an authorization to increase the share capital by approximately 10%. The Board is currently authorized to acquire own shares for a total face value of NOK 1 188 153. In addition, the Board has been authorized to issue up to 5 000 000 new shares. The above mentioned authorizations are valid until 30 June 2014. Authorizations to acquire own shares and issue new shares are assessed annually by the ordinary general meeting.

RS Platou | Annual R

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