Offshore Supply Weekly

Transcription

1 Offshore Supply Weekly (week 45) Kjetil Haukås,

2 Newsflow DESSC fleet status report for October 2014 slightly negative in our view» DESSC reported average AHTS rates at USD 18,600 per day, down from USD 21,400 in Q3/14. The number was likely impacted negatively by the AHTS Sea Lynx (~15,000 bhp) mobilizing from the North Sea spot market to the South Stream project in the Black Sea working for SPM. DESSC has negotiated a frame agreement for the vessels for 2014 and As a consequence Sea Lynx did not take part in the very strong North Sea spot market in October.» Average PSV dayrates came in at USD 19,200 per day, flat from September, and 4% below the average rate in Q3/14. Improved contract coverage for DESSC as the company secures BB charters for Sea Swift and Sea Spear» DESSC announced new BB contracts for Sea Swift and Sea Spear (4,700 dwt/2014 built). Client is undisclosed. BB rate of USD 20,00 is clearly positive. Rate and client is the same as for Sea Swan and Sea Surfer that was fixed in September, however end-client differs with Sea Swift and Sea Spear working for Saipem offshore Australia.» Firm contract coverage improves from 45% in 2015 to 47% on our estimates. Including options, contract coverage rises from 61% to 64% in 2015E.» DESSC has so far not succeeded in securing a term charter for the India built Sea Triumph. The vessels is currently heading for the North Sea to take part in the spot market which is entering low season. Spot utilization for PSVs currently stands at just above 80%. Average effective PSV spot rates (after adjusting for utilization) stands at NOK 104,000 for Implied purchase price for Sea Triumph was ~USD 31m (avg. purchase price for all 10 PSVs USD 36.6m). We estimate EV/EBITDA of just above 10x based on average spot rates. In comparison, we believe current avg. TC rates for such a vessel to be around USD 22,500 (~NOK 170,000) for 1-2 year contracts. Bourbon Q3 revenues up by 5.7% y-o-y to EUR 495m» 3rd quarter revenues increased by 5.7% to EUR 495m, up from EUR 472m in Q3/13, as fleet growth and higher avg. dayrates were partially offset by lower utilization. Bourbon is the world s largest OSV company as measured by the number of vessels under management (including all vessel classes, not only AHTS and PSVs). The total number of vessels operated by Bourbon was 501 in Q3/14 (includes BB charters) up by 22 a year ago implying ~4% fleet growth.» Avg. dayrates increased in most segments and regions, largely caused by an increase in the fleet to newer, larger vessels but also improved rates on some contract renewals. Utilization development was mixed across regions, with Asia and West Africa being adversely affected by increased supply of vessels and reduced activity, respectively. Cost reduction programs by E&Ps had a negative impact on all segments according to the company. Tidewater fiscal Q2/15 numbers roughly in line with consensus» Tidewater reported fiscal Q2/15 sales of USD 398m and EBITDA of 125m marginally above consensus at USD 396m and 123m respectively. Adjusted net income was USD 61m 13% above consensus at USD 54m. Overall a neutral report. The share has been trading fairly flat this week.» Nothing interesting mentioned in the call. The company highlighted that only around 60% of its revenue is related to rig support activity while remaining 40% is related to production, construction etc., i.e. the TDW share should thus not be treated as a pure derivative of drilling according to management. Solid Q3 report from Oceanteam Shipping (OTS)» OTS reported 3Q14 revenues of USD 15.4m (up from USD 14.5m in 2Q14) and EBITDA (incl. net income JVs) of USD 8.1m (up from USD 7.0m in 2Q14). Net profit came in at USD 1.8m (up from USD 0.4m in 2Q14). The EBITDA margin increased to 44% from 39% Q/Q. EBITDA came in 17% above our USD 6.9m estimate. The revenues were split 50/50 between the Shipping segment and the Solutions segment (small increase Q/Q in both). Backlog in the Shipping segment increased to USD 231m from USD 224m Q/Q (Oceaneering exercised both 1yr options on 101 during the quarter), while backlog in the Solutions segment increased to USD 37m from USD 35m Q/Q. The company maintains its USD ~30m FY14 EBITDA guidance implies 4Q14 EBITDA roughly on par with a strong 3Q14.» SB1 credit research analysis: Quarter-end, NIBD stood at USD 141m (down from USD 148m Q/Q) 3Q14 annualized net leverage at 4.4x, down from 5.3x as of 2Q14. The 3Q14 EBITDA interest coverage came in at 2.1x, up from 1.8x as of 2Q14. The book equity ratio increased to 49% from 44% Q/Q due to positive vessel revaluation effects (contract extension and supportive market transactions). Positively, the cash position increased to USD 15.3m from USD 9.9m driven by improved operating performance, the selling of certain equipment and positive working capital changes. 2 Source: Sparebank 1 Markets, Companies, Press,++

3 USD USD USD USD Weekly spot market development Strong AHTS market during Q3 will result in strong earnings reports PSV seasonal spot rates AHTS seasonal spot rates Week number Week number PSV spot rates and utilization since jan 2013 AHTS spot rates and utilization since jan PSV rate PSV utl 100 % AHTS rate AHTS utl 100 % % 80 % 70 % % 80 % 70 % % % % 40 % 30 % % 40 % 30 % Week number, since % Week number 20 % 3 Source: SB1 Markets, IHS Petrodata, Hagland Offshore

4 Recent spot fixtures Vessel Name Vessel Type BHP DWT (ton) Manager Contract typeactivity Country Client Fixture Date Start Date End Date w/o Options Rate USD Rate Far Scorpion AHTS Farstad Spot Rig Move Norway Statoil NOK 310, Island Valiant AHTS Island OffshoreSpot Rig Move Norway Statoil Normand Prosper AHTS Solstad Shipping Spot Anchor Assist - ChainNorway ConocoPhillips NOK 300, Balder Viking AHTS Viking Supply Spot Ships Rig Move United Kingdom Talisman GBP 35, Loke Viking AHTS Viking Supply Spot Ships Rig Move United Kingdom Talisman GBP 35, Odin viking AHTS Viking Supply Spot Ships Rig Move United Kingdom Talisman GBP 25, UP Jasper PSV Ultrapetrol Spot Cargo Run United Kingdom Premier GBP 8, KL Brofjord PSV K Line OffshoreSpot Supply Norway Statoil NOK 125, Northern Commander AHTS Trico Marine Services Spot Standby Norway Statoil NOK 75, Blue Thunder PSV Atlantic Offshore Spot Supply Norway Statoil NOK 100, Maersk Assister AHTS Maersk Supply Spot Service Heading Control United Kingdom Team GBP 25, North Cruys PSV Gulf OffshoreSpot Supply Norway BP NOK 140, Freyja Viking PSV Viking Supply Spot Ships Supply United Kingdom Apache GBP 8, Rem Provider PSV Rem MaritimeSpot Supply United Kingdom Peterson GBP 11, Rem Stadt PSV Remoy Shipping Spot Supply Norway Statoil NOK 120, Source: SB1 Markets, IHS Petrodata

5 OSV peer group Sparebank 1 Markets - Offshore Supply peer group SB1M Market cap. Px TP Potential Share price performance EV/EBITDA consensus P/B P/NAV Company Ticker Rating [USDm] [Local] [Local] upside 3m 6m 12m 2014E 2015E 2016E 5Y avg. current SB1 est. Deep Sea Supply DESSC NO Buy 293 7,7 12,0 56 % -17 % -16 % -36 % 5,2x 3,9x 4,1x 4,9x 0,6x 0,6x Siem Offshore SIOFF NO Neutral 284 5,0 5,5 10 % -36 % -43 % -49 % 7,8x 6,2x 5,7x 6,6x 0,4x 0,3x Farstad Shipping FAR NO Neutral ,0 80,0 10 % -37 % -38 % -48 % 7,2x 6,4x 6,2x 6,7x 0,4x 0,3x DOF DOF NO Neutral ,1 25,0 31 % -29 % -30 % -33 % 7,4x 7,5x 7,2x 7,2x 0,4x 0,5x Solstad Offshore SOFF NO Neutral ,0 85,0 4 % -19 % -25 % -32 % 7,3x 6,9x 6,4x 7,1x 0,6x 0,4x Havila Shipping HAVI NO Sell ,0 22,0-4 % -27 % -33 % -34 % 7,4x 7,8x 7,7x 8,0x 0,3x 0,3x Nordic American Offshore NAO US Sell ,2 15,0-1 % -17 % -18 % -20 % 11,2x 8,1x 7,2x #N/A N/A #N/A N/A 1,0x Eidesvik Offshore EIOF NO ,1-17 % -18 % -20 % 7,3x 5,4x 5,7x #N/A N/A 0,4x N/A Tidewater TDW US ,6-22 % -24 % -37 % 7,5x 6,9x 6,3x 7,0x 0,7x N/A Gulfmark GLF US ,1-21 % -31 % -37 % 7,5x 7,3x 7,4x 6,5x 0,7x N/A Avgerage all -24 % -28 % -35 % 7,6x 6,7x 6,4x 6,8x 0,5x 0,5x Source: Sparebank 1 Markets; Bloomberg *Change of analyst. Recommendation and target under review. Sparebank 1 Markets - Offshore Supply peer group EV/EBITDA SB1M TEV/EBITDA* SB1M Dividend yield ROE NIBD/Capital Company 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E 5Y avg. YE 2014 YE 2015 Deep Sea Supply 9,0x 6,1x 6,2x 6,2x 5,7x 5,7x 3 % 12 % 16 % 6 % 12 % 10 % 19 % 48 % 43 % Siem Offshore 8,1x 7,2x 7,9x 7,9x 7,1x 7,0x 2 % 4 % 6 % 8 % 9 % 1 % 2 % 53 % 44 % Farstad Shipping 6,8x 6,3x 6,0x 6,7x 6,1x 6,0x 4 % 4 % 4 % 6 % 6 % 6 % 14 % 48 % 48 % DOF 6,1x 6,5x 6,1x 5,7x 5,8x 5,7x 0 % 0 % 0 % 14 % 10 % 10 % 1 % 61 % 60 % Solstad Offshore 6,8x 5,8x 6,4x 6,6x 6,1x 6,1x 6 % 5 % 5 % 15 % 13 % 11 % 5 % 54 % 49 % Havila Shipping 7,1x 7,7x 7,3x 7,1x 7,7x 7,3x 0 % 2 % 2 % 8 % 5 % 5 % 5 % 65 % 63 % Nordic American Offshore 11,4x 14,3x 12,2x 17,2x 14,3x 12,2x 10 % 12 % 12 % 4 % 5 % 6 % N/A -16 % 25 % Average 7,9x 7,7x 7,5x 8,2x 7,5x 7,1x 4 % 6 % 6 % 9 % 9 % 7 % 8 % 45 % 48 % Source: Sparebank 1 Markets * Assumes all newbuilds operational with EV adj. for remaining capex Sparebank 1 Markets - Offshore Supply peer group Sales (local) vs. consensus (%) EBITDA (local) vs. consensus (%) Adj. EBITDA margin Company 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E E 2015E Deep Sea Supply % -4 % -5 % % 2 % 0 % 45 % 52 % 58 % Siem Offshore % -9 % -6 % % -26 % -27 % 34 % 37 % 34 % Farstad Shipping % 2 % 0 % % 6 % -2 % 38 % 39 % 41 % DOF % 3 % -2 % % -1 % 0 % 32 % 31 % 34 % Solstad Offshore % 1 % -2 % % 9 % 0 % 43 % 47 % 51 % Havila Shipping % 0 % -2 % % -4 % -6 % 47 % 51 % 49 % Nordic American Offshore % -14 % -11 % % -21 % -16 % N/A 48 % 47 % Average 1 % -3 % -4 % 1 % -5 % -8 % 40 % 44 % 45 % Source: Sparebank 1 Markets; Bloomberg 5 Source: Sparebank 1 Markets

6 EBITDA EBITDA EBITDA EBITDA EBITDA EBITDA Consensus EBITDA estimates Consensus EBITDA est. down for 15-16E. Slightly up for 14E for SOFF, FAR and HAVI which have the highest exposure to the AHTS spot 2 700,00 FAR 2 100,00 SOFF 2 500, , , , , , , , , ,00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct DOF 4 100, , , , , , , , , ,00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct , , , ,00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct SIOFF 350,00 330,00 310,00 290,00 270,00 250,00 230,00 210,00 190,00 170,00 150,00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct DESSC 140,00 130,00 120,00 110,00 100,00 90,00 80,00 70,00 60,00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct HAVI 950,00 900,00 850,00 800,00 750,00 700,00 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct Source: SB1 Markets, Bloomberg

7 Consensus EBITDA estimates OSV and drilling OSV consensus EBITDA revisions OSV and Drilling. 15E/16E OSV 2015 OSV 2016 Drilling 2016 Drilling Source: Sparebank 1 Markets; Bloomberg

8 Short interest OSV and drilling (US companies only) 350 Short positions (absolute) base year OSV and rig 16% Short positions % of free float. - OSV and rig % % 10% 8% 6% 4% 50 2% 0 des. 10 mar. 11 jun. 11 sep. 11 des. 11 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 jun. 13 sep. 13 des. 13 mar. 14 jun. 14 sep. 14 0% des. 10 mar. 11 jun. 11 sep. 11 des. 11 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 jun. 13 sep. 13 des. 13 mar. 14 jun. 14 sep. 14 Rig index Source: Bloomberg; Sparebank 1 Markets OSV index Rig Source: Bloomberg; Sparebank 1 Markets OSV 8 Source: Sparebank 1 Markets, Bloomberg

9 Oil service sector performance Oil Service Sector Performance since Jan Oil Service Sector Performance since Jan SUPPLY Index.USSUPPLY Index.SUBSEA Index.SEISMIC Index.DRILLING Index OSEBX Index.SUPPLY Index.USSUPPLY Index.SUBSEA Index.SEISMIC Index.DRILLING Index OSEBX Index 9 Source: SB1 Markets, Bloomberg

10 Share price performance Norwegian OSVs Share price performance since jan Norwegian peers Share price performance since jan Norwegian peers OSEBX Index SOFF FAR DOF DESSC SIOFF HAVI EIOF OSEBX Index SOFF FAR DOF DESSC SIOFF HAVI EIOF 10 Source: SB1 Markets, Bloomberg

11 Historic pricing of Norwegian OSV peers 11,5x EV/EBITDA (12m forward) 2,0x Price Boook 10,5x 1,8x 9,5x 8,5x 1,6x 1,4x 1,2x 7,5x 1,0x 6,5x 0,8x 5,5x 4,5x 0,6x 0,4x 0,2x 3,5x DESSC SIOFF FAR DOF SOFF HAVI EIOF DESSC SIOFF FAR DOF SOFF HAVI EIOF Industry avg. EV/EBITDA 1Y forward Industry avg. Price Book 9,5x 9,0x 8,5x 8,0x 7,5x 7,0x 6,5x 6,0x 5,5x 5,0x 4,5x ,2x 1,1x 1,0x 0,9x 0,8x 0,7x 0,6x 0,5x 0,4x Source: SB1 Markets, Bloomberg

12 Discount to NAV Discount to NAV Discount to NAV Discount to NAV Discounts to reported NAVs 80% 70% SOFF - Discount to last reported NAV 80% 70% HAVI - Discount to last reported NAV 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 80% 70% DOF - Discount to last reported NAV 80% 70% FAR - Discount to last reported NAV 60% 60% 50% 50% 40% 30% 20% 10% 0% 40% 30% 20% 10% 0% 12 Source: SB1 Markets, Company reports, Bloomberg

13 Liquidity Norwegian OSVs # of shares traded per day/# of outstanding shares DESSC SOFF FAR 1,00% 1,00% 1,00% 0,80% 0,80% 0,80% 0,60% 0,60% 0,60% 0,40% 0,40% 0,40% 0,20% 0,20% 0,20% 0,00% ,00% ,00% ,00% DOF 1,00% HAVI 1,00% SIOFF 0,80% 0,80% 0,80% 0,60% 0,60% 0,60% 0,40% 0,40% 0,40% 0,20% 0,20% 0,20% 0,00% ,00% ,00% Source: Sparebank 1 Markets; Bloomberg

14 Liquidity US OSVs # of shares traded per day/# of outstanding shares TDW GLF 5,00% 5,00% 4,00% 4,00% 3,00% 3,00% 2,00% 2,00% 1,00% 1,00% 0,00% ,00% ,00% HOS 5,00% NAO 4,00% 4,00% 3,00% 3,00% 2,00% 2,00% 1,00% 1,00% 0,00% ,00% Source: Sparebank 1 Markets; Bloomberg

15 Bond Indications Supply & Subsea Services Issuer ISIN Ticker Size Crncy Priority Security Maturity TTM Coupon Bid Px Bid YTW Bid Z/DM Ask Px Ask YTW Ask Z/DM Mid Z/DM Atlantic Offshore AS NO ATOFF NOK Senior unsecured m N % % Atlantic Offshore AS NO ATOFF NOK Share pledge Vessel owning comp's m N % % Atlantic Offshore AS NO ATOFF NOK Senior unsecured m N % % Boa OCV AS NO NOK 1st lien 2x OCV m N % % Boa Offshore AS NO BOAO NOK Senior unsecured m N % % Boa Offshore AS NO BOAO NOK Senior unsecured m N % % Boa SBL AS NO BOAS NOK 1st lien 2x EM vessels m N % % DOF ASA NO DOF NOK Senior unsecured m N % % DOF ASA NO DOF NOK Senior unsecured m N % % DOF ASA NO DOF NOK Senior unsecured m N % % DOF ASA NO DOF NOK Senior unsecured m N % % DOF Subsea ASA NO DOFSUB NOK Senior unsecured m N % % DOF Subsea ASA NO DOFSUB NOK Senior unsecured m N % % DOF Subsea ASA NO DOFSUB NOK Senior unsecured m N % % E Forland AS NO EFOR NOK 1st lien 1x Subsea m N % % Eidesvik Offshore ASA NO EIOF NOK Senior unsecured m N % % Farstad Shipping AS NO FAR NOK Senior unsecured m N % % Farstad Shipping AS NO FAR NOK Senior unsecured m N % % Golden Energy Offshore Services AS NO NOK 1st lien 2x PSV m N % % Havila Holding AS NO NOK Share pledge Various shares % % Havila Shipping ASA NO HAVI NOK Senior unsecured m N % % Havila Shipping ASA NO HAVI NOK 1st lien PSV Clipper m N % % Havila Shipping ASA NO HAVI NOK 1st lien OCV Subsea % % % Havila Shipping ASA NO HAVI NOK 1st lien OCV Subsea m N % % Island Offshore Shipholding L.P. NO IOSH NOK Senior unsecured m N % % Oceanteam Shipping ASA NO OTS02 93 USD Senior unsecured m L % % Olympic Ship AS NO OLSH NOK Senior unsecured m N % % Olympic Ship AS NO OLSH NOK Senior unsecured m N % % Olympic Ship AS NO NOK Senior unsecured m N % % Rem Offshore ASA NO REM NOK Senior unsecured m N % % Rem Offshore ASA NO REM NOK Senior unsecured m N % % Rem Offshore ASA NO NOK Senior unsecured m N % % Sea Trucks Group Ltd NO USD 1st lien Various vessels % % % Siem Offshore Inc NO SIOFF NOK Senior unsecured m N % % Siem Offshore Inc NO SIOFF NOK Senior unsecured m N % % Solstad Offshore ASA NO SOFF NOK Senior unsecured m N % % Viking Supply Ships AS NO VSS NOK Senior unsecured m N % % Volstad Maritime AS NO VOSUB NOK 1st lien 1x DSV & 2x Seismic m N % % Volstad Shipping AS NO VOLS NOK 2nd lien 2x PSV & 1x Subsea m N % %

16 Spread (bps) Spread/Maturity Supply & Subsea Services Supply & Subsea Services Spread/Maturity Diagram Oceanteam Atlantic +750 Golden Energy +725 (2x PSV) Viking +825 Boa Offshore +675 Havila Holding +660 (various E Forland +675 (Fugro Saltire) shares) VOLSHI +600 (2x PSV & 1x VOLMAR +650 (1x DSV, 2x DOF +700 DOF +725 REM +575 Subsea) Seismic) DOF +475 REM +525 Boa SBL +550 (2x EM vessels) Island Offshore +525 SIOFF +475 Havila 8.6% (OCV Subsea) SIOFF +440 Havila +850 (2016) Boa OCV +475 (2x OCV) Havila +450 (OCV Subsea) Olympic +600 DOFSUB +500 Olympic +500 Eidesvik +450 SOFF +440 Havila +375 (PSV Clipper) Farstad +340 Farstad +420 DOFSUB DOFSUB +550 DOF Olympic +525 Atlantic (vessel owning REM comp's) Boa Offshore +675 Atlantic Time to Maturity Unsecured 1 st lien 2 nd lien/share pledge Source: SpareBank 1 Markets Price Indications 16

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18 Disclaimer SpareBank 1 Markets Research Department Our recommendations are based on a six-month horizon, and on absolute performance. We apply a three-stage recommendation structure where Buy indicates an expected annualized return of greater than +15%; Neutral, from 0% to +10%; Sell, less than 0%. Current recommendations of the Research Department: (refers to Recommendations published prior to this report and required disclosed in accordance with the Securities Trading Regulations section 3-11 (4) Standard research disclaimer All employees of SpareBank 1 Markets are subject to duty of confidentiality towards clients and with respect to inside information. SpareBank 1 Markets operates a system of Chinese Walls and other organizational procedures in order to control the flow of information within the firm and minimize conflicts of interest within SpareBank1 Markets and between clients. The Research Department is part of this system. The Research Analysts of SpareBank 1 Markets receive salary and are members of the bonus pool. However no part of the analysts salaries or compensations relates to the performance of their recommendations, directly to investment banking services or other services provided by SpareBank 1 Markets or related companies to issuers. Analyst Certification The views expressed in this research accurately reflect(s) the personal views of the analyst(s) principally responsible for this report about the subject securities or issuers, and no part of the compensation of such analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. No part of the compensation of the research analyst(s) responsible for the preparation of this report was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analyst(s) in this report. Risks Generally, investments in financial instruments involve risks. For specific risks related to our various recommendations, please see the latest relevant reports. The target prices on companies in the SpareBank 1 Markets Research universe reflect the subjective view of the analyst about the absolute price that financial instruments should trade at, within our six-month recommendation horizon. The target price is based on an absolute valuation approach, which is detailed in our research reports. The target price can differ from the absolute valuation, in accordance with the analyst's subjective view on the trading or cyclical patterns for a particular financial instrument, or a possible discount/premium to reflect factors such as market capitalization, ownership structure and/or changes in the same, and company-specific issues. This report or summary has been prepared by SpareBank 1 Markets from information obtained from public sources not all of which are controlled by SpareBank 1 Markets. Such information is believed to be reliable and although it has not been independently verified, SpareBank 1 Markets has taken all reasonable care to ensure that the information is true and not misleading. Notwithstanding such reasonable efforts, SpareBank 1 Markets makes no guarantee, representation or warranty as to its accuracy or completeness. SpareBank 1 Markets assumes no obligation to update the information contained in this report or summary to the extent that it is subsequently determined to be false or inaccurate. This document contains certain forward-looking statements relating to the business, financial performance and results of the issuer 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, and similar expressions. The forward-looking statements contained in this document, including assumptions, opinions and views of the issuer or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. 18

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20 Disclaimer Any transaction in the securities discussed in this report by U.S. persons (other than a registered U.S. broker-dealer or bank acting in a broker-dealer capacity) must be effected with or through SpareBank 1 Capital Markets. The securities referred to in this report may not be registered under the U.S. Securities Act of 1933, as amended, and the issuer of such securities may not be subject to U.S. reporting and/or other requirements. Available information regarding the issuers of such securities may be limited, and such issuers may not be subject to the same auditing and reporting standards as U.S. issuers. Such information is provided for informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other U.S. federal or state securities laws, rules or regulations. The investment opportunities discussed in this report may be unsuitable for certain investors depending on their specific investment objectives, risk tolerance and financial position. In jurisdictions where SpareBank 1 Capital Markets is not registered or licensed to trade in securities, commodities or other financial products, transactions may be executed only in accordance with applicable law and legislation, which may vary from jurisdiction to jurisdiction and which may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements. The information in this publication is based on carefully selected sources believed to be reliable, but SpareBank 1 Capital Markets does not make any representation with respect to its completeness or accuracy. All opinions expressed herein reflect the author s judgment at the original time of publication, without regard to the date on which you may receive such information, and are subject to change without notice. The information contained herein may include forward-looking statements as described above within the meaning of U.S. federal securities laws that are subject to risks and uncertainties. Factors that could cause a company s actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company s products or services, changes in foreign exchange markets, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. 20