Klaveness Commercial Management spot earnings and asset management

Klaveness Commercial Management spot earnings and asset management

The Torvald Klaveness Group A leading dry bulk company for more than 60 years Founded in 1946 by Mr Torvald Klaveness Owned and managed Tom Erik and Trond Harald Klaveness A history of partnerships, joint ventures and pools Industry focus with emphasis on transparency and knowledge sharing Three business units: Klaveness Commercial Management Klaveness Maritime Logistics Klaveness Investments

Klaveness Commercial Management Baumarine Pool: Bulkhandling Pool: Panamax vessels Supramax/Handymaxvessels Panamax Handymax Facts and figures (2009) Number of employees 60 Fleet under management Average fleet age Main cargo carried Cargo lifted Number of vessel fixtures Number of freight derivative transactions About 60 standard bulk carriers 6 years Iron ore, coal, grain and bauxite About 33 million tonnes 465 620

The dry bulk market from 2000 till today 250 000,00 200 000,00 150 000,00 P 4 T C, S p o t S 6 T C, S p o t C 4TC, Spot 100 000,00 50 000,00 0,00 04.01.2000 04.05.2000 04.09.2000 04.01.2001 04.05.2001 04.09.2001 04.01.2002 04.05.2002 04.09.2002 04.01.2003 04.05.2003 04.09.2003 04.01.2004 04.05.2004 04.09.2004 04.01.2005 04.05.2005 04.09.2005 04.01.2006 04.05.2006 04.09.2006 04.01.2007 04.05.2007 04.09.2007 04.01.2008 04.05.2008 04.09.2008 04.01.2009 04.05.2009 04.09.2009 04.01.2010 Main characteristics: High volatility Increasing liquidity Short term contracts Market collapse Main characteristics: High volatility High liquidity Changing trade patterns Main characteristics: Low volatility Stable trading patterns Long term contracts

The drybulk market in 2010 Record volatility makes timing of fixtures crucial Changing sourcing strategies and trade patterns Tactical pricing moves by the major iron ore and coal players Increasing derivatives trading and psychology driving the market The tonnage supply is highly uncertain Over reported orderbooks and non performing shipyards Lacking port logistics creates congestion The Counterpart risk remain high Successful shipowners utilize the opportunities of a volatile market!

The spot market has been a good strategy Net earnings per day to Owner $60 000 Pool Result Panamax $60 000 Pool Result Handymax $50 000 $50 000 $40 000 $40 000 $30 000 $30 000 $20 000 $20 000 $10 000 $0 2004 2005 2006 2007 2008 2009 $10 000 $0 2004 2005 2006 2007 2008 2009 Average earnings years 2004 2009: Panamax: 34,600 $/day Handymax: 28,900 $/day paying 10 MUSD more than a TC strategy (fixing a Panamax vessel on 1 year TC at the start of each of these years)

The Pools have delivered full market upside Net earnings per day to Owner $30 000 $25 000 $20 000 $15 000 $10 000 $5 000 $0 Pool result Baumarine Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Pool result Bulkhandling $30 000 $25 000 $20 000 $15 000 $10 000 $5 000 $0 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

Cashflow, Asset Management and Knowledge Steady cashflow Get the full benefit of the spot market, with low operational risk Timely payment every 15 days regardless of vessel position Possibility of converting to fixed rate TC at predefined levels Asset management A strong competence base on our operations desk Extensive use of port captains Optimized vessel positioning to cater for owners needs Knowledge sharing Commercial and operational meetings Dedicated operator PIC makes ship owning easier Weekly spot market updates

Steady cashflow Full benefit of the spot market, with reduced operational risks Timely payment every 15 days regardless of vessel position The Value is created through Chartering desks in Beijing, Singapore and Oslo A global network of first class charterers Optimized vessel utilization through market knowledge, large fleet and deal flow Reduced geographical, operational and counterpart risk Close follow up of outstanding freight and demurrage

Owner s option to convert to TC $6 000 P4TC Daily change P4TC Level $4 000 $2 000 $0 $2 000 $4 000 $6 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 $100 000 $80 000 $60 000 $40 000 $20 000 The daily volatility can challenge a presumably good time to fix the ship Conversion to TC can be done irrespective of the vessel s physical position With a predefined rate level, we can utilize the volatility to the benefit of the ship owner $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

The shipowners we do business with: Share Klaveness view on counterpart risk Want to gain further market access and knowledge Value the Klaveness flexibility and risk management approach Use the Klaveness operations department to further improve their vessel s performance

Access to new market opportunities Klaveness Commercial Management

The Bulkhandling Handymax Fleet Vessel Owner Built Dwt. Agia Filothei Klaveness 2010 58 923 Anarchos Klaveness 1996 46 676 AS Victoria Ahrenkiel 2009 57 000 AS Virginia Ahrenkiel 2009 57 000 CMB Jialing Bocimar 2010 55 000 Dubai Faith Emarat Maritime 1996 45 681 Dubai Fortune Emarat Maritime 1995 46 638 Frederike Selmer Oskar Wehr 2009 57 000 Genco Predator Genco 2005 55 407 Livanita Klaveness 1997 45 426 Monica P Eurobulk 1998 46 667 New Venture Klaveness 2008 53 411 Ocean Bridge Mitsubishi 1998 45 766 Vessel Owner Built Dwt. Ocean King Yamamoto Kaiun 2001 47 314 Port Moresby Stella Marine 2002 53 553 Port Nelson Stella Marine 2006 53 553 Prisco Abakan Prisco Bulk 2009 57 327 Prisco Udokan Prisco Bulk 2009 57 327 Sanmar Phoenix Sanmar 2008 54 682 Spar Cetus Spar Shipholding 1998 45 700 Spar Gemeni Klaveness 2007 52 000 Svenner Scantank 2010 57 000 TBN Dolphin 57 Klaveness 2010 57 000 TBN Dolphin 57 Klaveness 2010 57 000 Tai Hawk Klaveness 2004 52 686 Triton Eagle Klaveness 2003 52 579 Triton Lark Klaveness 2006 56 024

The Baumarine Panamax Fleet Vessel Owner Built Dwt. Aeolian Breeze Klaveness 2001 74 255 Agios Nikolas Klaveness 2004 76 390 Andrea D Amato D Amato di Nav. 2008 76 619 Anna Seaarland 1999 75 592 Arabella Marwave 2001 75 592 Atlantic Breeze Klaveness 2004 76 267 Bottiglieri Ambition Cargoship Maritime 2010 92 500 CIC Piraeus Klaveness 2001 76 296 Erica Klaveness 2009 83 000 Genco Leader Klaveness 1999 73 941 Glyfada I Klaveness 2009 75 639 Goya Klaveness 2008 75 754 Irini Euroseas 1988 69 734 Lian Hua Feng Klaveness 2002 73 901 Vessel Owner Built Dwt. MBA Giovanni Michele Bottiglieri 2010 92 500 Nordelbe Reederei NORD 2001 75 323 Nordems Klaveness 2001 75 323 Nordmosel Reederei NORD 2001 75 323 Nordtrave Reederei NORD 2001 75 323 Pacific Breeze Blenheim 2004 76 343 Primrose Klaveness 2001 74 710 Ruby Crest Klaveness 1997 73 300 Sanmar Paragon Sanmar 1996 73 080 Sea Breeze Blenheim 2009 91 800 Triton Hawk Klaveness 2010 78 000 Atalanta Klaveness 2010 83 000 Tiare Marwave 2009 83 000 Torm Anholt Klaveness 2004 74 195

Cargo carried 2009 Bulkhandling (Supramax) Grain Coal Iron ore 1.COAL (34%) 2.IRON ORE (13,9%) 3.GRAIN (5,5%) 4.PETCOKE (6,4%) 5.CLINKER (5,8%) 6.SCRAP (4,2%) 7.SUGAR (3,3%) 8.OLIVINE SAND (2,9%) 9.BAUXITE (2,9%) 10.AGGREGATES (2,3%) 11.ALUMINA (2,1%) 12.SALT (1,7%) 13.CONCENTRATES (0,9%) 14.DAP (0,9%) 15.GYPSUM (0,8%) 16.CEMENT (0,8%) 17.FERTILIZER (0,7%) 18.POTASH (0,7%) 19.SAND (0,5%) 20.NICKLE ORE (0,5%) 21.BARYTES (0,5%) 22.SULPHUR (0,4%) 23.GENERAL CARGO (0,4%) 24.SLAG (0,3%) 25.HBI (0,3%)

Cargo carried 2009 Baumarine (Panamax) 1. COAL (50,3%) Coal 2. IRON ORE (12,8%) 3. BAUXITE (7,2%) 4. SOYA BEANS (6,7%) Bauxite Iron ore 5. PETCOKE (6%) 6. CORN (4,6%) 7. GRAIN (3,4%) 8. SOYA BEAN MEAL (1,5%) 9. BARYTES (1,2%) 10. WHEAT (1,1%) 11. PHOSPHATE (1,1%) 12. OLIVINE SAND (0,7%) 13. PIG IRON (0,6%) 14. MANGANESE ORE (0,6%) 15. SUGAR (0,6%) 16. ALUMINA (0,6%) 17. HEAVY HSS (0,6%) SODA SORGHUM (0,6%) 18. PHOSROCK (0,5%)

Klaveness Group key figures All figures MUSD 2009 2008 2007 2006 2005 Gross operating revenue 562 1,462 1,959 1,338 1,466 Profit before tax 58 (48) 224 85 129 Total assets 1,064 1,094 1,387 1,007 1,089 Total equity 678 602 686 583 513 Number of vessels 2009 2008 2007 2006 2005 Vessels owned/controlled 120 144 137 126 98 Vessels operated 61 78 120 146 150