Diamond S Shipping Inc. First Quarter 2019 Earnings Presentation - PowerPoint PPT Presentation

Diamond S Shipping Inc. First Quarter 2019 Earnings Presentation May 14, 2019

Disclaimer and Forward-Looking Statements Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the assumptions will prove correct. Some factors that, in the Company’s view, could cause actual results or conditions to differ materially from those discussed in the forward-looking statements include unforeseen liabilities; future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires, and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

Highlights & Business Overview Craig H Stevenson, Jr., CEO

Highlights  Merger consummated on March 27  68 vessels in the fleet – Crude Fleet: 15 Suez, 1 Afra; Product Fleet: 46 MR2, 6 MR1  Estimated gross asset value of $1.6 billion  Strong balance sheet capitalized to thrive throughout the cycle  Asset value to net debt: 51%  Total gross debt of $953.6 million, weighted average margin of 270 bps  Balanced/opportunistic chartering strategy with approximately 20% of the fleet on time charter FIRST QUARTER RESULTS  Four days of combined entity (DSS Holdings LP operations plus four days of CPLP contributed vessels)  Key Factors CRUDE PRODUCTS TCE (1) $20,786 per day $14,486 per day Vessel expenses (2) $6,965 per day $6,328 per day General & administrative (3) $1,233 per day $1,233 per day TCE less Vessel expenses less G&A $12,588 per day $6,925 per day  Cash and restricted cash: $81.3 million  $16.1 million undrawn on available credit lines  Net loss attributable to Diamond S Shipping Inc. was $1.0 million, $0.04 per basic/diluted share Notes: Data as of March 31, 2019 1. TCE rates are a non-GAAP measure. Please refer to non-GAAP measure disclosures at the end of this presentation. 2. The vessel operating expenses we incur primarily consist of crew wages and associated costs, insurance premiums, lubricants and spare parts, and repair and maintenance costs and technical management fees. Excluded in above are nonrecurring benefits in Q1 2019. 4 3. General and administrative expenses for the Q1 22019 period excludes certain costs related to strategic planning and the Transaction.

Completion of Merger Merger with CPLP’s crude and product tanker business was completed on March 27, 2019. COMBINATION  DSS Holdings LP’s business merged with CPLP’s tanker fleet in a share-for-share transaction to form one of the largest publicly traded tanker companies Strategic access to public markets with enhanced scale at a cyclically opportune time o Fleet / operations in-process, expected to be efficiently and quickly combined o  New York Stock Exchange listed (ticker: DSSI)  Transaction created the third-largest publicly traded MR and product fleet in the world, and one of the world’s largest public mixed product and crude fleet operators VALUE PROPOSITION  Management is focused on maximizing value for all shareholders Grow earnings to drive future stock price o Expand the business via accretive acquisition opportunities o Ultimately pay regular dividends quarterly o  Attractive entry point for new investors; tankers believed to be turning towards recovery  Proven management track record 5

Key Oil Market Factors Macro oil indicators suggest that shipping is poised for a recovery OIL DEMAND EXPECTED TO HIT 100MMBPD THIS YEAR OPEC STILL RELEVANT IEA est. OPEC est. PROVEN RESERVES (2017) COVERS 1/3 OF WORLD OIL PRODUCTION mmbpd 32.8 32.6 32.4 32.3 32.3 32.3 32.1 100 NON- 31.6 OPEC, 18% 30.8 OPEC, 82% 90 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2017 2017 2017 2017 2018 2018 2018 2018 avg GROWING DISTANCE OF OIL SUPPLY GROWTH AND DEMAND GROWTH GLOBAL INVENTORIES EXPECTED TO CONTINUE TO DECREASE OECD DAYS FORWARD DEMAND OF COMMERCIAL INVENTORY (CRUDE AND PRODUCTS) OIL PRODUCTION GROWTH OIL CONSUMPTION GROWTH 2024 v 2018 2024 v 2018 66 60 days 62 30-50 DAY EAST OF SUEZ VOYAGE 58 WEST OF SUEZ 6.2 5.5 54 50 2008 2010 2012 2014 2016 2018 Sources: IEA/OPEC; OPEX; Fearnleys; OPEC 6 Sources from April/May 2019

Suezmax Crude Carrier Overview Suezmaxes are well-positioned to benefit from the strengthening crude oil market fundamentals due to a historically low orderbook. GROWING US EXPORTS ABSORBING TONNAGE ON LONG HAUL VOYAGES EAST 4,000 3,000 2,000 1,000 0 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Source: EIA, May 2019 SUEZMAX FLEET AGE PROFILE NEWBUILD PARITY HISTORICALLY LOW ORDERBOOK GROUPED AGE OF FLEET (yrs) ORDERBOOK EXCL. SHUTTLE TANKERS & JONES ACT: 6% SIGNIFICANT VALUE IN OLDER VESSELS 34% 50% NEWBUILD DEPRECIATION LINE 26% 40% 19% 17% 30% CURRENT VALUES 20% 4% 10% 0% 0-4 5-9 10-14 15-19 20+ 2009 2011 2013 2015 2017 2019 5 Yrs 10 Yrs 15 Yrs 20 Yrs Source: Clarkson Research, May 2019 Source: Clarkson Research, May 2019 Source: vv.com, VV matrix, May 2019 7 Graph includes shuttle tankers and Jones Act vessels

MR Product Carrier Overview New refining capacity is primarily being built for export purposes increasing the demand for product tankers generating ton-mile growth. REFINING CAPACITY ADDITIONS MOSTLY BUILDING FOR EXPORT (MMBPD) World capacity additions/product flows 2020 WEST OF SUEZ EAST OF SUEZ Middle East Asia Pacific Americas Africa Europe Russia 5.1 1.8 1.6 1.3 0.9 0.4 0.3 0.2 0.1 (0.4) Source OPEC (3.2) (4.3) FLEET AGE PROFILE ORDERBOOK IS LOWEST IN YEARS NEWBUILD PARITY GROUPED AGE OF FLEET (yrs) NO. SHIPS ON ORDER/ % ORDERBOOK SIGNIFICANT VALUE IN OLDER VESSELS 31% 27% 480495 NEWBUILD DEPRECIATION LINE 25% 9% 295295 290 290 250 215235 CURRENT VALUES 225 11% 165190 137153150136 155 6% 120 60 0-4 5-9 10-14 15-19 20+ 2001 2004 2007 2010 2013 2016 2019 5 Yrs 10 Yrs 15 Yrs 20 Yrs Source: Clarkson Research, May 2019 Source: Clarkson Research, May 2019 Source: vv.com, VV matrix, May 2019 8

Marine Fuels – Regulatory Change in Sulfur Emissions (IMO 2020) IMO 2020 is the most significant regulatory-driven change in the tanker industry since the Oil Protection Act of 1990. COMPLIANT FUELS DEMAND MORE GASOIL FOR BLENDING YET LIGHT ABOUT 3-4 MMBPD OF BUNKER FUEL DEMAND LIKELY TO BE CRUDE YIELD MORE NAPHTHA TYPE PRODUCTS DISPLACED BY A DISTILLATE BLEND YIELDS OF CERTAIN CRUDE OILS FOR A COMPLEX REFINERY Coke Fuel Oil Gasoil Kerosene Naphtha LPG Refinery changes Shipping changes Naphtha/Gasoline yields 1.7 43.7% 27.1% 32.0% 1.0 0.5 0.5 41.2% 34.8% 0.3 27.9% Gasoil yields Refinery Blending/ Feedstock Non Alternatives Permian Arab Light WCS Scrubbers, LNG Expansion Processing Change compliance US Crudes Source: Fearnleys, IEA, May 2019 Source: Evercore, April 2018 SCRUBBER INSTALLATIONS POTENTIAL FOR OLDER VESSELS TO PHASE OUT LESS THAN 16% OF THE TANKER FLEET INSTALLING SCRUBBERS PERCENT OF VESSELS OLDER THAN 15 YRS No. of vessels installing scrubbers No. of vessels NOT installing scrubbers 1,573 38% 36% 168 22% 21% 774 17% 645 575 242 455 89 11% 424 10% 364 129 20 21 87 VLCC SUEZ AFRA LR2 LR1 MR Handy VLCC SUEZ AFRA/ LR2 LR1 MR Handy PANAMAX Source: Clarksons Research, May 2019 Source: Clarksons Research, May 2019 9

Financial Overview Kevin Kilcullen, CFO