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

Diamond S Shipping Inc. Fourth Quarter 2019 Earnings Presentation March 5, 2020

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 Company will achieve or accomplish these expectations, beliefs or projections. 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; the duration and impact of the COVID-19 (coronavirus) outbreak; 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 & Recent Activity DAILY STATISTICS FOR FOURTH QUARTER 2019 FOURTH QUARTER 2019 RESULTS  Net income of $26.1 million or $0.65 per share CRUDE PRODUCTS Includes a loss on extinguishment of debt of $4.0 million Spot TCE (1) $43,703 per day $15,677 per day recognized in Q4 2019 due to refinancing of debt facilities  Adjusted EBITDA of $69.9 million TCE (1) 40,443 per day 15,322 per day Vessel expenses (2) 7,829 per day 7,092 per day  Cash and restricted cash: $89.2 million; $15.0 million available on revolvers General & administrative (cash) (3) 1,042 per day 1,042 per day  Working capital approximately $75 mm, up about $30 mm from TCE less Vessel expenses less G&A 31,572 per day 7,188 per day Q3 2019 CURRENT MARKET ENVIRONMENT IN Q1 2020 DSSI: 73% fixed = $47,000/day DSSI: 80% fixed = $15,900/day MR Spot Rates Suezmax Spot Rates 48,000 120,000 42,000 105,000 36,000 90,000 30,000 75,000 24,000 60,000 10 YR RANGE 18,000 45,000 2020 10 YR RANGE 2019 12,000 30,000 2020 2019 6,000 15,000 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Clarksons Research Source: Clarksons Research NOTES 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 costs or benefits. Daily vessel expenses are based on total operating days, which are the number of calendar days in the period of owned vessels. 4 3. General and administrative expenses (cash) excludes non-cash compensation expenses.

Current Market Uncertainty in near term as coronavirus continues to spread, but longer term outlook remains positive. BEARISH FACTORS IN THE OIL MARKETS BULLISH FACTORS IN THE TANKER MARKETS Coronavirus affecting worldwide markets. Oil demand expected to return later in year. Bloomberg commodity index 82 1.5 1.2 80 1.0 78 76 74 72 (0.4) 70 Jan 02 Jan 16 Jan 30 Feb 13 Feb 27 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Source: Bloomberg, Feb 2020 Source: Bloomberg, IEA, Feb 2020 Other Factors include: Other Factors include:  Inventories at 60.5 days forward demand near 10 year averages  Oil market in contango  OPEC+ has continued limits on production quantities  Reemergence of arbitrage opportunities  Chinese cuts on refinery runs  Fuel spreads tightening 5

Tanker Fundamentals Tanker earnings supported by low tanker supply growth and rising demand growth SUEZMAX FLEET PROFILE MR FLEET PROFILE Basis: 564 vessels Basis: 1,600 vessels 33% 28% 26% 25% 23% 22% 18% 13% 11% 8% 6% 5% 0-4 5-9 10-14 15-19 20+ On order On Order 0-4 5-9 10-14 15-19 20+ On Order On order CRUDE TANKER DEMAND GROWTH PRODUCT TANKER DEMAND GROWTH 10% YOY Growth by DWT YOY Growth by DWT 10% 8% 8% 7.4% 6.5% 6% 6.4% 6% 4.8% 4.3% 4% 4.7% 3.1% 4% 2% 0.4% 2% 0% 1.2% 0% -2% -1.0% -3.3% -4% -2% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 6 Source: Clarkson Research Feb-20

Asset Values Continued value in secondhand market SUEZMAX FLEET $mm 90 90 80 60 NEWBUILD RESALE 5 YR OLD 10 YR OLD 80 80 70 50 2020 10yr range 2020 10yr range 72.0 70 70 60 40 2019 36.0 2020 61.5 2020 2019 53.0 60 60 2019 10yr range 50 30 2019 10yr range 50 50 40 20 40 40 30 10 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct MR FLEET $mm 50 50 40 30 NEWBUILD RESALE 5 YR OLD 10 YR OLD 45 45 35 26 2020 2020 31.0 40 40 30 22 40.0 2020 2019 2019 2019 20.0 2019 2020 35 35 10yr range 25 18 35.5 10yr range 10yr range 10yr range 30 30 20 14 25 25 15 10 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 7 Source: Clarkson Research Feb-20

Financial Overview Kevin Kilcullen, CFO

Q4 2019 Performance Ended Sept 30 Data includes DSS ownership (51%) in JV ADJUSTED NET INCOME $mm ADJUSTED EPS $/share TCE RATES $mm Adjusted to exclude the loss on extinguishment of debt NET INCOME EPS Crude Fleet Product Fleet 30.1 Q4 2019 Spot $ 15,677 $ 43,703 0.75 9,615 Q4 2018 22,951 Q4 2019 Total 40,443 15,322 Q4 2018 22,951 10,209 Q1 2020 Booked to-date (1) 47,000 15,900 Total TCE (73% of available days) (80% of available days) (1.13) (1) As of February 28 2020 (30.8) See Non-GAAP Measures at the end of the presentation Q4 2019 Q4 2018 Q3 2019 Q3 2018 2018 shares based on DSS 68.1% share split ADJUSTED EBITDA $mm CASH FLOWS $mm, includes restricted cash CRUDE PRODUCT TOTAL 69.9 25.8 5.0 8.0 69.9 33.0 41.1 28.8 20.0 89.2 14.6 81.1 5.4 Sept 30 EBITDA Debt DD & Refi, net WC & Dec 31 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Service Capex Other 9 See non-GAAP measures at the end of the presentation

Balance Sheet, Operating Leverage and Liquidity CONDENSED BALANCE SHEET CASH & LIQUIDITY $mm Assets $mm Liabilities & Equity $mm Cash and cash equivalents $83.6 Current portion of debt $134.4 $15.0 Other current assets 126.0 Other current liabilities 46.0 $48.6 Excess Cash Current assets 209.6 Current liabilities 180.4 Restricted cash 5.6 Long-term debt 744.1 $89.2 Vessels, net 1,865.7 Equity 1,169.1 $55.6 Deferred drydocking 37.3 Noncontrolling interest 34.8 Bank required minimum cash Other noncurrent 10.2 CASH & UNDRAWN REVOLVING LIQUIDITY Total Assets 2,128.4 Total Liabilities & Equity 2,128.4 RESTRICTED CASH CREDIT CAPACITY DEBT SCHEDULE OTHER STATISTICS NET DEBT TO VALUE (2) 2020 DAILY CASH BREAKEVENS (3) # Outstanding Quarterly Maturity Name Collateral Margin 21,000 12/31 Repayment Date Vessels $mm $mm 525mm Facility 36 $515.0 250 bps $18.8 2024 13,500 66mm Facility (1) 2 51.8 325 bps 1.1 2021 360mm Facility 28 327.5 265 bps 13.7 2024 47% Deferred Fees (15.9) Total 66 $878.4 $33.6 Crude Product Note: Data as of December 31, 2019 except cash break even – see note 3. 1. This facility relates to a joint venture, in which Diamond S is a 51% owner. 2. Loan-to-value is based on brokers in conjunction with debt compliance. 3. Cash breakeven is an average estimate in 2020 and includes daily vessel expenses, general & administrative expenses and debt service. 10 4. Debt service costs are based on forward LIBOR curve and mandatory repayments on existing debt.