Simon Boddy, Chairman of Management Board Kaspars Bunne, Finance - PowerPoint PPT Presentation

Simon Boddy, Chairman of Management Board Kaspars Bunne, Finance Manager Webinar on May 16, 2013 May 16, 2013

Table of contents  Company in brief  Highlights of 2012  Oil market in 2012 and 2013 Q1  Financial performance  Forecast for 2013 May 16, 2013

Ventspils Nafta Group  Largest Latvian-Russian  The largest petroleum  One of the largest joint venture transhipment terminal owner in the handy-size in the Baltic States  One of the largest oil and medium range product transportation  105 tanks with tanker market segment companies in the Baltic combined capacity of States  1,2 million m3 19 modern tankers   An integral part of Vitol Pipeline / rail road  Average age of the fleet and Transneft logistical connections from CIS 6.3 years infrastructures countries   Own internal technical The 21st most  The 19th most profitable company in profitable company in and crewing Latvia (DB TOP500) Latvia (DB TOP500) management company May 16, 2013

May 16, 2013

Highlights of 2012  LSC has stabilised its financial performance – losses decreasing  LatRosTrans cleaned 2/3 of the crude oil pipeline  New websites and profiles in social media  Two companies of the VN Group received Baltic Market Awards in the category “Best improvement of investor relations in the Baltic States in the course of the year”  LSC – 1st place, VN 2nd place

Operational environment in 2012 and 2013  Influence by regional politics of the countries supplying oil products.  VNT like all terminals is subject to the shape of the global oil product market  regional rail tariffs becoming WTO compliant  Latvian rail tariffs need to become more competitive  LSC’s operations  global economic situation affecting demand for oil and oil products May 16, 2013

Oil market 160 Crude oil price 1997-2013 143.14 140 127.54 120 111.14 100 77.57 88.62 80 60 40.05 37.61 52.39 40 33.65 20 Crudes Platt's Brent Dated Mid 10.43 12.62 0 May 16, 2013

FINANCIALS

VN’s financial performance as a parent company  VN’s revenue in 2012 was 21% less in VN’s net profit (million, LVL) comparison with 2011 3.64  4.00 VN’s financial income in 2012 was LVL 269 thousand less than in 2011 3.00  Loans to related companies issued in 2.00 2012 (LVL equivalent – LVL 14.37 1.00 0.36 0.26 million) 0.00 2010* 2011 2012  VN’s administrative costs (million, LVL) In 2012 VN’s administrative costs were 1.47 17.2% less in comparison with 2011 1.50 1.10  the largest decrease was in professional 1.00 0.91 charges and legal costs – by more than 50% 0.50 0.00 2010  *In 2010 foreign exchange gain was LVL 3.78 million 2011 2012 May 16, 2013

VNT’s financial performance VNT’s transhipment volumes  Transhipment volumes of VNT (million metric tons) increased by 5% 15.0  In 2012 gross profit of VNT is LVL 1.12 11.4 12.0 9.0 million more than in 2011 10.0  Administrative costs of VNT are 20.8% 5.0 lower compared to 2011 0.0 2010 2011 2012  In 2012 net profit of VNT is LVL 10.44 VNT ’s revenue, net profit (million LVL) million, which is LVL 1.97 million more than in 2011 80.00 58.75 60.43 60.00 43.44 40.00 9.67 20.00 8.47 10.44 0.00 2010 2011 Revenue (million LVL) 2012 Net profit (million LVL) May 16, 2013

LRT’s financial performance LRT’s transhipment volumes  Transhipment volumes of LRT in 2012 (million metric tons) increased by 8.98% or 520 thousand metric tons compared to 2011 6.40 6.31 6.20  LRT’s revenue in 2012 was 19.45% 6.00 5.79 higher compared to 2011 5.64 5.80  5.60 After a long period of time LRT 5.40 operated with a gross profit. In 2012 5.20 it was LVL 2.1 million (2011: gross 2010 2011 losses of LVL 0.41 million) 2012 LRT’s revenue, net profit/ (loss) million LVL  In 2012 a net profit of LRT is LVL 2010 2011 11.82 million 2012 15.00  Net profit from sale of crude oil was 11.82 12.16 9.90 10.18 LVL 15.06 million (2011: LVL 10.41 10.00 8.02 million) 5.00  Deferred tax liabilities recognized in 0.00 the amount of LVL 3.94 million -5.00 (1.62) Revenue (million LVL) Net profit/ (loss) million LVL May 16, 2013

LSC Group’s financial performance LSC Group’s revenue (million LVL)  In 2012 revenue of the LSC Group is LVL 13.75 million more than in 2011 80.00 58.84  Gross profit has increased from LVL 63.08 60.00 49.33 7.96 million in 2011 to LVL 13.05 40.00 million in 2012 20.00 0.00 2010 2011 2012 LSC Group’s net loss and impairment of  non-financial assets (million LVL) Net loss of the LSC Group in 2012 was LVL 18.85 million. 2010 2011 2012  0.00 The largest proportion of the net loss – LVL 15.28 million is related to (20.00) (14.26) (15.28) (24.09) impairment of the fleet required by (18.65) (40.00) International Financial Reporting Net loss (million LVL) (60.00) Standards (51.69) (80.00) (77.95) Impairment of non- financial assets (million LVL) May 16, 2013

VN Group’s financial performance in 2012 VN Group’s revenue (million, LVL) 135.67  VN Group’s revenue is LVL 135.67 140 118.24 112.02 120 million or 14.8% more than in 2011 100 - the largest increase in voyage 80 income +LVL 13,72 million 60 40 20  VN Group’s gross profit is LVL 8.65 0 million more than in 2011 (The largest 2010 2011 increase of gross profit was in the LSC 2012 Group and LRT) VN Group’s gross profit (million, LVL)  > 60% of VN Group’s revenue is from 30 26.97 related parties. 25 18.32 20 15.11 15 10 5 0 2010 2011 2012 May 16, 2013

VN Group’s financial performance in 2012 (cont’d) VN Group’s net profit/ (loss) million, LVL  VN Group’s financial result for 2012 is a net profit of LVL 3.87 million 20.00 3.87  0.00 The net result of the VN Group is still (20.00) substantially affected by losses of (12.19) (40.00) the LSC Group (60.00)  Administrative costs of the VN (65.57) (80.00) Group are 20.38% lower compared 2010 to 2011 2011 2012 VN Group’s EBITDA, EBIT (million, LVL)  VN Group has invested more than 2010 2011 2012 LVL 6.5 million in 2012 50 - the largest investments made by 40.32 40 VNT (LVL 3.5 million). 24.05 30 23.34  Substantial improvements in general 20 16.62 financial performance and earning 10 1.10 ability of VN Group 0 (0.38) -10 EBITDA (million LVL) EBIT (million LVL) May 16, 2013

Highlights for 2013  All shares in regulated market  Conversion of 43’881’398 shares of closed issue  The total number of VN shares 104’479’519  Dividends from daughter companies:  Q1: VNT paid dividends for 2011 – EUR 6,145 mln  Q2: VNT paid dividends for 2012 – EUR 7,577 mln  Use dividends to continue financing LSC Group  Improvement in product shipping market  LRT testing old crude pipeline with intelligent pig  Next Business Update in November May 16, 2013

Q&A