Viking Supply Ships AB Interim report Q1 2016

Press release
FIRST QUARTER

  · Total revenue was MSEK 319 (509)
  · EBITDA was MSEK 67 (58)
  · Result after tax was MSEK -40 (-71)
  · Result after tax per share was SEK -0.2 (-0.4)

SUMMARY OF EVENTS IN Q1

  · EBITDA for Q1 was MSEK 67 (58).
  · The average fixture rate in Q1 was USD 63,600 (54,100) for the AHTS fleet
and USD 6,200 (7,500) for the PSV fleet. The average utilization in Q1 was 56%
(71) for the AHTS fleet and 39% (33) for the PSV fleet.
  · In February 2016 Magne Viking was certified according to the IMO Polar Code.
The vessel, which is the first vessel globally to comply with the code, was
approved by DNV GL.
  · Due to a continued weak PSV market VSS A/S, in March 2016, decided to lay up
the PSVs Sol and Freyja Viking with immediate effect. The decision will reduce
the company’s operational costs going forward and will give a positive impact on
the results from the second quarter of 2016.
  · The market for PSV vessels has continued to deteriorate after the end of the
reporting period. The current challenging market conditions are supported by a
decline in observable broker values of the PSV fleet. VSS A/S will continue to
closely monitor the market development and need for further impairment of the
PSV fleet’s carrying amount.
  · The subsidiary VSS A/S has from 1 January 2016 changed its functional
currency from NOK to USD.
  · In Q4 2015 VSS A/S had initiated a dialogue with its lenders to secure a
long-term stable financing solution. In February 2016 VSS A/S entered into a
standstill agreement with its lenders, during which VSS A/S has not paid
instalments to its lenders. This agreement expired on 26 April 2016, but VSS A/S
has continued to not fully service its debt obligations as they fall due.
  · At the expiration and redelivery of two bareboat vessels in TA AB there was
a residual value guarantee commitment for the Group in favor of the financing
bank. The commitment amounts to a total of MSEK 63. The bank has agreed that the
payment is postponed to no later than in Q3 2016. Further, in a loan agreement
within TA AB there is a loan-to-value clause that the bank has invoked and
requested an instalment of MSEK 47. The bank has now agreed to give TA AB time
to pursue opportunities to free up liquidity to reduce the loan.

SUBSEQUENT EVENTS

  · In May 2016, the Group agreed the main principles for a restructuring
agreement with the bank lenders. Execution of a final agreement in the form of a
term sheet (the “Agreement”) is pending certain conditions precedent, including
that an amended agreement is negotiated and agreed with the bondholders in the
senior unsecured bond in VSS A/S and that terms for the bareboat charter of Odin
Viking are re-negotiated and amended. Among other things these conditions have
not yet been resolved and, accordingly, the Agreement has not yet been signed
and deemed effective.
  ·
On 9 June 2016, VSS AB's subsidiary VSS A/S was informed that Norseman Offshore
AS has filed an application for bankruptcy against VSS A/S with the Maritime and
Commercial High Court in Copenhagen. The company has not yet been officially
notified of the petition by the Court. Norseman Offshore AS is the owner of the
vessel Odin Viking which is on a bareboat charter with VSS A/S. The petition for
bankruptcy is made on the basis of unpaid hire in an aggregate amount of
approximately USD 2.5 million.The parties have been in discussions for several
months as part of the overall financial restructuring of the group. VSS A/S is
of the view that there is no basis for the petition and will vigorously defend
itself against it. VSS A/S will continue to pursue the process to achieve a
restructuring of its debts as further described in the annual report for 2015.

  ·
As an effect of the deteriorated market conditions within the oil & gas industry
and as a measure to further strengthen the focus on cost efficiency within VSS
A/S, the Management has decided to close the office in St. John’s, Newfoundland
with effect as of 28 April 2016. VSS A/S still considers Newfoundland and
Eastern-Canada to be of strategic importance going forward and in the future,
commercial activities towards the region will be followed up closely by
dedicated personnel from the headquarter in Copenhagen and the chartering office
in Kristiansand.

  · As part of the restructuring process in the Group, the majority shareholder,
Kistefos AS, has entered into agreements with some of the Group’s financing
counterparts. As a consequence, the Group has entered into agreements on market
terms with Kistefos AS. The compensation in these agreements has been agreed to
an annualized fee of 12% covering the associated risk and exposure.
  · TA AB has sold the two small bulk vessels TransAndromeda and TransCapricorn.
The transaction, which was concluded in May 2016, generated a positive cash
effect of MSEK 24.
  · After a short temporary leave Christian W. Berg is back in his position as
CEO of Viking Supply Ships A/S.

In conjunction with the publication of this interim report, an earnings call
will take place on Monday 13 June, 2016 at 10.00 am.

  · Phone: +46 (0) 8 50520424
  · Password: Viking Supply Q12016

Please dial in 5-10 minutes before the call starts.

For further information please contact:

Ulrik Hegelund, CFO, ph. +45 41 77 83 97, e-mail
ulrik.hegelund@vikingsupply.com

Morten G. Aggvin, IR & Treasury Director, ph. +47 41 04 71 25, e-mail
ir@vikingsupply.com

Viking Supply Ships AB (publ) is a Swedish company with headquarter in
Gothenburg, Sweden. Viking Supply Ships A/S is a subsidiary of Viking Supply
Ships AB (publ). In addition Viking Supply Ships AB (publ) has the subsidiary
TransAtlantic AB. The operations are focused on offshore and icebreaking
primarily in Arctic and subarctic areas as well as on Shipping services mainly
between the Baltic Sea and the Continent. The company has in total about 500
employees and the turnover in 2015 was MSEK 1,977. The company’s B-shares are
listed on the NASDAQ Stockholm, Small Cap segment. For further information,
please visit: www.vikingsupply.com

Viking Supply Ships AB is obliged to make this information public according to
the Financial Markets Act and/or the Financial Instruments Trading Act (Sw:
lagen om värdepappersmarknaden and lagen om handel med finansiella instrument).
The information was submitted for publication on 10 June 2016 at 17:30.