Hunter Group ASA - Q1 2018 report

Highlights

- Total consolidated revenues was NOK 5.8m in Q1 2018. Total net income for Q1 2018 was NOK -44.8m.

 - EBITDA (Earnings before interest, tax, depreciation and amortization) was negative with NOK -15.2m in Q1 2018. One off cost related to negotiations with IKM for possible acquisition was NOK 7.3m.

 - EBIT (Earnings before interest and tax) was negative with NOK -44.7m in Q1 2018, including a write-down of NOK 25.5m (please see note 10 for further details).

- Cash position as of 31.3.2018 was NOK 267.3, down from NOK 279.5m last quarter. Total interest bearing debt was NOK -25.1m.

Key events in Q1 2018

- The management and board of directors proposed medio February to acquire IKM Subsea & Technology from IKM Gruppen AS. The transaction was withdrawn, as the board received documentation from Apollo Asset Ltd, owned by Arne Fredly, that shareholders holding in excess of 1/3 of the Company's shares will vote against the contemplated transaction with IKM Gruppen AS.

 - In March, the board of directors received notice from interim CEO and CFO, that they will resign from their positions.

 - The WOR contract with a yard for Dwellop, a presented in the 4q 2017 report, has not materialized in the quarter as the yard has not concluded on a contract with its client. The absent of a WOR contract, in combination with a high level of fixed costs, have over the past month led to a tensed liquidity situation in Dwellop. As such, the board of directors in Hunter Group ASA has decided to make an impairment of the book value of the goodwill related to the CGU for Dwellop with NOK 25.5 million in 1Q 2018. Please see note 9 for further details. On a positive note, the order intake for WIS segment (Well Intervention System & Products) shows signs of improvement compared with same quarter in 2017.

Subsequent events

- The board of directors announced 11 May 2018, that the Company had received satisfactory refund guarantees and made the first instalment for three of the VLCC construction contracts, the Company will undertake the payment for the fourth construction contract once a refund guarantee is in place. In addition, the Company announced that it will exercise the three VLCC construction option contracts once a firm contract is signed and a refund guarantee is in place.

 - At the ordinary general meeting 9 May, the shareholders approved of i) the private placement of NOK 172,5m, ii) issuance of 15m warrants to Apollo Asset Ltd, iii) agreement with Apollo Asset Ltd related to take over the four VLCC construction contracts and three options on a “back-to-back” basis and iv) distribution of Dwellop to the Company’s shareholders. Please see note 9 and 10 for further details.

 - The Company announced early May that Mr Erik Frydendal will take on the position as CEO and Mr Sujoy K. Seal the position as COO.

 - On 10 April 2018 (later approved at the AGM 9 May 2018) the Company received a non-binding indicative offer from Apollo Asset Limited, the Company’s largest shareholder as of the same date, with respect to transferring four (4) VLCC newbuilding contracts and three (3) VLCC options to the Company. The transfer of the newbuilding contracts and the options is on a back-to-back basis as contracted with the Daewoo Shipbuilding Marine Engineering Co., Ltd, whereby the Company will assume the obligations towards the Shipyard (directly or indirectly). Total commitments for the four newbuilding contracts are USD 341.1m. Please see note 9 for further details.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

For further information, please contact:

Erik A.S. Frydendal, CEO, +47 957 72 947, ef@huntergroup.no  

www.huntergroup.no

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About Us

Hunter Group ASA is a publicly traded investment company listed on the Oslo Axess. Hunter Group currently has 7 high spec VLCC's with scrubbers under construction at DSME in Korea.