The Board of Directors of d’Amico International Shipping S.A., a leading international marine transportation company operating in the product tanker market, today examined and approved the first quarter 2017 financial results.

MANAGEMENT COMMENTARY

Marco Fiori, Chief Executive Officer of d’Amico International Shipping S.A. commented: ‘I am pleased to announce DIS’ Q1’17 results, which saw our Company posting a Net Profit of US$ 1.8m and an EBITDA of US$ 16.5m. In particular, our Q1’17 EBITDA is US$ 1.7m higher than the EBITDA achieved in the previous 2 quarters combined. This positive result is due to an improving product tanker market, which led DIS to increase its daily spot average by over 32% (or US$ 3,200/day) at US$ 13,363 relative to the average of the second half of last year. At the same time, DIS’ good level of time-charter coverage (41% at US$ 15,908/day), allowed us to achieve quite of a satisfactory total daily TCE average of US$ 14,412 in the quarter. We maintain our positive outlook on the product tanker market and on its very solid fundamentals. On the one hand, the current MR orderbook is at its lowest level in more than 15 years and there is very limited shipyard capacity at least for the next 2 years. This should limit the supply of new tonnage to the market. On the other hand, the world’s oil product demand is expected to increase in the next few years, outpacing supply growth. In addition to this, the concentration of the World’s refining capacity away from some of the key consuming areas will definitely lead to an increase of the ton-mile demand for product tankers. In this context, as I have been saying in the past I think our Company is very well positioned to benefit from the expected market recovery. The share capital increase we recently announced together with the sale of some of our existing vessels will strengthen our balance sheet and liquidity position, while completing our remaining CAPEX plan of US$ 197.3m. After our ambitious US$ 755m investment plan in 22 newbuildings begun in 2012 and due for completion at the end of 2018, DIS will have a very young and mostly eco fleet, with a good mix of owned and time-chartered-in vessels, which I believe will perfectly match the demand coming from our key customers in the coming years.’

Carlos Balestra di Mottola, Chief Financial Officer of d’Amico International Shipping S.A. commented: ‘I am rather satisfied of DIS’ Q1’17 results and in particular of the good level of EBITDA generated in the period, thanks mainly to a stronger spot market. In fact, our EBITDA of US$ 16.5m in the period was more than twice as high as in the previous quarter. We continued implementing our long-term investment plan during the quarter, with CAPEX of US$ 27.2m and the delivery of one MR newbuilding in January 2017. As

of today, our remaining CAPEX amounts to US$ 197.3m, for 6 LR1s expected to be delivered between Q4’17 and Q4’18. Out of the total remaining CAPEX, US$ 136.5m (69% of the total) will be financed with bank debt already fully secured as of today. DIS plans to generate liquidity and sustain its investment plan also through the disposal of some of its existing vessels, as well as through sale-leaseback transactions. In Q1’17, we finalized the sale of 2 MR vessels, generating a total net gain on disposal of US$ 2.7m and a net cash effect (after the repayment of outstanding debt) of US$ 5.2m. Three further vessels are currently under sale negotiations and their disposal is expected to generate net cash in excess of US$ 15m during the current year. These deals together with the share capital increase we recently announced will considerably strengthen our balance sheet and provide the required resources for our Company to complete its long-term investment plan’.

FINANCIAL REVIEW

SUMMARY OF THE RESULTS IN THE FIRST QUARTER 2017

According to the IMF’s January update after a subdued 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging economies. The IEA said in their recent report that after expanding by 1.6 million b/d in 2016, global oil product demand growth will slow to 1.4 million b/d in 2017. In January demand grew much stronger than anticipated in Russia and France, but slower than expected in Germany, Japan, India and Korea. Oil products demand growth for Q1 2017 is estimated by the IEA at around 1.6 million b/d relative to the same quarter last year. Product stocks are still at high levels and following steady declines since August 2016, built by a sizeable 48 million barrels (or around 1.5 million b/d) in January. Europe contributed to an increase in product stocks of 10 million barrels due to high diesel imports and a lack of gasoline exports. The IEA, however, expects product stocks to resume their declining trend in February and March, falling by around 9.5 million barrels during the period. . In the first two months of Q1 product tankers’ freight rates moved down from the levels reached at the end of 2016, with an improvement recorded only in the last two weeks of the quarter. Global stocks built at the beginning of the quarter and with no real increase in demand for winter fuels rates flattened out. West of Suez saw some improvement with increased demand into South America and Mexico. Poor domestic demand for gasoline in the US and West Africa reduced exports from Europe.

Refinery outage and poor demand curtailed Middle East runs to the Far East. During the last part of the quarter, the East of Suez remained flat at depressed levels with a healthy supply of tonnage facing lacklustre demand. However, as we approached the end of Q1, the Western Hemisphere saw a marked improvement in demand for products into West Africa and South America, drastically reducing supply of tonnage and subsequently improving earnings. The one-year time-charter rate is always the best indicator of spot market expectations. Despite the improvement in spot rates towards the end of the quarter in the west, the one-year rate for an MR increased only from $12,500 to $ 13,500 per day during the period. In Q1 2017, DIS generated a Net Profit of US$ 1.8 million, mainly thanks to a stronger freight markets compared to the second half of last year. This results compares with US$ 7.2 million Net Profit posted in Q1 2016. In detail, in Q1 2017 DIS’ daily spot rate was US$ 13,363 still significant lower than the same quarter of last year (US$ 18,076) but considerably higher than in both Q4 2016 (US$ 10,120) and Q3 2016 (US$ 10,101). The product tanker market seems to be gaining further momentum going into Q2 2017. At the same time, 41.2% of DIS’ total employment days in Q1 2017, were covered through ‘time-charter’ contracts at an average daily rate of US$ 15,908, which represents a lower percentage than the previous year but at a higher average rate (Q1 2016: 46.7% coverage at an average daily rate of US$ 15,706). Such high level of time charter coverage is one of the pillars of DIS’ commercial strategy and allows it to mitigate the effects of spot market volatility, securing a certain level of earnings and cash generation. DIS’ total daily average rate (which includes both spot and time-charter contracts) was US$ 14,412 in Q1 2017 compared with US$ 16,970 achieved in the previous year.

Thanks to an improved TCE performance and to a cost efficient operating platform, DIS achieved an EBITDA of US$ 16.5 million in Q1 2017. This level is lower than the same quarter of last year (Q1 2016: US$ 21.6 million) but it is US$ 1.7 million higher than the entire EBITDA generated in the previous six months, reflecting improving market conditions. DIS’ EBITDA margin was 24.8% in Q1 2017 vs. 28.8% in Q1 2018. In the first three months of the year, DIS had US$ 27.2 million in ‘capital expenditures’, mainly in relation to its new-building plan. Since 2012, DIS has ordered a total of 22 ‘Eco design’ product tankers1 (10 MR, 6 Handy-size and 6 LR1 vessels), of which 161 vessels have been already delivered as at the end of Q1 2017. This corresponds to an overall investment plan of approximately US$ 755.0 million and is in line with the Company’s strategy to modernize its fleet through new-buildings with an eco-design. In addition, DIS has already fixed 14 of its new-building vessels on long-term time-charter contracts with three oilmajors and a leading refining company, all at profitable levels.

OPERATING PERFORMANCE

Time charter equivalent earnings were US$ 66.6 million in Q1 2017 vs. US$ 75.1 million in Q1 2015. Such variance is due to the softer spot market compared with the same period of last year. In particular, DIS realized a Daily Average Spot Rate of US$ 13,363 in Q1 2017 compared with US$ 18,076 achieved in the same quarter of 2016. However DIS’ spot result of Q1 2017 represents an improvement of 32% (or US$ 3,200/day) relative to the previous two quarters. Following its strategy, in Q1 2017 DIS maintained a high level of ‘coverage’ (fixed contracts), securing an average of 41.2% (Q1 2016: 46.7%) of its available vessel days at a Daily Average Fixed Rate of US$ 15,908 (Q1 2016: US$ 15,706). In addition to securing revenue and supporting the operating cash flow generation, these contracts enabled DIS to strengthen its historical relationships with the main oil majors, which is one the pillars of its commercial strategy.

EBITDA was US$ 16.5 million in Q1 2017 vs. US$ 21.6 million achieved in the same quarter of the previous year. The reduction relative to last year, is mainly due to lower ‘TCE Earnings’, partially compensated by lower ‘Time charter hire costs’. DIS’ EBITDA Margin was 24.8% in Q1 2017 compared with 28.8% in Q1 2016. EBIT for the first three months of 2017 was positive for US$ 7.3 million compared to US$ 12.7 million for the same period of last year. DIS’ Net Profit was US$ 1.8 million compared with US$ 7.2 million posted in the same period of 2016. The variance compared to the previous year is almost entirely due to the higher spot rates in the first three months of 2016.

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Source: d’Amico International Shipping (DIS)