Aspo Investor Event: ESL Shipping's long-term profitability

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Nov 24, 2016 at 2:15 AM

Aspo Investor Event: ESL Shipping's long-term profitability is expected to improve and net sales are expected to grow

ASPO Plc STOCK EXCHANGE RELEASE November 24, 2016 at 9:00 a.m. Aspo investor EVENT: ESL Shipping's long-term profitability is expected to improve and net sales are expected to grow Conglomerate Aspo will host an investor event in Helsinki today on November 24, 2016, starting from 11:00 a.m. The event will start with a review of Aspo Group, after which focus will be shifted to ESL Shipping, one of Aspo's subsidiaries. ESL Shipping is the leading shipping company transporting dry bulk cargo in the Baltic Sea. Its purpose is to secure raw material transportation for the industry and energy production around the year, even under difficult weather conditions. The company's key customer segments include the steel, energy and mining industries. In 2015, the company launched a significant investment in two new vessels - the first LNG-fueled Handysize dry bulk carriers in the world. Event's presentation material in English will be available today at 11:00 a.m. on the company's website at www.aspo.fi. A video of the comments of Aspo's CEO in Finnish will be available on the Aspo website on the following day. ESL Shipping is looking for an increase in net sales and an operating profit rate of 20-24% ESL Shipping expects its net sales to grow and its operating profit to increase to a level of 20-24% by 2020. In 2015, its operating profit rate was approximately 19%. The company is looking for growth from the additional capacity offered by its new vessels, a larger customer base and the opportunities presented by new business areas. The company can improve its profitability, for example, through its new energy-efficient vessels. ESL Shipping will receive funding of at most EUR 5.9 million from the EU Motorways of the Sea program as part of the Bothnia Bulk project it coordinates ESL Shipping is building two LNG-fueled Handysize dry bulk carriers of 25,600 DWT. They will be the first of their kind in the world and completed in China during 2018. The new vessels will operate in the northern Baltic Sea, improving the efficiency of the transportation chain and significantly reducing the environmental load of operations. The shipping company invests a total of approximately EUR 60 million in the new vessels. The EU supports energy-efficiency and environmental investments in ships. ESL Shipping will receive funding of at most EUR 5.9 million in 2016-2019, of which EUR 2.1 million will be paid in 2016. In addition to ESL Shipping, the Bothnia Bulk project involves SSAB Europe Oy, Luleå Hamn AB, Oxelösunds Hamn AB, Raahen Satama Oy and Raahen Voima Oy. The EU funding has been awarded from the Connecting Europe Facility for Transport instrument. ESL Shipping has signed vessel financing agreements of EUR 50 million Today on November 24, 2016, ESL Shipping has signed vessel financing agreements with OP Corporate Bank Plc to finance newbuilding projects. The total value of the two separate agreements is EUR 50 million, and the loan period is seven years. The repayment schedule includes a grace period of three years and a payback profile of 12 years. The new agreements extend the average maturity of Aspo Group's financing and, on their part, reduce the average financing rate. Aspo Group's financial objectives remain unchanged, target year specified Aspo's financial objectives remain unchanged. With its current structure, the company is looking for an operating profit of 7%, an average return on equity of over 20% and gearing of up to 100%. Aspo specifies that its aim is to reach these objectives by 2020. Aspo Group's strategy will remain unchanged. The key factors of the strategy are diversity, operating in eastern growth markets and the ability to implement structural changes. Aspo will keep its dividend distribution policy unchanged and, on average, will distribute at least half of the annual profit in dividends. Aspo's Board of Directors previously announced that it will propose a transition to a twice-a-year distribution policy to the Annual Shareholders' Meeting to be held in spring 2017. The guidance for 2016 specified in the January-September interim report will remain unchanged. Aspo's operating profit will be approximately EUR 19-22 (20.6) million in 2016. ASPO Plc Aki Ojanen CEO Further information: Aki Ojanen, CEO, Aspo Plc, tel. +358 400 106 592, aki.ojanen(a)aspo.com and Mikki Koskinen, Managing Director ESL Shipping Ltd, tel. +358 50 351 7791, mikki.koskinen(a)eslshipping.com Distribution: Nasdaq Helsinki Key Media www.aspo.com Aspo is a conglomerate that owns and develops business operations in Northern Europe and growth markets focusing on demanding B-to-B customers. Our strong company brands - ESL Shipping, Leipurin, Telko and Kauko - aim to be the market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these. Together they generate Aspo's goodwill. Aspo's Group structure and business operations are continually developed without any predefined schedules. ESL Shipping is the leading carrier of dry bulk cargoes in the Baltic Sea region. The company's main clients are the steel, energy and mining industries. Present fleet consists of 14 vessel units, of which the company owned 13 in full and one was leased. In 2015 the cargo volume carried was 11.1 million tons. ESL Shipping ensures availability of raw materials for industries and energy production throughout the year even in difficult climate conditions. Special services include loading and unloading of large ocean carriers at sea.

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