STAR Reefers

STAR ReefersSTAR Reefers

PresentationNovember 23 2004

Presentation 23 November

Reefer Market Caracteristics Reefer Market Caracteristics

Commodities in specialised reefers over 300,000 cbftBananasDecidiousCitrus

South north lanesSesonal businessLow valueHigh VolumLow draftSmall vesselsLoading in ports with limited infrastructureVessels have Cranes

The Forgotten Segment


Conventional reefer landscapeConventional reefer landscape

Source: Drewry

Reefer commodities Conventional reefer vessels distance volume

Bananas43 %

Deciduous10 %

Citrus11 %

Exotics2 %

Fish21 %

Meat10 %

Others2 %

Dairy1 %


Trade patterns (Banana trade)Trade patterns (Banana trade)

Source: UN


Recent Reefer Industry DevelopmentsRecent Reefer Industry Developments

Market growth expected to exceed 2,5% p.a.Significant increase in spot ratesCustomers concerned about availability of tonnageFruit major securing tonnage on 3 year contractAggressive competition amongst operatorsOperators chartering in vessels on medium term (3 – 5 years)Container lines concentrated on dry cargoCompetition for quality 2nd hand shipsScrapping continuing in strong marketOld fleet Almost no new orders

Star well positioned to take advantage of this period of change


Conventional reefer landscapeConventional reefer landscape

MAJOR REEFER OPERATORS (Post split)

Source: Drewry

Source: Star

Reefer commodities Conventional reefer vessels distance volume

Bananas43 %

Deciduous10 %

Citrus11 %

Exotics2 %

Fish21 %

Meat10 %

Others2 %

Dairy1 %


2004 With 2nd Peak in May and a Strong Summer and 2004 With 2nd Peak in May and a Strong Summer and Fall Market Fall Market

YEARLY SPOT RATES

0

20

40

60

80

100

120

140

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

USC per cbft

Modern 03

Older 03

Small 03

Modern 04

Older 04

Small 04

Source: Orion Shipping AS, Oslo


2004 With 2nd Peak in May and a Strong Summer and 2004 With 2nd Peak in May and a Strong Summer and Fall Market Fall Market


Are Rates Returning to 1997 Levels?Are Rates Returning to 1997 Levels?

REEFER 12 MONTHS ESTIMATED EARNINGSSize: 350-550.000 cbft vessel

30

35

40

45

50

55

60

65

70

75

80

85

US

Cen

ts p

er c

bft

Source: Orion Shipping AS, Oslo

---- Conventional type - "old / new " ---- Modern high quality vessels


Factors influencing demandFactors influencing demand

Consumer expenditures and general economic conditions

A Theoretical Approach

A B C

GDP per capita

Consumption pr. capita

0

2

4

6

8

10

12

14

Russia

1930

SaudiArabia6870

Germany

25280

USA

25820

OtherE. Eur.2355

OtherW. Eur.1)

25927

OtherEU

19755

A) Low income, basic need coverage

B) Rising income changing spending (eating) habit. Economy in focus by multinationals (Distribution network/promotion).

C) Consumption reaches top point. Rising income triggers substitution to more sophisticated fruits


Strategic matrix – Reefers vs containersStrategic matrix – Reefers vs containers

REEFERS

SOUTH – NORTH LANE

SPEED ADVANTAGE

PORT TO PORT

LOW DRAFT

GEAR

HIGH AVERAGE AGE

QUALITY PAYS

NO ORDER BOOK

HIGH VOLUME – LOW VALUE

BANANA TRADE

CHANGE OF BANANA REGIME 06

WEAK SERVICE & CHAIN MANAGEMENT

CONTAINERS

EAST – WEST LANE

SPEED IMPROVEMENTS TO COME

TERMINAL TO TERMINAL / DOOR TO DOOR

DRAFT LIMITATIONS

NO GEAR

LOW AVERAGE AGE

ESTABLISHED QUALITY

HIGH ORDER BOOK IN 3000 TEU RANGE

LOW VOLUME – HIGH VALUE

NO BANANA TRADE EXCEPT FOR BRAZIL/USWCNO IMPACT TO THE CONTAINER

STRONGER LOGISTICAL BASE


Net Scrapping Continues in a Strong Market... Net Scrapping Continues in a Strong Market...

0

1

2

3

4

5

6

7

8

Mill cbft

1999 2000 2001 2002 2003 Sep-04

...but most of it is the older frozen vessels.

Source Orion Shipping


Reefer Age Distribution Fleet over 300 000 cbft Reefer Age Distribution Fleet over 300 000 cbft 231 mill. cbft.231 mill. cbft.

Over 20

15-20

10-15

0-10

39% of fleet is over 20 years and almost no newbuildings


Star Strategy Star Strategy

Objective

Strategy

To generate a RoE better than our major competitors

Simplify and improve the management of the Company

Optimise fleet structure

Business risk management

Reduce costs

To evaluate new reefer shipping and terminal opportunities.


.

# of Ships Capacity Average Average

(mill cbft.) Age Size

1 000 cbft.

Owned 16 7.9 14 490

Bare Boat Charter 6 3.2 12 540

Time Charter 14 7.7 10 553

Total Fleet 36 18.8 12 523

STAR Core FleetSTAR Core Fleet


Reefer Age Distribution of Fleet over Reefer Age Distribution of Fleet over 300 000 cbft (231 mill) 300 000 cbft (231 mill)

0

10

20

30

40

50

60

70

Mill cbft

Age >25 20-25 20-15 15-10 10-5 >5

# Ship Star Owned/BB - 1 5 12 4 -

# Ships Star Chartered - - 1 9 2 2


STAR Reefers Highlights in 3QSTAR Reefers Highlights in 3Q

EPS $ 0.48 against $ -0.32 last year

Freight rates 49 cents in 2Q vs. 39 cents last year

Sale of 2 ships generating profit of $ 4.6 million

Contract renewals 2005 at levels up 15-25%

Strenghening balance sheet


.

3 Q 2004 3 Q 2003 YTD YTD

30-Sep-04 30-Sep-03

Net operating revenues 28.6$ 23.0$ 102.0$ 88.0$ Ships operating expenses -10.4 -10.2 -30.9 -30.4 Time charter hire -12.8 -10.3 -41.7 -33.5 Administrative expenses -0.4 -0.6 -1.5 -2.5 EBITDAR 5.0 1.9 27.9 21.6Bare boat charter hire -2.4 -1.5 -6.9 -4.6 Depr. and amortization -2.1 -2.2 -6.9 -6.6 Gain sale ships/subsidiary 4.6 0.8 5.0 1.5Operating profit 5.1 -1.0 19.1 11.9Interest expense -0.9 -1.7 -3.4 -5.1 Other financial items -0.1 0.2 -0.2 0.1Net income 4.1$ -2.5 $ 15.5$ 6.9$

EPS 0.48$ -0.32 $ 1.84$ 0.90$

Profit & Loss AccountProfit & Loss Account


.

30-Sep-04 30-Sep-03

Vessels 141.2$ 157.5$ Other fixed assets 5.8 5.5 Other current assets 18.8 19.9 Bank deposits 32.2 20.4 Total assets 198.0$ 203.3$

Equity 85.4$ 62.3$ Provisions 0.1 1.2 Interest-bearing debt 92.4 120.6 Short term liabilities 20.1 19.2 Total equity and liabilities 198.0$ 203.3$

Equity ratio 43% 31%

Equity per share $10.09 $8.15

Balance SheetBalance Sheet


STAR Reefers Recent DevelopmentsSTAR Reefers Recent Developments

Time Charters for 2 newbuildings

Vessels to be built at Shikoku Yard in Japan

Delivery Q1 2006 and Q4 2006

Specialised Reefers of 585,000 cbft.High Speed

High containerintake

Low bunker consumption

10 year duration of charters

STAR secruing modern long term tonnage as a leading quality reefer operator

STAR Reefers

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