Diamond S Shipping Inc. First Quarter 2020 Earnings Presentation - PowerPoint PPT Presentation

Diamond S Shipping Inc. First Quarter 2020 Earnings Presentation May 8, 2020

Disclaimer and Forward-Looking Statements Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. Some factors that, in the Company’s view, could cause actual results or conditions to differ materially from those discussed in the forward-looking statements include unforeseen liabilities; future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the Company’s operations; risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all; the failure of counterparties to fully perform their contracts with the Company; the strength of world economies and currencies; the duration and impact of the COVID-19 (coronavirus) outbreak; general market conditions, including fluctuations in charter rates and vessel values; changes in demand for tanker vessel capacity; changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs; the market for the Company’s vessels; availability of financing and refinancing; charter counterparty performance; ability to obtain financing and comply with covenants in such financing arrangements; changes in governmental rules and regulations or actions taken by regulatory authorities; potential liability from pending or future litigation; general domestic and international political conditions; potential disruption of shipping routes due to accidents or political events; vessels breakdowns and instances of off-hires; and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

Highlights & Business Overview Craig H Stevenson, Jr., CEO

Highlights & Recent Activity DAILY STATISTICS FOR FIRST QUARTER 2020 FIRST QUARTER 2020 RESULTS  Net income of $45.0 million or $1.13 per share CRUDE PRODUCTS Spot TCE (1) $46,725 per day $16,426 per day  Adjusted EBITDA of $84.7 million TCE (1) 42,855 per day 15,947 per day  Cash and restricted cash: $116.6 million; $20.0 million available on revolvers Vessel expenses (2) 7,429 per day 6,660 per day General & administrative (cash) (3) 1,131 per day 1,131 per day  Working capital approximately $83 mm, up from $77 mm in Q4 2019 TCE less Vessel expenses less G&A 34,295 per day 8,156 per day  Share repurchase program 137k shares for approx. $1.4 mm CURRENT MARKET ENVIRONMENT IN Q2 2020 DSSI: 54% spot fixed = $48,700/day DSSI: 51% spot fixed = $20,700/day MR Spot Rates Suezmax Spot Rates 120,000 80,000 105,000 70,000 90,000 60,000 75,000 50,000 2020 60,000 40,000 45,000 30,000 2020 10 YR RANGE 10 YR RANGE 30,000 20,000 2019 2019 15,000 10,000 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Clarksons Research Source: Clarksons Research NOTES 1. TCE rates are a non-GAAP measure. Please refer to non-GAAP measure disclosures at the end of this presentation. 2. The vessel operating expenses we incur primarily consist of crew wages and associated costs, insurance premiums, lubricants and spare parts, and repair and maintenance costs and technical management fees. Excluded in above are nonrecurring costs or benefits. Daily vessel expenses are based on total operating days, which are the number of calendar days in the period of owned vessels. 4 3. General and administrative expenses (cash) excludes non-cash compensation expenses.

Current Market As the coronavirus causes significant demand destruction, tanker rates in the near term have been supported by storage. BEARISH FACTORS IN THE OIL MARKETS BULLISH FACTORS IN THE TANKER MARKETS Millions of barrels per day Millions of barrels Oil demand has declined at a rapid rate. Excess oil is being stored on tankers. 6 mos Ago Today Implied Inventory Max onshore storage 7,000 102.1 101.7 100.9 100.1 99.8 6,000 97.3 5,000 94.3 92.9 92.8 4,000 86.7 3,000 2,000 1,000 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Jan Feb Mar Apr May Jun Q3 Q4 Source: OPEC, Apr 2020 Source: Fearnleys, Apr 2020, Implied inventory represents current inventory plus supply less demand (IEA) Other Factors include: Other Factors include:  Inventories at 72.7 days forward demand well above 10 yr avg  Oil market in contango, sizable to incentive storage  OPEC+ has agreed to cut 9.7 mmbpd in May/June and 7.7 mmbpd  Reemergence of arbitrage opportunities Jul-Dec  Fuel prices have declined by approx. 60% in 2020  Refinery processing is well below capacity levels 5

Tanker Fundamentals Storage trade supporting near term strength in tanker rates. SUEZMAX FLEET PROFILE MR FLEET PROFILE Basis: 564 vessels Basis: 1,600 vessels 33% 27% 26% 24% 23% 22% 18% 14% 11% 8% 7% 6% 0-4 5-9 10-14 15-19 20+ On order On Order 0-4 5-9 10-14 15-19 20+ On Order On order CRUDE TANKER DEMAND GROWTH PRODUCT TANKER DEMAND GROWTH 10% YOY Growth by DWT YOY Growth by DWT 10% 8% 8% 7.4% 6% 6.3% 6% 4.2% 5.1% 4.3% 4% 4% 2.9% 2.2% 2% 2% 0% 0% -0.5% -2% -2% -4% -4.2% -4% -6% -6% -6.4% -8% -8% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 6 Source: Clarkson Research Apr-20

Asset Values Product tanker values remain near 10-yr highs; Mid-cycle valuations on crude assets. SUEZMAX FLEET $mm 90 90 80 60 NEWBUILD RESALE 5 YR OLD 10 YR OLD 80 80 70 50 10yr range 2020 10yr range 70 70 60 40 70.0 2020 2019 37.5 2020 2019 53.0 60 60 2019 10yr range 50 30 2020 60.5 2019 10yr range 50 50 40 20 40 40 30 10 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct MR FLEET $mm 50 50 40 30 NEWBUILD RESALE 5 YR OLD 10 YR OLD 45 45 35 26 2020 2020 40 40 30 22 39.0 30.0 2019 2020 2019 2019 19.0 2019 35.5 35 35 10yr range 25 18 2020 10yr range 10yr range 10yr range 30 30 20 14 25 25 15 10 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 7 Source: Clarkson Research Feb-20

Financial Overview Kevin Kilcullen, CFO

Q1 2020 Performance Ended Sept 30 NET INCOME $mm BASIC EPS $/share TCE RATES $mm Crude Fleet Product Fleet NET INCOME EPS 45.0 Q1 2020 Spot $ 46,725 $ 16,426 14,357 Q1 2019 20,765 Q1 2020 Total 42,855 15,947 1.13 20,786 14,486 Q1 2019 Q2 2020 Booked to-date (1) 41,800 18,500 Total TCE (63% of available days) (60% of available days) (1) As of May 7, 2020. Booked to-date is inclusive of long-term charters. (0.04) (1.0) See Non-GAAP Measures at the end of the presentation for detailed calculation. Q1 2020 Q1 2019 Q1 2020 Q1 2019 ADJUSTED EBITDA $mm CASH FLOWS $mm, includes restricted cash CRUDE PRODUCT TOTAL 84.7 48.6 3.0 84.7 1.4 4.2 48.2 36.5 30.3 116.6 18.6 89.2 11.7 Jan 1 EBITDA Debt Capex Share WC & Dec 31 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Service repurch Other 9 See non-GAAP measures at the end of the presentation