Höegh Realigns

Friday, March 11, 2005
After posting strong results for 2004, Leif Höegh & Co. Limited announced today that the company has completed the final phase of its corporate re-alignment by merging all aspects of its Ro/Ro operations in Höegh Autoliners. Supported by significant investment capital Höegh Autoliners will be focused on growth. Further newbuilding opportunities will be pursued and the last non-core vessels have been sold.

§ All operating activities are integrated in two separate entities to be aligned with the commercial growth strategy:

- Höegh Autoliners – a fully integrated Ro/Ro company focused on execution of a substantial and capital intensive customer driven growth plan.

- Höegh LNG – expanding its fully integrated business model to encompass large and complex mid-stream projects.

§ Höegh Fleet Services will provide ship management for Ro/RO and LNG vessels as before.

§ Leif Höegh & Co will be a holding company without commercial operation or external visibility. § The Höegh name and the H-flag logo will be shared.

Focused growth

Leif Höegh & Co has been transformed from being a broadly diversified company to one focusing on Ro/Ro and LNG. This process has been concluded with:

- the sale of the last seven open hatch vessels at the end of 2004

- the sale of the last two large bulk carriers in March 2005 - the contracting of 20 car carriers and 2 LNG carriers scheduled

for delivery between 2004 to 2008

– investments representing vessel values of about USD 1.5 billion.

“The new management structure is a logical consequence of the implementation of the strategy to focus on Ro/Ro and LNG,” says Thor Jørgen Guttormsen, President of Leif Höegh & Co and new CEO of Höegh Autoliners. “Our order-book confirms the growth ambitions and the objective is to provide customers with an even better service.”

Höegh Autoliners – Positioned for substantial growth Höegh Autoliners has developed from being a niche operator into a global Ro/Ro service provider with 50 vessels in world wide trade systems. As a fully integrated Ro/Ro company Höegh Autoliners will be focused on the successful execution of a customer-driven, far reaching and capital-intensive growth strategy.

Thor Jørgen Guttormsen as CEO will be supported by a management group consisting of:

- Karl Terjesen, executive vice president (EVP) commercial

- Niels Ronald Bugge, EVP ship owning and fleet capacity

- Yngvil Åsheim, EVP ship management

- Roar Flom, EVP and CFO

Höegh LNG - Expanding its role in the LNG supply chain In order to capitalise on increased global market demand for LNG, Höegh LNG has committed itself to growing its LNG fleet and related services. The company will be managed as a separate entity although ship management will be supplied by Höegh Fleet Services.

With more than 30 years experience in the transportation of LNG, Höegh LNG operates a fleet of four LNG carriers, of which three are wholly or partly owned. Two newbuildings are ordered together with partners for delivery in January 2006 and will be employed on long-term contracts.

In addition, Höegh LNG has introduced the Floating Midstream Solutions comprising innovative solutions and partnerships with industry leaders aiming at expansion in the LNG supply chain. Höegh LNG’s "Shuttle and Regasification Vessel" ("SRV") concept for offshore ports, floating LNG terminals and technology for marine transportation of compressed natural gas (CNG) are examples of current activities.

Results support growth

“2004 was a good year and the company anticipate continued growth in 2005,” Thor Jørgen Guttormsen says. “We view the changes we are making to be in the best, long-term interests of our customers, the company and our employees.”

While T J Guttormsen acknowledges that this final phase of the company’s re-alignment plan represent significant changes for the company, he notes that the only notable difference to customers will be the name and further enhanced service capacity in the future.

Results 2004:

- Operating profit before sales gain and depreciation increased to USD 147 million (USD 141 million in 2003).

- Operating profit more than doubled to USD 106 million (USD 46 million in 2003). This was, however, partly due to a 2003 loss from sale of vessels being replaced by a profit in 2004.

- Strong cash-flow contributed to net debt being reduced to USD 505 million (USD 557 million in 2003), in spite of substantial investments in new vessels.

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