Untitled

ANNUAL

REPORT

2021

OKEANIS ECO TANKERS

OKEANIS ECO TANKERS 2021 ANNUAL REPORT TABLE OF CONTENTS

TABLE OF

CONTENTS

03 Letter from the Chairman

07 History

8 Fleet

9 Presentation of the Board of Directors

12 Board of Directors’ Report

24 Responsibility Statement

26 Corporate Governance Statement

37 Consolidated Financial Statements

38 Directors’ Statement

39 Independent Auditor’s Report

46 Consolidated Statement of Profit or Loss and Other Comprehensive Income

47 Consolidated Statement of Financial Position

48 Consolidated Statement of Changes in Equity

49 Consolidated Statement of Cash Flows

50 Notes to the Consolidated Financial Statements

82 Parent Company Financial Statements

83 Independent Auditor’s Report

86 Statement of Profit or Loss and Other Comprehensive Income

87 Statement of Financial Position

88 Statement of Changes in Equity

89 Statement of Cash Flows

90 Notes to the Financial Statements

LETTER FROM

THE CHAIRMAN

HISTORY

& FLEET

PRESENTATION

OF THE BOARD

OF DIRECTORS

BOARD

OF DIRECTORS’

REPORT

RESPONSIBILITY STATEMENT

CORPORATE

GOVERNANCE

STATEMENT

CONSOLIDATED

FINANCIAL

STATEMENTS

PARENT COMPANY

FINANCIAL

STATEMENTS

OKEANIS ECO TANKERS

OKEANIS ECO TANKERS 2021 ANNUAL REPORT

LETTER FROM

THE CHAIRMAN

HISTORY

& FLEET

PRESENTATION

OF THE BOARD

OF DIRECTORS

BOARD

OF DIRECTORS’

REPORT

RESPONSIBILITY STATEMENT

CORPORATE

GOVERNANCE

STATEMENT

CONSOLIDATED

FINANCIAL

STATEMENTS

PARENT COMPANY

FINANCIAL

STATEMENTS

LETTER

FROM THE

CHAIRMAN

LETTER FROM THE CHAIRMAN

OKEANIS ECO TANKERS

OKEANIS ECO TANKERS 2021 ANNUAL REPORT LETTER FROM THE CHAIRMAN

Our company’s focus has been to ensure that our seafaring and onshore staff remain safe

and protected from Covid-19 pandemic and the Ukrainian crisis while engaging in our daily

operations. I would like to take this opportunity to express our deepest gratitude especially to

the crews on our vessels for their unwavering professionalism, dedication and stamina during

these uncertain times.

We are deeply shocked by the atrocities perpetrated against the innocent people of Ukraine and

we condemn the Russian state’s invasion. Our focus has been to safeguard the wellbeing of our

onboard employees and comply with the continuously evolving legal and sanctions framework.

The crude tanker markets are known for their volatility and rapid response to geopolitical events.

The juxtaposition between our markets in 2020 and 2021 clearly demonstrates the challenges

and opportunities participants in the tanker sector have witnessed. In particular, the market

moved from the most profitable year of the last decade in 2020, to the most challenging year

since 1994 in 2021.

It was under these circumstances that Okeanis Eco Tankers (“OET”) continued to commercially

outperform the market and managed not only to breakeven but also improve its balance sheet,

that will allow the company to navigate through the cycle while remain opportunistic towards

scale, and return $38m back to shareholders in the form of dividends, capital distributions and

share buybacks.

The first half of the year was characterized by weak seaborne crude oil trade volumes, primarily

attributable to soft crude oil demand on the back the COVID-19 pandemic and mobility

restrictions in many parts of the world, further exacerbated by the curtailed production output

from the Organization of the Petroleum Exporting Countries (“OPEC”) and significant destocking

of cheap oil inventories that were built through the price war in 2020.

Our markets have experienced incremental pressure from the supply side. Firstly, a large portion

of the ﬂeet employed under ﬂoating storage business returned to the market. Secondly, a

frontloaded orderbook, even though at historically low levels, resulted in increased vessel deliveries

during the period. Thirdly, we have seen weaker than anticipated scrapping activity despite

softening rates and elevated steel prices on the back of lucrative employment opportunities in

sanctioned trades that absorbed approximately 6% of the large crude tanker ﬂeet.

Source: Company filings, OET.

VLCC Suezmax

OET PeerA PeerB PeerC PeerD OET PeerA PeerC PeerD

$15,400

$15,300

Full year 2021 Spot TCE performance ($/day)

OKEANIS ECO TANKERS

OKEANIS ECO TANKERS 2021 ANNUAL REPORT LETTER FROM THE CHAIRMAN

Notwithstanding the improvement in crude oil demand and the tanker markets over the

second half of the year, a combination of new COVID-19 variants and further lagging of OPEC+

output versus quotas resulted in an inﬂationary, steeply backwardated, oil price environment

that kept cargo volumes rebound to a halt and prolongated the anticipated, fundamentally-

driven recovery in the crude tanker space. The disruption to crude tanker markets from these

factors has been reﬂected in spot daily earnings in 2021 that came in below operating costs for

conventional non-eco / non-scrubber crude tanker vessels.

Contrariwise, we generated well above market earnings leveraging on our young, fuel-efficient

ﬂeet, active management and scrubber investments that have more than paid off given the

large delta between High Sulphur Fuel Oil (“HSFO”) and Very Low Sulphur Fuel Oil (“VLSFO”). In

the VLCC segment, OET delivered daily spot earnings throughout the year of $15,400 per day,

representing 15% outperformance relative to the average of the crude tanker peer group and

379% compared to average sector earnings for conventional assets. Similarly, our Suezmax daily

spot earnings of $15,300 per day represented 35% outperformance relative to the peer group

and 108% versus the average sector earnings for conventional vessels.

Our active management was the imminent response to the adverse market conditions during

the year. OET optimized its vessel portfolio and strengthened its balance sheet through the sale

and purchase market. In particular, we have monetized our three investments in the Aframax/

LR2 tanker segment at very attractive prices during the first quarter of the year. Towards the end

of the second quarter, the Company rejuvenated its VLCC ﬂeet by selling at record prices for the

reported year two 2019 built vessels and replaced them with two Gas Ready (MEc), eco-design,

open loop scrubber-fitted 300,000 DWT VLCC crude tankers under construction at Hyundai

Heavy Industries, South Korea with delivery in the first half 2022.

Consistent with our promises to investors, we have returned $38m back to our shareholders in

the form of dividends, capital distributions and share buybacks in the most challenging year

ever in crude tankers, proving our dedication and focus on shareholder returns. Our increasing

allocation of returns via share repurchases reﬂects our firm conviction and belief of the dislocation

between our intrinsic value and the value assigned to our Company from the market. In this

regard, this is an attractive investment opportunity for the Company and we will closely monitor

the market to execute on such value accretive strategy.

Source: Clarksons Research, OET.

21,100

18,700

32,100

28,300

16,300

24,500

14,000

20,700

11,600

16,800

100 200 300 400 500

VLSFO-HFO spread, $ per tonne

Daily eco and scrubber savings ($/day)

VLCC

Suezmax

OKEANIS ECO TANKERS

OKEANIS ECO TANKERS 2021 ANNUAL REPORT LETTER FROM THE CHAIRMAN

At OET we are acutely aware of our responsibility to be part of the efforts to achieve net zero carbon

and comply with sustainable investment practices. Our commitment towards sustainability has

been one of our founding pillars and is reﬂected in our carbon efficiency measures for our young

and fuel-efficient ﬂeet. As measured by the Annual Efficiency Ratio (“AER”) – a measure of our

ﬂeet’s carbon efficiency using the parameters of fuel consumption, distance travelled, and design

deadweight tonnage – OET’s AER of 2.1 grams/ton-mile is the lowest in the crude tanker peer

group. We are well equipped to comply with upcoming Energy Efficiency Existing Ship Index

(“EEXI”) regulations. The Company will publish its inaugural sustainability report during the year

and has already set the path, together with its managers, for continuous monitoring, reporting

and improvement on all sustainability related aspects.

Looking forward, we believe that recent market headwinds will be transitory and give way to

the unique set of supply and demand fundamentals that the sector has not seen since the

2000s. Namely, the supply side is expected to be muted if not negative given an undemanding

orderbook currently at historically low levels, tight yard capacity, incoming environmental

regulations and scrapping potential. Demand measured in tonne-miles is projected to rebound

significantly on the back of firm business activity and travel, as the world moves away from

mobility restrictions associated to the pandemic, emerging trade patterns that support tonne-

miles and pent-up demand to replace global inventory depletion.

Ioannis Alafouzos

Chairman

54%

11%

10%

(41%)

60%

40%

20%

(20%)

(40%)

(60%)

Total shareholder return (2021)

Share total return

OET PeerA PeerB PeerC PeerD PeerΕ

Source: Company filings.

Note: Shareholder total return for 2021 calculated as: (share price at 31 December 2021 less share

price at 31 December 2020 plus total cash distributions for 2021 per share, divided by share price

at 31 December 2020).