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Deep Sea Supply plc

24 f Fb 2010

Complete version

Q410

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Deep Sea Supply Plc (DESSC or Company) is an

offshore supply company with a modern fleet

operating world-wide. The fleet can be divided into

two segments; Anchor Handling Tug Supply Vessels

(AHTS) and Platform Supply Vessels (PSVs).

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Deep Sea Supply plc 4th Quarter anD preliminary Financial report 2010

4 Q2010 3

Deep Sea Supply Plc (DESSC or Company) is an

offshore supply company with a modern fleet

operating world-wide. The fleet can be divided intotwo segments; Anchor Handling Tug Supply Vessels

(AHTS) and Platform Supply Vessels (PSVs).

Summary: Improved EBITDA due to increased revenuesand gain on sales. Good cost control. Soft market.

In Q410 DESSCs revenues increased to USD 37.3 mill. (USD 30.3 mill. in

Q409) due to an increased fleet, higher utilization ratio and improved rates. A

sale of Sea Otter and Sea Marten resulted in a USD 10 mill. gain. Vessels

operating expenses (when adjusted for an increased fleet) have reduced

by 3% and EBITDA hence improved to USD 26 mill. (USD 12.6 mill.). Net

income before taxes was USD 8.7 mill. (-USD 3.3 mill).

Full year 2010 revenues were USD 132.3 mill compared to USD 167.6 mill in

2009, or a reduction of 21%. EBITDA was USD 62.8 mill compared to USD

111.5 mill in 2009 or a reduction of 44%. The pre-tax result was USD 0.1 mill

compared to USD 43.2 mill in 2009.

The market for offshore supply vessels remained soft for Q410. The

relocation of vessels to Brazil continued in Q410 and DESSC has currently 5

PSVs on long term charter to Petrobras and 3 AHTS on short/medium term

contracts to other charterers in Brazil.

An important part of DESSCs strategy is to gain market access to new

local markets for its vessels. In Q111, DESSC reflagged Sea Weasel to

Malaysian flag and the vessel was sold to a Malaysian joint venture where

DESSC participates as owner and operator. The Company looks positively at

developing new market opportunities in Malaysia.

In Q111, DESSC sold the 11 year old AHTS vessels Sea Cougar and Sea

Wolf at attractive prices. The strategic reason behind this sale was renewal

of the Companys fleet.

As the Company has previously announced, the Norwegian tax authorities,

after reviewing the Companys tax return for 2006, claim that the sales price

of shipbuilding contracts sold to Cyprus subsidiaries should have been higher.

The Board of DESSC strongly disagrees with the tax authorities assessmentof this case. No allocation has been done in the accounts for 2010.

Following the revised tax legislation applicable for Norwegian Shipping

Companies made after the High Court decision in February 2010, DESSC

has booked a tax liability of NOK 15.8 mill. (USD 2.8 mill.) fully recognized in

2010. The tax is payable over 3 years.

The Board suggests no dividend distributions in 4Q10. It is the Companys

intention to revert to its former dividend strategy as and when the market

improves.

Earnings, rate levels and market conditions

AHTS vesselsIn the end of 4Q10 DESSC had 13 AHTS vessels in operation of which 4

operated in the North Sea spot market. In addition DESSC had 5 AHTS

vessels under construction.

Freight revenues

Total revenues from the AHTS vessels in 2010 decreased by 13% compared

to 2009. The reduction was mainly due to lower rates and lower commercial

utilization. This impact was partly offset by new vessels in operation and

lower technical offhire.

PSVs

In the end of 4Q10 DESSC had 8 PSVs operating in the international term

markets. In addition, the Company has 1 PSV under construction in Brazil.

Freight revenues

Total revenues from the PSVs in 2010 decreased by 35% compared to 2009.

This was due to lower commercial utilization and lower rates.

Vessel operationVessels operating expenses in 2010 were USD 73.7 mill compared to USD

65.8 mill in 2009. Adjusting for fleet growth and vessels on bareboat charter,

the operating expenses decreased by 1% in 2010 compared to 2009.

Area of operation

The Fleet of 21 vessels has been employed worldwide in 4Q10 and by end

of the quarter the vessels operated in or were under mobilization to the

following geographical areas;

North Sea : 5 vessels

Mediterranean : 2 vessels

West Africa : 1 vessels

Asia and Australia : 5 vessels

South America : 8 vessels

Deep Sea Supply has chartering departments in Singapore, Brazil and Norway

responsible for the marketing and chartering of the vessels. The offices inSingapore and Brazil are also technical managers for part of the fleet.

Of the 21 vessels, 15 vessels had Cyprus flag and 6 vessels had Norwegian

flag. The NOR flagged vessels are primarily crewed with Norwegians and EU

seafarers. The Cyprus flagged vessels have full Filipino crew, a combination

of Filipino crew and European Officers or a combination of Filipino and

Indonesians.

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Vessels under construction - Construction supervision:

Construction supervision is performed partly by external management

companies and partly by DESSC, with site teams located at the shipyard.

Technical management of the Fleet

DESSC considers it vital to do proactive maintenance and ensure that vessels

are operating safely and are in technical good condition. At the same time, the

Company has a strong focus on reducing operating expenses. This is done by

continuously tight follow-up of external and own management offices.

DESSC has established ship management companies in Brazil and Singapore

in order to do technical management of the fleet in-house. The first vessels

were taken over by DESSC own technical organizations in Q410.

Other items

Gain on sales

The sale of Sea Otter and Sea Marten gave a significant gain in Q410.

In addition, this item consists of gain related to the sale of vessels to ShipFinance International in 2007 and 2008.

Other operating expenses

These are general and administration expenses for the offices in Cyprus,

Singapore, Brazil and Norway.

Depreciations

All vessels are depreciated to zero when they are 30 years old.

Net financial items

Interest expenses are related to interest on the senior bank loan facility

financing most of the Companys vessels, the interest portion of the bareboat

paid to Ship Finance International regarding the vessels on sale and leaseback,

the separate financing facility for Sea Eagle 1 and interest of the loan facilityfrom Metrogas Holdings.

Net currency items

Currency items are the net result of both realised gains/(losses) and

unrealised gains/(losses) arising from revaluation of monetary assets of the

Group.

Change in value of financial derivatives

For hedging purposes, the Company has entered into interest rate swaps. The

market value of these transactions is measured at the end of every quarter,

resulting in an increase in 4Q10 of USD 0.6 mill. The value of the interest rate

swaps is negative with USD 0.5 mill.

Tax

Taxes in 4Q10 were USD 2.6 mill and taxes for the full year 2010 were USD

2.5 mill. In 2007 the Company recognized an amount (USD 8.1 mill) as taxes

payable following the transition rules from the old tax regime to the new

tonnage tax system adopted by the Government. After a High Court decision

in Norway, made on 12th February 2010, it was concluded that the transition

rules were in breach of the constitution, paragraph 97. Following thisdecision, the Company decided to reverse the provision made in 2007 and to

recognize the tax already paid in 2008 and 2009 as a receivable in the balance

sheet. In May 2010 it was decided that tax legislation will be changed, which

will give an option to settle the untaxed profits from the previous tonnage tax

system with a one-time assessment. The Company has decided to enter into

the new tax regime, which means that the company will settle its tax liability

with a total payment of NOK 15.8 mill (USD 2.8 mill). This tax has been

recognized in full in 4Q10 and will be payable in the period 2011-2013.

As previously reported, DESSC has had a long standing dispute with the tax

authorities. The tax authorities, represented by Skatt Sr (the regional tax

office) is claiming that the sales price of shipbuilding contracts sold to various

Cyprus domiciled subsidiaries in 2006, should have been higher. In February

2011, the Company was notified that Skatt Sr maintains their position. TheCompany strongly disagrees with Skatt Sr and has made no allocations in

the 2010 financial statements related to this.

Cash, cash flow and equityThe Companys cash balance by the end of 2010 was USD 41.9 mill compared

to USD 31.6 mill by the end of 2009. The cash generated from operating

activities in 2010 was USD 36.4 mill, net cash generated from investingactivities was USD 20.0 mill (sale of two AHTS vessels, delivery of Sea

Marten, upgrade and survey costs), net proceeds from financing activities

were a negative USD 46.1 mill. Net change in liquidity is hence USD 10.3 mill.

Total Equity by the end of the 4Q10 was USD 161.6 mill compared to USD

164.0 mill by the end of last year.

Balance sheet

Trade and other receivables

Total receivables from customers were USD 26.0 mill which is a slight

increase from USD 22.5 mill by end of 2009. Of the total receivables, 70%

was less than 1 month old and 24% between 1 and 4 months old.

CIRR LoansDuring 2008 the Group applied for Commercial Interest Reference Rate

(CIRR) loans from the Norwegian Export Credit Agency. The total loan

amount was in NOK equivalent to USD 48.6 mill. The duration of the loans

are 12 years and the cash proceeds from the loans have been deposited

in a fixed deposit account with a Norwegian bank at a higher interest rate

than that of the loans. The agreed period of the deposits is identical with the

one of the loans. The loans and the interest thereof will be repaid from that

account and the difference has been recognized as deferred gain and will be

amortized over the period of the life of the loans.

Currencies of revenues and costs

Revenues are mainly in USD, EURO, BRL and GBP. Operating expenses are

mainly in USD with the exception of NOK salaries on the NOR flagged

vessels. Financial expenses are in USD and NOK.

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Events after end of reporting periodAn important part of DESSCs strategy is to gain market access to new

local markets for its vessels. In Q111, DESSC reflagged Sea Weasel to

Malaysian flag and the vessel was sold to a Malaysian joint venture whereDESSC participates as owner and operator. The Company looks positively at

developing new market opportunities in Malaysia.

In Q111, DESSC sold the 12 year old AHTS vessels Sea Cougar and Sea

Wolf at attractive prices. The strategic reason behind this sale was renewal

of the Companys fleet.

Future outlook

The long term market fundamentals remain in place with a high oil price. E&P

spending for 2011 is expected to increase by 15% compared to 2010, which is

expected to lead to an increased demand for AHTS and PSVs.

In the short and medium term, DESSC is expecting a soft Q111. There are

many available OSVs worldwide and a significant number of vessels will bedelivered also in 2011. However, bright spots include the recent tightening

of the North Sea spot market, an increase in international outstanding term

requirements and the continued trend of old vessels leaving the market.

The Company is expected to benefit from strategic moves made in Brazil

and Malaysia, and expects increased utilization of the fleet based on these

initiatives.

Companys shareholdersAs per the end of Q410, the Companys largest shareholder is Hemen

Holding Limited with a shareholding of 35.1%.

Main risks factors and uncertaintiesA number of the Companys vessels are in the spot market, on short or

medium term charters and the earnings on these vessels are hence sensitive

to changes in the charter rates and utilization. Reduced charter rate can

result in a drain of the Companys cash. Currently the Company has 5

newbuildings under construction from shipyards and the Company is hence

exposed to delays in deliveries which may impact future revenues. The

Company is furthermore sensitive to changes in interest rates as part of its

financing has floating interest.

Transaction between related parties

DESSC has entered into two sale and leaseback transactions with Ship

Finance International Limited (SFI) in 2007 and 2008. SFIs largest

shareholder is Hemen Holding Ltd. who is also DESSCs largest shareholder.The sale and leaseback transactions are done on market terms.

The Company has also entered into a credit facility agreement with Metrogas

Holdings Inc, an affiliated company of Hemen Holding Limited. The facility

agreement is done at market terms.

Statement of the members of the board of Directors andother responsible persons of the Company for the interimfinancial statements

In accordance with Article 10, sections (3) (c) and (7) of the TransparencyRequirements (Securities for Trading on Regulated Market) Law of 2007

(Law), we the members of the Board of Directors and other responsible

persons for the interim financial statements of Deep Sea Supply Plc for the

period of twelve months ended 31 December 2010 confirm that to the best

of our knowledge:

a.

The interim consolidated financial statements that are presented on pages 7

to 19:

(i)

were prepared in accordance with the International Financial Reporting

Standard 34 Interim Financial Reporting as adopted by the European Union,

and in accordance with the provisions of Article 10, section (4) of the Law,and

(ii)

give a true and fair view of the assets and liabilities, the financial position and

the profit or losses of Deep Sea Supply Plc, and

b.

The interim management report gives a fair review of the information

required by Article 10, section (6) of the law.

Limassol, 22 February 2011The Board of Deep Sea Supply PLC

Svein Aaser, Chairman Frixos Savvides Kathrine Fredriksen Anna Cecilie Holst Fredrik Halvorsen Terje Tellefsen

Finn Amund Norbye, CEO Anders Hall Jomaas, CFO

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Deep Sea Supply Plc (or the Company) is an offshore supply company

with a modern fleet of Anchor Handling Tug Supply vessels (AHTS) and

Platform Supply Vessels (PSVs). The parent company is based in Cyprus

and listed on Oslo Stock Exchange under the ticker DESSC.

The Companys focus is on the following main strategic areas;

Chartering/Marketing

Businessdevelopment

Finance/Reporting

InvestorRelations

Qualityandefficientoperationsofitsvessels

The Companys fleet of AHTS and PSVs are trading world-wide.

Deep Sea Supply practices an open and transparent communication.

Since inception in 2005, Deep Sea Supply has maintained a shareholder

friendly strategy with a focus on high dividend payments.

In 2009, the Company started to focus on market penetration and taking

the necessary steps to be a local supplier of offshore supply vessels in

several countries. In 2009, the Company established business in Brazil and

placed a newbuilding order for a large PSV at STX Offshore Brasil S.A.

The Company is also working on market penetration in other countries.

Lately, the Company has decided to establish its own technical

management organizations for the purpose of doing the technicalmanagement of most of the AHTS and PSVs in house.

In addition to a management company in Cyprus, the Company has

management companies in Singapore, Brazil and Norway.

The Companys main shareholder is Hemen Holding Ltd., owning 35,1 % of

the Company. The DESSC share has been the most liquid offshore supply

stock on Oslo Stock Exchange.

Distribution

to shareholders Amount per share Ex. dividend date Payment date

2006* noK 0,80 08-05-07 28-06-07

Q1 2007* noK 0,20 22-06-07 04-10-07

Q2 2007* uSD 0,85 (noK 4,62) 24-09-07 29-10-07

Q3 2007* uSD 0,40 (noK 2,18) 11-12-07 31-01-08

Q4 2007* uSD 0,40 (noK 2,00) 26-03-08 29-05-08

Q1 2008** uSD 0,13 (noK 0,68) 14-05-08 16-06-08

Q2 2008** noK 1,00 02-09-08 17-09-08

* Dvdd b w f dg s

** od dvdd f f

Deep Sea Supply plc

NOKpershare

Share price and total return

0

5

10

15

20

25

30

35

40

Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08

Total Return Price

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11

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conSoliDateD Statement oF comprehenSiVe income

4 Q2010 7

(Unaudited figures in USD 1,000) Note YTD 2010 YTD 2009 4Q 10 4Q 09 3Q 10

Operating revenue 4 132,346 167,633 37,337 30,287 33,906

Vessel operating expenses 4 -73,681 -66,163 -18,807 -17,162 -19,651

Operating lease -2,925 0 -1,104 0 -1,104

Other gains / (losses) 0 8,953 0 199 0

Gain on sale 15,819 8,765 11,441 2,271 1,463

Other operating expenses 4 -8,710 -7,696 -2,881 -2,981 -2,012

Total operating costs -69,497 -56,142 -11,352 -17,674 -21,305

EBITDA 62,849 111,491 25,984 12,613 12,600

Depreciation 5 -36,447 -36,368 -9,447 -9,115 -9,148

EBIT 26,402 75,123 16,538 3,498 3,452Financial income 337 665 160 157 67

Financial expenses -29,065 -28,013 -7,693 -5,879 -8,100

Net currency items 1,164 -8,316 -960 -1,333 1,423

Change in value of financial derivatives 1,241 3,752 631 267 227

Net financial items -26,323 -31,913 -7,863 -6,788 -6,383

Pre-tax result 79 43,210 8,675 -3,290 -2,931

Taxes -2,617 8,084 -2,475 8,095 -2

Total comprehensive income -2,538 51,294 6,200 4,805 -2,933

Average number of shares 126,863,860 126,863,860 126,863,860 126,863,860 126,863,860

Earnings per share 7 -0.02 0.40 0.05 0.04 -0.02

Earnings per share diluted 7 -0.02 0.40 0.05 0.04 -0.02

Cash flow per share 1) 0.27 0.66 0.15 0.05 0.04

1) Profit before taxes+depreciation-unrealized gain on currencies

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conSoliDateD Balance Sheet

4 Q2010 9

(Unaudited figures in USD 1,000) Note 31.12.10 31.12.09Non-current assets

Vessels cost 5 603,322 650,537

Construction contract 5 24,736 26,327

Equipment 5 659 65

Deferred income tax 234 0

Other long term receivables 455 0

CIRR deposit 43,693 49,426

Total non-current assets 673,098 726,355

Current assets

Inventories 2,909 2,221

Other short term receivables 9,374 6,349

CIRR deposit 4,959 5,038

Freight income not received 26,017 22,483

Cash and cash equivalents 41,932 31,616

Total current assets 85,192 67,707

Total assets 758,290 794,062

(Unaudited figures in USD 1,000) Note 31.12.10 31.12.09Liabilities

Borrowings 6 456,496 471,599

CIRR loan 6 43,647 49,374

Deferred gain 36,573 53,057

Long term tax liabilities 1,806 0

Other long term liabilities 11 79

Total long term liabilities 538,535 574,109

Borrowings 6 35,738 39,505

CIRR loan 6 4,959 5,038

Trade payables 11,519 3,588

Deferred gain 4,493 6,059

Tax payable 903 0

Other short term liabilities 529 1,770

Total short term liabilities 58,171 55,960

Total liabilities 596,706 630,069

Net assets 161,584 163,994

Shareholders equity

Share capital, share premium and treasury shares 10,861 10,735

Retained earnings and currency translation 150,723 153,259Total shareholders equity 161,584 163,994

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conSoliDateD Statement oF chanGeS in eQuity

4 Q2010 10

(Unaudited figures in USD 1,000) ShareCapital

Reverse

acquisitionreserves

Share

premiumreserves Treasuryshares

Other

paid-in-equiy Retainedearnings

Currency

translationdifferences Total

Balance at 1 January 2009 2,599 -123,386 139,588 -9,787 1,242 109,085 -7,120 112,221

0

Total comprehensive income for year ended ended 31 December 2009 51,294 51,294

Balance at 31 December 2009 2,599 -123,386 139,588 -9,787 1,242 160,379 -7,120 163,516

Balance at 1 January 2010 2,599 -123,386 139,588 -9,787 1,720 160,379 -7,120 163,994

Cancellation of own shares -62 -9,725 9,787 0

Share option scheme 126 126

Total comprehensive income for year ended 31 December 2010 -2,538 -2,538

Balance at 31 December 2010 2,537 -123,386 129,863 0 1,846 157,841 -7,120 161,583

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conSoliDateD Statement oF caSh FloWS

4 Q2010 11

Year ended 31 December

(Unaudited figures in USD 1,000) 2010 2009Cash flows from operating activities

Cash generated from operations 36,409 116,995

Net cash generated from operating activities 36,409 116,995

Cash flows from investing activities

Acquisitions of vessels and construction contracts -20,915 -61,052

Disposals of vessels and construction contracts 40,969 0

Net cash used in investing activities 20,054 -61,052

Cash flows from f inancing activities

Interest paid -27,138 -27,308

Proceeds from borrowings 39,482 9,660

Repayments of borrowings -58,491 -40,478

Net cash used in financing activities -46,147 -58,126

Total changes in liquidity in the period/year 10,316 -2,183

Cash and cash equivalents at beginning of period/year 31,616 33,799

Cash and cash equivalents at end of the period/year 41,932 31,616

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noteS

4 Q2010 12

1. General information

Deep Sea Supply PLC (the Company) and its subsidiaries, here

after collectively (the Group) principal activities are to engage and

invest, directly or indirectly, by itself or through subsidiaries or part-

owned companies, partnerships or other forms of entities, in the

international offshore supply vessel business.

The Company was incorporated as a public limited liability company

on 7 November 2006 in Cyprus in accordance with the provisions of

the Companies Law, Cap. 113.

The Company was established for the purpose of acquiring all shares

of Deep Sea Supply ASA.

The Company has its primary and only listing on the Oslo Stock

Exchange.

These unaudited condensed consolidated financial statements have

been approved for issue by the Board of Directors on 22nd February

2011.

2. Basis of preparation

These condensed unaudited consolidated interim financial

information for the year ended 31 December 2010 have been

prepared in accordance with IFRS as adopted by the E.U. applicable

to interim financial reporting, IAS 34 Interim Financial Reporting and

the regulations of Oslo stock exchange. The interim financial report

should be read in conjunction with the annual financial statements

for the year ended 31 December 2009, which have been prepared in

accordance with IFRS as adopted by the European Union.

3. Summary of significant accounting policies

Accounting policies

Except as described below, the accounting policies applied are

consistent with those of the annual financial statements for the year

ended 31 December 2009, as described in those financial statements.

Taxes on income in the interim period are accrued using the tax rate

that would be applicable to expected total annual earnings.

At the date of approval of these financial statements a number of

accounting standards were issued by the International Accounting

Standards Board but were not yet effective. The effect of those

standards is not expected to be material for the Group.

There has been no further impact on the measurement of the

Groups assets and liabilities

4. Segment information

The chief operating decision maker for the Group is the top

management together with the board of directors in matters that

concern the day to day running of the business and in matters

concerning acquisition and disposals of vessels.

Day to day running of the business includes decision on where the

vessels should be located and duration of the contracts with the

customers.

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4. primary SeGment - area oF operationS

The segment results for the year ended 31 December 2010 is as follows:

North Sea AfricaAsia /

Australia

North /

SouthAmerica Mediterranean

Unallocateditems Total

Segment revenues 21,582 11,804 38,408 26,873 33,678 0 132,346

Vessel operating expenses -18,703 -5,795 -17,143 -15,971 -16,069 0 -73,681

Operating lease 0 0 -2,736 -189 0 0 -2,925

Other gains/(losses) 0 0 0 0 0 0 0

Gain on sale 248 659 -13 11,487 3,438 0 15,819

Other operating expenses -1,420 -777 -2,528 -1,769 -2,216 0 - 8,710

EBITDA per segment 1,706 5,891 15,988 20,432 18,831 0 62,849

EBITDA margin per segment 8% 50% 42% 76% 56% 47%

Depreciation -8,365 -2,139 -7,309 -6,162 -12,376 -97 -36,447

EBIT per segment -6,659 3,752 8,680 14,270 6,455 -97 26,402

EBIT margin per segment N/A 32% 23% 53% 19% 20%

Net Financial Items -26,323

Pre-tax result 79

Taxes -2,617

Net Result -2,538

4 Q2010 13

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4. primary SeGment - area oF operationS

The corresponding segment results for the year ended 31 December 2009 is as follows:

North Sea AfricaAsia /

Australia

North /

SouthAmerica Mediterranean

Unallocateditems Total

Segment revenues 20,822 15,893 45,295 8,535 77,089 0 167,633

Vessel operating expenses -17,166 -5,574 -10,815 -3,180 -29,426 0 -66,163

Other gains/(losses) 0 0 0 0 0 8,953 8,953

Gain on sale 0 659 0 1,689 6,863 -447 8,765

Other operating expenses -956 -730 -2,079 -392 -3,539 0 -7,696

EBITDA per segment 2,700 10,248 32,401 6,652 50,987 8,506 111,493

EBITDA margin per segment 13% 64% 72% 78% 66% 67%

Depreciation -7,140 -1,967 -5,764 -3,077 -18,361 -60 -36,369

EBIT per segment -4,440 8,281 26,637 3,575 32,626 7,999 75,124

EBIT margin per segment N/A 52% 59% 42% 42% 45%

Net Financial Items -31,915

Pre-tax result 43,209

Taxes 8,084

Net Result 51,294

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4. SeconDary SeGment - type oF VeSSel

4 Q2010 15

The segment results for the year ended 31 December 2010 is as follows:

AHTS PSVUnallocated

items Total

Segment revenues 92,351 39,995 0 132,346

Vessel operating expenses -53,581 -20,101 0 -73,681

Operating lease -2,925 0 0 -2,925

Other gains/(losses) 0 0 0 0

Gain on sale 14,429 1,384 5 15,819

Other operating expenses -6,078 -2,632 0 -8,710

EBITDA per segment 44,196 18,646 5 62,849

EBITDA margin per segment 48% 47% 47%

Depreciation -29,012 -7,338 -97 -36,447EBIT per segment 15,185 11,308 -92 26,402

EBIT margin per segment 16% 28% 20%

Net Financial Items -26,323

Pre-tax result 79

Taxes -2,617

Net Result -2,538

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4. SeconDary SeGment - type oF VeSSel

The corresponding segment results for the year ended 31 December 2009 is as follows:

AHTS PSVUnallocated

items Total

Segment revenues 105,971 61,662 0 167,633

Vessel operating expenses -48,502 -17,659 0 -66,161

Other gains/(losses) 0 0 8,953 8,953

Gain on sale 7,828 937 0 8,765

Other operating expenses -4,865 -2,831 0 -7,696

EBITDA per segment 60,432 42,109 8,953 111,494

EBITDA margin per segment 57% 68% 67%

Depreciation -28,704 -7,603 -61 -36,369

EBIT per segment 31,728 34,506 8,892 75,124EBIT margin per segment 30% 56% 45%

Net Financial Items -31,915

Pre-tax result 43,210

Taxes 8,084

Net Result 51,294

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5. property, plant anD eQuipment

4 Q2010 17

VesselsFinance lease

vesselsVessels inprogress

Vehicles &equipment Total

Opening net book value as at 1 January 2009 369,404 285,285 31,735 95 686,520Additions 55,264 -345 8,910 44 63,873

Disposals 0 0 0 -14 -14

Vessels impairment 0 -33,426 0 0 -33,426

Delivered new buildings 10,664 0 -10,664 0 0

Cancellation of new buildings 0 0 -3,655 0 -3,655

Depreciation and amortisation -20,991 -15,317 0 -60 -36,369

Closing net book value as at 31 December 2009 414,340 236,196 26,327 65 676,928

Opening net book value as at 1 January 2010 414,340 236,197 26,327 65 676,930

Additions 11,395 4,453 3,718 693 20,260

Disposals -29,696 -29,695

Vessels impairment 0 -12,027 0 0 -12,027

Delivered new buildings 15,003 0 -5,309 0 9,695

Depreciation and amortisation -24,137 -12,211 0 -98 -36,445

Closing net book value as at 31 December 2010 386,904 216,412 24,736 659 628,716

FUTURE CAPITAL EXPENDITURE NEWBUILDING CONTRACTS

(Unaudited figures in USD 1,000) Q1 2011 Q2 2010 Q3 2010 Q4 2010 Q1 2012 Total

Contractual yard payments 24,500 32,000 12,250 0 60,000 128,750

Maximum committed bank borrowings* 18,500 18,500 9,250 0 54,750 101,000

* Based on current market values of the vessels to be delivered from ABG shipyard, the total available bank commitment is USD 9.25 mill.

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6. BorroWinGS anD loanS

4 Q2010 18

Borrowings 31 December 2010 31 December 2009

Non-current 260,601 260,698

Current 20,639 25,207

281,239 285,905

Sale and leaseback and bareboat

Non-current 195,895 210,901

Current 15,129 14,298

211,025 225,199

CIRR Loan

Non-Current 43,647 49,374

Current 4,959 5,038

48,607 54,412Total Borrowings 540,870 565,516

Movement in borrowings are analysed as follows:

Year ended 31 December 2009 Borrowings Sale and leaseback CIRR Loan Total

Opening balance as at 1 January 2009 290,722 240,694 48,943 580,359

Proceeds from new loans 9,660 0 0 9,660

Repayment of loans -25,002 -15,495 -5,038 -45,535

Borrowing costs 940 0 5 945

Currency translations 9,584 0 10,502 20,086

Closing amount as at 31 December 2009 285,905 225,199 54,412 565,516

Year ended 31 December 2010 Borrowings Sale and leaseback CIRR Loan Total

Opening balance as at 1 January 2010 285,905 225,199 54,412 565,515

Proceeds from new loans 39,600 0 0 39,600

Repayment of loans -43,705 -14,174 -4,959 -62,838

Borrowing costs 627 0 6 633

Currency translations -1,188 0 -852 -2,040

Closing amount as at 31 December 2010 281,239 211,025 48,607 540,870

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7. earninGS per Share

4 Q2010 19

Basic 2010 2009

Profit attributable to equity holders of the company -2,538 51,294

Weighted average number of ordinary shares (thousands) 126,863,860 126,863,860

Basic earnings per share (USD per share) -0.02 0.40

Diluted 2010 2009

Profit attributable to equity holders of the company -2,538 51,294

Weighted average number of ordinary shares diluted (thousands) 128,112,188 128,112,188

Diluted earnings per share (USD per share) -0.02 0.40

During the year, the Group has obtained an unsecured loan from a major shareholder, of USD 10 million. The balance at the end of thi rd quarter was USD 10 million. The loan is payable in three years

and carries interest of 3 months LIBOR plus 450 bps per annum.

As previously announced, the Norwegian tax authorities, after reviewing the tax return of 2006 of Deep Sea Supply AS (a wholly owned subsidiary of the Group at that time), claims that the transaction

involving the sale of ship building contracts to Cyprus domiciled subsidiaries should have been done in higher levels. The Company, after advice from auditors and tax lawyers, is disputing the claim of

the tax authorities. The board is strongly disputing the issue raised by the tax authorities.

The vessels Sea Wolf 1 and Sea Cougar were sold. The vessel Sea Weasel was reflagged to Malaysian flag, and sold to a joint venture in Malaysia where the Company participates with a significant shareholding.

10. relateD party tranSactionS

11. income tax

12. eVentS aFter the Balance Sheet

9. SeaSonality

8. Sale anD leaSeBacK eFFectThe impact from the sale and leaseback transtactions on the profit and loss is as follows:

2010 2009

Interest paid -17,331 -17,887

Deferred gain recognised in profit and loss 5,828 9,212

Depreciation charge of leased vessels -12,212 -15,317

Operating income and expenses are not subject to seasonable fluctuations other than changes in spot rates due to changes in the underlying market conditions.

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ShareholDerS

4 Q2010 20

THE LARGEST SHAREHOLDERS AS PER 17 FEBRUARY REGISTERED IN VPS

Citizen No. of shares: %

hemen holDinG limiteD cyp 44,583,853 35.14%SKaGen Kon-tiKi nor 11,096,000 8.75%

pereStroiKa aS nor 6,350,000 5.01%

SVenSKa hanDelSBanKen SWe 3,255,577 2.57%

orKla aSa nor 3,025,275 2.38%

Varma mutual penSion inSurance GBr 2,764,109 2.18%

DnB nor marKetS nor 2,643,717 2.08%

Klp aKSJe norDen VpF nor 1,700,000 1.34%

terra Spar nor 1,280,000 1.01%

centra inVeSt aS nor 900,000 0.71%

VerDipapirFonDet hanDelSBanKen nor 800,000 0.63%

tD ameritraDe uSa 769,757 0.61%

J.p. morGan chaSe BanK GBr 754,200 0.59%

J.p. morGan chaSe BanK GBr 747,239 0.59%

citiBanK n.a. uSa 689,312 0.54%

liVSFrSKrinGSaKtieBolaGet GBr 669,933 0.53%

mp penSJon pK nor 658,800 0.52%

e traDe clearinG llc GBr 640,990 0.51%

SKanDinaViSKa enSKilDa BanKen SWe 635,012 0.50%

DnB nor SmB nor 600,000 0.47%

Total 20 largest shareholders: 84,563,774 66.66%

Total other shareholders: 42,300,086 33.34%

Total number of shares: 126,863,860 100.00%

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Fleet liSt & charter StatuS aS per 24 FeBruary 2011

4 Q2010 21

Firm: Option: Spot:

Vessel Type Bhp/Dwt Year built

AHTS Vessels

Sea Lion AHTS Havyard 842 17520 BHP 04.11.08

Sea Tiger AHTS KMAR 404 15000 BHP 1998

Sea Lynx AHTS KMAR 404 15000 BHP 1999

Sea Panther AHTS KMAR 404 15000 BHP 1999

Sea Leopard AHTS KMAR 404 15000 BHP 1998

Sea Bear AHTS KMAR 404 15000 BHP 1999

Sea Cheetah AHTS Khiam Chuang 15000 BHP 25.01.07

Sea Jaguar AHTS Khiam Chuang 15000 BHP 06.07.07

Sea Eagle 1 AHTS Khiam Chuang 12000 BHP 20.04.09

Sea Ocelot AHTS Khiam Chuang 10800 BHP 01.10.07

Sea Weasel AHTS Seatech P-729 6500 BHP 29.10.09

Sea Fox AHTS Seatech P-729 6800 BHP 13.01.11

PSVs

Sea Trout VS 470 MK II 3300 DWT 18.06.08

Sea Halibut PSV UT 755 L 3250 DWT 27.04.07

Sea Angler PSV UT 755 L 3250 DWT 19.07.07

Sea Pike PSV UT 755 L 3250 DWT 10.10.07

Sea Bass PSV UT 755 L 3250 DWT 18.01.08Sea Pollock PSV UT 755 L 3250 DWT 30.04.08

Sea Turbot PSV UT 755 L 3250 DWT 20.08.08

Sea Witch PSV UT 755 L 3250 DWT 17.12.08

2011 2012 2013 20141Q 2Q 3Q 4Q

md

msk o/S Bs

n S

msk o/S Bs

Bz

n S

eni c

eni c

Sg

ps ms

Sg

eQs n S

pbs Bz

eni cg

pbs Bz

pbs Bzpbs Bz

pbs Bz

Sg

m Gs lb

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Vessel no Vessel Yard Type Bhp/Dwt Expected Delivery

AHTS Vessels

272 Sea Jackal ABG AHTS Seatech P-729 6800 BHP Mar 11

273 Sea Badger ABG AHTS Seatech P-729 6800 BHP May 11

274 Sea Vixen ABG AHTS Seatech P-729 6800 BHP Jun 11

275 Sea Stoat ABG AHTS Seatech P-729 6800 BHP Jul 11

PSVs

28 TBN STX Offshore Brazil S.A. STX PSV 09 CD 4700 DWT Jan 12

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aGe DiStriBution current Fleet anD orDer BooK

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0

50

100

150

200

250

300

350

Numb

erofunits

AHTS PSV

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011E

2012E

2013E

2014E

Source: ODS Petrodata

AHTS PSVVessels > 20 years: 34.3 % of total fleet Vessels > 20 years: 23.5 % of total fleetVessels > 30 years: 13.8 % of total fleet Vessels > 30 years: 9.9 % of total fleet

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the riG anD Supply marKet SeemS to Be in Balance

4 Q2010 24

Supply vessels Total fleet AHTS PSVExisting fleet 2318 1351 967

Orderbook 393 17% 215 16% 178 18%

Average age 12.9 13.7 11.8

Rig market Total fleet Semis/drillships Jackups

Existing fleet 733 259 474

Orderbook 135 18% 69 27% 66 14%

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Brazil

D S S Svs ms ltDa

avd psd Ws

231, s 1.403.

c:20030-021 r d J

rJ Bz

Singapore

D S S mg (Sg) p.ld.

10 h cg rd

#19-03/04/05 K tw

Sg 089315

Norway

D S S mg aS

tv 22

4841 ad

nw

Cyprus

D S S p

J Kd av.

is hs

7 F

off .740B

lss 3100

cs

D S S mg (cs) ld

D B as, Bk 1, F 411

p efs S ags ass 4013

lss

cs

ps ddss:

p.o. B 53340

cy-3302 lss

cs

Deep Sea Supply Group Contact information

www.deepseasupply.no