1. STAR REEFERS INC STRATEGY AND ACTION PLANS REVISITED
STRONGER SERVICES AND EARNINGS RECOVERY
OSLO 4 NOVEMBER 2003

2. Outline Reefer market fundamentals Star Reefers Inc
Brief introduction to the Reefer industry and its characteristics
Star Reefers Inc
Star Reefers in brief
Fleet and market position
Key financial figures
Market drivers and outlook
Demand and supply
Structural changes
Star Reefers – Strategy and action plans revisited
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

3. 1. Reefer market fundamentals

4. Conventional reefer landscape
MAJOR REEFER OPERATORS (Post split)
Source: Star
Source: Drewry
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

5. Market share – Reefer import & export
Source: UN
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

6. Trade patterns (Banana trade)
Source: UN
Trade patterns (Banana trade)
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

7. 2. Star Reefers Inc

8. Star Reefers in brief
A leading provider of reefer transportation services
Operating a fleet of 37 large reefer vessels
Leading market position
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

9. Historic highlights
Jan. 01 : New equity USDM 44. Creditor write off USDM 55
Jul. 01 : Acquisition Star Reefers London Commercial operator owned and 18 chartered vessels
Aug. 01 : Pool with NYK
Nov. 02 : Renegotiation of long term t/c
Nov. 02 : Dividend pay out of USD 0.10
: Sold 11 vessels for USDM 52
: Acquisition of 9 vessels (incl. 2 options) for USDM 114
2003 : Stand alone from Jan. 04 (Pool with NYK terminated)
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

10. Current fleet
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

11. Tonnage analysis – Sale & Purchase 2003
OLD
NEW
Swan class
Durban Star
Built
1979
1993
Capacity cbft
Revenue cent
¢ 28,0
¢ 54,0
Ships opex per day
4 100
4 300
Revenue
1,6
3,4
Opex excl. drydock
-1,5
-1,6
EBITDA
0,1
1,8
Asset Value
$ 2,7
$ 11,0
EBITDA / Investment
3,4 %
16,2 %
ROE
negative
36 %
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

12. Fleet changes Disposal of Vessels Acquisition of Vessels
Vessels name
Capacity (cbft.)
Built
Price (USD million)
Date Sold / Bought
Canadian Reefer
1979 3
Nov-01
Ecuadorian Reefer
1980
Belgian Reefer
1983
6,5
May-02
Brazilian Reefer
1984
Anglian Reefer
1988 10
Mar-03
Argentinean Reefer
Swan Lagoon
2,65
Aug-03
Swan Ocean
Swan Strean
2,6
Swan River
1978
2,4
Dec-03
Swan Bay
51,7
Acquisition of Vessels
Chiquita Brenda
1993 11
Oct-02
Chiquita Joy
1994
Napier Star
Nelson Star
Tauranga Star
1992
Durban Star
10,5
Jul-03
Cape Town Star
Sep-03
Costa Rican Star
1998
19,9
Option
Caribbean Star
1997
114,8
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

13. Profit & Loss Account .
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

14. Balance sheet .
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

15. Sensitivities Star Reefers – Sensitivities
Revenue +/- 5% = +/- USD 0.78 per share
Vessel opex. +/- 3% = +/- USD 0.16 per share
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

16. Star Reefers – 2004 platform
Improved and modern fleet – Average 12 years / Banana Type
Improved operational cost base
Quality name
Dedicated and energized staff
Positive market outlook
Termination of NYKSTAR
Consolidation paused
37 ships fleet and ranked as a number 3 among reefer operators
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

17. 3 Market drivers and outlook

18. Factors influencing demand
Consumer expenditures and general economic conditions
A Theoretical Approach A B C
GDP per capita
Consumption pr. capita 2 4 6 8 10 12 14
Russia
1930
Saudi
Arabia
6870
Germany
25280
USA
25820
Other
E. Eur.
2355
W. Eur.1)
25927 EU
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
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

19. Factors influencing demand cont.
Currency exchange rates
Since the main export areas are USD economies and the largest import areas are EUR economies, USD/EUR fluctuations have a significant impact on consumers demand of reefer products
Non economic variables
Changes in consumer preferences/taste/trends
The effect of political decisions (Import ban, taxes)
Availability of domestic volumes either from own production or from volumes in continued improved storage facilities
Climatic factors
Banana regime up for revision in 2006
Market access for developing countries
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

20. Factors influencing supply – Reefer vessels order book vs scrap
Source: Orion Shipping
The reefer fleet (above 300 cub. ft.) consists of around 505 vessels, equivalent to around 233 million cub.ft. (Source: Drewry)
The reefer fleet reached its peek in 1993, and has slowly been reduced due to historic low rates in the period from 1998 – 2002, and consequently very limited newbuilding
The order book is presently at 0.5 million cub.ft.
The drop in second hand values for reefer ships has not been reflected in new building prices, hence little anticipated new building activity going forward
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

21. Reefer fleet age distribution – 2003
Global
Source: Orion Shipping AS, Oslo
SRI Owned 1 5 6 6 1
SRI Ch. In 2 8 4 4
SRI Fleet Average – 11.7 years
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

22. Illustration of historic development of second-hand value
Source: Orion Shipping
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

23. Strategic matrix – Reefers vs containers
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/USWC
NO IMPACT TO THE CONTAINER
STRONGER LOGISTICAL BASE
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

24. Projected Seaborne Trade Developments
Source: Drewry
Conventional reefer trade continues to grow steadily
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

25. Projected Seaborne Trade Developments
Reefers still dominate
the important fruit trades
Source: Drewry
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

26. Historic rate developments
Source: Orion Shipping
Influx of newbuildings during 80’s and mid 90’s
Impacts of El Niño and La Niña
USD appreciation of some 20% during 90’s
EU enacted a restrictive quota system for bananas in 1993
Collapse of USSR during mid-90’s and Asian financial crisis
Fruit majors suffering at end of 90’s
Commission driven market players
High tech storage technology - controlled atmosphere
Container influx and penetration
The market during the years 1998 –2001 experienced many negative events simultaneously which disrupted the supply/demand balance in the reefer market
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

27. Seasonal spot rates Steady increase in rates from historic low levels
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

28. 12 Months T/C rates Size: 350-550.000 cbft vessel
Source: Orion Shipping
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

29. 4. Strategy and action plans revisited

30. Star Reefers - Strategy revisited
TRANSFORMATION TO A STRONGER SERVICE PROVIDER
Ad hoc logistics / chain management
Reorganisation – overhead reduction – adjustment to strategy execution
Dedicated services
Trade sectors
Reefer services
Creative customer solutions
Rates on quality ships will increase
Increase spot exposure
Worldwide representation
Improve operating efficiency
Market growth
Tapping the tonnage supply market
Alert to consolidation – opportunity knocks
Strategy of executing accretive acquisitions
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway

31. Impact to Star Reefers Improved operating margins
Increased market control
Increase in working capital needs
Increase fleet efficiency
Increased topline revenue growth
Continued quality improvements
Improved share liquidity and free float
STAR more attractive as a consolidation partner
STAR Reefers AS, as managers for STAR Reefers Inc Rådhusgaten 23, N-0158 Oslo, Norway