MPC CONTAINER SHIPS ASA

“Material Risks Potential case of high levels of stress and long working hours for employees MPCC recognizes employee stress and burnout as challenges within its operations. High workloads and extended working hours can negatively impact mental and physical well-being, resulting in financial risks such as operational inefficiencies, elevated turnover rates, increased recruitment expenses, productivity losses, and rising insurance premiums.”

Annual report 2024A · The company itself

“The DMA identified the following impacts, risks and opportunities relating to workers in MPCC’s value chain to be material. Material impacts – Working Conditions Major health and safety issues (Seafarers) Health and safety incidents offshore have long been a critical focus in the maritime industry, given their potential for severe and lasting consequences.”

Annual report 2024A · The company itself

“Decreased lifespan of ship recycling workers The decreased lifespan of ship recycling workers is a recurring, actual negative impact within MPCC’s downstream value chain, affecting those exposed to harsh working conditions and toxic substances in end-of-life operations. These workers face severe health risks, including long-term illnesses that reduce life expectancy.”

Annual report 2024A · The company itself

“Suboptimal working conditions for supply chain workers MPCC recognizes suboptimal working conditions as a medium-term potential negative impact affecting all workers across both the upstream and downstream value chain including ship repair and ship recycling which occur at both stages of the supply chain. Some workers in MPCC’s supply chain, operating in high-risk jurisdictions, face inconsistent compliance with labor standards, wage disparities, and unequal access to social protections and health and safety measures.”

Annual report 2024A · The company itself

“Material impacts – Other work-related rights Human rights abuses of smaller suppliers down the value chain Human rights abuses by smaller suppliers present a short-term potential negative impact on MPCC’s upstream and downstream value chain. These abuses may include forced labor, wage exploitation, and inadequate working conditions.”

Annual report 2024A · The company itself

“Limited freedom of ship recycling yard workers Limited freedom of ship recycling yard workers represents a recurring potential negative impact on MPCC’s downstream value chain. In some regions, workers may face restricted movement, lack of collective bargaining rights, and inadequate representation in workplace decisions.”

Annual report 2024A · The company itself

“Minors working in ship recycling yards The presence of minors in ship recycling yards is a short-term potential negative impact on MPCC’s downstream value chain. Child labor remains a concern in certain shipbreaking regions, where economic pressures force underage workers into hazardous environments.”

Annual report 2024A · The company itself

“There are also around 1,400 seafarers serving aboard our vessels, who make our operations possible enabling the seamless transportation of goods across the globe.”

Annual report 2024A · The company itself

“A growing trend in Western and industrialized nations shows a reduced willingness to perform physically intensive labor, leading to a shrinking talent pool for seafarers. This shift presents recruitment challenges, increased competition for talent, and rising labor costs.”

Annual report 2024A · The company itself

“The Company has identified thirteen material impacts, two risks, and one opportunity, reinforcing its commitment to addressing critical challenges such as health and safety risks, working conditions, and human rights protections. Through its Human Rights, Health & Safety, Sustainability, and Human Capital Policies, MPCC promotes fair labor practices, safe working environments, and ethical supply chain management. Key initiatives include training programs for seafarers, enhanced ship recycling standards, human rights education for stakeholders, and workplace well-being initiatives.”

Annual report 2024A · The company itself

“Management of relationships with suppliers – Engagement with ship recycling yards MPCC can have a positive impact on the shipping industry as result of selecting ship recycling yards that uphold high environmental and social standards, including fair working conditions, wages, and health and safety measures. Through these audits and ongoing engagement, MPCC can contribute to improving worker conditions across the value chain, significantly enhancing their well-being.”

Annual report 2024A · The company itself

“Approach In the supply chain, the focus area for MPCC is connected to human rights. The Company follows up with suppliers to ensure that they uphold the Company’s zero-tolerance policy for human rights violations and indecent working conditions.”

Annual report 2024A · The company itself

“To achieve the Company’s sustainable procurement goals, MPCC prioritizes suppliers that align with the ESG policies, ensuring responsible employment, ethical business practices, and fair trade. Suppliers are expected to respect internationally recognized human rights, adopt a precautionary approach to environmental challenges, and actively work to reduce pollutants, GHG emissions, and SO x .”

Annual report 2024A · The company itself

“Stricter decarbonization regulations could have substantial effects on MPCC’s strategy and business model by causing increased capital expenditure for fleet upgrades and higher operating costs.”

Annual report 2024A · The company itself

“Climate change mitigation – Increased revenues through maintaining a CII above average MPCC has a material opportunity to enhance its reputation and market position by maintaining a Carbon Intensity Indicator (CII) rating of C or better. While there are no current regulatory penalties for failing to meet the threshold, stakeholders, financiers, and customers pay increasing attention to the carbon intensity of vessels in their operations and portfolios.”

Annual report 2024A · The company itself

“Non-compliance with EU Ship recycling rules on inventories of hazardous substances Non-compliance with the EU Ship Recycling Regulation regarding inventories of hazardous substances could pose a financial risk for MPCC in the medium term. These repercussions may include fines, penalties, costs associated with corrective actions, potential legal fees, and damage to the Company's reputation. In addition, failure to comply could lead to the inability to operate within EU waters, affecting both business opportunities and revenue streams.”

Annual report 2024A · The company itself

“Climate change mitigation – Methanol vessels an advantage in FuelEU maritime regulatory setting The growing focus on emissions reduction in the shipping sector presents MPCC with an opportunity to gain a competitive edge. The FuelEU Maritime initiative aims to drive demand for renewable and low-carbon fuels, incentivizing the adoption of cleaner technologies across the industry. MPCC’s investment in methanol-fueled vessels positions it to capitalize on these developments.”

Annual report 2024A · The company itself

“years after delivery) Total Loan Amount: USD 54.5 million Amount Drawn to Date: USD 15.6million Use of Proceeds: (Partly) fund the contract prices in the relevant building contract (Construction of two 1,300 TEU dual-fuel methanol container vessels with energy-saving and emissions-reducing technologies) Green Loan Allocation Report In line with the GLP and the terms of the Agreement, the proceeds of the USD 54.5 million loan have been exclusively allocated to finance the acquisition costs for the construction of two state-ofthe-art dual-fuel methanol feeder vessels. These 1,300 TEU vessels are a cornerstone of MPC Container Ships ASA’s decarbonization strategy and are equipped with a comprehensive suite of energy efficiency and emissions reduction technologies.”

Annual report 2024A · The company itself

“The vessels utilize low-friction silicon-based coatings to reduce fuel consumption, enhancing overall efficiency while lowering emissions but especially to minimize the impact of the coating on the marine environment.”

Annual report 2024A · The company itself

“In addition, we have continued to invest and progress in our retrofit program to continuously enhance our fleet and align with our commitment to sustainable shipping solutions.”

Annual report 2024A · The company itself

“Going forward, the Group will continue to pursue selective opportunities for growth and sale of older, less efficient tonnage, and invest in efficiency-enhancing retrofits of its existing fleet, as part of its fleet optimization and renewal strategy.”

Annual report 2024A · The company itself

“Energy efficiency improvements In 2023, MPCC assessed its fleet’s overall weighted average CII, achieving an average C rating. This rating was sustained in 2024 through retrofitting and operational efficiency measures, reducing carbon intensity.”

Annual report 2024A · The company itself

“A core element of MPCC’s decarbonization strategy is the implementation of fleet-wide energy efficiency initiatives. In 2024, the Company completed multiple retrofitting projects, including propeller optimization, installation of boss cap fins and pre-swirl devices, and hull modifications to reduce drag and enhance hydrodynamics.”

Annual report 2024A · The company itself

“Additional energy-saving technologies installed include waste heat recovery systems, CJC filters, pre-heating systems for main and auxiliary engines, variable frequency drives for pumps, LED lighting, upgraded autopilots, and low-friction silicon paints. These measures have directly reduced fuel consumption and emissions.”

Annual report 2024A · The company itself

“These include: Energy efficiency measures: Retrofitting and operational improvements (e.g., propeller optimization, energy-saving decides, SEEMP improvements) contribute approximately 15–25% of total GHG reduction.”

Annual report 2024A · The company itself

“Explanation of KPI Evolution The positive development of MPCC’s fleet-wide AER between 2023 and 2024 reflects the company’s strategic and ongoing investments in efficiency enhancing measures. Key drivers of the KPI improvement include the intensive retrofit and modernization program across the fleet, focusing on energy-efficiency technologies such as VFD, CJC filters, LED lights and engine upgrades as well as hydrodynamic measures like optimized propellers/boss cap fins, pre swirl devices, new bulbous bows and hull coatings.”

Annual report 2024A · The company itself

“Early investments in alternative fuels and low-carbon technologies are expected to strengthen MPCC’s capacity to offer sustainable shipping solutions and generate long-term commercial value. The opportunity is situated within MPCC’s own operations and is projected to unfold over the medium term.”

Annual report 2024A · The company itself

“Climate change mitigation – Methanol vessels an advantage in FuelEU maritime regulatory setting The growing focus on emissions reduction in the shipping sector presents MPCC with an opportunity to gain a competitive edge. The FuelEU Maritime initiative aims to drive demand for renewable and low-carbon fuels, incentivizing the adoption of cleaner technologies across the industry. MPCC’s investment in methanol-fueled vessels positions it to capitalize on these developments.”

Annual report 2024A · The company itself

“Transition to low-carbon fuels As part of its decarbonization strategy, MPCC is preparing for the integration of renewable fuels. The Company has ordered three dual-fuel methanol vessels, with one delivered in January 2025, the second scheduled for delivery in Q2 2025, and the third in 2026.”

Annual report 2024A · The company itself

“Renewable fuel adoption: Depending on the share and blending of renewable fuels (e.g., biofuels, renewable methanol, ammonia), this lever can contribute 20–80% of reductions Fleet modernization: Newbuild orders and eco-friendly vessel acquisitions are expected to achieve an additional 10–15% reduction Renewable energy integration: Adoption of alternative maritime power (AMP) (onshore power supply) is expected to add 5–10% in GHG reduction.”

Annual report 2024A · The company itself

“In January 2024, the Group partnered with Unifeeder in a joint investment for the construction of a third 1,300 TEU dual-fuel methanol container vessel is scheduled for delivery in late 2026 and will be under a 7-year time charter agreement with Unifeeder post-delivery.”

Annual report 2024A · The company itself

“MPCC has already taken proactive steps by investing in dual-fuel methanol vessels as part of its fleet renewal and decarbonization strategy. This is part of its long-term strategy to strengthen its position in sustainability-driven shipping markets.”

Annual report 2024A · The company itself

“In March 2025, as part of the Group's strategy for fleet optimization and renewal, the Group entered into agreement to sell five vessels en bloc, involving three 1,300 TEU vessels and two 2,000 TEU vessels, to an unrelated party.”

Annual report 2024A · The company itself

“As part of its fleet renewal strategy, MPCC sold five vessels in 2024, averaging 17 years in age and 2,300 TEU in size, and acquired seven vessels averaging 10 years and a capacity of 3,400 TEU.”

Annual report 2024A · The company itself

“MPC Container Ships’ vessels are chartered out on fixed-rate contracts with a specific focus on intra-regional trade lanes. Intra-regional services play a pivotal role in connecting major ports on intercontinental shipping lanes with smaller, regional ports.”

Annual report 2024A · The company itself

“The Company owns and operates a portfolio of vessels serving intra-regional trade lanes on fixed-rate charters.”

Annual report 2024A · The company itself

“MPCC delivered a strong operational performance in 2024 while actively managing fleet composition, with continued robust chartering activity, successfully securing attractive time charters throughout the year to capture additional value and achieve high utilization for the fleet.”

Annual report 2024A · The company itself

“Our vessels are chartered to global liner shipping companies and regional carriers.”

Annual report 2024A · The company itself

“The newbuilding activity is also impacting the environmental profile, with 43% of all container vessels ordered set to be built with a DF-LNG engine. Another 24% will have methanol DF engines.‌ 11 8 Alphaliner, Weekly Container Shipping Newsletters, January 2025.”

Annual report 2024A · The company itself

“Expectations in the industry are pointing to a multi-fuel future, and by incorporating environmentally sustainable technologies, we are strategically positioning MPCC to invest in and capitalize on the transition towards greener shipping practices and further enhancing long-term shareholder value.”

Annual report 2024A · The company itself

“The vessels are equipped with the latest engine technology and advanced hull design that will emit approximately 20% less greenhouse gases compared to conventional designs if operated on the same fuel. Additionally, the design allows for a cost-efficient conversion to operations on methanol in the future, in which case emission reductions of more than 90% would be in reach.”

Annual report 2024A · The company itself

“In accordance with the Green Loan Principles (GLP) developed by the Loan Market Authority (LMA) recommending borrowers to engage external review providers to assess the alignment of their green loan or green loan program with the four core components of the GLP, MPCC has obtained a second party opinion confirming the alignment of the Agreement with the GLP by the American Bureau of Shipping (ABS).”

Annual report 2024A · The company itself

“Two of the 1,300 TEU dual-fuel vessels are able to operate on green methanol with a design-based efficiency yield of more than 30%. Equipped with an ice class hull, they will be deployed on trades along the western coast of Norway, where they can achieve emission reductions of up to 95% compared to conventional ships.”

Annual report 2024A · The company itself

“Constantin Baack CEO Moritz Fuhrmann Co-CEO and CFO | CEO Letter Year in Review | CEO Letter Advancing operational sustainability and efficiency During the year, we have continued to execute on our fleet renewal strategy and have near completed our USD 600 million investment program for fleet renewal. We welcomed 6 eco-design vessels into our fleet, as well as the first of the three dual-fuel methanol vessels in the newbuilding program that was delivered in January 2025.”

Annual report 2024A · The company itself

“The vessels are equipped with the latest engine technology and advanced hull design that will emit approximately 20% less greenhouse gases compared to conventional designs if operated on the same fuel. Additionally, the design allows for a cost-efficient conversion to operations on methanol in the future, in which case emission reductions of more than 90% would be in reach.”

Annual report 2024A · The company itself

“In accordance with the Green Loan Principles (GLP) developed by the Loan Market Authority (LMA) recommending borrowers to engage external review providers to assess the alignment of their green loan or green loan program with the four core components of the GLP, MPCC has obtained a second party opinion confirming the alignment of the Agreement with the GLP by the American Bureau of Shipping (ABS).”

Annual report 2024A · The company itself

“years after delivery) Total Loan Amount: USD 54.5 million Amount Drawn to Date: USD 15.6million Use of Proceeds: (Partly) fund the contract prices in the relevant building contract (Construction of two 1,300 TEU dual-fuel methanol container vessels with energy-saving and emissions-reducing technologies) Green Loan Allocation Report In line with the GLP and the terms of the Agreement, the proceeds of the USD 54.5 million loan have been exclusively allocated to finance the acquisition costs for the construction of two state-ofthe-art dual-fuel methanol feeder vessels. These 1,300 TEU vessels are a cornerstone of MPC Container Ships ASA’s decarbonization strategy and are equipped with a comprehensive suite of energy efficiency and emissions reduction technologies.”

Annual report 2024A · The company itself

“Nevertheless, both vessels are designed with a strong environmental profile aligned with MPC Container Ships ASA’s decarbonization trajectory and the objectives of the Green Loan Principles. Once in service, the vessels are expected to deliver substantial environmental benefits across multiple impact areas, including: Greenhouse Gas Emissions Reduction: The use of renewable methanol and advanced dual-fuel engines is projected to reduce CO 2 emissions by up to 95%, depending on the feedstock and production pathway of the renewable methanol.”

Annual report 2024A · The company itself

“The Company’s fleet strategy is aimed at supporting the long-term sustainability and robustness of its fleet operations.”

Annual report 2024A · The company itself

“Strong Commitment to Shareholder Value Creation As part of our objective to maximize shareholder returns, we maintain a commitment to distributing quarterly recurring dividends equal to 75% of the adjusted profit for the period, declared at the discretion of the Board.”

Annual report 2024A · The company itself

“Environmental, Social, and Governance (ESG) topics and issues are key focus areas of MPCC’s operations and an integrated part of MPCC’s strategic objectives.”

Annual report 2024A · The company itself

“Our business philosophy embraces market consolidation, differentiating us from small owner-operators in the industry, and we prioritize building and maintaining a high-quality customer base, emphasizing investment-grade partnerships.”

Annual report 2024A · The company itself

“Continued value creation through strategic utilization of favorable market conditions Throughout the year, the Red Sea crisis became a major disruption in the shipping industry. The market for container shipping experienced increased freight rates driven by the rerouting of vessels around Cape of Good Hope, higher-than-expected demand, and persistent vulnerabilities in global supply chains.”

Annual report 2024A · The company itself

“was characterized by continued geopolitical tensions and largely impacted by the Red Sea crisis becoming a major disruption in the shipping industry.”

Annual report 2024A · The company itself

“Case of a whistleblower showing deliberate pollution of water in U.S. territory MPCC faces a material risk associated with deliberate water pollution occurring on one of its vessels in U.S. territory, particularly if reported through a whistleblower. In such a case, the Company would be subject to financial penalties, including fines related to the whistleblower incident and potential probation in U.S. waters. This poses a direct threat to MPCC’s own operations and could result in operational disruptions and reputational damage in the mediumterm.”

Annual report 2024A · The company itself

“Actions related to climate change mitigation and adaptation Most of the Company’s GHG emissions are linked to vessel operations, primarily due to fuel consumption associated with shipping activities.”

Annual report 2024A · The company itself

“MPCC’s energy consumption derives from fossil forces, primarily crude oil and petroleum products. In 2024, total energy consumption amounted to 5,398,050.93 MWh, representing a 10.98% reduction compared to 2023.”

Annual report 2024A · The company itself

“The time between the decision of the presidential election at the beginning of November 2024 and the second inauguration of Donald Trump as the 47 th president of the United States in January 2025, was characterized by fears about additional tariffs and other trade interventions. It would be accurate to describe the current trade conflict between the United States and China, Mexico, Canada and even the European Union as volatile.”

Annual report 2024A · The company itself

“The IMF and OECD both forecast global growth at 3.3% in 2025 and 2026 respectively.‌ 4, ‌ 5 Uncertainties about increasing protectionism are set to weigh on the global trade outlook. For this reason, the IMF revised its world trade growth estimates down slightly for 2025 and 2026.”

Annual report 2024A · The company itself

“The market for container shipping experienced increased freight rates driven by the rerouting of vessels around Cape of Good Hope, higher-than-expected demand, and persistent vulnerabilities in global supply chains.”

Annual report 2024A · The company itself

“For example, on the Far East – Europe trade alone, the deployed capacity in 2024 increased by 28% compared to the previous year.‌ 10 Without the additional deployment created by the Suez rerouting, supply side pressure would have prevailed in 2024.”

Annual report 2024A · The company itself

“The smaller and relatively older segments below 8,000 TEU continue to show limited contracting.‌ 12 A return to the Suez route would drastically change the market balance Figure 6 shows that TEU trade grew by 5–6% in 2024. In contrast, net fleet growth (accounting for deliveries and demolitions) amounted to 10.5%.‌ 13 The increased transport distances lifted this trade demand by another 12%‌ 14 and are vital to understand why the 2024 market balance was so favorable for shipowners despite the strong fleet growth.”

Annual report 2024A · The company itself

“Spot freight rates are falling but are still above levels before the Red Sea crisis Figure 1 illustrates that freight rates peaked in July 2024 with the Shanghai Containerized Freight Index (SCFI) recording 3,734 points.‌ 6 Afterwards they declined by approximately 30% until the end of 2024. Nonetheless, freight rate levels at the end of 2024 were still almost twice as high as seen at the beginning of December 2023, right before the rerouting around the Cape of Good Hope started.”

Annual report 2024A · The company itself

“Above 4,000 TEU, vessels were able to secure three-year employments, while 3,000 TEU designs achieved periods between two and three years. Between 2,000 TEU and 3,000 TEU, ships managed to fix for two years, and even smaller vessels than that were able to secure two-year periods.”

Annual report 2024A · The company itself

“That was primarily driven by US importers’ fear of increased tariffs and potential port strikes.‌ 3 The global economy has shown resilience over the past years with stabilizing inflation rates and interest rate cuts in many economies. Nonetheless, the global economic outlook for 2025 and 2026 remains below the historical 2000-19 long-term average.”

Annual report 2024A · The company itself

“Resource inflows – Paints used for hull MPCC relies on protective hull coatings to prevent corrosion and maintain the long-term usability of its vessels. Without these coatings, ships would rapidly deteriorate due to constant exposure to harsh marine conditions, making the application of paints essential for maintaining operational efficiency.”

Annual report 2024A · The company itself

“While MPCC has not yet recycled a vessel, this impact is concentrated in its downstream value chain, during the end-of-life phase of vessels when they are dismantled. The risk is expected to materialize in the medium term if not managed effectively.”

Annual report 2024A · The company itself

“Improperly managed hazardous waste from ship recycling Improperly managed hazardous waste from ship recycling, including materials like asbestos, heavy metals, and toxic chemicals, poses risks to both the environment and public health. If not properly handled, these hazardous substances can contaminate soil, water, and air. Furthermore, when materials containing toxins, such as lead and mercury are sold for reuse or upcycling without adequate safeguards, they can cause long-term harm to ecosystems and human well-being.”

Annual report 2024A · The company itself

“Clients increasingly prefer service providers capable of delivering lower-emissions solutions, driven by regulatory changes and rising costs for fuel-intensive industries. The trend is expected to strengthen MPCC’s market position, as its energy-efficient fleet offers a competitive advantage over peers with less efficient assets.”

Annual report 2024A · The company itself

“Throughout 2024, MPCC continued optimizing its debt portfolio by refinancing existing debt and leveraging green financing solutions, with the USD 125 million senior unsecured sustainability-linked bond, in addition to an ECA-Covered green loan, bringing total interestbearing debt to USD 343.3 million as at December 31, 2024, which corresponds to a leverage ratio of 27.9%, compared with USD 126.5 million and a leverage of 13.3% at the end of 2023.”

Annual report 2024A · The company itself

“The newbuilding activity is also impacting the environmental profile, with 43% of all container vessels ordered set to be built with a DF-LNG engine. Another 24% will have methanol DF engines.‌ 11 8 Alphaliner, Weekly Container Shipping Newsletters, January 2025.”

Annual report 2024A · The company itself

“Similarly, steel demand will persist as it is fundamental to maintaining fleet performance and safety.”

Annual report 2024A · The company itself