JSC Latvijas kuģniecība (Latvian Shipping Company - LASCO) reported a successful performance in the first half of 2007. As evidenced by the Group’s Un-audited Condensed Consolidated Financial Statements for the first six months ended 30 June 2007, the Company’s Net Profit reached USD 55.2 million, thus exceeding the respective result for 2006 by 3.6 times or USD 40.0 million. The result was ensured by both Vessel Operating Profit and Gain on Sale of Vessels.

It is important that, compared to the respective period of 2006, LASCO Group’s Voyage Income increased by USD 9.0 million. The positive changes were made possible by the restructuring of LASCO fleet, namely the number of new and more profitable ships with much higher income has grown. According to LASCO Management Board resolution on further development of the Group’s middle-range and handy-size tanker segment through increasing its tonnage to approximately DWT 200 thousand, in the first half of 2007 a total of four tankers were sold or scrapped, while the number of younger ships, whose age does not exceed five years, increased to ten.

In the first half of 2007, all types of LASCO fleet operated with profit, and the total Vessel Operating Profit exceeded the respective result for 2006 by 73% or USD 14.7 million.  

Due to the consistently implemented LASCO tanker chartering policy, the largest contribution to the Group’s total Vessel Operating Profit (83% or USD 28.7 million, compared to USD 11.7 million in 2006) was, as usually, made by its tanker fleet. As noted by Mr. Imants Vikmanis, Chairman of JSC Latvijas kuģniecība Management Board, LASCO tanker fleet’s positive results once again evidence the validity of the Group’s strategic objective of concentrating JSC Latvijas kuģniecība activity in the middle-range and handy-size segment of the tanker market.

The performance of LASCO LPG fleet, in its turn, was influenced by the declined freight rates caused by the unusually warm winter 2007 and hence deteriorated demand for liquefied petroleum in the international market.  LASCO’s 2 LPG carriers continued to be employed by ScandiGas Pool, and their Vessel Operating Profit for the first half of 2007 amounted to USD 3.7 million or 10% of the Group’s total result.

In the first half of 2007, positive results were achieved also by LASCO reefer fleet, whose contribution to the Group’s total Vessel Operating Profit made up USD 1.6 million, slightly exceeding the respective result for the first half of 2006. At the same time, considering that the reefer fleet consists of 5 vessels, its contribution to the Group’s total result is comparatively low – 5%.

Last year’s result was exceeded also by LASCO’s only Ro-Ro/general type vessel Telo: in the first half of 2007 it earned a stable Vessel Operating Profit of USD 0.55 million and made a 2 percent contribution to the Group’s total result.

In the course of a successful implementation of LASCO Tanker Fleet Renewal Programme, in the first six months of 2007 the Group took the delivery of four newbuildings: m/v Targale and m/v Ugale built by 3.Maj shipyard in Croatia, as well as m/v Kraslava and m/v Kandava delivered by Hyundai Mipo Dockyard Co. Ltd. in Korea. In total seven out of 14 newbuildings ordered have been delivered to LASCO by 30 June 2007.

As at 30 June 2007, LASCO fleet comprised 41 vessels: 33 product tankers (including three tankers time chartered in from other shipowners), 2 LPG carriers, 5 reefer vessels and 1 Ro-Ro/general type vessel.

As at the end of the reporting period, LASCO Un-audited Shareholders’ Equity was USD 474.5 million or USD 2.37 per share, which is the highest level in the history of LASCO as a private company.

For detailed information:
Marita Ozolina-Tumanovska
Head of PR Department
Phone: +371 7020120, 9287169
E-mail : marita.ozolina@lscgroup.lv