Today, 28 November 2007, the Company’s financial results for the first nine months 2007 were reviewed and considered by JSC Latvijas kuģniecība Supervisory Council.

 

As at 30 September 2007, the fleet under LASCO commercial management comprised 44 vessels: 36 product tankers (including 3 tankers time chartered in from other shipowners), 2 LPG carriers, 5 reefer vessels and 1 Ro-Ro/general type vessel. In the first nine months of 2007, all types of LASCO fleet, except for the reefer fleet the result of which deteriorated compared to the previous year, operated with profit. The analysis of the result break-down by fleet type evidenced that the largest contribution to the Group’s total Vessel Operating Profit (90% or USD 48.1 million compared to 68% or USD 20.7 million in 2006) was made by its tanker fleet.  

 

Mr. Imants Sarmulis, Chairman of JSC Latvijas kuģniecība Management Board, believes that LASCO tanker fleet’s positive results were ensured mainly by the optimal mixture of the different types of chartering agreements combined depending on the shipping market conditions. “Besides, an important role in the improvement of the results was played by the higher freight rates achieved through the renewal of the Group’s tanker fleet, as well as by a favourable market situation,” stressed Imants Sarmulis. 

 

In total 10 out of 14 newbuildings ordered by JSC Latvijas kuģniecība had been delivered to the Company by 30 September 2007: six by 3.Maj shipyard, Croatia and four by Hyundai Mipo Dockyard Co., Ltd., Korea. The implementation of LASCO Tanker Fleet Renewal Programme is planned to be completed in 2008, as a result of which the Group’s fleet will be expanded with 14 modern tankers compliant with all EU marine safety requirements and international conventions.

 

LASCO LPG fleet’s Vessel Operating Profit for the first nine months of 2007 reached USD 4.9 million and made up 9% of the Group’s total result, while that of LASCO’s only Ro-Ro/general type vessel amounted to USD 0.6 million or approximately 1% of the Group’s total Vessel Operating Profit.

 

In the reporting period, LASCO reefer fleet incurred losses amounting to USD 0.5 million. The negative result can be explained by comparatively low freight rates prevailing in the reefer market, as well as by the vessels’ repair-related costs.

 

As already reported, on 2 November 2007, LASCO signed contracts with Hyundai Mipo Dockyard Co., Ltd. on the building of four additional middle-range (MR) tankers, thus implementing the Group’s Tanker Fleet Further Development Plan that provides for the expansion of the given segment by approximately 200 thousand deadweight tons (DWT).

 

JSC Latvijas kuģniecība tanker fleetranks 6^th-8^th in the handy-size and middle-range (Handy/MR) segment of the world shipping market, at the same time taking leading position in the North European region.