JSC Latvijas kuģniecība Earns Profit of USD 65.6 Million in Nine Months 2008

JSC Latvijas kuģniecība (Latvian Shipping Company - LASCO) consolidated
unaudited financial report for nine months 2008 shows net profit in the amount
of USD 65,6 million, exceeding the amount earned over the respective period a
year before by USD 1,7 million. The Net Voyage Result has grown for almost USD
10 million reaching USD 163,9 million during the report period compared to USD
154,3 million last year. 

Both, the vessel operating profit (USD 49,6 million) and successful sale of
five elderly vessels (USD 45,2 million) have secured the positive LASCO
performance results. 

LASCO assets have grown during the report period reaching USD 928,8 million on
September 30, 2008. The LASCO Group equity value has been USD 552,8 million at
the end of the report period and the earnings per share (EPS), regardless of
the highly unfavorable situation in the global stock markets, have reached USD
0,34 compared to USD 0,32 for the same period of 2007. 

All the LASCO shares are being traded publicly at the Official List of Riga
Stock Exchange. LASCO shares have comprised more than 50 per cent of the total
turnover by the number of shares traded at Riga Stock Exchange - in nine months
of year 2008 there have been  2 218 transactions made with 6,36 million LASCO
shares for the total value of LVL 7,05 million. 

At the end of September 2008 the fleet in LASCO commercial management consisted
of 33 tankers, two LPG carriers and one dry cargo ship. During the report
period LASCO has sold three elderly tankers, two reefer vessels and has
received a tanker newbuilding Salacgrīva. LASCO has been proceeding also with
the management of three vessels belonging to other shipowners on time charter
basis. 

During the nine month period of 2008 LASCO fleet has performed with profit in
all the segments regardless of the increase of bunker costs in the first half
of the year. Already at the end of July the reduction of oil prices has been
observed giving, even if temporarily, a positive impact on the fleet voyage
results. Traditionally the largest proportion of the total vessel operating
profit has brought the Tanker fleet - 82 per cent, the contribution of the LPG
fleet has increased slightly and reached 14 per cent, the share of the Reefer
fleet has been 3 per cent, but the dry cargo vessel has brought profit
representing slightly more than one percent from the total LASCO vessel
operating result. 

During the report period the tanker voyage charter rates demonstrated a
moderate increase and reached their highest level this year at the beginning of
the third quarter. However at the beginning of July considerable reduction of
the freight rates was observed that lasted until the middle of August. The
reduction of the freight rates is explained by the beginning of annual summer
period characterized by irrelevance of the heating issue and the holiday season
factor. In the middle of August the freight rates have strengthened marking a
short-term market recovery. 

Both the LPG carriers of the LASCO fleet continued to operate within the
ScandiGas pool during the nine months period of 2008. Their revenues have been
higher than over the respective period a year ago. 

The sale of the old reefer fleet has been finalized during the report period.
The revenues from the transaction are foreseen for investment into four medium
range tanker newbuildings. 

During the report period the dry cargo vessel of the LASCO fleet continued to
work in accordance with the time charter agreement showing the same performance
result as a year before. 

Uldis Pumpurs, the chairman of LASCO Supervisory council concludes: „Even
though I find the LASCO performance results for the nine months period very
good we cannot ignore the forecasts of decline in the shipping market in the
nearest future. We can observe already that the market is abundant and bearing
in mind the risks of the global recession the demand for raw material shipments
is reducing. 

In this situation LASCO plans to strengthen its investment line in order to
diversify its sources of revenue. Our company has sufficient amount of cash
reserves we could possibly invest into various asset categories. ” 

LASCO has gained more power in competing in the world markets by implementation
of its fleet modernization program - within its framework over a three year
period there have been 13 vessel newbuildings received ordered at 3.Maj
shipyard in Croatia and Hyundai Mipo Dockyard Co., Ltd in Korea. Accomplishing
the first stage of the tanker fleet renewal program LASCO will receive a tanker
newbuilding Ainaži from the Croatian shipyard 3.Maj in November, 2008. On
September 5, 2008, the launching ceremony of the tanker has been honored by the
presence of President of Latvia Valdis Zatlers. 

In addition to the fleet renewal program project mentioned above there are four
medium range 52 000 DWT tankers being built at Hyundai Mipo Dockyard Co., Ltd
in Korea in accordance with the tanker fleet development scenario foreseen in
LASCO Operations Strategy for the period till year 2015. The optimum parameters
of the tanker newbuildings ordered will provide for their comprehensive
employment in oil product, chemical cargo and vegoil shipments. 

More detailed information:
Marita Ozolina-Tumanovska
Head of PR Department
Phone: +371 67020120, 29287169
E-mail : marita.ozolina@lscgroup.lv