OREANDA-NEWS. On 03 June 2008 Novorossiysk Commercial Sea Port (“NCSP”) announced its consolidated unaudited financial results for the three months to 31st March 2008, in accordance with International Financial Reporting Standards.

Mr. Igor Vilinov, CEO of NCSP, said: “Key financial indicators continued to grow in the first quarter of 2007. Revenue reached \\$151,6 million in comparison with the same period last year, EBITDA grew to \\$95,7 million, net profit increased to 56,3 million (consolidated unaudited financial results). An important growth factor for the company in the first quarter of 2008 was the commissioning of new transshipment facilities in late 2007, including container, timber, bunkerage and grain terminals.

As a result of corporate strategy focused on increasing the share of high-profit cargoes in the port’s turnover, the share of containers increased from 4% to 6%, oil products – from 11% to 14%, ferrous metals – from 11% to 12% and timber – from 1% to 2%, as well as the attraction of a new cargo – imported cement. The first quarter results also demonstrate further increase of the company’s operating efficiency”.

Growth Factors in the 1st quarter of 2008

• Increasing share of high-profit cargoes in the 1st quarter of 2008 (in comparison with the 1st quarter of 2007):

- Share of containers grew from 4% to 6%

- Share of diesel fuel grew from 8% to 10%

- Share of fuel oil grew from 3% to 4%

- Share of ferrous metals grew from 11% to 12%

- Share of timber grew from 1% to 2%

- A new cargo appeared – imported cement

• Effect from commissioning of new port complexes (NLE Container and Timber Terminals, IPP Bunkerage Complex, NZT Grain Terminal)

• Decrease of discounts for clients

• Scheduled tariff increase

• Technical modernization: purchase and commissioning of new equipment

• Increase in labor productivity (the indicator of labor productivity increased 7% in comparison with the1st quarter of 2007).

Key events and transactions in the 1st quarter of 2008

• During the 1st quarter of 2008 NCSP continued to execute its investment program to 2012 aimed at modernization and port capacity increase.

1) In January 2008 Novoroslesexport (NCSP's subsidiary) has passed a complex certification of the Integrated Management System (ISO - ISO 9001:2000 “Quality Management Systems. Requirements,” ISO 14001:2004 “Environmental Management Systems Requirements and Management Applications,” and OHSAS 18001:1999 “Occupational Health and Safety Management Systems,” as well as the IQNet International Certificate in Quality).

2) In March 2008 container handlers Reachstaker and container cranes RTG and RMG were commissioned on Novoroslesexport container terminal

• In February 2008 NCSP consolidated 100% stock of the “Baltic Stevedore Co.” by acquisition of the remaining 50% stock of the “Baltic Stevedore Co.” (BSC), which specializes on container cargo and is the first project of NCSP in the Northwestern basin.

• Increase of high-profit cargoes turnover:

1) Turnover of containers in the 1st quarter of 2008 grew to 85 thousand TEU, up 60% year-on-year (53 thousand TEU in the 1st quarter of 2007)

2) Turnover of diesel fuel increased 16,25% to 1857 thousand tons, turnover of fuel oil increased 27,56% to 704 thousand tons, UAN – 31,67% to 211 thousand tons, timber – 15% to 298 thousand tons (all data is given in comparison with the 1st quarter of 2007).

Key growth factors for the company:

• New terminals are built and the existing facilities are expanded:

- Containers: BSC (Baltic Stevedoring Company), NCSP, NLE (Novoroslesexport)

- Oil products

- Crude oil

- Dry bulk imports

• Scheduled tariff increase

• Acquisitions of new core assets

• Acquisitions of subsidiaries’ minority packages

• Increase in cargo turnover volumes through participation in the development of the Novorissiysk Transport Hub