OREANDA-NEWS  On 03 December was announced, that JSC Latvijas kugnieciba (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 Salacgriva. 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 Ainaћi 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 inaccordance 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.