OREANDA-NEWS. December 21, 2010. Considering the cautious recovery of the global shipping markets and the optimised expenses for vessel operational activities the fleet of JSC „Latvijas kugnieciba” (Latvian Shipping Company) during the 9 months of 2010 was able to show positive trends and the result from vessel operation during the said period has reached almost USD 8 million. In the same time due to the complicated situation in sectors that are not related to the basic business field, especially in the real estate segment, the total result still is negative. Due to mentioned reasons, the total losses of the JSC „Latvian Shipping Company” Group during the reporting period reached USD 28.2 million.

Since the beginning of the year liabilities have decreased by USD 46 million or 8% and constitute 51% of the Group’s assets. Assets of the JSC „Latvian Shipping Company” Group as on 30 September 2010 amounted to USD 1000.4 million.

The Latvian Shipping Company is a public stock company with shares on Official list of the stock exchange NASDAQ OMX Riga. During the nine months of 2010 the share price has not actually changed as at the beginning of the year it was LVL 0.40, and at the end of the period it was LVL 0.42, although in the middle of the period when the market situation improved the price per share reached even LVL 0.52.  All in all the Latvian Shipping Company’s shares were among the most actively traded ones during the reporting period - 1826 transactions involving 3.52 million shares worth LVL 1.48 million were conducted, representing 42% of all share transactions on the NASDAQ OMX Riga Official list during the reporting period.  On September 30, 2010, capitalisation of Latvian Shipping Company shares at NASDAQ OMX Riga was at a level of LVL 84 million.

At the end of the third quarter (Q3) the fleet under commercial management of the JSC „Latvian Shipping Company” consisted of 22 tankers, 20 of which are possessed by the JSC „Latvian Shipping Company” Group, but two vessels belong to other ship owners.

Pursuant to the resolution passed at the beginning of 2010 about sale of six Kherson tankers, already the fifth tanker of this type (“Estere”) was sold during the Q3. As a result of the JSC „Latvian Shipping Company” fleet updating programme the average age of the JSC „Latvian Shipping Company” Group’s fleet has reduced from 17.5 years in 2005 to five years at the end of the reporting period.

During the course of Q3 2010 tankers of the JSC „Latvian Shipping Company” fleet were mainly employed in time charter, as these charter rates remained comparatively higher if comparing to voyage rates. The tanker time charter rates during the Q3 2010 levelled out both in the Handy and MR tanker sector giving hope to cautious market recovery.

Even though the result from vessel operation during the 9 months was positive and reached USD 8 million, the net voyage result of JSC „Latvian Shipping Company” Group’s vessels during the nine months of 2010 substantially fell behind the last year’s result and reached USD 65.8 million, thus cumulatively as from the beginning of the year showing the comparatively negative situation in the shipping markets. Reduction of operational costs was the most important step in order to improve the fleet operation. In order to continue consideration of the future possibilities to reduce operational costs we will evaluate scenarios for outsourcing of the vessel technical management services.

In order to ensure qualitative management of the JSC „Latvian Shipping Company” Group a new member of the Management Board – Mr. Edvins Berzins was elected, but Mr. Raivis Veckagans voluntarily left the Management Board after the reporting period.

Stagnation in the Latvian real estate market has been the main reason for application of out-of-court legal protection process to the JSC „Latvian Shipping Company” Group’s companies „LASCO Investment” Ltd and „LASCO nekustamie ipasumi” Ltd.  On 7 October 2010 the court approved out-of-court legal protection process of „LASCO Investment” Ltd on the term of two years, but on 1 October the court confirmed out-of-court legal protection process of  „LASCO nekustamie ipasumi” Ltd for one year.

With the judgement of the Riga District Court of October 12, 2010, the claim of the liquidator of “Banka Baltija” against the Bank of Latvia and Ministry of Finance has been partly satisfied and from the Bank of Latvia 59.9 million lats recovered. Such a judgement of the first instance court is favourable to JSC „Latvian Shipping Company” as the claim of JSC „Latvian Shipping Company” against “Banka Baltija” is 14.4  million lats.

JSC „Latvian Shipping Company” will continue honest and focused actions in order ensure rights and interests of all the shareholders. JSC „Latvian Shipping Company” is doing all its best and dependent on the company in order to complete the JSC „Latvian Shipping Company” Group’s audited financial statements for 2009 and to submit it for approval to the shareholders.