OREANDA-NEWS. June 5, 2012. In the first quarter of 2012, the JSC Latvian Shipping Company (hereafter – LSC) Group (NASDAQ OMX RIGA: LSC1R) has succeeded to increase the profit from operating activity of ships by 6%. The profit from ship activity in the first quarter of 2012 was 6.609 million lats, compared to the first quarter of 2011 where it was 5.979 million lats.

The company’s gross profit has increased as well – in the first quarter of 2012 it was 3.181 million lats, which is 22% more than in the same period a year ago (2.605 million lats). Net profit of the LSC Group has been negative, namely, the company had net losses of 9.1 million lats in the first quarter. Most of the losses – 8.3 million lats – are related to impairments in the value of the fleet as required by International Accounting Standards. The decrease in fleet value in the first quarter of 2012 directly reflects the difficulties that all ship owners have to face in the current financial situation.

“The economic climate continues to be challenging for all ship owners, but the product tanker market, which is LSC niche business,  has been more resilient  than other segments of the tanker industry in Q1/2012,” explains Simon Blaydes, chairman of the LSC Management Board.

The average charter rates for “handy” size tankers (LSC owns 7 “handy” size tankers, each with a deadweight 37 thousand tons) have increased considerably in the first quarter of 2012. In the first quarter of 2011 these were 11’138 USD per day, but in the first quarter of 2012 the average charter rates for “handy” size tankers increased by 16.7% and were 13’003 USD per day. The charter rates for medium size tankers (12 MR type tankers with deadweight 52 thousand tons) and one “panamax” type tanker (deadweight 68 thousand tons) have had minimal change in the first quarter of 2012 .

On March 31, 2012, the total value of the LSC Group’s assets was 333 million lats. The total value of the LSC Group’s fleet has increased from 277.4 million lats to 289.8 million lats, which is attributable to the fact that the ships that were previously classified as assets for sale have been included in the fleet.