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Latvian Shipping Company Reports the First Quarterly Profit Since 2008

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Latvian Shipping Company Reports the First Quarterly Profit Since 2008

may 31, 2013 / Latvian Shipping Company

Latvian Shipping Company (AS “Latvijas kuģniecība”) and its affiliates (hereinafter – LSC Group) in the first quarter of the year has made a profit of USD 77 thousand despite an impairment charge of USD 1.7 million against the decrease of the fleet value. Though in absolute terms the profit is merely symbolic, it is nevertheless a sign of major progress; it is the first time since 2008 when the LSC Group reports a positive financial result. Just to compare – the LSC Group closed Q1 of 2012 with a loss of USD 17.77 million.

Simon Blaydes, Chairman of LSC Management Board, explains: „Latvian Shipping Company is prudently optimistic about the prospects of the petroleum product tanker market, because charter rates have been increasing progressively. The closing down of oil refineries in OECD countries, resulting in increasing demand for longer voyages, as well as the emergence of new product export markets in the USA can also be mentioned as positive trends. At the same time the global economic environment continues to be in a fragile equilibrium. Growing demand in product haul, without any rapid increase in orders for new ships, will remain the key driver to future success for Latvian Shipping Company.”

LSC fleet net voyage result in the first quarter of 2013 was USD 22.22 million, which is a small increase over the first quarter of 2012 (USD 21.58 million). Net voyage result is the difference between voyage income and voyage cost, and it represents total income irrespective whether the fleet is engaged on voyage or time charters.

Also further cuts to administrative expenses by 36% to USD 2.06 million in Q1 of 2013, down from USD 3.24 million in Q1 of 2012, have had a positive effect on the LSC Group financial performance.

In the first quarter, the LSC Group has been able to improve its cash flow: as at 31 March, it had cash and short-term deposits of USD 29.26 million, which is by USD 3.13 million more than at the beginning of the year. Furthermore, LSC has reached an agreement with its major shareholder joint stock company „Ventspils nafta” that, if needs be, the latter would continue financing the LSC Group, so that the cash reserves of the LSC Group at any time do not fall below the USD 17 million threshold set by the bank syndicates.

Attachment

LSC Unaudited Condensed Interim Consolidated Financial Statements  for the 1st quarter 2013

About JSC “Latvijas kuģniecība” (Latvian Shipping Company)

In the medium-sized and handy tankers categories JSC „Latvijas kuģniecība” (NASDAQ OMX RIGA: LSC1R)  is among the leading ship owners in the world, and in terms of transport volumes of petroleum products  it is also in a leading position among similar companies in Northern Europe. It owns 19 modern ships, employing more than 700 professional and highly qualified seamen from Latvia. The total carrying capacity of the LK fleet is 957 974 DWT and the average age of the fleet is 6.3 years. All ships have received ISM (International Safety Management) certificates.

 
Latvian Shipping Company  www.lk.lv/en/
LSC Shipmanagement  www.lk.lv/en/shipmanagement