JSC "Latvijas kuģniecība" Profit USD 42.1 million in the First Half 2008

Today, on August 27, Supervisory Council of  JSC Latvijas kuģniecība (Latvian
Shipping Company - LASCO) has reviewed and acknowledged the Group's financial
results achieved during the first half of 2008. LASCO Group performance during
the report period demonstrates evidently the efficient and professional
commercial management of its fleet and the reasoned strategic decisions taken -
regardless of the unfavorable impact of various external factors on company's
performance, LASCO has worked with success and has earned profit in the amount
of USD 42.1 million during the report period. 

Group's Net Voyage result has reached USD 111.7 million or USD 10.9 million
more than over the respective period a year before. LASCO Group's Net Profit is
USD 42.1 million and both, the vessel operating profit of USD 34.1 million as
well as successful selling of six elderly vessels with profit of USD 27.7
million has contributed to the result attained. The deviation of profit
indicators compared to the analogue a year before are basically explained by
the different revenues from vessel disposal: the profit from asset disposal has
been USD 38.0 million in the first half last year, whereas it stands at USD
27.7 million during the report period. 

Over the first half of 2008 LASCO Group has been proceeding with the
implementation of its strategic goal set - ensuring increase of LASCO value and
securing its place among the top ten medium range tanker owners in the world. 

Uldis Pumpurs, Chairman of LASCO Supervisory Council concludes: “It is utmost
important that the Company's top management works closely together with its
employees in implementation of the Group's strategy, and I am pleased that
joining all our efforts  we succeed in accomplishment of the strategic tasks
deriving from the interests of the Company and its stakeholders”. 

LASCO Group's assets have grown during the report period reaching USD 897.5
million on June 30, 2008. The Group's unaudited equity has comprised USD 531.0
million. 

All the LASCO shares are being traded publicly at the Official List of Riga
Stock Exchange. During the first half of 2008 the trade with LASCO shares has
represented the biggest turnover among the companies listed at Riga Stock
Exchange - there have been  1 490 transactions made with 4.38 million shares
with total value of LVL 4.75 million.  LASCO share capitalization at Riga Stock
Exchange has reached LVL 246 000 000 on June 30, 2008. 

During the first six month of 2008 LASCO fleet has worked with profit in all
the segments. Regardless of the dramatic increase of crude oil price affecting
bunker costs accordingly, the optimum application of various freight types
responding to the situation in the shipping market provided for performance
with profit in all the LASCO fleet segments - the vessel operating profit
reached USD 34.1 million during the report period, compared to USD 34.7 million
for the respective period last year. 

At the beginning of the report period the tanker voyage charter rates had
fallen to their lowest level of the decline experienced at the final quarter of
2007 and gradually the market recovery commenced. At the end of the first
quarter of 2008 and the beginning of the second the activities in oil shipments
encouraged optimism among the market players regarding development of freight
rates.  Even though to a lower extent than the year before LASCO Tanker fleet
has provided the largest contribution to the total vessel operating profit  -
79 per cent or USD 27.1 million during the report period. 

Both LPG carriers of the LASCO fleet “Vidzeme” and “Kurzeme”, built in 1997,
continued to operate successfully within the “ScandiGas” pool during the report
period. Their contribution has increased by USD 0.6 million compared to the
respective period of 2007. In the first half of 2008 LPG sector represented 13
per cent of the total vessel operating profit or USD 4.3 million. 

In accordance with LASCO Operations Strategy and the decisions taken before,
there have been three “Akadēmiķis Vavilovs” type reefer vessels sold. The
revenues from their sale have been invested in four medium range tanker
newbuildings. The remaining two reefer vessels of the LASCO fleet have been
working in accordance with their agreements, in time charter mainly.
Considering the reduction of operation costs (crewing, dry-dock and repairs,
equipment, etc.) due to the sale of vessels as well as increase of the time
charter rates, the profit from reefer operations is USD 0.6 million higher than
during the same period in 2007. 

The dry cargo vessel of the LASCO fleet continued to work in accordance with a
time charter agreement generating solid and predictable profit slightly over
USD 0.4 million during the first half of 2008. 

In the first half of 2008 within the Tanker Fleet Renewal Programme LASCO took
the delivery of one tanker newbuilding “Užava” from “3. Maj” shipyard in
Croatia. Another tanker newbuiding “Salacgrīva” had been received just after
the report period on July 24, 2008. During the second half of 2008 LASCO will
take the delivery of the last tanker newbuilding from ten ordered at “3. Maj”
shipyard in Croatia thus completing the Tanker Fleet Renewal Programme launched
in 2004. In total LASCO will have received 14 new and modern tankers from
Korean and Croatian shipyards complying with all the requirements of
international shipping safety conventions. 

LASCO President Imants Sarmulis underlines: “Accomplishment of the fleet
renewal programme has boosted the Group's confidence - over the last couple of
years LASCO has taken delivery of 12 tanker newbuildings within the programme
and, given the freight rates, their revenues have been considerably higher,
than those of the older tonnage. The systematic approach to the tanker fleet
renewal is the good news to our present and potential business partners
evidently proving LASCO's long term development perspectives.” 

In addition to the fleet renewal programme mentioned above, according to the
tanker fleet development scenario foreseen in LASCO Operations Strategy for the
period till 2015, there are four medium range 52 000 DWT tankers being built at
“Hyundai Mipo Dockyard Co., Ltd” in Korea.  The optimum parameters of the
tanker newbuildings ordered will provide for their comprehensive employment in
oil product, chemical cargo and vegoil shipments. 

Information: 
The core business of LASCO is freight shipments among the ports worldwide. At
the end of the first half of 2008, the fleet in LASCO commercial management was
comprised of 40 vessels - 35 tankers, two LPG carriers, two reefer vessels and
one dry cargo vessel. 


More detailed information:
Marita Ozolina-Tumanovska
Head of PR Department
Phone: +371 67020120, 29287169
E-mail : marita.ozolina@lscgroup.lv