JSC Latvian Shipping Company (LSC) announced that its core business in

2002  was successful, as proven by the results of the audit of its last

year's  Financial  Statements.  LSC's vessel operating profit last year

made  up  USD 20.1 million. However, due to revaluation of some vessels

and  signing  of  the  Agreement  of  Settlement  with Stocznia Gdanska

Shipyard,  for  the  year  ended  December  31, 2002 LSC Group reported

losses of USD 54.4 million.

"Taking  into  account  LSC's  ageing  fleet, last year's trends in the

world  economy  and shipping industry, as well as recent changes in the

company  itself,  the  Group's  vessel operating result for 2002 can be

considered as positive," stated Imants Vikmanis, LSC President.

LSC  President  believes  revaluation  of  the vessels to be justified,

since the real value of the Group's fleet is realised.

Independent   professional   valuers   estimates  revealed  significant

difference  between certain vessels' market value and their book value.

The difference was especially notable for the two LPG vessels and three

Panamax  product  tankers  purchased  within  the  last  five  years at

relatively  high  prices.  Therefore  an  impairment  loss  of USD 47.5

million  in  total  was  recognised  in  the accounts in respect of the

fleet.  The  Group's  result  was  also  considerably  affected  by the

settlement  of a legal dispute with Stocznia Gdanska Shipyard caused by

a  breach  of the contract for a number of reefer newbuildings. But for

these  two  factors  LSC  would  have made profit of USD 1.1 million in

2002.

Settlement  of  the legal dispute with Stocznia Gdanska Shipyard was of

great  importance  for  LSC.  Signing  of  the  Agreement of Settlement

enabled  the  Group  not  only  to  avoid  substantial costs of further

litigation,  but  also  to  save  on maintenance costs of two tankers -

Razna  and  Taganroga  - while at arrest, which exceeded USD1.4 million

per annum.

"The  2002  was  a  year  of considerable changes in the history of JSC

Latvian  Shipping  Company.  The  Privatisation  process of the Group's

parent  company JSC Latvian Shipping Company (LSC) was completed during

the  year,  which  brought  more  than  81%  of LSC shares into private

ownership.  Structural  changes  were  made  to  improve  the company's

performance and cost effectiveness, and a working group was established

to  develop  LSC's long-term strategy. Leading shipping consultants are

involved  in the elaboration of the Group's Strategic Plan. Considering

LSC's  ageing  fleet  and  the  potential  changes  in  the  vessel age

restrictions, formulation of the Group's strategy in the nearest future

is  of  great  importance  for  the  company's further operation," said

Imants Vikmanis, LSC President.

Product  tankers  remained  the  most  profitable segment of LSC fleet,

whose  share  in  LSC Group's total net voyage result made up more than

82%. At the beginning of the year LSC Product Tanker Fleet consisted of

40  vessels  of  single and double hull construction. Two tankers under

arrest  in France remained unemployed. Upon signing of the Agreement of

Settlement  with  Stocznia  Gdanska  Shipyard  in  October 2002 the two

vessels were released and arrived in Riga.

The  market situation in the tanker segment was unfavourable during the

whole  year,  except  for the very beginning and end of 2002. The rates

were relatively low. Demand for oil product transportation increased at

the  end  of  the  year due to rise in oil product prices caused by the

crisis  in  Venezuela,  increasing  tension  about  the  Iraq conflict,

congestion  in  Bosphorus,  as  well as by a relatively cold winter and

complicated  ice  navigation.  The demand especially grew for ice-class

vessels.  However,  on  the  whole  average  freight rates in 2002 were

considerably  lower  than  the  exceptionally high rates experienced in

2001,  which  was  the main reason for a worse Group's operating result

compared to the previous year.

For  the year ended December 31, 2002 LSC Group's Tanker Fleet reported

vessel  operating profit of USD 21.8 million, LPG and Dry Cargo Fleet -

USD  1.3  and  USD 0.2 respectively, while Reefer Fleet incurred losses

amounting to USD 3.2 million.

During 2002 the Reefer Fleet generated 10% of the total LSC Group's Net

Voyage  Result. On the whole market rates in the reefer segment in 2002

were  slightly  higher  compared to 2001. However, market rates in 2002

continued  to remain low. Therefore another attempt to dispose of seven

reefers was made. The interest shown in the purchase of the vessels was

rather  weak. After the end of the high season LSC will continue active

attempts to sell seven old reefer vessels.

Two  modern  LPG  carriers  owned by LSC generated 7% of the Net Voyage

Result  of  the  Group. The traditional seasonal growth of LPG rates at

the beginning of the year in 2002 was lower than in the previous years.

Similar  to  product tanker rates LPG rates developed in a positive way

in the last quarter of the year.

Along with maritime transportation services rendered by the company the

Group  is also involved in other shipping-related activities. These are

performed  by  LSC Group's subsidiaries. All of these units, except for

Riga Ship Repair Base, made a profit in 2002.

Upon  settlement  of  the  military conflict in Iraq a slump in freight

rates was registered in the shipping market. Further development of the

rates  will  be  influenced  by  oil prices in the world markets on the

whole,  and rehabilitation of oil production in Iraq in particular. Any

decrease  in  demand  for  maritime transportation services will in the

first  place  affect the oldest part of the fleet, since the charterers

prefer  well-equipped modern tonnage. Therefore, to preserve the future

competitiveness  of  the  Company,  LSC  Group's  Strategic  Plan  will

comprise  a  Fleet  Renewal Programme, which will take several years to

fully implement.

JSC  Latvian  Shipping  Company  financial  results  for the year ended

December 31, 2003 will be presented to LSC General Shareholders Meeting

to convene on May 30, 2003.

Marita Ozolina-Tumanovska

PR Manager

Phone: +371 7020120, 9287169

Fax: +371 7820239

E-mail : ozolina@lsc.riga.lv