JSC Latvijas kuģniecība                                        02.12.2004.



JSC Latvijas kuģniecība Reports Nine-Month 2004 Results



JSC Latvijas kuģniecība (Latvian Shipping Company - LASCO) announced its 

financial results for the first nine months of 2004. LASCO Group’s profit 

after tax for the nine months ended September 30, 2004 reached $ 10.7 million. 

Though exceeding the budget by $ 3.7 million, the result is a decrease of $ 

6.5 million compared to the respective period in 2003. The Group’s turnover 

made up $ 121.9 million, compared to $ 164.0 million last year.



“Despite the fact that the level of the profit earned in the same period in 

2003 has not been achieved, the Group's consolidated financial result for the 

first nine months of 2004 evidences that the Company’s performance should be 

viewed positively. The deterioration of the result can be explained mainly by 

the lower (compared to last year) freight rates and the reduction of the 

Company’s fleet. Therefore, only further consistent implementation of the 

Group’s Strategic Plan will enable LASCO to develop and preserve its market 

share in the middle-range tanker segment of the shipping industry,” stressed 

Imants Vikmanis, LASCO President.



80% of the Group’s total Net Voyage Result was generated by LASCO Tanker Fleet. 

Relatively favourable market conditions in combination with the purposeful 

implementation of the Company’s Fleet Renewal Programme enabled the fleet to 

earn profit of $ 16.6 million. As at the end of the first nine months 2004 LASCO 

Tanker Fleet consisted of 33 double-hull and partially double-hull product 

tankers with a total tonnage of 1,051,548 deadweight tons (dwt).



“During the third quarter of 2004 the situation in the tanker market was more 

favourable than expected - relatively high freight rates and stable demand 

prevailing in the market enabled the Tanker Fleet to exceed the budgeted result. 

However, the demand for oil products decreased and a negative trend in the 

development of freight rates was observed at the end of the quarter. It may 

result in unfavourable prospects for the employment of LASCO’s older tonnage, 

whose technical condition does not comply with EU regulations,” said Alvis 

Akmens, Director of LASCO Tanker Fleet Department.

   

During the period LPG freight rates remained at their average level, and 

LASCO’s both LPG carriers continued to be employed by ScandiGas Pool. They 

generated 9% of the Group’s total Net Voyage Result. LPG vessel operating profit 

for the first nine months of 2004 made up $ 4.3 million. 



Also Reefer Fleet’s result for the first nine months of 2004 was positive. It 

exceeded the respective result of 2003 by $ 1.5 million. Compared to last year 

the rates were slightly higher from June through September. Besides, the disposal 

of the unprofitable Kurska type reefers enabled the fleet to lower its vessel 

operating costs. Consisting of five highly ice-classed reefer vessels, LASCO 

Reefer fleet was traditionally employed in carrying fruit and other frozen cargoes.



With a net loss of $ 0.8 million, LASCO Dry Cargo Fleet was the only fleet to incur 

losses in the first nine months of 2004. The result of the fleet was affected by 

the repairs of the Ro-Ro type vessel Telo and the costs of closing Ventspils - 

Traveminde ferry line.





Following positive changes in the Latvian Maritime Tax Policy LASCO considered 

reflagging the Group’s vessels. During the first nine months of 2004 the following 

vessels were transferred to Latvian Ship Register and are now flying Latvian flag:

 LPG carriers Kurzeme and Vidzeme, product tankers Rīga, Latgale and Zemgale, as

 well as the Ro-Ro/general cargo vessel Telo. One of the positive aspects of the 

reflagging that can be already mentioned is a favourable attitude of the USA 

authorities towards the vessels flying a national flag. The assessment of the 

economic aspects will take place early next year. 



As at September 30, 2004 LASCO Group’s fleet consisted of 33 product tankers, 2 

LPG carriers, 5 reefer vessels and 1 Ro-Ro/general cargo vessel.