LSC "Latvijas kuģniecība"                       16.05.2005



LASCO REPORTS 2004 ANNUAL RESULTS 



JSC Latvijas kuģniecība (Latvian Shipping Company - LASCO) today 

announced its unaudited consolidated financial results for the 

year ended December 31, 2004. The results evidence the Company’s 

ability to benefit from the favourable market situation and earn 

profit. According to the unaudited consolidated Financial 

Statements the Group’s profit after tax for 2004 is 

U.S.$ 71,4 million. The main two sources of the profit for 2004 

were the Company’s core business activity and the reversal of 

previously recognised fleet impairment loss. It is planned to 

utilise the profit earned for the investments in LASCO tanker 

fleet renewal as well as to cover the accumulated loss of the 

previous years.



"2004 was marked by a favourable market situation in the shipping 

industry, and I am glad that we were able to benefit therefrom. 

Undoubtedly, it was also the Group’s stable reputation and purposeful

activity aimed at the implementation of the Group’s long-term 

strategic plan that underlay its successful performance," said 

Imants Vikmanis, LASCO President.



A considerable part of the Group’s income in 2004 was formed by 

the reversal of the previously recognised impairment loss of the 

fleet, recognised in the Consolidated Income Statement for 2004 

in the amount of U.S.$ 42,6 million. The significant difference 

between the vessels’ market value and their book value, revealed 

by the independent professional valuators’ estimates, can be 

explained by a positive development of freight rates in the 

shipping market in 2004. 



Similar to the previous years, the Group’s 32 tankers remained 

leaders of JSC Latvijas kuģniecība fleet. They traditionally 

traded all over the world with a particularly strong presence 

in Northern Europe, Mediterranean, North America and West Africa. 

LASCO Tanker Fleets’ Vessel Operating Profit for 2004 reached 

U.S.$ 32,6 million, and it’s Net Voyage Result formed 81% of the 

Group’s total Net Voyage Result.



Imants Vikmanis, the Chairman of JSC Latvijas kuģniecība Board 

of Directors, believes that it was only due to a favourable market 

situation and the related stable demand for product tankers that 

enabled LASCO to successfully employ its older tonnage. As it 

has been reported, the Group’s Strategic Plan 2003-2010 provides 

for a special attention to be paid to the renewal of the Group’s 

Tanker Fleet, and it will be expanded with 14 modern ice-classed 

vessels in the nearest years.



Due to non-compliance with European Union marine safety requirements 

m/t Gaida was sold for scrap and m/t Viktorio Kodovilja was sold. 

At the same time three ice-class product tankers built in 2003 – 

m/t Kolka, m/t Kuldiga and m/t Kaltene – were purchased by the Group.



About 10% of the Group’s total Net Voyage Result was generated by 

LASCO Reefer and Dry Cargo Fleet, comprising 5 super ice-class reefers 

and 1 Ro-Ro/general cargo vessel. In 2004 the reefer segment showed a 

moderate growth of the freight rates, which is reflected by the said 

fleet’s financial results – LASCO Reefer Fleet’s Vessel Operating 

Profit for 2004 reached U.S.$ 2 million. During the year the Company’s 

Reefer Fleet was traditionally employed in carrying bananas, other 

fruits and frozen food from the Southern Hemisphere to Russia. 



2004 was a successful year also for the Group’s two modern LPG carriers, 

whose Vessel Operating Profit for 2004 makes up U.S.$ 6,6 million. Both 

vessels still remained members of the Scandigas Pool, one of the largest 

in the world.  



Favourable changes in the maritime taxation regulations in Latvia 

enabled LASCO to consider reflagging the Group’s fleet to Latvian flag. 

Since 5 December 2003, when the national flag was raised on the first 

LASCO’s vessel, already seven vessels have been transferred to the 

Latvian Ship Register. 



"2004 was notable for a strong demand for oil products and high freight 

rates, peaking in the last quarter and in certain markets reaching record 

levels not seen for years. However, we should now concentrate on the 

market conditions less favourable than prevailed in 2004, since the 

principles of economic cycles apply also to the shipping industry. 

At present LASCO is engaged in the consistent accomplishment of the 

strategically important tasks aimed to preserve the company’s 

competitiveness in the international market both in the nearest two-three 

years, and in a long-term perspective," stressed Imants Vikmanis, 

the Chairman of JSC Latvijas kuģniecība Board of Directors.



										



Marita Ozolina-Tumanovska

Head of PR Departament

Phone: +371 7020120, 9287169

Fax: +371 7820239

E-mail : ozolina@lsc.riga.lv