Comments on LSC Group first six months results of 2002

(All amounts are expressed in US $ '000s)

After  the first six months of 2002 the vessel operating profit for the

LSC  Group  amounted  to US $ 10.750'. That was US $ 13.605' lower than

corresponding period of last year.

The  first  half  of 2002 was largely influenced by the slowdown of the

world  economy and stagnation in several regions, as well as by certain

political factors (like terror attacks in the USA). The problems in the

financial  markets strongly affected oil product consumption leading to

lower  volumes  of cargo to carry. At the beginning of 2001 the product

tanker rates were at their highest during the past 20 years.

The  net  profit  of  LSC  Group was US $ 4.180'. That was US $ 16.668'

lower than last year. Beside the drop in the tanker rates the result of

the  Group  was affected by unrealized exchange losses due to the lower

US Dollar rate against Latvian lat.

As of 30 June 2002 LSC Group fleet consisted of 57 vessels (including 5

vessels  on  Bare-Boat  Charter  with  purchase option), thus being one

vessel  less  compared  to  the  beginning  of the year. The ro-ro type

vessel  "Komponists  Caikovskis"  was  sold under the Bare-Boat Charter

Agreement.

Strategic Development of LSC Group



LSC  Management  Board  has approved the main guidelines of the Group's

activity for the second half of 2002.

They  provide  for  further renewal of the old tanker fleet tonnage, as

well  as  for  assessment  of  the prospects for further "Pablo Neruda"

class  operation  depending  on market situation. The decision has been

taken to scrap one of the oldest tankers "Ž. Diklo" due to economically

unjustified repair costs required for further operation of the vessel.

Low profitability and poor prospects of the reefer segment are the main

reasons  to  believe that the reefer fleet will cause further losses to

the  Group. It is planned to sell seven reefers to reduce the losses of

the company.

The  LPGs  "Vidzeme"  and "Kurzeme" will continue stay in the Scandigas

Pool.