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LSC: JSC LATVIJAS KUĢNIECĪBA EARNS USD 9.3 MILLION IN THE FIRST HALF OF 2009

Spekuliantai.lt | 2009-08-28 | NASDAQ OMX biržų naujienos | perskaitė: 1265
Raktiniai žodžiai: Latvijas kugnieciba, LSC
LSC: JSC LATVIJAS KUĢNIECĪBA EARNS USD 9.3 MILLION IN THE FIRST HALF OF 2009

Latvijas kugnieciba Half Year financial report 28.08.2009

JSC LATVIJAS KUĢNIECĪBA EARNS USD 9.3 MILLION IN THE FIRST HALF OF 2009

The consolidated performance results of the public joint stock company Latvijas
kuģniecība (Latvian Shipping Company-LASCO) Group achieved during the first
half of 2009 confirm the Group's competitiveness in the international shipping
environment. Regardless of the low market activity and the dramatic decline of
the freight rates in the shipping markets consequently affecting the
performance of JSC Latvijas kuģniecība, too, the net profit of JSC Latvijas
kuģniecība Group reached USD 9.3 million in the first half of 2009 due to
efficient cost optimization, and turnover in the amount of USD 104.6 million.

“JSC Latvijas kuģniecība Group being a strong and financially healthy player in
the world shipping markets carries out thorough analysis of the changes caused
by the economic decline in the shipping market in order to identify
opportunities that could be used for strengthening the Group and its market
share during the economic recovery period. The long-term experience in the
shipping markets, strong customer base, good reputation and efficient Group's
performance will serve as the key pre-requisites for JSC Latvijas kuģniecība
growth in the years to come,” points out Māris Gailis, Chairman of JSC Latvijas
kuģniecība Supervisory Council.

Despite of the global economical crisis influencing directly the demand for oil
product shipments, during the report period JSC Latvijas kuģniecība Group
managed to secure successful core business - vessel operating profit growth by
10 per cent compared to the first half of 2008. In the first six months this
year the Group succeeded at reducing its liabilities by USD 50.8 million. On
June 30, 2009, the return on the invested equity (ROE) was 9 per cent and
annual profit on one JSC Latvijas kuģniecība share was USD 0.26.

All the JSC Latvijas kuģniecība shares are traded publicly and are included in
NASDAQ OMX Riga Official List. With the prevailing negative macro-economic
tendencies in the Baltic stock markets during the first half of 2009 JSC
Latvijas kuģniecība share value has dropped from LVL 0.66 at the beginning of
the year to LVL 0.46 at the end of the period. During the report period JSC
Latvijas kuģniecība shares have been among the most actively traded ones -
there have been 735 transactions with 1.6 million shares in the amount of LVL
721.0 thousand. Still these liquidity indicators are considered low and do not
reflect the real value of the shares.

The ongoing fleet renewal is still one of the JSC Latvijas kuģniecība Group's
priorities and since the end of 2005 the average age of the fleet has been
reduced nearly by half from 17.5 years to 7.9 years today, the total tonnage
growing from 1.01 million tons to 1.26 million tons.

At the end of the first half of 2009 the fleet of JSC Latvijas kuģniecība
consisted of 30 tankers, including three vessels chartered in from other
shipowners, two LPG carriers and one dry cargo ship. Vessel operating profit in
the first six months of 2009 was USD 37.4 million being 10 per cent or USD 3.3
million better than during the respective period a year ago. The result was
attained due to effective assessment of costs' efficiency and economy.

“In general JSC Latvijas kuģniecība Group's fleet performance is considerably
affected by the world economic situation that influences the demand for oil
products to great extent. Towards the end the report period there were observed
promising tendencies of the economic development in some countries and the news
that the economies of Germany, France and Japan are getting out of the
recession could be perceived as a positive signal for shipping business also.
Most probably the recovery from the recession albeit slow and with some offset
in time will be observed in shipping markets with some offset in time and the
first indicators of this recovery could be expected within the next year,”
considers Imants Sarmulis, Chairman of JSC Latvijas kuģniecība Management
Board.

Reflecting the overall situation in the shipping markets in the first half of
2009 the net voyage result of JSC Latvijas kuģniecība Group was slightly behind
the indicator of the year before and reached USD 96.3 million. The achieved
result is rated positively and the long term development strategy of JSC
Latvijas kuģniecība focused on the growth of a medium range tanker fleet has
ensured good core business results compared of other players in the market.
Comparatively successful business of JSC Latvijas kuģniecība Group is also
supported by the Group's traditionally strong customer base developed over the
years.

Both the LPG carriers of JSC Latvijas kuģniecība Group's fleet Kurzeme and
Vidzeme have been chartered out during the first half of 2009. Their profit
indicators are positive.

The only dry cargo vessel of the JSC Latvijas kuģniecība Group's fleet Telo was
operating on time charter basis in accordance with the agreement signed before.

During the first half of 2009 Latvijas kuģniecība Group continued to dispose of
its elderly tonnage and in the prevailing decline of the global economy the
Group managed to sign with success a number of contracts for the vessels' sale.

Observing on regular bases the development of the economic processes and timely
anticipating the radical fluctuations in the shipping markets JSC Latvijas
kuģniecība took adequate actions in the given situation thoroughly revising and
cutting its costs and making safe long-term investments promoting further
development of the Group and reducing its business risks at the same time.
During the report period the Group's daughter company LASCO Investment Ltd. had
accomplished an asset purchase transaction and worked out the Group's real
estate development strategy for the next five years. There are three main
targets set in the strategy: maximum return on investment, maximum added value
and selling the investment with the highest profit possible when the situation
becomes stable in the real estate market. Keeping in mind that the real estate
investment portfolio is comprised of a different type of properties there will
be differentiated development model applied to each of them aimed at increasing
the value of the particular property. In order to run its real estate
investments effectively there was a new entity formed LASCO Housing Service
established within the Group; some functions are out-sourced.

The Group's equity value at the end of the period was USD 555.2 million being
USD 13.1 million higher than at the beginning of the year and it represented 50
per cent of the Group's assets. The liabilities had reduced by USD 50.8 million
or 8 per cent since the beginning of the year and their proportion was 50 per
cent of the Groups' assets. JSC Latvijas kuģniecība Group's assets were USD 1
112.5 million at the end of the first half of 2009.

Over the following six months of this financial year the performance of JSC
Latvijas kuģniecība Group will be influenced by the unstable situation in the
world economy and financial markets, therefore JSC Latvijas kuģniecība will
execute prudent and well-considered Group's financial and operational
performance continuing thorough assessment of all the Group's costs and highly
efficient employment of the internal and external resources.

In order to secure competitiveness of JSC Latvijas kuģniecība Group's tanker
fleet in the world shipping markets the fleet renewal will be continued and
disposal of the elderly tonnage at maximum profit will be exercised in order to
keep its medium range tanker tonnage and its growth in future.

Considering the diversified investments of JSC Latvijas kuģniecība in both good
quality cash-flow generating objects and objects with significant development
capacity JSC Latvijas kuģniecība will engage actively in the management of the
real estate objects purchased thereby increasing profitability and value of the
investments that will serve the interests of all the shareholders.








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



1. birai_engl.pdf
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