Latvijas Kuģniecība

LSC continues to stabilise its financial position


LSC continues to stabilise its financial position

april 30, 2013 / News

According to audited financial statements, Latvian Shipping Company (LSC) Group turnover has increased by 18.43% in 2012, to USD 115.56 million, while EBITDA has increased by as much as 55.32%, to USD 40.99 million – this is the best result in the last four years. An increase in operational profit, of USD 12.51 million in 2012 (all-time high since 2009), also shows a significant improvement in LSC overall performance.

The need to make valuation provisions of USD 28.24 million against the fleet, as a consequence of the continued economic stresses experienced in the shipping sector in 2012, was among the main reasons accounting for the Group’s losses of USD 34.60 million. This is a 28% improvement over 2011 however, and a 75% improvement over 2010 when losses amounted to USD 141.8 million. The valuation provisions made against the fleet have no effect on cash flow or the Group’s cash position. At the end of December 2012, LSC Group’s cash and cash equivalents amounted to USD 26.13 million.

Notwithstanding the improvement in LSC financial results, the global shipping market still remains very challenging. However the handy size and medium range product tanker markets, which are LSC’s core area of expertise, have suffered the least during the economic downturn in the shipping industry as compared with other sectors of the tanker market and shipping markets in general.

Simon Blaydes, Chairman of the Management Board of LSC, offers his forecasts for the year 2013 with prudent optimism: “LSC does not anticipate any fundamental improvements in the shipping market throughout 2013, because the markets will continue to be affected by   continued weak economic growth, particularly in the EU and USA, as well as by the consequences of the massive shipbuilding orders placed during previous years. The future nevertheless gives some positive signals suggesting increasing demand for LSC product tankers owing to growing demand for petroleum products in South America, Africa and Australia (due to closure of refineries) and with the USA becoming an exporter of refined products.”

LSC total fleet income in 2012 was USD 114.61 million, which is notably higher than USD 96.60 in 2011. The net voyage result also demonstrates some improvement in 2012, amounting to USD 88.33 million (up from USD 87.99 million in 2011). The vessel “Kaltene” was sold on 16 April 2013. The sale has enabled LSC to repay the outstanding debt owed on the vessel which was due to be repaid prior end June 2014 and additionally improve the cash position of LSC by approximately USD 3.0 million.


LSC Annual Report 2012

LSC Consolidated Annual Report 2012

LSC Corporate Governance Report 2012

About Latvian Shipping Company

In the medium-sized and handy tankers market, Latvian Shipping Company is among major ship owners in the world. In terms of transported volumes of petroleum products, it is also a leader among its peers in Northern Europe. The company owns 19 modern ships and employs more than 700 professional and highly qualified seamen from Latvia. The total carrying capacity of the LSC fleet is 920 thousand DWT and the average age of the fleet does not exceed 6.3 years. All ships have been issued ISM (International Safety Management) certificates.