President's View

With the first half of 2008 now behind us, I note that our business activities have by and large proceeded according to plan. Our product tanker fleet has generated revenues somewhat over expectations, despite at times a very weak freightmarket, thanks to our fixed contracts with guaranteed minimum freight rates. Operationally, our product tankers have also performed well.

Our net financial result continues to be positive. Financial investments have generated the return anticipated and, thanks to our conservative investment policy, the nervous financial markets have had a negligible impact on their value. Interest expenses continue to be low.

Our cash flow and result met expectations and the forecast for the full year remains unchanged, SEK 70 million. However, crew costs as well as operating and maintenance costs are a growing challenge. Costs in the first and second quarters were more or less at the same level, but salaries, spare parts and equipment are exposed to inflationary pressure. It is worth noting that Concordia Maritime is not affected by the high oil prices in the form of increased fuel costs. In time-charter contracts, it is customary that customers pay these costs.