Summary of 2004

As a result of a number of business events in 2004, Concordia Maritime has undergone major changes as regards both financial position and the direction of its business activities.

In the autumn, a new company, Arlington Tankers, was formed together with Stena, which acquired Concordia’s two V-MAX VLCCs and four tankers from Stena. The company was successfully introduced onto the New York Stock Exchange at the beginning of November. The pricing of the share, which then determined the selling price of the ships, was very satisfactory and generated a capital gain of just over SEK 600 million for Concordia. Approx. 90% of the sales proceeds was paid in cash and approx. 10% in the form of shares in the newly formed company.

This means that the company is currently free from debt and has liquid funds, including short-term investments, which amounted to approx. USD 190 million at year-end. The company has eight product tankers on order, including two in which it has a 50% share. The majority of these tankers will be delivered in 2006 and 2007. The investments amounts to approx. USD 275 million, of which USD 20 million has already been paid in the form of advance payments and project costs.

In the space of a few years, Concordia will thus have a modern tanker fleet with a very low debt-equity ratio.

2004 signalled the end of 15 successful years with the Concordia Class, Concordia’s own brand name for high-quality VLCCs. The two remaining tankers in the original series of six tankers were sold in 2004 for employment in the offshore industry. One of the vessels was delivered in June and the other, Stena Congress, was withdrawn from service in November and delivered in January, 2005.

The first vessel in the series of six P-MAX tankers ordered in 2003 will be delivered at the end of 2005. In addition to the 5-year charter contracts, which were signed in January with the French oil company TOTAL for the first two tankers, 10-year time-charter contracts were signed in September with the Russian logistics company Progetra for two vessels. These long-term contracts will secure a stable cash flow at the same time as they give the company flexibility regarding the employment of the two remaining P-MAX tankers.

During the year, a joint project, involving the construction of two Panamax product tankers with ice class 1A, was initiated together with the Finnish energy group Fortum. These vessels will be owned by a joint venture, in which Fortum and Concordia each has a 50% share, and they will be time-chartered to Fortum for ten years.