Presidents View

Concordia Maritime is in the middle of a newbuilding program, comprising eight vessels involving a total investment of SEK 2,2 billion. The first vessel in the newbuilding program was delivered in December and has been in service with the French oil company TOTAL for two months. The vessel has performed up to expectations.

Work at the yard on our newbuildings is proceeding according to plan and we are looking forward to the delivery of a further four vessels in 2006. At the beginning of 2008, all the vessels on order will have been delivered. All but one have been chartered out on contracts ranging between five and ten years. When all the vessels have been delivered, we estimate that they will generate an annual cash flow before depreciation and financial expenses (EBITDA) of approx. SEK 250-300 million depending on the outcome of profit-sharing clauses in some of the contracts.

In a few years time, we will have a completely new tanker fleet ordered at a time when shipbuilding prices were substantially lower than they are today and we will have a low debt-equity ratio. Our goal is to utilise this favourable position and stable financial base to both expand and maintainour profitability. We will achieve this by continuing to identify specific market and transportation requirements and, together with customers and partners, developing new business deals based on, among others, the MAX concept. Timing is crucial for successfully running a business in international tanker shipping, which, historically, has been extremely cyclical.