Shipping firm lost big again last year

Unaudited financial results of joint-stock company Latvian Shipping Company (LSC Group) for 2014 show losses totaling almost $31m USD, attributed “predominantly as a consequence of vessel impairments in the amount of $55.25m USD.”

In a media statement on its website LSC Group nevertheless stressed “a positive result from its chartering and other activities achieving a net profit before tax and exceptionals of $12. 68m USD.”

The firm also said it “continued to improve its cash position significantly… due to positive cash flow from shipping activities as well as from the sale of non-shipping assets.”

Newswire BNS reported Wednesday that the losses were 70% greater than how far in the red the company said it was in 2013.

According to LSC Group management board member Paul Thomas, current conditions are unfavorable for the shipping business. Global growth being weak, oil prices down, and the supply of shipping companies growing by 4.5% year by year. These factors combine into negative effects on the shipping sector, Thomas explained.

Thomas said the company was unlikely to order construction of any new vessels in the nearest future. „At present we have no finances for this,” he said, adding that construction of a new ship would cost around 35 million US dollars and the ship would be delivered in 2017 at the earliest.

In 2013, LASCO group reported a turnover of €75.4m (USD $104.2m), down 11 percent from 2012, and cut its loss by 52 percent to €13.13m (USD $18.2m).

LASCO provides shipping services in all seas and oceans of the world, trains and recruits crews, as well as provides technical ship management to its own and ships owned by other companies. LASCO is quoted on the Main List of the Nasdaq Riga stock exchange. Its key shareholder is the Latvian holding company Ventspils Nafta.

LSC Group is one of the biggest owners of shipping vessels in the medium- and handy-size tanker segment, transporting a leading amount of petroleum products among similar companies in Northern Europe. It owns sixteen modern (average age – seven years) safety-certified ships providing jobs to professional crews of over 500 seamen.

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