Interim report 30 June, 1999

OUR POSITION INTERIM REPORT FOR CONCORDIA MARITIME AB (publ) 1.1 - 30.6 1999 ¤ Profit of SEK 3.3 (78.7) million after financial net ¤ Weak development of freight market ¤ Poor freight market also anticipated in third quarter ¤ Continued good ship operation at low costs Concordia owns seven large tankers built in the mid-1970s as well as a product tanker and two self-discharging bulk carriers. In addition to these wholly- owned ships, Concordia has chartered a VLCC and has a freight contract equivalent to the capacity of one VLCC together with Stena Bulk. In terms of quality, the Group's large tankers are comparable with many younger vessels. They were built to very high specifications as regards both customer satisfaction and life-span. The quality of the vessels and the management and manning organisations is documented by quality certificates from Det Norske Veritas and the American Bureau of Shipping. Two 314,000 DWT VLCCs, with a new and innovative design, were ordered in December, 1998, at Hyundai Heavy Industries in South Korea for delivery in the first half of 2001. These two vessels have been chartered to an American oil company on satisfactory terms for a period of three years. SALES AND RESULT Consolidated sales amounted to SEK 406.6 (593.3) million. The profit after financial items was SEK 3.3 (78.7) million and the profit per share after tax was SEK 0.34 (3.03) and SEK 0.36 (1.86) after full conversion. The freight rates fell during the fourth quarter of 1998. This decline has continued and accelerated in 1999, mainly due to production cutbacks by OPEC which have resulted in sharply rising oil prices and consequently, lower demand for oil transportation. The average freight rate during the period was USD 18,400 (27,700) per day for the VLCC fleet and USD 27,200 (36,200) for the ULCC fleet, i.e. a drop of about USD 9,000 per day. EQUITY RATIO AND NET WORTH The equity ratio was 41% (42) while the adjusted equity ratio, i.e. including surplus values in ships, was 48% (56). After full conversion, these figures were 54% (57) and 59% (68), respectively. Net worth per share, excluding deferred tax, was estimated to be SEK 36.59 (44.06) on 30 June, which corresponds to SEK 25.76 (29.96) after full conversion. On 31-12-1998, net worth per share was SEK 38.14 and SEK 26.64 after full conversion. The fleet was appraised by three independent shipbrokers on 15-06-1999. The average value of the fleet according to these valuations was USD 164.0 (213.0) million. On 31-12-1998, the market value was USD 181.5 million. Compared with the end of last year, the ship values have fallen by about 10% which is in line with the general price trend for second-hand large tanker tonnage. On 30 June, Concordia's fleet had a book value equivalent to USD 137.5 million which represents a surplus value of USD 26.5 million. The SEK/USD exchange rate was 8.46 (7.96) on 30-06-1999. LIQUIDITY AND INVESTMENTS The Group's disposable liquid funds, including unutilised credit facilities, amounted to SEK 822.6 (205.6) million while the corresponding figure on 31-12- 1998 was SEK 128.1 (196.2) million. The increase in the Group's liquidity is the result of a bank loan of USD 165 million raised during the spring which replaced an earlier bank loan of USD 65 million. This loan is intended to refinance the existing fleet and finance the two Stena V-MAX design VLCCs ordered at the end of 1998. INVESTMENTS Investments during the period totalled about SEK 140 million while they were negligible during the same period, last year. A substantial portion of the investments consists of part payment relating to the VLCCs under construction in South Korea. PARENT COMPANY The Parent Company's sales totalled to SEK 15.7 (15.5) million. Intergroup invoicing accounted for SEK 4.5 (5.0) million of this amount. The result after financial items was SEK 12.8 (-16.1) million. The difference in result is due exchange rate changes affecting receivables from foreign subsidiaries. In the Group, this currency effect is charged directly to equity and does not affect the result for the year. The Parent Company's disposable liquid funds, including unutilised credit facilities, amounted to SEK 13.2 (1.8) million while the corresponding figure on 31-12-1998 was SEK 6.7 (13.6) million. There were no investments during the period. CONCORDIA'S LARGE TANKERS ON THE SPOT MARKET All the Group's large tankers have traded mainly on the spot market in 1999. A profitable freight contract together with Stena Bulk accounts for capacity equivalent to one VLCC. Freight rates of about USD 19,000 per day for the VLCCs and USD 20,000 per day for the ULCCs are required to cover the vessel's daily running costs, capital costs and administrative costs. OTHER VESSELS The product tanker STENA BARBADOS and the self-discharging salt carriers KURE and CONVEYOR are signed to long-term charters with Texaco and Mitsubishi, respectively. DRY-DOCKING During the period, four VLCCs and one ULCC were dry-docked. These dry-dockings were carried out as planned and budgeted. During dry-docking, all the large tankers' voluntary quality certificates with the American Bureau of Shipping and Det Norske Veritas, respectively, were renewed with, once again, the highest grade - CAP 1. Following the dry-docking of the KURE in the autumn of 1999, all Concordia's vessels will have been dry-docked in 1998-1999. They are dry-docked on a regular basis about every third year. The loss of income resulting from the planned dry-dockings carried out during the first half of the year is estimated at SEK 16 (7) million. Over the next two years, only the salt carrier KURE will be dry-docked. MANAGEMENT AND OPERATION The daily running costs for Concordia's vessels are among the lowest in the industry as a result of a continuous maintenance program which has preserved the very high quality of the vessels. The high quality, together with well- trained crews, insures smooth operation. There was no unforeseen off-hire. The daily running costs - including crew, insurance, repair, dry-docking. maintenance and administrative costs - are USD 10,000 per day for the VLCCs and USD 12,000 per day for the ULCCs in 1999. FREIGHT MARKET DURING THE FIRST HALF OF 1999 In 1998, oil prices fell to their lowest level for many years and a direct result of this was that the oil companies built up their stocks. This, in turn, resulted in good transport volumes in 1998 and good profits for tanker shipping companies. With the aim of raising oil prices, the OPEC countries officially cut their oil production by 1.7 million barrels per day from April, 1999. At the same time, quota discipline in OPEC improved drastically and the real production cut was more like four million barrels per day compared with February, 1998. This represents a reduction of about 15%. The price of crude from the Middle East rose from USD 10.50 at the end of 1998 to USD 16.50 per barrel at the end of June. This higher price has dampened the demand for oil transportation since most of the oil companies have chosen to draw from stock. Consequently, the market for large-tanker tonnage developed negatively during the first half of 1999 compared with the same period last year. The freight rates during the first half of the year were USD 18,400 per day for our VLCCs and USD 27,200 per day for our ULCCs. During the period, the vessels were employed to a greater extent than before in traffic from the Middle East instead of in the Atlantic Basin. One reason for this was that several dry-dockings were carried out at shipyards in Singapore or Dubai which justified this rearrangement. A freight contract from West Africa to South Korea, which increase the utilisation level by limiting the number of ballast days, also contributed to this change in loading area. Rising oil prices caused the price of bunker oil to climb sharply. Concordia has largely covered its bunker oil requirements by purchasing futures and this has softened the effect of rising bunker prices. Without this, the cost of bunkers would have been about SEK 10 million higher during the period. Concordia has applied the same procedure for the second half of 1999. During the period, 15 new VLCCs were delivered and 16 were scrapped or sold to the offshore industry. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/08/11/19990811BIT00300/bit0001.doc The Full Report http://www.bit.se/bitonline/1999/08/11/19990811BIT00300/bit0002.pdf The Full Report

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Concordia Maritime is an international shipping company. Our focus is on the cost-efficient and safe transportation of refined petroleum products and edible oils. The series B-share has been listed on Nasdaq Stockholm since 1984. www.concordiamaritime.com

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