Interim Report January - June, 2000

Interim Report January - June, 2000 * Result before tax MSEK -12 (-16) * MSEK 17 refund from SPP included * MSEK 12 in higher bunker costs * Strategic collaboration, with company for Mediterranean traffic jointly owned by SOL and Scan Orient, begins in second half of year and will result in substantially improved future profitability * Sale of shares in Sea Partner Operations After winding up its reefer operations in December, 1999, SOL is now a dedicated liner shipping company. SOL's core business is liner shipping, which it has been engaged in for nearly 90 years, between the Nordic countries and the eastern Mediterranean. This service is operated with four RoRo vessels which are supplemented by chartered tonnage when the need arises. SOL also operates a container service between the Nordic countries and southern Africa and carries out agency operations for traffic to and from West Africa as well as international project consignments. The company owns 50% of the shares in Sea Partner Sweden AB, a ship management company, which is responsible for the operation of SOL's and other shipping companies' ships on an assignment basis. Consolidated result The consolidated result before tax for the first six months of the year was MSEK -12 (-16). The result includes MSEK 17 in the form of a refund from the insurance company SPP. The result was negatively affected by traffic disruptions in Israeli ports and steeply rising bunker prices. The first few months of the year saw lower cargo volumes than normal for the liner service to and from the Mediterranean. Capacity utilisation has since improved. The waiting times in the Israeli ports, which were lengthy at the beginning of the year, have gradually diminished. The sharply increased bunker prices, which have more than doubled since the first half of 1999, have resulted in substantial additional costs for SOL, about MSEK 12, compared to the same period last year . The company has only been able to partially compensate for these cost increases in the form of higher freight rates due to continued heavy competition on the freight market. The container service between the Nordic countries and southern Africa and operations involving international project assignments have performed better than during the previous year. About MSEK 5 has been charged to the consolidated result for the first six months as a result of retroactive adjustments of the result of the traffic pool in which SOL's vessels participated in 1999. However, these adjustments have not been accepted by SOL. Financial position On 30 June, consolidated liquid funds, including short-term investments and unutilised credit facilities, amounted to MSEK 25 (31-12-1999: MSEK 26). In February, 2000, a new issue of shares was floated, providing the Group with a net capital infusion of MSEK 47. MSEK 25 of this amount was used to make an amortisation of the long-term liabilities. After the amortisation and repayment of ship loans in conjunction with the delivery of the last reefer at the beginning of January, the remaining interest-bearing liabilities amounted to MSEK 324. The equity/assets ratio was 15%, which is the same as at the beginning of the year. Investments during the first half of the year amounted to MSEK 1 (2). As a result of overconsolidation, the insurance company SPP has decided to give its corporate customers a refund. Svenska Orient Linien, directly and indirectly via its associated company Sea Partner AB, will receive approximately MSEK 21. This amount has been calculated in accordance with the present value method and recorded as income in accordance with the Swedish Financial Accounting Standards Council's recommendations, which means that MSEK 17 is included in the consolidated result for the first half of the year. MSEK 4 of the amount will be paid out in cash during the third quarter and the remainder will be used to reduce future payments of pension premiums. ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: