* In the fourth quarter, strong improvement was reported in operating profit, compared with the preceding year. Earnings for the quarter amounted to SEK 107 M (69). The Group's full-year operating profit increased and amounted to SEK 281 M (216).

Net revenues increased to SEK 659 M (621) for the fourth quarter and to SEK 2,530 M (2,252) for the full year.

* The offshore market remained strong during the fourth quarter, and earnings for the Offshore/Icebreaking business area amounted to SEK 86 M (67).
For the full year, a record profit of SEK 230 M (191) was reported.

 

* The Transatlantic Services division reported stronger earnings for the quarter, and an operating profit of SEK 21 M (12) was reported for the full year.

 

* In the European Services division, earnings continued to improve during the fourth quarter. For the full year, operating profit amounted to SEK 60 M (37).

 

* A new tax regulation in Norway resulted in tax on the accumulated profit in the subsidiary Transviking becoming taxable. A non-recurring tax expense of SEK 90 M was therefore charged against earnings in the fourth quarter.

 

* Net profit per share amounted to SEK 6.60 (6.20).

 

* The Board of Directors proposes that the ordinary dividend to shareholders be increased by SEK 0.50 per share to SEK 2.50 per share.

 

* The market is expected to remain favorable in 2008.

 

* Negotiations with a proposed shipyard regarding orders for new vessels for Transatlantic Services were discontinued due to delivery problems. Alternative shipyards are being investigated.

 

* Results for January-December 2007:

Net revenue: SEK 2,530 M (2,252)
Operating profit before tax: SEK 281 M (216)
Profit before tax: SEK 278 M (207)
Profit after current tax: SEK 185 M (200)
Profit after full tax: MSEK 186 M (188)
On December 31, 2007, shareholders¡¯ equity per share amounted to SEK 43.60 per share (37.90 at year-end 2006)
On the balance-sheet date, the surplus value in the vessel fleet amounted to approximately SEK 40 per share
The equity/assets ratio on the closing date was 39 % (40% at December 31, 2006)

 

Transatlantic's operations, goals and strategy
Transatlantic consists of the Industrial Shipping business area, which comprises two divisions-Transatlanticervices and European Services-and the Icebreaking/Offshore division. Transatlantic Services and European Services are focused on contract shipping, primarily for the forest products and steel industries. The operations of the Icebreaking/Offshore division are based on combination vessels with long-term contracts and guaranteed income for icebreaking, in addition to other deployment, mainly for rig relocation in the offshore market.

 

Transatlantic's business concept is to market, develop and deliver the market's most efficient transport solutions in close and active cooperation with customers.

 

Transatlantic's goal is to be the market leader in its segments, with profitability that generates a favorable return for shareholders. The goal is a return of 12% on shareholders equity and an equity/assets ratio that does not fall below 30%.

 

The Group's strategy for the next few years emphasizes growth and sustainable profitability. Growth will be achieved both organically and through acquisition. The Group is also very open to the development of various partnerships aimed at broadening operations or implementing various investments and projects.

 

The ambitions for growth will require investments in new tonnage and replacement tonnage. These will be conducted without jeopardizing the Group's financial targets. It also means the Group's tonnage requirements will be partly resolved through charter contracts and by external investors becoming wholly or partly involved in the fleet operated by the Group.

 

The strategy for and development of the Group places major demands on quality, safety and the environment, as well as awareness of customer demands and a willingness to change.

 

General development during the fourth quarter

During the fourth quarter, shipping trends were generally favorable as a result of a continued strong global economy, although certain segments experienced volatility and lower prices, albeit at historically high levels.

 

In Transatlantic's segment, demand and capacity utilization were generally favorable. In the Industrial Shipping business area, the European Services division showed strong volume and revenue growth during the period. In Transatlantic Services, a difficult imbalance continued, which had a negative effect on capacity utilization. In the Offshore/Icebreaking business area, prices were very high, and capacity utilization was favorable.

The Industrial Shipping business area increased its operating profit for the period to SEK 27 M (11).

 

* Earnings in the Transatlantic Services division were higher than in the preceding year. The transported goods volume rose, compared with the corresponding period in the preceding year, although imbalances continued in the traffic flow that had a negative effect on earnings. Transatlantic bulk operations continued to develop positively.

 

The division's operating profit amounted to SEK 8 M (loss: 4).

* The European Services division showed positive growth in the form of higher revenues due to full capacity utilization, increased earnings attributable to higher capacity utilization in TransLumi Line and lower charter costs as a result of implemented refinancing.

 

The division's operating profit amounted to SEK 19 M (15).

In the Offshore/Icebreaking business area, demand improved, resulting in improved capacity utilization and very favorable earnings. During the fourth quarter, two vessels were on long-term charters, while two were employed in the spot market in the Baltic Sea. The business area's operating profit amounted to SEK 86 M (67).

 

Consolidated operating profit for the fourth quarter amounted to SEK 107 M (69).

 

Consolidated earnings for full-year 2007

 

Consolidated net profit for 2007 amounted to SEK 2,530 M (2,252). Revenues for the three business divisions rose by about 17%, while revenues for external ship management assignments declined by SEK 77 M or 32% due to discontinuation of assignments.

 

Consolidated operating profit for the full-year 2007 amounted to SEK 281 M (216). Profit before tax amounted to SEK 278 M (207). Restructuring costs of SEK 3 M (9), mainly attributable to adjustment expenses for personnel in 2007, were charged against earnings.

 

Net profit after full tax amounted to SEK 186 M (188). Net profit was negatively affected by a non-recurring tax in Norway of SEK 90 M. (See the section on Corporate tax.)

 

(for complete report see attached file)