SET Announcements

Ref. No. COR:MS/EL06020e/ms

14 November 2006

Subject : The Fourth Quarter Financial Results

To : The President of the Stock Exchange of Thailand

Overview

Thoresen Thai Agencies Public Company Limited ("TTA") recorded a consolidated net profit for the three-month period that ended on 30 September 2006 (the "2006 Fourth Quarter") of Baht 861.83 million, which included an exchange gain of Baht 160.82 million.

During the three-month period that ended on 30 September 2005 (the "2005 Fourth Quarter"), TTA recorded a consolidated net profit of Baht 1,100.51 million, which included an exchange gain of Baht 48.53 million.

The average TC rate, including contributions from chartered-in tonnage, fell 4.15% from USD 12,067 per vessel per day in the 2005 Fourth Quarter to USD 11,566 per vessel per day in the 2006 Fourth Quarter. TTA had a total of 4,180 available vessel days in the 2006 Fourth Quarter, compared to 4,461 available vessel days in the 2005 Fourth Quarter.

TTA's consolidated net profit for the twelve-month period that ended on 30 September 2006 ("FY 2006") equalled Baht 3,544.15 million, a 40.42% decrease from the consolidated net profit for the twelve-month period that ended on 30 September 2005 ("FY 2005"). The decrease in the consolidated net profit was primarily due to lower TC rates, lower vessel days, higher vessel operating expenses, and a stronger Thai Baht currency.

Business Segment Analysis

TTA will discuss our financial results based on our three business segments: the Shipping Business, the Offshore Service Business, and Other Service Businesses.

Shipping Business: The Shipping Business recorded a consolidated net profit of Baht 608.59 million, excluding exchange gains. The net profits of the Shipping Business increased 43.89% between the three-month period that ended on 30 June 2006 (the "2006 Third Quarter") and the 2006 Fourth Quarter.

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The higher net profit was primarily due to higher TC rates. The average TC rate, including contributions from chartered-in tonnage, increased 10.46% from USD 10,471 per vessel per day in the 2006 Third Quarter to USD 11,566 per vessel per day in the 2006 Fourth Quarter.

Our total fleet cargo volume from 1 October 2005 to 30 September 2006 rose by 7.35% to 14.07 million revenue tons, even though total vessel days fell from 17,217 in FY 2005 to 16,831 in FY 2006, which is equivalent to one less vessel. Based on these cargo volume figures and ongoing client discussions, we believe that freight market demand should remain strong in our current financial year.

TTA had a total of 4,180 vessel days available in the 2006 Fourth Quarter, compared to 4,130 vessel days available in the 2006 Third Quarter. Vessel operating expenses increased due to a number of reasons, including accelerated amortization of previous dry-docking expenses for three vessels (given sailing schedules, these vessels had the opportunity to perform earlier than scheduled dry-dock repairs) and additional premium calls from our third-party liability insurance provider.

The Shipping Business has already placed 27% of our available capacity on time charters for the current financial year and 13% of our available capacity on time charters for the next financial year, which will provide earnings visibility into next year.

Offshore Service Business: Mermaid Maritime Limited ("MML") posted decent quarterly results. The offshore oil and gas markets remain strong, and we expect higher performance from MML in the current financial year. The drilling segment generated approximately 33.24% and 35.04% of MML's total revenues and profits, respectively. One drilling rig, MTR-1, was off-hire for the last nine days of the 2006 Fourth Quarter due to a scheduled special survey and subsequent relocation from Malaysia to Indonesia. On the other hand, the assets in our sub sea engineering segment had a 70% utilisation rate during the quarter and generated approximately 59.76% and 66.67% of MML's revenues and profits, respectively. Excluding exchange gains, MML made a total revenue contribution of Baht 1,047.48 million and a net profit contribution (after deducting minority interests) of Baht 65.23 million to TTA's financial results.

Other Service Businesses: The Other Service Businesses made a net profit contribution (after deducting minority interests) of Baht 56.79 million, excluding exchange gains, to TTA's financial results. Thoresen Shipping FZE made the highest net contributions.

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Excluding foreign exchange gains and minority interests, the 2006 Fourth Quarter marked the second consecutive quarter of higher consolidated net profits for TTA, which demonstrates the benefits of our ongoing diversification strategy.

 

Yours faithfully,
Thoresen Thai Agencies Public Company Limited