The 1Q03 has been a particularly challenging period for SPT - the Shuttle Tanker Activities outside US waters. SPT experienced an annual fleet renewals program during an exceptionally strong and unexpected tanker market resulting in fewer vessels and more expensive tonnage to hire than before combined with high bunker prices in the US Gulf - and this has reduced the margins. It was all made more difficult by the indirect effects of the Venezuela petroleum strike and the Iraq war and this has challenged our organization to provide the best of service and our business model. SPT continues the fact its focus on customer service and specially our "on time performance"; which are amongst the key drivers for the results.
The Gas Activities, and mainly Norgas, are showing somewhat improved results in 1Q03 vs. 1Q02 and 4Q02 on EBITDA basis. The cost level for 1Q03 is in line with our program for 2003 to achieve a further reduced EBIT break-even level. Maintaining a high level of competitiveness continues to be the key focus for Norgas.
The prospect for immediate short-term economic improvements are presently considered uncertain; with slow growth predictions for the OECD and specially for the European economies. The longer-term impact of the Iraq war and the conflicts in Israel/Palestine is hard to assess. The war creates uncertainty in the world and also in the US - and the US is the "locomotive" for global growth, so much is dependent on the consumers attitudes in the US.
The IMS share price has decreased 13 % since 1 January 2003 and 15 % in the last 12 months. In March 2003 a dividend of NOK 7 per share was paid (USD 0.96). Including the dividend the 12 months yield has been a negative of 6 %. The Oslo Stock Exchange Benchmark Index (OSEBX) declined by 11% and the OSE Transportation Index (OSE2030GI) declined by 2 %.