The Third Quarter Financial Results

Ref. No. COR:MS/EL07017e/pc

14 August 2007

Subject : The Third Quarter Financial Results

To : The President of the Stock Exchange of Thailand

Overview

Thoresen Thai Agencies Public Company Limited (the "Company" or "TTA") reported a consolidated net profit for the three-month period that ended on 30 June 2007 (the "2007 Third Quarter") of Baht 1,389.86 million, which included an exchange gain of Baht 100.45 million, and earnings per share of Baht 2.16.

During the three-month period that ended on 30 June 2006 (the "2006 Third Quarter"), TTA recorded a consolidated net profit of Baht 702.98 million, which included an exchange gain of Baht 129.33 million, and earnings per share of Baht 1.09.

Total operating revenues for the 2007 Third Quarter were Baht 5,400.66 million, total operating expenses were Baht 3,424.71 million, and other expenses were Baht 638.59 million. Cash and cash equivalents increased by Baht 1,313.13 million from 1 October 2006 to 30 June 2007. The Company generated cash from operating activities and financing activities of Baht 4,968.50 million and Baht (1,133.89) million, respectively, and used Baht 2,514.29 million for investing activities.

The average time charter equivalent ("TC") rate, including net contributions from chartered-in tonnage, increased 58.06% from US$ 10,471 per vessel per day in the 2006 Third Quarter to US$ 16,550 per vessel per day in the 2007 Third Quarter, and available vessel days decreased 0.85% from 4,130 days in the 2006 Third Quarter to 4,095 vessel days in the 2007 Third Quarter.

The increase in the consolidated net profit was primarily due to strength of the dry bulk shipping and offshore service markets and a stronger Thai Baht currency.

Business Group Analysis

Our three business groups, the Dry Bulk Shipping Group, the Offshore Services Group, and the Shipping Services Group, showed good profitability.

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Thoresen Thai Agencies Public Company Limited

Dry Bulk Shipping Group: The Dry Bulk Shipping Group recorded a consolidated net profit of Baht 1,144.06 million, excluding exchange gains. The net profits of the Dry Bulk Shipping Group increased 28.87% between the three-month period that ended on 31 March 2007 (the "2007 Second Quarter") and the 2007 Third Quarter.

The higher net profit was primarily due to higher TC rates. The average TC rate, including net contributions from chartered-in tonnage, increased 14.51% from US$ 14,453 per vessel per day in the 2007 Second Quarter to US$ 16,550 per vessel per day in the 2007 Third Quarter.

Our total fleet cargo volume from 1 October 2006 to 30 June 2007 remained strong at 9.6 million revenue tons. Based on ongoing client discussions, we believe that strong demand from our core markets of China, Southeast Asia, India, and the Middle East will continue into 2008.

TTA had a total of 4,095 vessel days available in the 2007 Third Quarter, compared to 4,027 vessel days available in the 2007 Second Quarter. During the last couple of months, the Company has fixed out a few more vessels on time charter for periods up to two years.Vessel operating expenses increased 2.22%, due to higher vessel days in the 2007 Third Quarter. Subsequent to the end of the 2007 Third Quarter, we agreed to charter-in one more vessel on period time charter, bringing the total number of chartered-in vessels on period time charter to six.

The Dry Bulk Shipping Group has already placed 32.50% of our available capacity on time charters for the current financial year and 17.69% of our available capacity on time charters for the next financial year, which will provide earnings visibility into next year.

The dry bulk shipping market continued its strong performance in the 2007 Third Quarter. The Baltic Supramax Index (as calculated by the Baltic Exchange Limited) exceeded US$ 50,000 per day during the 2007 Third Quarter and continued its high levels through the current quarter (US$ 49,854 per day as of 10 August 2007). Average daily earnings on a Supramax vessel were US$ 41,706 per day for the 2007 Third Quarter.

A recent presentation from R.S. Platou estimates 2007 dry bulk demand growth of over 6.7% in volume terms, mainly driven by strong growth in the main commodities of iron ore and coal. Further factors have also contributed to the strong market, such as port congestion, especially in Australia, and increased sailing distances. Therefore, supply and demand fundamentals are tight, and very little correction in freight rates has occurred, even during the traditionally weaker summer months.

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Thoresen Thai Agencies Public Company Limited

 

The dry bulk shipping market has experienced an increase in ton-miles. China has already imported 187.9 million tons of iron ore for the first six months of 2007, which is 16.4% higher than the first six months of 2006. Furthermore, China became a net importer of steam coal, which means that neighbouring countries of China will have to source coal from areas with longer sailing distances, like Indonesia and Australia.

The increasing second hand values of modern dry bulk vessels has continued. The value of a five year old Supramax has risen to US$ 59 million as of 10 August 2007, which is an all-time high. Newbuild prices also continue to rise in spite of longer delivery times.

Offshore Services Group: Mermaid Maritime Public Company Limited ("MMPLC") posted positive quarterly results. The drilling segment generated approximately 32.10% and 22.67% of MMPLC's total revenues and profits, respectively.

During the 2007 Third Quarter, MMPLC's drilling units, MTR-1 and MTR-2, had committed client contracts. MTR-1 worked for the first 76 days of the 2007 Third Quarter before suffering accidental damage. Repairs are expected to take approximately 79 days, and MTR-1 should be back in operations before the conclusion of the three-month period that will end on 30 September 2007 (the "2007 Fourth Quarter"). MMPLC has taken a charge of US$ 2.25 million in the 2007 Third Quarter to deal with the accident-related asset write-offs and deductibles on our insurance policies.

MTR-2 worked continuously through the 2007 Third Quarter and for another 16 days in the 2007 Fourth Quarter. Before commencing its next contract, MTR-2 will undertake its special survey and dry-docking program, which occurs every five years. The special survey program is expected to take approximately 101 days, and is a requirement of Bureau Veritas and American Petroleum Institute, the rig's classification societies. The special survey and dry-docking program will ensure MTR-2's ongoing safety and maintenance standards.

As a result of these items, we expect that the drilling segment's revenues and profits will fall during the 2007 Fourth Quarter.

The offshore rig market continues to show strength across all categories and classes of mobile offshore drilling units. The volatility in oil prices experienced over the last months has so far not affected the oil companies' demand for offshore drilling units. In addition, although there have been several more newbuild orders, day rates have continued to increase.

The market sentiment for tender rigs is sound, and the increased day rate level for jack-ups has had a positive effect on day rates for tender rigs. In addition, oil companies continue to enter into term contracts well in advance of commencement, which provides good opportunities to build the order backlog and facilitate further organic growth. The Company expects the favourable market environment to prevail.

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Thoresen Thai Agencies Public Company Limited

The assets in our sub sea engineering segment had an 86.81% utilisation rate during the quarter and generated approximately 67.30% and 71.85% of MMPLC's revenues and profits, respectively. Exploration, development, and maintenance and upgrading of existing installations are being carried out to capacity. This has resulted in a very tight market for most types of offshore service vessels in all geographical areas, including Southeast Asia.

The future market is anticipated to continue with a high level of activity. In 2007-2008, demand for vessels is expected to increase as a result of the higher number of drilling rigs in operation, combined with extensive development activity. Despite strong price pressure and long delivery times, the number of vessels on order is still relatively high. This is anticipated to have a negative impact over time on today's high profit margins.

Excluding exchange gains, MMPLC made a total revenue contribution of Baht 1,150.57 million and a net profit contribution (after deducting minority interests) of Baht 134.32 million to TTA's financial results.

Shipping Services Group: The Shipping Services Group made a net profit contribution (after deducting minority interests) of Baht 42.92 million, excluding exchange gains, to TTA's financial results. Thoresen Shipping FZE made the highest net contributions, followed by ISS Thoresen Agencies Ltd., which recorded higher service income and profits due to the increasing number of vessel calls.

Excluding foreign exchange gains and minority interests, the 2007 Third Quarter marked the fifth consecutive quarter of higher consolidated net profits for TTA, which demonstrates the benefits of our ongoing diversification strategy and the strength of both the dry bulk shipping and offshore markets.

Yours faithfully,
Thoresen Thai Agencies Public Company Limited

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