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| Summary - 2003 In many ways 2003 was a very satisfactory year. The net result was USD 76.2 million compared to a USD (32.4) million deficit in 2002, representing the best result in more than a decade. Return on invested capital was 16.4% ((8.8)% in 2002) and return on equity was 39% compared to (23)% in 2002. The pre tax result is primarily related to Lauritzen Bulkers fleet strategy and the significant increases in dry cargo bulk rates. The reefer business also contributed positively to the result. 2003 became a turning point for rates, supporting higher vessels values and enabling JL to make an attractive sale of three non-core reefer vessels. In another difficult year for gas transportation, Lauritzen Kosan improved earnings significantly, although still making a negative contribution to net results. With its change in flag policy, Lauritzen Kosan has adopted a more competitive cost structure. Finally, the net result was positively influenced by a revaluation of deferred tax based on the positive prospects for JL’s future earnings capacity. Accounting policies have been changed to reflect the recent change in the Danish Financial Statements Acts, which now allow companies to present their accounts in their functional currency. The USD is the functional currency of JL and therefore the accounts are presented in USD as opposed to previous years when they were presented in DKK. 
Late in 2003, JL decided to re-enter the product tanker business, adding another open market to JL’s business portfolio which presently comprises two niche businesses: gas and reefer, and the more open dry cargo bulk market. During 2003 JL invested USD 74 million in fleet expansion in the gas and bulk businesses. 
Further fleet expansion is expected in the years to come. At present, two second-hand Handysize bulk carriers of 26,500 dwt was delivered in the first quarter of 2004 and a total of three modern Handysize newbuildings will be delivered in 2005, 2006 and 2007. The strategy for developing the LauritzenCool Logistics concept attracted NYK as a new partner for LauritzenCool. As of 1 January 2004, NYK and LauritzenCool implemented a vessel sharing agreement and became 50/50 co-owners of LauritzenCool Logistics. At JL’s Annual General Meeting, Mr Bent Østergaard was re-elected to the Board of Directors, from which Mr Leif Juul Jørgensen, Mr Ole Lauritzen and Mr Ole Jacob Diesen resigned. The Board appointed Mr Bent Østergaard as Chairman and Mr Ingar Skaug as Vice Chairman. At an Extraordinary General Meeting in November, Mr Peter Poul Bay was elected to the Board of Directors. In 2003, JL saw improved results due to the Company’s strategies. This also strengthened its competitiveness which, supported by positive forecasts for the world economy, makes the outlook for 2004 very positive, and significantly better than 2003. |