North Sea Utilization Rates Down

Farstad Shipping achieved a cash flow of NOK 142.3 million in 3Q 2003 (NOK 145.1 million in 3Q 2002). The operating income was NOK 381.2 million (NOK 318.2 million) and the operating profit (EBIT) was 82.9 million (NOK 112.5 million). Five of the company's vessels have traded the spot market in the North Sea. Two other vessels have been upgraded and mobilized for long-term contracts and were therefore without revenue forpart of the period. In the Far East/Australia two of the vessels have traded the spot market in September. The third quarter is the first whole quarter where the IOS fleet is 100% owned (earlier 50%). Results for the 3rd quarter 2003 Farstad Shipping achieved an operating income of NOK 381.2 million for the 3rd quarter (NOK 318.2 million in 3rd quarter in 2002). The operating costs for the period were NOK 214.8 million (NOK 149.8 million). The increase is due to growth in the fleet, the IOS vessels being 100% owned and several vessels have operated in Australian water which has higher crew costs than in Southeast Asia. The operating profit (EBIT) was NOK 82.9 million (NOK 112.5 million) after depreciation of NOK 83.5 million (NOK 55.9 million). The operating income at September 30, 2003, was NOK 1,027.8 million (NOK 956.9 million). The operating costs were NOK 552.8 million (NOK 441.0 million) and ordinary depreciations NOK 205.6 million (NOK 163.3 million). The operating profit (EBIT) was NOK 269.4 million (NOK 352.8 million). The Fleet During the quarter the newbuildings Lady Astrid (AHTS), Far Swift (PSV) and Lady Melinda (PSV) were delivered in July, August and September. After trading the spot market in July and August Lady Astrid left the North Sea for the Far East. After delivery from the yard Lady Melinda started on a short-term operation in Nigeria. Far Swift was delivered from the yard in the beginning of August and immediately left for Mexico to start on a 3.5 years contract. Also Far Scotia left the North Sea in August for long-term employment in Mexico. Of the company's North Sea tonnage 5 vessels have traded the spot market during the third quarter. Far Swan has won a 6 months contract, while Far Turbot is in lay-up. During the 4th quarter 2 of the other spot vessels will be engaged in 2 towing operations of approx. 70 days duration outside the North Sea. In Brazil the Far Sea's contract has been extended by another 2 years. At present the company has 8 vessels in Brazil. All IOS owned vessels in the Far East/Australia have been well employed in July and August, while 2 vessels have partly been trading the spot market in September. The company has 2 vessels under construction at a Norwegian yard for delivery in December. One of these has long-term employment. In addition our Joint Venture Company (BOS) in Brazil has 3 AHTS under construction at Brazilian yards for delivery in 2004 and 2005. These have all long-term contracts for Petrobras.