The Board of Directors of Samudera Shipping Line Ltd (the "Board") refers to the current year trends and competitive conditions of the industry as commented in the Group's full year financial statement and dividend announcement for the twelve months ended 31 December 2005 made on 28 February 2006, where the container shipping industry is experiencing additional supply of space resulting a decline in freight rates and high and volatile bunker price.
Although there is a reduction in vessel charter-in costs due to lower charter-in hire rates, a full-year impact of reduction in its stevedoring cost in Indonesia, which commenced in the last quarter of 2005, fuel surcharges to customers to partly recover bunker cost and continuous efforts to remain costs competitive, the impact of the decline in freight rates and increase in bunker price are expected to be significantly higher, resulting in lower margins.
The Group deems it appropriate to issue a profit warning. After evaluating the performance and industry trends to-date, the profit of the Group in the first quarter 2006 and the rest of the year will be substantially lower than that of the previous year.
By Order of the Board
Anwarsyah
20 April 2006