Change of Fleet:None.

Change in Operation: 2 vessels in dry-dock.

Fluctuation of Exchange Rate: Yen fluctuations resulted in non-operating income (loss) from the valuation of financial derivatives and outstanding borrowings denominated in Japanese Yen.

Renewal of Contracts: None.

Operating Income

Operating income reduced due to charterers’ early termination of time charter contract this year. The Company recognized the compensation for early termination as other income and the difference between last contract and current contract caused the reduction of operating income. As a result, other income increased and operating income decreased.

Non-operating income: Net Income before Tax decreased comparing with monthly result last year because of the weak shipping market and the appreciation of Japanese Yen which led to foreign exchange loss.

However, foreign exchange loss is an unrealized item which does not affect the Company’s cash flow. The Company evaluates foreign exchange gain/loss by the exchange rate at the end of each month, and the loss will be reversed if Yen depreciates afterwards.

There was US$380,000 compensation from charterers for their early termination of time charter recognized as other income.

Source: Wisdom Marine Group