Viking Supply Ships

Earnings Release • Apr 30, 2008

Press release, April 29, 2008 from Rederi AB Transatlantic (publ)

INTERIM REPORT JANUARY – MARCH 2008

Continued strong Group earnings.

• Earnings during the first quarter rose by 17 % to SEK 74 M (63).
• On a rolling 12‐month basis, the Group's operating profit amounted to SEK 287 M.
• The offshore market was strong during the first quarter and earnings for the Offshore/Icebreaking business area were in line with the year‐earlier period.
• The European Services division reported improved earnings as a result of a continued strong market and marketing activities undertaken.
• Earnings in the Group's Transatlantic Services division were unsatisfactory and were in line with the year‐earlier period.
• Takeover of technical operation and manning of the Swedish Government's five state‐ owned icebreakers will go into effect June 1, 2008.
• Net profit per share amounted to SEK 2.60 (2.20)
• Strengthened financial position, with an increase in the equity/assets ratio to 41% and a decrease of the debt/equity ratio to 53%.
• Carl‐Johan Hagman will leave his position as President at the end of the year or once a new President has been recruited.
• Results for January ‐ March 2008:

Net revenue: SEK 585 M (623) Operating profit before tax: SEK 74 M (68) Profit before tax: SEK 79 M (66) Profit after current tax: SEK 79 M (65) Profit after full tax: SEK 74 M (63) On March 31, 2008 shareholders' equity per share amounted to SEK 45.30 per share (SEK 43.60 per share on December 31, 2007) The equity/assets ratio on the closing date was 41% (39% on December 31, 2007) Return on equity 24 % (22%) Return on capital employed 16% (15%)

*Operating profit: earnings before tax and restructuring costs

Transatlantic's operations, goals and strategy

Transatlantic consists of the Offshore/Icebreaking business area and the Industrial Shipping business area, which comprises two divisions – Atlantic and European. The operations of the Offshore/Icebreaking business area are based on combination vessels on long‐term contracts and guaranteed income for icebreaking, in addition to other deployment, mainly for rig‐relocation in the offshore market. Atlantic‐ and European divisions focus on contract shipping, primarily for the forest products and steel industries.

Transatlantic's business concept is to market, develop and deliver the market's most efficient transport solutions in close and active cooperation with customers.

Transatlantic's goal is to be the market leader in its segments, with profitability that generates a favorable return for shareholders. The goal is a return of at least 12% on shareholders' equity and an equity/assets ratio that does not fall below 30%.

The Group's strategy for the next few years emphasizes growth and sustainable profitability. Growth will be achieved organically and through acquisition. The Group is also very open to the development of various partnerships aimed at broadening operations or implementing various investments and projects.

The ambitions for growth will require investments in new tonnage and replacement tonnage. These include all divisions and will be conducted without jeopardizing the Group's financial targets. This also means that the Group's tonnage requirements will be partly resolved through charter contracts and by external investors becoming wholly or partly involved in the fleet operated by the Group.

The strategy for and development of the Group places major demands on quality, safety and the environment, as well as awareness of customer demands and a willingness to change.

General developments during the first quarter

During the first quarter of 2008, continued favorable shipping trends were reported despite the worries in the financial markets. Capacity utilization was generally satisfactory and price structures were somewhat better than the year‐earlier period.

With the Transatlantic segment, demand and deployment were favorable in the Offshore/Icebreaking business area, while the situation was somewhat varied in the Industrial Shipping business area, mainly due to the continued weakening of the US dollar.

The Offshore/Icebreaking business area noted continued strong demand for tonnage with freight levels in line with the strong earnings during the year‐earlier period. The business area's operating profit was SEK 58 M (64).

The Industrial Shipping business area improved its operating profit, which amounted to SEK 21 M (11) for the quarter.

Volumes for westbound Transatlantic Services were lower and one vessel experienced a serious grounding, creating an imbalance in service. The division's operating profit amounted to a loss of SEK 2 M (loss: 3).

The European Services division reported higher earnings from the TransLumi Line due to increased third‐party shipments, and earnings improved compared with the year‐earlier period. The division's operating profit was SEK 23 M (14).

Consolidated earnings for the first quarter of 2008

The Group's net revenues amounted to SEK 585 M (623). The change in sales was due mainly to lower revenues from transatlantic traffic, as well as the currency effects of a lower US dollar, the disposal of certain external vessel management tasks and the sale and leaseback of one vessel.

The Group's operating profit was SEK 74 M (68) and profit before tax amounted to SEK 79 M (66). Earnings include positive restructuring costs of SEK 5 M, mainly attributable to the sale of the M/S Holmön.

Net profit after full tax amounted to SEK 74 M (63).

Group		July ‐ March	Full‐year	Rolling
SEK M	2008	2007		2007 12‐month 1)
Net revenue	585	623	2 530	2 492
Profit before capital costs (ʺEBITDAʺ)	128	113	462	477
Operating profit	90	78	317	329
Profit before tax	79	66	278	291
Profit margin	13,6%	10,6%	11,0%	11,7%
Profit before tax by business area
Offshore/Icebreaking business area	58	64	230	224
Industrial Shipping business area
Transatlantic Services division	‐2	‐3	21	22
European Services division	23	14	60	69
	21	11	81	91
Ship Management/Group‐wide	‐5	‐7	‐30	‐28
Total operating profit	74	68	281	287
Restructuring items	5	‐2	‐3	4
Profit before tax	79	66	278	291
Current tax2)	0	‐1	‐93	‐92
Deferred tax	‐5	‐2	1	‐2
Profit after tax	74	63	186	197
SEK pershare
Operating profit after current tax	2,60	2,30	6,60	6,90
Profit after current tax	2,80	2,30	6,50	7,10
Profit after tax	2,60	2,20	6,60	7,00
1) Refers to the period April 2007 to march 2008.
2) Tax payable for the current year.

Offshore/Icebreaking business area

Operations are conducted through the Norwegian joint‐venture company TransViking AS, in which Transatlantic owns 50%.

During the first quarter, the trend was favorable in the Offshore/Icebreaking business area. Demand for AHTS/tonnage during the period, which is normally a seasonally weak period, was just as strong as the corresponding period in 2007. Freight levels were high, although the market and pricing continues to be characterized by high volatility.

The building of an additional four anchor‐handling vessels continues according to plan.

The business area's quarterly earnings amounted to SEK 58 M (64).

Offshore/Icebreaking		January ‐ March
SEK M	2008	2007	2007
Net revenue	92	96	359
Profit after net financial items	58	64	230
Profit margin	63,0%	66,7%	64,1%

Industrial Shipping business area

The business area consists of two divisions, Transatlantic Services and European Services. The business area's earnings improved compared with the year‐earlier period.

Industrial shipping	January ‐ March		Full‐year
SEK M	2008	2007	2007
Net revenue	468	488	2 005
Profit after net financial items	21	11	81
Profit margin	4,5%	2,3%	4,0%

Transatlantic Services

The Transatlantic Services division, which comprises three integrated units, had lower volume overall than the preceding year. Volumes of coated paper to the US declined, in particular, due to difficulties in maintaining sales. Imbalances in traffic flows remained, and were even reinforced during the period due to a serious grounding of the M/S Finnpine and repairs to M/S TransOak. The anticipated earnings improvement from Transatlantic's traffic did not materialize despite price increases and implementation of improved cost compensation clauses for bunker oil and currency.

Earnings for the LoLo unit were satisfactory and were mainly in line with the preceding year.

The division's earnings for the period were unsatisfactory. An action plan to improve the division's profitability is ongoing, with a focus on achieving a balance between eastbound and westbound cargo, increasing freight levels and expanding the customer base.

New vessels for shipping routes remain under review.

Quarterly earnings amounted to a loss of SEK 2 M (loss: 3).

Transatlantic Services	January – March		Full‐year
SEK M	2008	2007	2007
Net revenue	165	196	748
Profit after net financial items	‐2	‐3	2 1
Profit margin	‐1,2%	‐1,5%	2,8%

European Services

These operations comprise scheduled feeder traffic of containers to the UK and Germany, and contract‐based small bulk traffic within Europe, as well as an expanding unit for European system traffic for forest products.

Container traffic to the UK (TransPal Line) has reduced its volumes as part of an effort to improve profitability. One vessel was taken out of service and vessel rotation has been adjusted. Quarterly earnings strengthened in relation to the preceding year, but continued to be negative.

Feeder traffic (TransFeeder Line) saw a small volume increase and vessels of slightly larger size are being successively added to the shipping routes. Earnings were in line with the preceding year, but not at a satisfactory level.

RoRo traffic in the Baltic Sea (TransLumi Line) has exceeded the preceding year in terms of earnings, despite slightly weaker volumes of forestry products. The increased share of third‐party cargo loads resulted in vessels being fully utilized. Larger so‐called project loads are beginning to take on greater significance both in terms of volume and earnings.

Contract‐based small bulk traffic (TransBulk Services) experienced favorable growth during the period. A vessel from TransPal line has strengthened service, which has been expanded and now regularly plies a route from the eastern Mediterranean to Northern Europe. The operation reported improved earnings, compared with the preceding year. The vessel M/S Holmön, which had previously been sold, was delivered to its new owner during the quarter.

The European Service division, which reported a margin improvement and increased revenues during the quarter, reported earnings of SEK 23 M (14) for the first quarter.

European Services		January ‐ March	Full‐year
SEK M	2008	2007	2007
Net revenue	303	292	1 257
Profit after financial items	23	14	60
Profit margin	7,6%	4,8%	4,8%

Central Group organization

The central Group organization comprises management and the Production support function, as well as central administration and finance management. This includes ship management, which is responsible for Transatlantic's own fleet, and assignments for external vessel owners. These are responsible for all operating costs, and Transatlantic invoices actual operating expenses incurred and fees for operating the external vessels. The primary motive for accepting external assignments is to achieve economies of scale for shipboard employees and for the comprehensive purchases undertaken for the Group's fleet of vessels.

A new task, to man and conduct technical operation of the Swedish government's five icebreakers, has been secured through cooperation with the Norwegian ship management company OSM. This assignment is expected to secure Transatlantic's position as the leading global shipping company within the offshore sector, with the ability to operate in Arctic regions. There is a shortage of available skilled and experienced personnel in this area and this will give the shipping company competitive advantages.

Earnings for the unit, which include net financial items for the central finance management, amounted to a loss of SEK 5 M (loss: 7) for the quarter.

Central Group		January ‐ March
SEK M	2008	2007	2007
Net revenues	25	39	166
Loss after financial items	‐5	‐7	‐30
Profit margin	‐20,0%	‐17,9%	‐18,1%

Corporate tax

The general situation for the Group's current structure is that taxes payable are very limited. Accordingly, corporate tax consists mainly of estimated, deferred tax. The low level of taxes payable arises since some of the Group's operations are conducted in countries where taxation is based on so‐called tonnage tax, or similar tax structures, and tax and depreciation/amortization regulations that provide opportunities to defer tax liability payments.

During the quarter, no costs for actual (payable) taxes were recorded, only deferred tax liability of SEK 5 M. The recognized, deferred tax liability for Swedish operations amounted to SEK 108 M at March 31, 2008 (120 at December 31, 2007).

Transatlantic's jointly held company, TransViking, has been included since 2007 in the new Norwegian tonnage tax system, which means that in the future only a low annual tax will have to be paid, without any other taxable consequences. The tax consequences of participating in the new system of SEK 90 M, were assumed in their entirety during 2007, with the liability being repaid over a ten‐year period.

The shipping company is still waiting for a political decision regarding whether Swedish tonnage tax will be introduced. A decision is required and expected during the year.

Financial position, investments and divestments

The Group's cash and cash equivalents amounted to SEK 486 M at the end of the quarter (SEK 393 M at December 31, 2007). In addition, the Group has unutilized committed lines of credit in the amount of SEK 400 M.

At the end of March, the Group's shareholders' equity totaled SEK 1,264 M (corresponding to SEK 45.30 per share). Minority interest in the year's closing shareholders' equity amounted to SEK 27 M, corresponding to SEK 1.00 per share.

The equity/assets ratio amounted to 41% at the end of the quarter (39% at December 31, 2007).

Gross investments during the quarter amounted to SEK 43 M (15). Expenses were primarily attributable to capitalized docking fees.

Finan cial position	M arch	D ecem ber
SEK M a t the close o f each p eriod	2008	2007
T o tal assets	3 064	3 124
Sharehold ers ʹ equity (incl. m ino rity )	1 264	1 217
E quity/assets ratio	41%	39%
N et indebted ness	664	823
D ebt/equity ratio, %	53%	68%
C losing cash and cash equivalen ts	486	393
SEK per share
Sharehold ers ʹ equity incl. m ino rity in terests	4 5,3 0	4 3,6 0

Repurchase of shares

During the first quarter, no repurchase of shares occurred. At the end of March, there was a total of 504,800 own shares held, which were acquired at an average price of SEK 45.41 per share. Prior to the Annual General Meeting, the Board of Directors has proposed that these shares shall be held in treasury.

Events after the close of the reporting period

Two vessels from the TransPal Line were damaged, which will negatively impact the European Services division's earnings.

President Carl‐Johan Hagman will be leaving the company at the end of the year. Recruitment of a new president has begun. There is no conflict between the shipping company and Hagman.

Risks and uncertainties

Transatlantic is a Group comprising a high degree of international operations, thereby exposing it to a number of operational and financial risks. Transatlantic works actively to identify and manage these risks and risk management is included as an element of the ongoing reviews of the operations.

It has been deemed that no further key risks and uncertainties have arisen in addition to those risks and uncertainties described in Transatlantic's annual report for 2007 (page 35).

Transactions with closely related parties

No transactions have taken place between Transatlantic and closely related parties that have significantly affected the company's positions or earnings.

Accounting principles

This interim report was prepared in accordance with the Swedish Annual Accounts Act and with the application of IAS 34, Interim Financial Reporting and in accordance with the Swedish financial Reporting Board's recommendation RfR 2:1 Accounting for legal entities. The same accounting principles and basis for estimation for both the Group and Parent Company have been applied as those used in the most recent annual report. New or revised IFRS standards that have come into effect since January 1, 2008, have not had any significant impact on the Group's earnings or balance sheets.

Outlook for 2008

Despite the financial crisis, the general shipping market is expected to remain favorable. Ongoing structural measures, in the Industrial Shipping business area, and price increases in the Transatlantic Services division, are expected to generate improved earnings for the Industrial Shipping business area.

The Offshore market is anticipated to remain strong during the rest of the year, but with a slight increase in the number of vessels in the market, it is uncertain whether the favorable revenues from last year can be repeated. The volatility in our industry remains.

Telephone conference

In conjunction with the interim report, a telephone conference is scheduled for Wednesday, April 30, 2008 at 8:30 a.m. with Transatlantic's President Carl‐Johan Hagman and CFO Stefan Eliasson. For further information, please check our website: www.rabt.se

Financial reports 2008

Second quarter	August 27
Third quarter	October 20

Skärhamn, April 29, 2008

Rederi AB Transatlantic

(Corp. Reg. No. 556161‐0113) Board of Directors

This report is unaudited

For further information, please contact President Carl‐Johan Hagman or CFO Stefan Eliasson, tel+46 (0)304‐67 47 00

Consolidated income statement

	January ‐ March		Year
All amounts in SEK M	2008	2007	2007
Net sales	585	623	2 530
Other operating revenue	6	1	7
Personnel costs	‐111	‐113	‐451
Other costs	‐352	‐398	‐1 624
Depreciation / write‐downs	‐38	‐35	‐145
Operating profit/loss	90	78	317
Net financial items	‐11	‐12	‐39
Profit/loss before tax	79	66	278
Tax on profit/loss for the period 1)	‐5	‐3	‐92
PROFIT/LOSS FOR THE PERIOD 2)	74	63	186
Attributable to: Shareholders of the parent company Minority interests in subsidiaries	73 1	63 0	186 0
PROFIT/LOSS FOR THE PERIOD	74	63	186

1) The tax expense for the period includes actual tax amounting SEK 0 M (Jan ‐ Mar 2007: ‐1, Jan ‐ Dec 2007: ‐93).

2) The amount includes restructuring costs, mainly book‐gains from sale of the vessel ʺHolmonʺ,

with SEK 5 M (Jan ‐ Mar 2007: ‐2, Jan ‐ Dec 2007: ‐3).

Net sales by area of operation

	January ‐ March		Year
All amounts in SEK M	2008	2007	2007
Offshore/Icebreaking	92	96	359
Industrial Shipping
Transatlantic Services	165	196	748
European Services	303	292	1257
	468	488	2 005
TOTAL ‐ BUSINESS OPERATIONS	560	584	2 364
Ship Management/Group‐wide items	25	39	166
TOTAL NET SALES	585	623	2 530

Profit/loss after financial items per business area

		January ‐ March	Year
All amounts in SEK M	2008	2007	2007
Offshore/Icebreaking	58	64	230
Industrial Shipping
Transatlantic Services	‐2	‐3	21
European Services	23	14	60
	21	11	81
TOTAL ‐ BUSINESS OPERATIONS	79	75	311
Ship Management/Group‐wide items	‐5	‐7	‐30
OPERATING PROFIT/LOSS BEFORE TAX	74	68	281
Restructuring items	5	‐2	‐3
PROFIT/LOSS BEFORE TAX	79	66	278
Attributable to:
Shareholders of the parent company	78	66	278
Minority interests in subsidiaries	1	0	0

Consolidated balance sheet

	Mar 31.	Dec 31.
All amounts in SEK M	2008	2007
Vessels	1 994	2 047
Other tangible fixed assets	61	64
Intangible fixed assets1)	14	14
Financial assets	75	73
Total fixed assets	2 144	2 198
Current assets	920	926
TOTAL ASSETS	3 064	3 124
Shareholdersʹ equity 2)	1 264	1 217
Long‐term liabilities 3)	1 341	1 365
Current liabilities 3)	459	542
TOTAL SHAREHOLDERSʹ EQUITY, PROVISIONS AND LIABILITIES	3 064	3 124
1) Amount includes goodwill of SEK 2 M ( 2 ). 2) Minority interests are included with SEK 27 M ( 25 ). 3) The total of the Groupʹs long‐ and short‐term interest‐bearing liabilities amounts to SEK 1 149 M ( 1 215 ).

Pledged assets	2 003	2 061
Contingent liabilities	‐	‐

Consolidated cash‐flow statement

		January ‐ March	Year
All amounts in SEK M	2008	2007	2007
Cash flow from current operations before changes
in working capital	108	98	414
Changes in working capital	54	‐55	‐116
Cash flow from current operations	162	43	298
Investing operations 1)	‐21	‐15	‐40
Financing operations	‐41	‐44	‐86
Dividend	‐	‐	‐57
Change in cash equivalents	100	‐16	115
Cash equivalents at beginning of period	393	264	264
Exchange‐rate difference in cash equivalents	‐7	8	14
CASH EQUIVALENTS AT END OF PERIOD 2)	486	256	393

1) Gross investments, mainly capitalized docking expenses, amounted for the period January ‐ March SEK 43 M.

2) Cash equivalents, including utilized overdraft facilities, of SEK 486 M (Jan ‐ Mar 2007: 256, Jan ‐ Dec 2007: 393) are included in the balance sheet among current assets. In addition the group have unutilized standby facilities amounting SEK 400 M. The cash‐flow statementʹs ʺCash equivalents at end of periodʺ comprise liquid funds, including utilized overdraftfacility of SEK 0 M (Jan ‐ Mar 2007: 0, Jan ‐ Dec 2007: 0).

Consolidated shareholdersʹ equity

	January ‐ March		Year
All amounts in SEK M	2008	2007	2007
Shareholdersʹ equity at beginning of period	1 217	1 085	1 085
Dividend	‐	‐	‐57
Acquisition of own shares	‐	‐11	‐34
Translation differences / cash flow hedges	‐27	22	37
Profit/loss for the period	74	63	186
SHAREHOLDERSʹ EQUITY AT END OF PERIOD 1)	1 264	1 159	1 217

There are no warrants or other equity instruments in Transatlantic Group.

1) Shareholdersʹ equity includes minority interests of SEK 27 M (31 Mar 2007: 25, 31 Dec 2007: 25).

	January ‐ March		Year
Number of shares (ʹ000)	2008	2007	2007
Number of outstanding shares at beginning of period	27 926	28 642	28 642
Buy‐back of shares	‐	‐211	‐716
Number of outstanding shares at end of period	27 926	28 431	27 926
Number of shares held as treasury shares	505	2 427	505
Total number of shares at end of period	28 431	30 858	28 431
Average number of outstanding shares	27 926	28 466	28 346

1) In August ‐07 the share capital was reduced with the at that time bought back shares, total 2,427,000.

Data per share

	January ‐ March		Year
All amounts in SEK	2008	2007	2007
Earnings before capital expenses (EBITDA)	4.6	4.0	16.3
Earnings before interest expenses (EBIT)	3.5	2.9	12.0
Profit after current tax	2.8	2.3	6.5
Profit after full tax	2.6	2.2	6.6
Shareholdersʹ equity at end of period	45.3	40.8	43.6
Operating cash flow	4.0	3.5	14.9
Total cash flow	3.6	‐0.6	4.1

Key data 1)

		January ‐ March		Year
		2008	2007	2007
Earnings before capital expenses (EBITDA)	SEK M	128	113	462
Earnings before interest expenses (EBIT)	SEK M	97	83	341
Shareholdersʹ equity	SEK M	1 264	1 159	1 217
Net interestbearing debts	SEK M	664	883	823
Operating cash flow	SEK M	112	101	423
Total cash flow	SEK M	100	‐16	115
Return on capital employed	%	16.0	15.0	14.8
Return on shareholdersʹ equity	%	23.8	22.4	16.2
Interest‐coverage ratio	TIMES	7.7	6.8	7.7
Equity/assets ratio	%	41.3	40.4	39.0
Debt/equity ratio	%	52.5	76.2	67.6
2008-04-30 10:19 Profit margin	%	13.6	10.6	11.0

1) The principles used calculating key data are the same that were used in the groupʹs latest annual report, where you also can find definitions.

Parent company income statement

		January ‐ March	Year
All amounts in SEK M	2007	2006	2006
Net sales 1)	177	57	317
Other operating revenue	7	1	7
Personnel costs	‐52	‐6	‐35
Other costs 1)	‐135	‐58	‐297
Depreciation / write‐downs	‐6	‐6	‐17
Operating profit/loss	‐9	‐12	‐25
Net financial items 2)	‐8	0	120
Profit/loss before tax	‐17	‐12	95
Tax on profit/loss for the period 3)	4	2	3
PROFIT/LOSS FOR THE PERIOD	‐13	‐10	98

1) Increase in sales and costs relates to the vessels Transpaper, Transpulp and Transtimber which by the parent

company are bare‐boat chartered in, and time‐chartered out to Stora Enso.

2) The amount includes dividends from group companies with SEK 0 M (Jan ‐ Mar 2007: 0, Jan ‐ Dec 2007: 118).

3) The tax expense for the period includes actual tax amounting SEK 0 M (Jan ‐ Mar 2007: 0, Jan ‐ Dec 2007: 0).

Parent company balance sheet

	Mar 31.	Dec 31.
All amounts in SEK M	2008	2007
Other tangible fixed assets	19	19
Intangible fixed assets1)	56	59
Financial assets	694	672
Total fixed assets	769	750
Current assets 2)	244	244
TOTAL ASSETS	1 013	994
Shareholdersʹ equity	747	759
Provisions	43	43
Long‐term liabilities 3)	24	24
Current liabilities 3)	199	168
TOTAL SHAREHOLDERSʹ EQUITY,
PROVISIONS AND LIABILITIES	1 013	994
1) Amount includes goodwill of SEK ‐ M ( ‐ ).
43

3) The total of the parent companys long‐ and short‐term interest‐bearing liabilities amounts to SEK ‐ M ( ‐ ).

Pledged assets	51	51
Contingent liabilities	320	322