The marine industry is a vital link in international trade, with ocean-going vessels representing the most efficient, and often the only means of transporting large volumes of basic commodities and finished products. International trade in turn is dependent on trends in the world economy.

China, and to a lesser extent, India have been the main drivers behind the recent growth in the world economy and increases in seaborne trade, as high levels of economic growth in both countries have generated additional demand for imported raw materials and finished and semi-manufactured goods for export.

Drybulk trades from and to the Baltic region are increasing, with the main engines of growth being Russian economic development and expanding industrial enterprises in Estonia, Latvia, Lithuania and Poland. The economies of these countries are growing strongly and this is stimulating external trade and generating demand for shipping.

Coal is the major export commodity and Russian coal exports have risen from 47 million tonnes in 2001 to 97 million tonnes in 2007, equivalent to a CAGR of 12.8%. Russia is now the third largest exporter of coal in the world, and a major and growing destination for these exports is the European Union. EU imports of Russian coal increased from 18.6 million tonnes in 2001 to 54.0 million tonnes in 2007, equivalent to a CAGR of 19.4%.

Following the completion of the acquisitions and delivery of six new-build, ice-class Panamax vessels, the Company’s owned fleet will consist of 19 drybulk carriers, five of which are ice-class, five ocean-going ice-class barges and four ice-class tugs, and the Company will have, upon delivery of the final vessel in June 2010, a total dwt capacity of approximately 1,067,460 and an average age of 19.3 years per vessel.

The Company’s owned fleet of drybulk vessels consists of Panamax, Handymax and Handysize vessels. The principal difference between the three categories of vessel is the carrying capacity.

The Company’s drybulk vessels principally focus on the transportation of commodities in and out of the Baltic region, including coal, fertilizer, scrap metals, iron ore and grain.

The Company’s tugs and barges are principally used to serve ports that are too small to accept traditional drybulk vessels. The Company’s tugs are used to push the barges, with the typical route being intra-Baltic. Customers for these vessels include Danish and Russian power companies that often utilize special ports and discharging facilities.

To complement its owned fleet, the Company actively charter-in a significant number of vessels to increase its service capacity and to enhance its overall dwt capacity. As at March 31, 2008, the number of chartered-in vessels under the Company’s control was 45, eleven of which were ice-class. These chartered-in vessels added dwt capacity of 2,197,891, significantly increasing the Company’s total fleet of controlled vessels.

Total voyage expenses in the three months ended March 31, 2008 were $63.7 million compared with $17.9 million in the three months ended March 31, 2007.

Total vessel operating expenses in the three months ended March 31, 2008 were $9.1 million compared with $3.5 million in the three months ended March 31, 2007, an increase of $5.6 million or approximately 160%.

Interest and finance costs were $6.1 million in the three months ended March 31, 2008 compared to $5.8 million in the three months ended March 31, 2007, an increase of $0.3 million.

Interest income in the three months ended March 31, 2008 was $0.4 million compared to $2.0 million in the three months ended March 31, 2007, a decrease of $1.6 million or 80%.