The market for offshore supply vessels, or OSVs, both on a worldwide basis and within Brazil, is driven by a variety of factors. On the demand side, the driver is the growth in offshore oil development/production activity, which in the long term is driven by the price of oil and the cost of developing the particular offshore reserves. Demand for OSVs is further driven by the location of the reserves, with fields located further offshore and in deeper waters requiring more vessels per field and larger, more technologically sophisticated vessels.

The demand for tankers is a function of the volume of crude oil and petroleum products to be transported by sea and the distance between areas of oil consumption and oil production. The volume of crude oil and petroleum products transported is affected by overall demand for these products, which in turn is influenced by, among other things, general economic conditions, oil prices, weather, competition from alternative energy sources, and environmental concerns. World oil demand increased from about 70.0 million barrels per day, or MBD, in 1995 to 83.6 MBD in 2005, a compounded annual growth rate, or CAGR, of approximately 1.8%. Oil demand increased in all regions of the world except for Europe and the former Soviet Union. In 2005 oil demand grew by approximately 1.1 MBD.

Passenger vessel demand is a function of overall demand for the global cruise industry. Principal sources of cruise passengers are North America, Europe, Asia and the South Pacific (including Australia and New Zealand), and South America. The estimated number of cruise passengers in North America has grown from 5.0 million in 1997 to 9.1 million in 2004, a CAGR of 8.8%. This increase includes growth of 1.1 million in 2004, an annual increase of 11.1%. The estimated number of cruise passengers in major European markets is also growing. The number of cruise passengers from Europe grew from 2.66 million in 2003 to 2.8 million in 2004, representing annual growth of 5.3%.

The Company’s River Business has approximately 490 barges with approximately 798,000 dwt capacity and 23 pushboats. The Company owns 446 dry barges that transport agricultural and forestry products, iron ore and other cargos, and 44 tanker barges that carry petroleum products, vegetable oils and other liquids. In addition, the Company uses one 35,000 dwt barge designed for ocean trading, the Alianza G2, as a transfer station to provide storage and transshipment services of cargo from river barges to ocean export vessels.

The Company’s Offshore Supply Business is focused on serving companies that are involved in the complex and logistically demanding activities of deepwater oil exploration and production. The Company has ordered the construction of six proprietarily designed and technologically advanced PSVs. The Company’s PSVs are designed to transport supplies, equipment, drill casings and pipes on deck, along with fuel, water, drilling fluids and bulk cement in under-deck tanks, and a variety of other supplies to drilling rigs and platforms. The Company employs two of these vessels in the spot market in the North Sea and employs the other two on time charter in Brazil with Petrobras.

In its Ocean Business, the Company owns and operates six oceangoing vessels, including one semi-integrated oceangoing tanker barge unit, under the trade name, Ultrapetrol. The Company’s three Suezmax OBO vessels transport liquid cargo, such as petroleum and petroleum products, as well as dry cargo, such as iron ore and coal, on major routes around the globe. The Company’s Aframax tanker carries both crude oil and a variety of refined petroleum products internationally. The Company’s semi-integrated tug barge Alianza G-3/Alianza Campana operates under long-term charter as a support vessel in North Brazil. The Company’s chemical/product carrier, Miranda I, transports chemicals and petroleum products in the regional trade of Argentina and Brazil. The Company’s current ocean fleet has an aggregate cargo carrying capacity in excess of 600,000 dwt and an average age of approximately 17 years.

In its Passenger Business, the Company owns and operates two vessels that it purchased in 2005, the New Flamenco, with a 1,010 person capacity and 401 cabins, and the Grand Victoria, with a 575 person capacity and 242 cabins. The Company currently employs these vessels under seasonal charters with European tour operators cruising the Mediterranean, Black Sea and Norwegian Fjords.

In the six months ended June 30, 2006, total voyage expenses were $21.2 million, as compared to $14.1 million for the same period in 2005, an increase of 50%.

For the six months ended June 30, 2006, total running costs were $23 million, as compared to $18.2 million for the same period in 2005, an increase of 26%

Amortization of drydocking and special survey costs increased by $0.7 million, or 19%, to $4.2 million for the six months ended June 30, 2006, as compared to $3.5 million for the same period in 2005.

Operating profit for the six months ended June 30, 2006 was $14.4 million, a decrease of $29.1 million as compared to the same period in 2005.