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Remarkably enough, this is being written at a time when the global economy is suffering one of its worst crises in many decades. Practically all industries, including shipping, have been affected.

The reason behind Transatlantic’s favorable results is the people who work in and with our operations. The shipping company has long been based on acquired values encompassing a longterm approach and broad expertise in how vessels can be developed and employed efficiently. The combined power of these factors cannot be underestimated.

The Offshore/Icebreaking business area posted a new record in earnings during the year. The four vessels were deployed and utilized to a high degree in the North Sea in a very strong market for short-term assignments. The operations were also characterized by extensive development activities, which were largely conducted in close cooperation with oil companies. An increasingly large share of extraction that currently takes place in the North Sea will move toward the as yet undeveloped areas north of the Arctic Circle. It is thought that between 25 and 30% of the world’s potential gas and oil reserves can be found in these Arctic waters. Oil extraction in Arctic waters will impose rigorous demands on advanced ice-management expertise. Ice conditions render extraction complicated and environmental requirements are very strict. For this reason, we founded the Transatlantic Ice Council during the year, which comprises about 12 of the world’s most prominent ice researchers. Together with the University of Kalmar, we also launched the Transatlantic Ice Academy, a training program for vessel operations in ice, with access to an ultramodern ice simulator. The ice simulator will enable both current and future employees to develop their skills, which they can later apply in the often extremely demanding conditions at sea.

The Industrial Shipping business area is undergoing an intense restructuring process to meet tomorrow’s demands for transports. A large part of the year was characterized by the understanding that the record-long shipping business cycle was approaching its end and that a future recession will involve heavier demands on customer orientation and efficiency.

Cooperation with the forest industry in the Baltic Sea was intensified by establishing a higher frequency of departures and increasing reliability. The company’s own booking organization was established in Gothenburg and new IT systems were put into operation. The work on taking over the responsibility for StoraEnso’s route between Kotka and Gothenburg/Lubeck was completed at year-end. Profitability was strengthened by the high availability of third-party loads.

Transatlantic Services improved its profitability compared with the preceding year, despite substantial imbalance between westbound and eastbound volumes. Both the EUR and USD strengthened toward the end of the year, which had a positive impact on utilization levels in westbound and eastbound traffic.However, full-year earnings were adversely impacted by the grounding of TransPine in St. Lawrence at the beginning of the year.

Container traffic, which conducts scheduled service operations between a number of ports in the Mälardalen/Stockholm region and the UK and Germany, reported a marked improvement in its profitability in 2008. This increase is largely due to changes in the number of ports of call, other efficiency enhancements and an increasing number of project loads.

The Bulk/LoLo traffic was characterized by the extraordinary economic climate, with favorable utilization levels at high rates for both eastbound and westbound traffic. In the autumn, revenue fell sharply as a result of the rapidly accelerating financial crisis and ensuing recession. Due to the relatively large number of long-term contracts, the negative effects on Transatlantic were limited.

Despite the gloomy expectations for 2009, Transatlantic holds a strong sense of confidence in the future. Increased welfare throughout the world is stimulating production and trade, and about 90% of global trade now takes place by sea. This is a figure that we believe will increase, for example, as congestion on roads and railway lines becomes more intolerable. In this context, the sea offers a generous transportation option, with small investment requirements on government budgets throughout the world. In addition, shipping is exceptionally safe, a low-energy consumer and environmentally friendly. These are aspects that we will continue to develop together with our customers and other partners. Respect for people and the environment is a natural consideration for us at Transatlantic.

The coming year will be dominated by the restructuring process Transatlantic began in 2008. It will provide us with a solid basis when the shipping business cycle is eventually improves. The knowledge that problems in the market also present opportunities is strongly evident in the work of the Board, management and the rest of the organization.

In 2008, we saw many strong examples that Transatlantic’s long-term approach, quality and level of service can advance relations with our customers, even in more difficult times. This trust, which is our most important asset, is something that we will continue to nurture and invest in during 2009.

In conclusion, I want to sincerely thank the Board of Directors and company management, all of our employees on land and at sea, and our customers and business partners. I would also like acknowledge the contribution of our shareholders to the development of the company, and thank them for the trust they have invested in us.

Skärhamn, March 2009

Anders Källström

President and CEO