Comments from the Chairman

Not once during my 47 years as a shipowner have I experienced such a difficult market as in 2009. We have certainly had recessions, financial crises and surplus tonnage in the past – but not at the same time, and not to such a global extent. It is easy to understand that there is only one focal point for many companies: survival.

TransAtlantic was also seriously impacted by the problems in the market in 2009. Having the right experience and expertise in place to lead the company is key when difficult market conditions prevail. In December, when Anders Källström resigned as President, the Board of Directors felt secure in immediately appointing Stefan Eliasson, with ten years in various executive positions at TransAtlantic, as Deputy President. Stefan is also responsible for our Offshore/Icebreaking business area, which is facing an exciting future as exploration for oil and gas accelerates in the Arctic waters. Finding a permanent solution to the position of president is now my highest priority and that of the Board of Directors.

Compared with many traditional shipping companies, TransAtlantic is in a relatively advantageous position, and despite the weak market, is able to both decelerate and accelerate. We will continue to save and restructure to generate resources for investment in areas where we recognize major growth opportunities. In addition to Arctic offshore, this pertains to the Baltic Sea, where we continue to develop a competitive shipping transport system for the Nordic base industry.

We have not ordered any new tonnage in the Industrial Shipping business area, which is positive for us today. However, the weak cargo market means that revenue is low for everyone. Neither can we count on any rapid recovery considering the large range of vessels waiting to be deployed – vessels that are currently laid up or on the way from the shipyard. To increase profitability in the coming years within Industrial Shipping will require continuous discussions with customers and a strong offering. Our extensive cooperation with the forest industry, for example, is an excellent example of this.

We at TransAtlantic are among the exceptions in terms of being pleased by the current icy winter. In addition to all our icebreakers being ordered into service by the Swedish Maritime Administration, for the first time since the contract was signed in 1999, we are benefiting in the short and long-term from our extensive ice expertise and a fleet consisting of icegoing vessels. The difficult weather conditions have made more customers aware of the significance of securing their transports, in a sea with or without ice, both today and in the future.

We are currently working intensely to additionally strengthen our expertise in safety and environmental issues. In order to be involved and assist in oil and gas exploration in the Arctic waters, nothing in these areas must be left to chance. Zero tolerance is a must. During 2010 – 2011, several of the major oil companies will be signing contracts with suppliers for future exploration in highly sensitive areas in the Arctic. Living up to their tough demands pertaining to safety and the environment is a must in order to even be involved in discussions. Our extensive experience in ice operations and the fact that we have already built up a safe, efficient and environmentally friendly Arctic offshore system,
means that we have excellent prerequisites prior to negotiations. At the same time, the higher safety and environmental awareness exists throughout TransAtlantic’s entire organization, which will be advantageous in discussions with other customer segments.

I am the last to deny that many challenges lie ahead. I have experienced many tough shipping recessions and I am well aware that this one is particularly difficult and drawn out. It is gratifying that the same insight is shared by the rest of the Board of Directors, as well as all of TransAtlantic’s competent employees. If we are patient and focus on the areas in which we have the best prerequisites, we will be able to get through this recession stronger than ever.

Skärhamn, February 2010

Folke Patriksson
Chairman

Folke Patriksson

Chairman