income of $144,000 for the second quarter to September 30, a more than 76 percent drop from the $604,000 second quarter earnings a year ago.

The results come after the company improved operating income from $1,809,000 to $2,121,000 over the comparative periods.

The company took delivery of two new buildings by December 1995, leading to increased debt, reduced cash balances and interest no longer being capitalised in the cost of the vessels.

Net income for the first six months was $549,000, compared with $2,200,000 for the first six months last year. Net operating income was up from $3.72 million to almost $4.6 million.

The company conceded disappointment at not posting an improved profit for the second quarter, because of the demonstrated market strength, but faced "several unexpected problems in the period which adversely affected our result.'' The company said demand for Panamax vessels in the Caribbean was weak because of reduced oil movements in Panamax sizes, increased tonnage availability and continued draw down of oil stocks.

The market weakness, together with offhire for scheduled drydockings, depressed the potential contribution of the Panamax.

LOF sees continued strength in tanker earnings Net operating income was cut to $324,000, a drop by nearly $700,000.

The Suezmax vessels were better, apart from a default by a charterer on its obligations under a voyage contract, the claim for damages of which is the subject of arbitration.

Net operating income for the Suezmax fleet increased more than a million dollars, because of an additional ship, and the fact that the average daily time charter equivalent (TCE) earned in the quarter was higher than in the prior period.

Improved rate levels has led to an increase in the world tanker fleet by one percent as owners shelve plans to scrap their old tankers, keeping them in service.

Ordering for new tankers is down, but there is evidence that that can change soon, especially because of the continued depressed prices for newbuildings.

Increasing demand for oil and ocean transportation, the company believes, combined with a stable fleet and an increasing preference for modern ships, are pushing tanker earnings upward.