of its highest levels of profitability, a near 400 percent (397 percent) improvement for the first quarter to June 30, when compared with the same period a year ago.

First quarter net income was $2,011,000, compared with $405,000 for the same period in 1996.

LOF is still exploring a range of alternatives to become more competitive in a changing market for quoted tanker companies.

Net operating income for the quarter rose from $2.5 million to $3.8 million, while net operating income for the Panamax fleet (three ships) alone tripled from $279,000 to $898,000.

Net operating revenues increased for the Panamax fleet although there were increased vessel operating costs and administrative charges as a result of the restructuring.

Net operating income for the Suezmax fleet (three ships) more than doubled to nearly $2.9 million, again with an increase in operating revenues, offset by increased administrative expenses.

The average daily time charter equivalent (TCE) earned in the quarter for Panamax was up from $14,000 to $16,000. For Suezmax the TCE rose from $25,500 to $29,500. Both improvements reflected an improvement in the voyage market.

As a result of reduced debt and increased cash balances, net interest expense declined from $2,061,000 to $1,741,000.

The ships in the company's fleet are British flagged and operate in crude oil and oil products trades with a principal concentration on serving US and European import and export requirements.

LOF CEO, Miles A. Kulukundis said the company was delighted with the profit improvement over last year's first quarter and said that net income was also 144 percent higher than that recorded for the prior quarter to March 31, 1997.

"This level of profitability is the highest we have achieved since March 1995,'' he said. "The tanker market showed strength overall in the face of increasing oil demand, a stable fleet and high capacity utilisation.

"This trend was especially evident in the Caribbean market where rates were particularly strong for US oil imports. As in the March 1997 quarter, the Caribbean was the strongest sector of the tanker market.

"The earnings on our Panamax vessels have sustained the improvement they enjoyed in the March 1997 quarter, but our Suezmax earnings have increased by 15 percent. This Suezmax increase has been the major contributor to this quarter's profit improvement.'' Looking to the future, he said that tanker market rates for the company's vessels have eased since the end of the quarter, since the interruption of exports from Iraq has temporarily reduced tanker demand in the Atlantic basin.

The ships, London Spirit and London Victory will both undertake their biennial overhauls during the September 1997 quarter. And he said that those factors will depress earnings in the quarter, but won't detract from the company belief that the underlying tanker market strength will continue.

Mr. Kulukundis added: "The tight supply/demand balance that we have been mentioning for some time is beginning to impact strongly on market rates.

"While the newbuilding tanker order book continues to grow, stimulated by this improvement in rates, quality modern tanker supply will be in short supply for 1997 and 1998 and this will further support our earnings in the quarters ahead. We look forward to this continued improvement in our fortunes.''