Sharelink maintains Louis price target at EUR 0.71

Following a fine imposed by the Greek Government on 18 June 2007 on the Captain and the company owning the ‘Sea Diamond’which sank near the island of Santorini on 6 April 2007, Louis Pcl (LUI) announced that any fines as well as any other claims relating to this accident are fully insured.

The ‘Sea Diamond’ was fully insured (including possible sea pollution) and according to LUI Management its accident is not expected to have a significant direct negative impact on LUI’s profitability. Sharelink Securities & Financial Services analysts’ estimate however, that the aforementioned accident may have an indirect negative impact on LUI’s profitability through negative publicity, possible cancellations in the future, etc., which currently cannot be fully assessed. LUI has already proceeded with the acquisition of the ‘Opera’ cruise ship for $49m in May 2007 to permanently replace the ‘Sea Diamond’. This ship will be deployed in Piraeus in July for cruises in the Eastern Mediterranean (mainly the Greek islands).

In another development, LUI announced that it has jointly decided with Tasmanico Trading Limited (which charters the ‘Arielle’ (ex-‘Aquamarine’) for a period of five years since April 2006) the termination of the chartering agreement on 20 November 2007. According to LUI Management, this decision relates to LUI’s strategy to upgrade the own-product offered by LUI, i.e. cruises from ports such Limassol (Cyprus), Piraeus (Greece), Genoa (Italy) and Marseilles (France). According to LUI Management, the aforementioned decision is not expected to have a material impact on the financial results of the Group in the next years, as the expected profitability contribution of the ‘Arielle’w ill remain at the same levels with the aforementioned terminated chartering agreement.

“Our estimate on profit after tax attributable to LUI’s shareholders for 2007 is maintained at EUR37.0m, including a one off accounting profit of EUR15.6m on disposal of 57% of the ‘Cyprus Tourism Development Public Company Ltd’ (CTD),” notes Sharelink.

“We also maintain our price target on the stock at EUR0.71/share, based on the Sum of the Parts Valuation Methodology. Any possible changes in our profit projections and valuation on LUI (relating to the impact of the accident of the ‘Sea Diamond’) should not be ruled out in the near future, depending on the flow of new information,” conclude Sharelink analysts.