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ULTRAPETROL TURNS THE CORNER With Encouraging 2nd Qrtr Results

In my instablog of 10th may I gave a shortterm target for the stock at usd 3,50. Yesterday the stock closed at Usd 3,30 after release of its 2nd quarter figures.

the company finally turned the corner with good results in all segments, but most importantly the river-business, where higher freight rates and bigger volumes finally produced a profit. This is extremely important as the river business makes up about 50 pct of the companies activities and has been loss-giving for years.

better even, the prospects for the remainder of the year are good to excellent, due to higher then usual crops of soya, which excess qty is larger then the carrying capacity available.

viewing the 2nd quarter results and the prospects for the remainder of the year, we can safely assume that the river-business will generate additional profit by the tune of usd 6.mill and the offshore segment we estimate will improve by abt usd 8.mill, due to higher charter rates for 4 ships that will kick-in and one additional PSV coming on charter to Petrobrás as fm august, aswell as one month less downtime in drydock for 1 PSV, compared to the 1st half of the year.

all-in-all, we estimate nett income of about usd 0,25 p/share for 2013 compared to a loss of usd 1,80 in 2012. actually this will be the first profitable year after 4 loss-giving years, sothat one can truly speak of a significant turn-around for the company.

The company also advised that a new bulk-transfer station has been commissioned and this could again prove to be a golden move. same as the fully automated shipyard producing a variety of barges with excellent results. such transfer station is in high demand in the river Plate and shud run at close to 95/100 pct occupancy and will no doubt generate high returns for the company and add a competitive edge to Ultrapetrol's business.

i have long argued that the breakup value of the company would be at usd 3 per share, but that once the company turned the corner of becomming profitable again, a minimum shareprice of usd 4,00 would be realistic. the market has recognized Ultrapetrols potential this week, by passing the usd 3,00 mark and closing at usd 3,30 yesterday.

with a bit more patience, the usd 4,00 - 4,50 mark will come in sight as we progress into the 4th quarter.

i am long Ultrapetrol ( ofcourse....what else..)

hans spliethoff

Disclosure: I am long ULTR.