Gross Profit Operating Expenses

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3. Gross Profit

in thousands of Rupiah Information 31 December For the period of 6 six months ended on 30 June 2007 2008 2009 2010 Gross Profit 103,789,999 133,026,393 130,733,644 82,486,626 The period of 6 six months ended on 30 June 2010 Gross profit for the period of 6 six months ended on 30 June 2010 amounted to Rp.82,486,626 thousand, or approximately 63.09 of the gross profit for the year ended on 31 December 2009 due to the increase in revenues from platform supply vessels, which began operations in May 2010. Comparison between the year ended on 31 December 2009 and the year ended on 31 December 2008 Gross profit decreased by Rp.2,292,749 thousand or approximately 1.72 from Rp.133,026,393 thousand in 2008 to Rp.130,733,644 thousand in 2009. This was because the lower margin of gross profit from the chartering division and the increase in the Company’s maintenance expenses amounting to Rp.5,742,589 thousand or 37.36 compared to 2008. The increase in the maintenance expenses in 2009 was due to docking, with 20 vessels scheduled for docking in 2009 compared to 11 vessels in 2008. Another factor causing the decrease in gross profit in 2009 was the completion of a one off contract under our other shipping services fee income, which in 2008 contributed a significant amount of profit, because there was very little corresponding increase in costs associated with this contract. Comparison between the year ended on 31 December 2008 and the year ended on 31 December 2007 Gross profit increased by Rp.29,236,394 thousand or approximately 28.17 from Rp.103,789,999 thousand in 2007 to Rp.133,026,393 thousand in 2008. This was due to the higher gross profit margin generated by new vessels with larger added value.

4. Operating Expenses

in thousands Rupiah Information 31 December For the period of 6 six months ended on 30 June 2007 2008 2009 2010 Marketing 181,760 188,478 806,372 28,624 General and Administration Salary 10,756,309 14,236,936 17,575,666 11,666,075 Provision for Doubtful Accounts - - 6,699,924 1,914,481 Office Utilities 2,061,267 2,163,376 3,795,875 1,908,091 Professional fee 576,392 2,097,813 1,681,642 1,076,728 Post employee benefitss 1,427,888 1,322,170 1,561,247 817,046 Depreciation 1,227,801 1,227,965 1,243,654 660,291 Administration 1,053,820 869,406 1,073,317 1,039,279 Telecommunications 952,335 942,586 1,007,080 499,028 Business travelling 681,704 891,171 948,959 699,331 Training and recreation 821,443 786,369 853,314 583,192 Donation 75,814 92,840 88,309 24,240 Pension funds 49,775 55,650 87,925 43,450 SubTotal 19,684,547 24,686,281 36,616,912 20,931,234 Total 19,866,307 24,874,759 37,423,284 20,959,858 The period of 6 six months ended on 30 June 2010 Operating expenses of the Company consisted of marketing and general and administrative expenses. Operating expenses of the Company for the period of 6 six months ended on 30 June 2010 amounted to Rp.20,959,858 thousand, or approximately 56.01 of the operating expenses for the year ended on 31 December 2009. The most significant part of operating expenses in 2010 is Salary expenses, which amounted to approximately 66.38 of the Salary expenses for the year ended on 31 December 2009, primarily caused by the recruitment of several senior management and department heads to improve the capacity of the manage- ment team to prepare for vessels with higher value. The Company also recruited experts experienced in handling types of vessels with higher added value. 20 20 Comparison between the year ended on 31 December 2009 and the year ended on 31 December 2008 Operating expenses of the Company increased by Rp.12,548,525 thousand or approximately 50.45 from Rp.24,874,759 thousand in 2008 to Rp.37,423,284 thousand in 2009. This increase originated primarily by the recording of doubtful accounts amounting to Rp.6,699,924 thousand in 2009 and the increase in Salary expenses amounting to Rp.3,338,730 thousand or approximately 23.45 compared to 2008, The increase of salary was caused by the recruitment of senior management and experts. The increase in operating expenses in 2009 remained increasing in accordance with the management strategy to anticipate vessels with higher added value by recruiting human resources experienced in handling such vessels. In addition, to handle its future needs as a public company, the Company had established a corporate division and conducted a migration of the new accounting system. Marketing expenses also increased due to a larger number of contracts which affects the total increase in value for larger tender on bid bonds . This was caused by the increase in the number of types of vessels with higher added value. Comparison between the year ended on 31 December 2008 and the year ended on 31 December 2007 Operating expenses of the Company increased by Rp.5,008,452 thousand or approximately 25.21 from Rp.19,866,307 thousand in 2007 to Rp.24,874,759 thousand in 2008. This increase was primarily due to the increase in Salary expenses amounting to Rp.3,480,627 thousand or approximately 32.26 and professional services amounting to Rp.1,521,421 thousand or approximately 263.96 compared to 2007. Based on management’s vision to prepare the Company for the market opportunities arising from the application of the cabotage principle, the Company had started to invest in 3 sectors, namely human resources, infrastructures including IT, and vessels. In addition, to avail itself of more choices of sources of funding that would support this vision, the Company conducted a restructuring in preparation for going public. The direct impact of this strategy was an increase in Salary and professional expenses mentioned above. Development of Operating Expenses of the Company 2007 – 30 June 2010

5. Income from Operations