$604,000 in the second quarter to September 30, and a half year profit of $2,222,000.

The figures compare with last year's second quarter of $2,070,000 in net income and half year profits of $3,751,000.

The company cited factors for increasing second quarter net income that included higher rates obtained for the use of their vessels, London Enterprise and London Pride .

One additional factor was higher prevailing interest rates on cash balances.

Factors decreasing net income for the same period included lower rates for London Spirit and London Victory , and a below break-even rate for the new London Glory , since it was delivered in May.

The company also cited increased costs, as a result of the added OPA `90 CoFR requirements for ships sailing in US waters, lower cash balances and higher outstanding debt balances.

They also said that there had been a lower capitalisation of interest in progress payments on the new ships prior to their delivery. The company's growth has also led to additional expenses.

Additional factors decreasing net income included 16 days off hire for dry docking that didn't occur in the previous year, and higher operating costs through the buying of initial stores for the new ship London Glory .

The company said that the increasing trend in interest cost will continue until next month when the London Splendour delivers, after which all necessary loans will have been drawn down and no further interest will be capitalised.

But CEO, Mr. Miles Kulukundis, stated: "Should charter rates not improve from this quarter's level, the increasing interest cost and the delivery of the London Splendour will place further pressure on net income through the balance of the fiscal year.'' The oil tanker market has shown strength in the last quarter and has been volatile because of tight supply.

The company is hoping to capitalise on an anticipated one percent increase in tanker demand, after the world tanker fleet has spent 1995 decreasing by about one percent.

Mr. Kulukundis said that it should only tighten the supply/demand balance, setting the stage for market improvement.