Croatia Shipping Report Q1 2011

Throughput at one of Croatia's main ports, Ploce, is on course to continue its recovery in 2011, with
seven-month throughput volumes at the port showing that the facility's recovery started in 2010.
The latest year-to-date figures (January-July 2010) saw tonnage volumes at the port of Ploce for the first
seven months of 2010 increase by 40% on the same period in 2009. We project that this increase will also
be reflected in container volumes, with BMI projecting that the port will handle 34,508 20-foot
equivalent units (TEUs) in 2010, a y-o-y increase of 33%.

Throughput growth at Croatia's two main ports, Ploce and Rijeka, is on course to continue in the mid term
(2011-2014) as both ports strive to recover their pre-downturn throughput volumes in both total tonnage
and boxes. We believe that in terms of total throughput the ports of Ploce and Rijeka will recover their
pre-downturn levels in 2012 and 2014 respectively. We are more bullish on the box front, and project a
recovery to the ports' 2008 container throughput levels in 2011.

Headline Industry Data
􀂃 2011 port of Rijeka tonnage throughput forecast +13.96%, following projected growth of 9.36%
in 2010.
􀂃 2011 port of Rijeka container throughput forecast +37.21% following projected growth of
29.55% in 2010.
􀂃 2011 total trade growth forecast at 5.24%.
Key Industry Trends

Developing For The Box Trade - Major investment is set to flood into Croatia's port sector in the next few
years. The EBRD continues to issue funds for the country's maritime development and the concession to
develop and operate the Bradjica container terminal at Rijeka has reportedly been won by HHLA, with
the facility garnering interest from global port operating majors DP World, ICTSI and APM Terminals.
Considering the double-digit box growth the port of Rjieka and Ploce were posting pre-downturn it is
understandable why so much investment is flooding in. With BMI projecting pre-downturn box volumes
at the port to recover by 2011, more interest in Croatia's container sector is likely.
China Gets Interested - Chinese shipping company and port operator COSCO is reportedly interested in
operating a concession at the port of Rijeka. The Chinese firm took over the Greek port of Pireaus in 2009
and could be seeking to expand its European port exposure. The port of Rijeka is well located and has the
potential to develop into a maritime hub for trade bound for landlocked Central and Eastern European
states.

Risks To Outlook
Investment from major port operators offers upside potential to our forecasts. A positive outlook will be
supported by the country's recovering economy, with unemployment falling and household consumption
likely increase, factors that should push imports up. 2013 onwards with the country's accession into the
EU could see further growth as membership traditionally goes hand-in-hand with investment.