Tallink Grupp
Quarterly report

Q3 results of the 2014 financial year

Tallinn, 2014-11-13 08:50 CET -- Q3 results of the 2014 financial year

In the third quarter (1 July - 30 September) of the 2014 financial year AS Tallink Grupp and its subsidiaries’ (the Group) carried nearly 2.6 million passengers which is 5.8% less compared to the same period last year. The number of cargo units transported increased by 1.0% and the number of passenger vehicles transported decreased by 3.7% for the same period as last year.

The Group’s consolidated revenue in the third quarter was EUR 262.7 million, being 5.7% or EUR 15.7 million less than a year ago. In the third quarter of the 2014 financial year the Group’s gross profit amounted to EUR 69.6 million and EBITDA to EUR 64.0 million being respectively EUR 10.2 million and EUR 8.6 million less compared to the same period last year.

The unstable macro-economic situation in Europe has had a negative impact to the Group’s operations. The decline in the passenger volume from the Russian market continuous to be visible, decreasing by 25% in the third quarter, compared to the same period last year.

The Group has been working for a smoother transition facing the sulphur regulations and one of the goals has been to reduce fuel consumption by optimising our current operations, therefore several re-routings were made: the cruise ferry Silja Europa was chartered out, the cruise ferry Baltic Queen changed to the Tallinn-Helsinki route and the cruise ferry Romantika changed to Tallinn-Stockholm route, leaving the Riga-Stockholm route with the cruise ferry Isabelle as the only vessel. Majority of the decline of the third quarter results was a direct one-off effect related to the re-routing of the vessels, chartering out Silja Europa and the Silja Symphony docking. These changes in the operations are a good reference of the flexibility of our business and ensure that we are better prepared for the upcoming year.

In the third quarter the Estonia-Finland route showed a slight decline with passenger’s numbers decreasing by 3.3%, cargo units transported increased by 11.5% and the sales numbers remained on the last year’s level. The results were affected by a competitor bringing more capacity to the Tallinn-Helsinki route. The Finland-Sweden route showed a decline with passenger’s numbers decreasing by 5.5%, cargo units transported decreased by 11.0%, the sales numbers decreased by 7.4%. The results were affected by Silja Symphony being out of operations in September. The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 23.3%, cargo units transported decreased by 42.5%, the sales numbers decreased by 24.5%. The results were affected by Romantika changing to Tallinn-Stockholm route, leaving Isabelle as the only operating vessel on the route.

In the third quarter the charter revenue increased by 58.9% or EUR 5.2 million, this is a result of more vessels being in charter and is expected to have a positive effect to the profitability in the forthcoming quarters. The total number of vessels currently chartered out is six, while last year at the same time four vessels were chartered out.

While pricing the cargo services for next year the upcoming rise in the fuel price related to the switch to the low sulphur fuel has been taken into account. Pricing of the passenger service will depend on market demand, competition and seasonality.

The unaudited net profit for the third quarter of the 2014 financial year was EUR 36.2 million or EUR 0.05 per share compared to the net profit of EUR 44.0 million or EUR 0.07 per share in the same period last year.

The total liquidity, cash and unused credit facilities at the end of the third quarter were EUR 66.7 million providing a strong position for sustainable operations. At the end of the third quarter 2014 the Group had EUR 66.1 million in cash and equivalents and the total of unused credit lines were at EUR 0.5 million.

EBITDA:  Earnings before net financial items, taxes, depreciation and amortization;
Earnings per share: net profit / weighted average number of shares outstanding;
Equity ratio: total equity / total assets;
Shareholder’s equity per share: shareholder’s equity / number of shares outstanding;
Gross margin: gross profit / net sales;
EBITDA margin: EBITDA / net sales;
Net profit margin: net profit / net sales;
Net debt: Interest bearing liabilities less cash and cash equivalents;
Net debt to EBITDA: Net debt / 12-months trailing EBITDA.
¹ Share numbers exclude own shares.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited, in thousands of euros)

CONSOLIDATED CASH FLOW STATEMENT

         Harri Hanschmidt
         Head of the Finance Department
         
         AS Tallink Grupp
         Sadama 5/7. 10111 Tallinn
         Tel +372 640 8981
         E-mail harri.hanschmidt@tallink.ee