Published: 2014-11-20 18:47:58 CET
Eimskipafélag Íslands hf.
Financial Statement Release

Eimskip announces Q3 2014 financial results

Strong results in the third quarter 2014

  • Operating revenue EUR 119.6 million, up by EUR 6.1 million or 5.3% from Q3 2013
  • Operating profit, EBITDA, EUR 12.6 million, up by EUR 0.5 million or 4.2% from Q3 2013
  • Net earnings EUR 7.5 million, up by EUR 2.4 million or 48.0% from Q3 2013
  • Transported volume in North Atlantic liner services up by 7.3% from Q3 2013
  • Transported volume in reefer forwarding services up by 19.2% from Q3 2013
  • Equity ratio was 64.0% and net debt was EUR 32.3 million at the end of September
  • EBITDA forecast for the year 2014 is in the range of EUR 38 to 40 million

Gylfi Sigfússon, President and CEO

“The third quarter 2014 is the company’s best quarter from 2009 in terms of operating revenue, EBITDA and net earnings. Revenues amounted to EUR 119.6 million compared to EUR 113.5 million for the same period last year and grew by 5.3%. EBITDA for the third quarter amounted to EUR 12.6 million and grew by 4.2% from the same quarter 2013. The increased results are explained by increased transported volume of mainly vehicles, construction supplies and mackerel to and from Iceland. The Faroe Islands volumes are up, mainly due to increased transport of consumer goods, mackerel and salmon. Better results are also explained by increased activity in the company’s reefer forwarding services and by a more efficient sailing system following the changes made on the Red Line and by adding the Gray Line in the first quarter this year. Net earnings for the quarter amounted to EUR 7.5 million and grew by EUR 2.4 million or 48.0% from the third quarter last year, mainly due to currency exchange differences.

Revenues for the first nine months amounted to EUR 332.8 million and grew by 1.8% from last year. EBTIDA for the period amounted to EUR 29.7 million compared to EUR 29.2 million for the same period 2013. Transported volume in the company’s North Atlantic liner services for the first nine months grew by 8.4% from the same period last year with revenue increase of 2.6%. Transported volume in the company’s reefer forwarding services rose by 12.6% from the same period last year, mainly due to increased activity in inbound cargo. The revenues of forwarding services decreased by 0.4% but EBITDA from the forwarding services grew by 3.8%. Inbound means that Eimskip takes care of custom clearance and door-to-door delivery of the cargo.

Negotiations with the Chinese shipyard Rongcheng Shenfei which is building the 875 TEU Bakkafoss have been finalized. Further discount of the vessel’s purchase price amounts to USD 0.8 million, making the total contract price USD 18.0 million. The estimated delivery of the Bakkafoss is in the fourth quarter of 2015. The remaining obligation of the vessel’s contract price amounted to USD 4.9 million at the end of September.

In November, Eimskip announced the building of a 10,000 ton cold storage facility at its operating site in Hafnarfjördur in Iceland. Considerable recent and future increases in the fishing and processing of pelagic fish call for increased cold storage space and services. In addition, there is growing demand for warehouse services for frozen consumer goods. Fjarðarfrost, Eimskip’s current cold storage facility in Hafnarfjördur, has capacity of approximately 3,000 tons. Construction of this new facility is expected to start before the end of the year and the first phase of the new storage is expected to be in operation the second half of 2015. In addition, there is an option to enlarge the facilities in Hafnarfjörður in stages, up to a total of 27,000 tons, according to customer needs. Estimated total project cost of the new 10,000 ton facility is EUR 10 to 11 million. 

There is still uncertainty in the labor market in Iceland with general wage agreements expiring at the end of February 2015. Eimskip has finalized wage agreements with crew members of its container vessels and the ferry Herjólfur with validity until the end of 2015.

As of 1 January 2015, new rules will apply to sulphur emissions from vessels in Emission Control Areas (ECAs). The rules oblige shipping companies to use fuel with sulphur content no higher than 0.1%, dropping from currently having a limit of 1.0%. This new regulation originates from the United Nations’ resolution on more environmentally friendly marine shipping, implemented by the International Maritime Organization. It will apply to all of Eimskip’s sailing routes and will inevitably increase the company’s fuel costs. Based on current market rates, the fuel cost increase is estimated to be USD 8.5 million on a yearly basis. The international shipping industry is currently announcing a new surcharge to its customers in relation to these regulation changes. Eimskip has already announced its new surcharge called LSS, or Low Sulphur Surcharge. The surcharge is supposed to hedge the company’s additional fuel costs. It is Eimskip’s ambition to be a leading transportation company in the North Atlantic and the company’s duty and intention is to show responsibility in this field and to fulfill global environmental requirements.

Regarding the investigation of the Icelandic Competition Authority, Eimskip has no further information on the Icelandic Competition Authority’s investigation than has already been disclosed and the company rejects all allegations of any violation against competition law. The investigation, the leak of the investigation’s documents to the media and RÚV’s coverage have harmed Eimskip’s image and caused damage to the company’s shareholders.

Eimskip continues working on potential investments in order to grow and to strengthen its current position in markets outside Iceland, in line with the company’s vision of being a leading transportation company in the North Atlantic. Related to these growth opportunities, Eimskip has been preparing dual listing of its shares and is still in discussion with the Central Bank of Iceland. The investigation of the Icelandic Competition Authority, the leak of confidential information of the Icelandic Competition Authority’s investigation to the media and RÚV’s media coverage certainly affect our dual listing plans.

A decision has been made to narrow the range of the company’s EBITDA forecast for the year 2014 from EUR 37 to 41 million to EUR 38 to 40 million.”

  Further information

  • Gylfi Sigfússon, President and CEO, tel.: +354 525 7202
  • Hilmar Pétur Valgardsson, CFO,  tel.: +354 525 7202
  • Erna Eiríksdóttir, Senior Manager of Investor Relations, tel.: +354 825 7220, email:

Eimskip - Financial Statements Q3 2014.pdf
Eimskip - Third Quarter 2014 Financial Results.pdf