Tallink Grupp
Quarterly report

12 months unaudited results of the 2014 financial year

Tallinn, 2015-02-26 08:50 CET -- 12 months unaudited results of the 2014 financial year  

AS Tallink Grupp and its subsidiaries (the Group) carried a total of nearly 8.9 million passengers in the 2014 financial year which is 2.6% less than the the year before. The Group’s unaudited consolidated revenue was EUR 921.5 million which is 2.2% lower compared to the previous year. The unaudited gross profit was EUR 181.8 million, EBITDA EUR 150.6 million. Unaudited net profit amounted to EUR 27.3 million or EUR 0.04 per share, which is a 37.1% decrease compared to the previous year.

The 2014 revenue was affected by several actions and changes in the operations and market developments. Most noticeably the revenue from charters increased by 53.1% or EUR 16.3 million. This is a result of more vessels being in charter and is expected to continue showing a positive effect to the profitability in the forthcoming quarters. The ticket and cargo sales decreased by 7.5% and 2.4% respectively. Estonia-Finland route showed a slight decline with passenger’s numbers decreasing by 1.3%, however cargo units transported increased by 13.8% and the segment revenue increased by 1.4%. On the Finland-Sweden route the passenger’s volume decreased by 3.4%, cargo units transported decreased by 8.8% and the sales decreased by 5.6%. due to Silja Symphony and Silja Serenade being altogether 80 days in upgrade works and did not operate. The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 12.5%, cargo units transported decreased by 26.5%, passenger vehicles transported decreased by 15.0% and the sales decreased by 16.5%. The decline in passenger and cargo volumes on the Latvia-Sweden route is due to Isabelle operating as the only vessel on the route since the beginning of August 2014. Throughout the year there was increased pressure from competitors in the form of aggressive pricing and added capacity.

In the fourth quarter (1 October - 31 December) of the 2014 financial year the Group carried over 2.05 million passengers which is 4.5% less compared to the same period last year. The number of cargo units transported decreased by 1.2% and the number of passenger vehicles transported decreased by 1.7%. The Group’s consolidated revenue in the fourth quarter was EUR 224.1 million, being on the same level as in the last year. In the fourth quarter of the 2014 financial year the Group’s gross profit amounted to EUR 49.5 million and EBITDA to EUR 41.1 million being respectively 33.4% or EUR 12.4 million and 37.7% or EUR 11.2 million more compared to the same period last year. The unaudited net profit for the fourth quarter of the 2014 financial year was EUR 8.4 million or EUR 0.01 per share compared to the net profit of EUR 7.5 million or EUR 0.01 per share in the same period last year.

In the fourth quarter the Estonia-Finland route showed a 1.8% decline in passenger’s numbers, however cargo units transported increased by 8.2% and the segment revenue increased by 0.8%. The Finland-Sweden route showed a decline with passenger’s numbers decreasing by 3.1%, cargo units transported decreased by 8.9%, the segment revenue decreased by 3.8%. The results were affected by Silja Symphony being out of operations due to upgrade works for two weeks in October. Despite the slight decline in passenger numbers we maintained our market share on the Finland-Sweden route. The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 32.2%, cargo units transported decreased by 58.8%, passenger vehicles transported decreased by 36.9% and the segment revenue decreased by 35.1%. The results were affected by Romantika changing to Tallinn-Stockholm route, leaving Isabelle as the only operating vessel on the route. The 119.5% higher revenues from charters altogether EUR 16.2 million and lower cost had a positive effect to the fourth quarter result.

The Group was successful in lowering fuel cost in the fourth quarter by approximately EUR 9 million compared to the same period last year. This was a combined effect of reducing consumption through optimising current operations, by way of re-routings and charters and the drop in fuel global prices in the end of the 2014 financial year. The Group had a smooth transition switching to the low sulphur fuel in the end of the fourth quarter.

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 has been visible throughout the year.

The Group successfully continued the deleveraging strategy and the net debt decreased by EUR 44 million to a total of EUR 678 million in the 2014 financial year.

The total liquidity, cash and unused credit facilities at the end of the fourth quarter were EUR 67.9 million providing a strong position for sustainable operations. At the end of the fourth quarter 2014 the Group had EUR 65.3 million in cash and equivalents and the total of unused credit lines were at EUR 2.6 million.

The 2014 financial year result did not meet the management’s expectations, however the fourth quarter result was strong and provides a good base for the forthcoming year. Due to increased competition, continuously weak Nordic economic environment and one-off effects the annual results for the 2014 financial year were weaker than expected. During the financial year several steps have been taken including charters, upgrades and re-routings with the goal to optimise operations. A positive effect to the profitability can be seen from the fourth quarter result. The management expects an improvement in the results for the 2015 financial year.

In management’s opinion, the Group’s financial position allows the Group to pay dividends. Management will propose to the shareholders’ general meeting a dividend distribution of EUR 0.02 per share, i.e. EUR 13,397,641 in aggregate.

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