Eimskipafélag Íslands hf.
Financial Statement Release
EIMSKIP: EBITDA growth 21.6% in second quarter 2016
Net earnings up by 58.7%
Revenue EUR 126.1 million, down by EUR 0.5 million or 0.4% from Q2 2015
Transported volume in the liner system up by 9.1% and liner revenue up by EUR 4.9 million
Volume in forwarding services down by 1.2% and revenue down by EUR 5.4 million, affected by lower international rates
EBITDA EUR 16.2 million compared to EUR 13.3 million, up by 21.6% from Q2 2015
Net earnings EUR 8.8 million compared to EUR 5.5 million, up by 58.7% from Q2 2015
Equity ratio 62.0% and net debt EUR 31.4 million at the end of June
EBITDA forecast for the year 2016 unchanged, in the range of EUR 49 to 53 million
GYLFI SIGFÚSSON, PRESIDENT AND CEO
“Eimskip’s EBITDA for the second quarter 2016 was EUR 16.2 million and was up 21.6% compared to the same period last year. Revenue for the quarter amounted to EUR 126.1 million, down by 0.4%. Transported volume in the North Atlantic liner services grew by 9.1% from the second quarter last year. The liner segment revenue were up by EUR 4.9 million. There was good growth in transport related to Iceland and Norway, but volume reduction in the Faroe Islands. The forwarding revenue were down by EUR 5.4 million, affected by lower international freight rates. There was a 1.2% reduction in the company’s forwarding services volumes compared to the same period last year. The reduction is mainly due to decreased reefer forwarding from China, but other markets have been growing.
Due to changes of the company’s sailing system, streamlining of operations, increased cost control measures and lower cargo rates in international forwarding, operating expenses including salaries were down by 3.0% in the quarter which is a good performance despite materially increased cost related to Icelandic wage agreements.
Positive turnaround of currency exchange difference in the quarter was EUR 2.1 million and net earnings amounted to EUR 8.8 million, up by 58.7% from the second quarter 2015. Cash flow from operating activities amounted to EUR 15.7 million compared to EUR 11.8 million in the same period last year and the cash position at the end of June was EUR 47.5 million. This is the company’s best second quarter in terms of EBITDA, EBIT, net earnings and net cash from operating activities since 2009.
The company’s revenue for the first six months amounted to EUR 239.4 million, similar to last year. EBITDA for the period was EUR 25.8 million and grew by EUR 6.7 million or 35.2% from the same period last year. Net earnings grew by 50.6% and amounted to EUR 10.6 million. Transported volume in the North Atlantic liner services grew by 8.6% compared to the first six months last year and the forwarding volumes grew by 2.2%.
In May, Eimskip and Royal Arctic Line, the national carrier of Greenland, signed a letter of intent to connect Greenland with Eimskip’s international sailing system. Since then, the companies have been evaluating and formalizing the potential cooperation regarding container vessel investments and connecting sailing systems. The project is progressing as planned and we expect a final decision shortly.
Since presented in May, Eimskip has made significant progress on acquisitions and aims to close several transactions in Europe in our existing core business in the third and the fourth quarter. The company has engaged international legal and audit firms to conclude due diligence.
As I have said before, it remains our intent to grow both organically and through strategic accretive acquisitions to increase shareholder value. We are continuing to evaluate additional acquisition and vessel investments on an ongoing basis. We will not be issuing new equity to conclude potential investments. However we will be using our excess cash and issuing additional debt, increasing the leverage of the company to more normal levels, still maintaining a strong balance sheet.
The outlook for the third quarter is in line with our expectations. The EBITDA forecast for the year 2016 is unchanged from what was presented in May, or EBITDA in the range of EUR 49 to 53 million."
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: email@example.com