Published: 2017-02-23 20:16:58 CET
Eimskipafélag Íslands hf.
Financial Statement Release

2016 was a record year for Eimskip

Normalized EBITDA growth 23.7%

  • Revenue EUR 513.9 million, up by EUR 14.3 million or 2.9% from 2015
    • Revenue up by EUR 16.3 million or 3.3% when excluding the EUR 2.0 million gain on disposal of a vessel included in 2015 revenue
  • EBITDA EUR 53.5 million, up by EUR 8.3 million or 18.3% from 2015
    • Normalized EBITDA up by EUR 10.3 million or 23.7%, excluding the EUR 2.0 million gain on disposal
  • Net earnings EUR 21.9 million, up by EUR 4.1 million or 23.0% from 2015
  • Equity ratio 62.2% and net debt EUR 41.6 million at year-end
  • The Board proposes a dividend payment of ISK 6.80 per share, a total of approximately EUR 11.0 million
  • EBITDA forecast for the year 2017 in the range of EUR 57 to 63 million


Gylfi Sigfússon, President and CEO

“I am pleased to say that 2016 was a record year for Eimskip. Overall revenue increased to EUR 513.9 million, up by 3.3% compared to normalized 2015 revenue. EBITDA increased to EUR 53.5 million, up by 23.7% compared to normalized EBITDA of EUR 43.2 million in 2015. Acquisition related costs of EUR 1.1 million were expensed in 2016. Net earnings for the year were EUR 21.9 million, up by 23.0%. The company’s cash flow remained strong and net cash from operating activities grew by EUR 11.3 million or 30.3% from prior year. The North Atlantic liner services revenue were EUR 380.3 million, up by 6.2%, and EBITDA for the segment was up by 18.5% and volume in the liner services 2016 grew by 5.9%. Revenues in forwarding services were EUR 133.6 million, down 5.6%, reflecting lower international freight rates. However EBITDA was EUR 11.0 million, up by 17.7% due to tight cost controls and because margins are not affected despite lower freight rates. Volume in forwarding services was up by 4.8%.

Revenue in the fourth quarter was EUR 140.5 million, up by EUR 9.9 million or 7.6%, and the quarter’s EBITDA was EUR 9.9 million, up by 1.6% compared to 2015. Liner services revenue was EUR 101.7 million, up by EUR 7.0 million or 7.4%, but the liner services EBITDA was 3.0% lower due to EUR 0.8 million of acquisition costs and lower earnings in Norway in the quarter. Norway had an overall record year in 2016 in revenues and EBITDA, but were lower in the fourth quarter compared to the previous year. We anticipate that Norway will continue to grow both in revenue and EBITDA in 2017. Transported volume in the liner services was flat due to volume decrease in Norway. Forwarding revenue was EUR 38.8 million, up EUR 2.8 million or 7.9% compared to prior year, mainly due to the acquisition of Extraco. EBITDA for forwarding was EUR 2.1 million, up by 23.2%, reflecting higher freight rates and volume growth of 9.3% in the quarter.

In May 2016, Eimskip and Royal Arctic Line in Greenland signed a letter of intent to form and evaluate a potential cooperation regarding building of three container vessels and sharing capacity. The two companies signed an agreement for the cooperation in January, subject to notification to and confirmation from the relevant competition authorities if applicable. At the same time, Eimskip signed a contract with a shipyard in China on building two 2,150 TEU ice class Polar Code container vessels. These vessels will be built in line with environmental standards, and are designed to be fuel efficient. The contract price of each vessel is approximately USD 32 million and the vessels are expected to be delivered in 2019. Royal Arctic Line also signed a contract to build one similar vessel with the same shipyard.

Eimskip acquired 90% of the forwarding company Extraco in Rotterdam in October 2016. In January, Eimskip announced the acquisition of an 80% share in Mareco, headquartered in Antwerp, Belgium. The companies specialize in reefer freight forwarding services. The total investment for the two companies was approximately EUR 29 million, with estimated annual revenue of EUR 80 million and EBITDA margins of about 6-8%. These two acquisitions are very strategic, both operate in our existing markets, each has a clear niche and will provide additional benefits to our existing forwarding services. Eimskip intends to continue to grow in the forwarding business and we welcome Extraco and Mareco into the Eimskip group. With access to the group and greater resources, we will create synergies and expand the services to our customers. Each forwarding company brings specialized expertise to our forwarding group and best practices can be shared. These asset-light companies add a great balance and diversification to our business. These accretive acquisitions will provide excellent growth in earnings and free cash. We are actively looking to acquire additional freight forwarding logistics companies.

Eimskip signed an agreement to acquire the Norwegian shipping and logistics company Nor Lines in November 2016, subject to the approval of the Norwegian Competition Authority (NCA). On 20 February, NCA gave a notice of an objection to Eimskip’s acquisition of Nor Lines. Eimskip has 15 business days to present its counter-arguments and following that the NCA has another 15 business days to make a final decision. Eimskip intends to submit its counter-arguments after evaluating the NCA objections.

In relation to Eimskip’s investment and acquisition projects, the company has made an agreement with Íslandsbanki for a revolving credit facility with an agreed term of 18 months in the amount of EUR 47 million. The company is evaluating several attractive long-term financing proposals for the vessels.

Changes will be made to the company’s sailing system by the end of February to further strengthen the system and its services. With the changes and an additional 700 TEU vessel, the company’s capacity to and from Europe and North-America will grow by 7-11%. A new route, the Red Line, will be added and the services of the Green Line and the Gray Line will be changed. Weekly coastal services will be offered to support the increasing activities in Iceland. In the beginning of May, the port of Helsingborg will replace Halmstad as the company’s port of call in Sweden. This change will better serve our customers.

Eimskip has sold its container vessel Brúarfoss, built in 1992, and has purchased a 700 TEU container vessel Sophia, built in 2008, which will be delivered in May.  We are continuing to upgrade and renew our fleet to better serve our customers and ensure our reliable services. We are going to continue to take advantage of the depressed shipping market and our strong financial condition to purchase attractively priced used vessels. Following the vessel changes, Eimskip will be operating a fleet of 21 vessels.

Eimskip’s intention is to grow organically and through strategic accretive acquisitions to increase shareholder value and the company continues to evaluate additional acquisitions and vessel investments on an ongoing basis. No new equity will be issued to conclude potential investments, but additional debt will be issued whilst still maintaining a strong balance sheet.

The Board of Directors proposes to increase its dividend from ISK 6.50 per share to ISK 6.80 per share, or up by 4.6% in ISK, amounting to ISK 1,269.1 million. In terms of EUR, the dividend increases from EUR 8.6 million to approximately EUR 11.0 million or up by 27.7%, reflecting the strengthening of the ISK.

The outlook for the year 2017 is positive and the company expects growth in imported volume to Iceland. The outlook for the Faroe Islands and Norway is also positive. The forwarding business is expected to grow in volume, revenue and margins in 2017, among other due to the new acquired companies and expected increasing international freight rates. Extraco and Mareco will create synergies for Eimskip into new commodities and trade lanes. Competition remains strong in the market area, especially in the company’s North Atlantic liner operation. The strike in the seafood industry in Iceland in January and February will negatively affect the first quarter’s results. We assume that the quota for the year will be fully caught and that the cargo will therefore switch from the first to the second quarter and that it will be transported during the remainder of the year. Increased imports to Iceland will partly compensate for less export of fish in the first quarter. The forecasted EBITDA for 2017 is in the range of EUR 57 to 63 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 - Consolidated Financial Statements 2016.pdf
Eimskip - Financial Results 2016.pdf