Published: 2017-11-09 08:50:00 CET
Tallink Grupp
Quarterly report

AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2017

Tallinn, 2017-11-09 08:50 CET -- AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2017

In the third quarter (1 July – 30 September) of 2017, Tallink Grupp AS and its subsidiaries (the Group) carried 2.9 million passengers, 2% more than in the third quarter of 2016. The Group’s unaudited third-quarter revenue grew by 3.3% to EUR 282.7 million (EUR 273.6 million, Q3 2016). Unaudited EBITDA for the third quarter improved by 12.3% to EUR 75.4 million (EUR 67.1 million, Q3 2016) and unaudited net profit increased by 11.7% to EUR 47.8 million (EUR 42.8 million, Q3 2016).

In the third quarter, the Group’s revenue and operating result were impacted by following operational factors:

-          after the rerouting of ships in December 2016, carriage capacity increased on a number of operated routes;
-          in the third quarter of 2017, during June and August, one cruise ferry operated the Tallinn – Helsinki route in contrast to two cruise ferries in last year;
-          increased competition on Tallinn – Helsinki route.

Sales and segments

In the third-quarter, the revenues from all core operational segments increased compared to third quarter last year. The shops and restaurant revenue increased by EUR 3 million and ticket revenue by EUR 1.2 million, the growth was supported by the 2% increase of passenger number. The third-quarter cargo revenue increased by EUR 3.5 million compared to same period last year, the growth was supported by the increase of number of transported cargo units in all geographical segments.

The third-quarter revenue of the Estonia – Finland routes decreased by 6% compared to same period last year. The decrease was driven by decline in passenger numbers that was attributable to smaller total carriage capacity on the routes and increased competition from added capacity by competitors during the summer high season. Despite lower revenue, the Estonia – Finland routes segment result improved as more optimal operating costs resulting from three vessels on the Tallinn – Helsinki route. On the Tallinn – Helsinki route the new Shuttle ferry Megastar started operating in January 2017, next to Shuttle ferry Star. On the Tallinn – Helsinki route cruise service only one cruise ferry is operating in 2017, compared to two cruise ferries in the period of March to August in 2016.

The third-quarter revenue of the Finland-Sweden routes increased by 4% compared to same period last year. Growth was supported by a 1.8% higher passenger number and by a 13.7% increase of number of transported cargo units. The segment’s third quarter result increased by EUR 1.9 million, compared to same period last year, amounting to EUR 17.9 million.

The Estonia-Sweden routes third-quarter revenue grew by 8.6% compared to same period last year. Growth was supported by an 8.1% higher passenger number. The number of transported cargo units increased by 2.9%. The segment’s result increased by 4.9% to EUR 7.8 million compared to same period last year.

The Latvia-Sweden route third-quarter revenue increased by 66.4% compared to same period last year and the number of transported cargo units increased by 120%. The segment’s third-quarter result increased by 4.2% to EUR 4.4 million. Since December 2016, two ships have been operating on the route compared to one ship in the third quarter last year. 

Earnings

In the third quarter of 2017, the Group’s gross profit grew by EUR 5.2 million compared to the same period last year, amounting to EUR 81.9 million. Third-quarter EBITDA increased by EUR 8.3 million to EUR 75.4 million. Third quarter growth was driven by a higher number of passengers and transported cargo units, attributable to the higher capacity, and more optimal operating costs resulting from three vessels on the Tallinn – Helsinki route. On the other hand, the result was also impacted by a year-on-year rise in fuel costs.

Net finance costs decreased by EUR 0.3 million compared to the third quarter last year mainly from lower interest expenses. The total exchange rate differences and the revaluation of cross currency and interest rate derivatives were on the same level.

The Group’s unaudited net profit for the third quarter of 2017 was EUR 47.8 million or EUR 0.071 per share compared to a net profit of EUR 42.8 million or EUR 0.064 per share in the same period last year.

Results of the first 9 months of 2017

In the first 9 months (1 January – 30 September) of 2017, the Group carried 7.4 million passengers which is 2.9% more compared to the same period last year. The Group’s unaudited revenue for the period increased by 3.2% to EUR 734.1 million. Unaudited EBITDA increased almost by EUR 10 million and amounted to EUR 129.5 million (EUR 119.6 million, 9M 2016), unaudited net profit for the period was EUR 45.4 million (EUR 40.6 million, 9M 2016 net profit).

The financial result for the first 9 months 2017 was influenced by the scheduled maintenance of five cruise ferries in the first quarter of 2017 and a rise in carriage capacity on several routes after the rerouting of vessels in December 2016. In the first nine months the competition in the maritime traffic between Estonia and Finland has increased, which has put pressure on ticket prices.

Financial position

In the third quarter, the Group’s net debt decreased by EUR 18.6 million to EUR 635.2 million. The net debt to EBITDA ratio was 4.0 at the reporting date.

At the end of the third quarter, total liquidity (cash, cash equivalents and unused credit facilities) amounted to EUR 87.5 million (EUR 116.3 million, 30 September 2016) providing a strong financial position for sustainable operations. The Group had EUR 80.2 million (EUR 88.8 million, 30 September 2016) in cash and cash equivalents and EUR 7.3 million (EUR 27.5 million, 30 September 2016) in unused credit lines.

 

KEY FIGURES 

For the period Q3 2017 Q3 2016 Change %
Revenue (million euros) 282.7 273.6 3.3%
Gross profit (million euros) 81.9 76.8 6.7%
Net profit for the period (million euros) 47.8 42.8 11.7%
EBITDA (million euros) 75.4 67.1 12.3%
       
Depreciation and amortisation (million euros) 22.2 19.3 15.3%
Capital expenditures (million euros) 2.4 15.1 -84.1%
Weighted average number of ordinary shares outstanding 669 882 040 669 882 040 0.0%
Earnings per share 0.071 0.064 11.7%
       
Number of passengers 2 912 759 2 855 112 2.0%
Number of cargo units 91 335 81 170 12.5%
Average number of employees 7 566 7 366 2.7%
       
As at 30.09.17 30.06.17 Change %
Total assets (million euros) 1 714.5 1 739.0 -1.4%
Total liabilities (million euros) 875.6 948.0 -7.6%
Interest-bearing liabilities (million euros) 715.3 735.7 -2.8%
Net debt (million euros) 635.2 653.7 -2.8%
Net debt to EBITDA 4.0 4.3 -7.9%
Total equity (million euros) 838.9 791.1 6.0%
Equity ratio (%) 48.9% 45.5%  
       
Number of ordinary shares outstanding 669 882 040 669 882 040 0.0%
Equity per share 1.25 1.18 6.0%
       
Ratios Q3 2017 Q3 2016  
Gross margin (%) 29.0% 28.1%  
EBITDA margin (%) 26.7% 24.5%  
Net profit margin (%) 16.9% 15.7%  

EBITDA: Earnings before net financial items, share of profit of equity accounted investees, taxes, depreciation and amortisation
Earnings per share: net profit / weighted average number of shares outstanding
Equity ratio: total equity / total assets
Equity per share: shareholder’s equity / number of shares outstanding
Gross margin: gross profit / revenue
EBITDA margin: EBITDA / revenue
Net profit margin: net profit / revenue
Net debt: interest-bearing liabilities less cash and cash equivalentsNet debt to EBITDA: net debt / 12-months trailing EBITDA 

 

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Unaudited, in thousands of EUR Q3 2017 Q3 2016 9M 2017 9M 2016
Revenue (Note 3) 282 715 273 615 734 121 711 670
Cost of sales -200 769 -196 839 -578 026 -560 154
Gross profit 81 946 76 776 156 095 151 516
         
Sales and marketing expenses -17 068 -16 571 -54 182 -53 166
Administrative expenses -11 780 -12 548 -37 234 -38 825
Other operating income 108 180 444 1 753
Other operating expenses -38 22 -182 -6
Result from operating activities 53 168 47 859 64 941 61 272
         
Finance income (Note 4) -102 4 398 7 806 8 760
Finance costs (Note 4) -5 214 -9 999 -23 183 -29 685
Profit/loss before income tax 47 852 42 258 49 564 40 347
         
Income tax  -12 580 -4 138 245
         
Net profit/loss for the period 47 840 42 838 45 426 40 592
         
Other comprehensive income/expense        
Exchange differences on translating foreign operations -40 -99 -22 -264
Other comprehensive income/expense for the period -40 -99 -22 -264
         
Total comprehensive income/expense for the period 47 800 42 739 45 404 40 328
         
Basic and diluted earnings per share (in EUR per share, note 5) 0.071 0.064 0.068 0.061

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

Unaudited, in thousands of EUR 30.09.2017 31.12.2016
ASSETS    
Cash and cash equivalents 80 161 78 773
Trade and other receivables 51 951 38 674
Prepayments 13 921 7 926
Prepaid income tax 34 91
Inventories 46 314 38 719
Current assets 192 381 164 183
     
Investments in equity-accounted investees 363 363
Other financial assets 353 348
Deferred income tax assets 18 797 18 791
Investment property 300 300
Property, plant and equipment (Note 7) 1 452 732 1 304 897
Intangible assets (Note 8) 49 579 50 127
Non-current assets 1 522 124 1 374 826
TOTAL ASSETS 1 714 505 1 539 009
     
LIABILITIES AND EQUITY    
Interest-bearing loans and borrowings (Note 9) 154 855 106 112
Trade and other payables 96 505 103 280
Payables to owners ¹ 3 4
Income tax liability 4 10
Deferred income 33 010 30 895
Current liabilities 284 377 240 301
     
Interest-bearing loans and borrowings (Note 9) 560 466 452 793
Derivatives (Note 6) 30 798 32 359
Non-current liabilities 591 264 485 152
Total liabilities 875 641 725 453
     
Share capital (Note 10) 361 736 361 736
Share premium 639 639
Reserves 70 958 68 774
Retained earnings 405 531 382 407
Equity attributable to equity holders of the Parent 838 864 813 556
Total equity 838 864 813 556
TOTAL LIABILITIES AND EQUITY 1 714 505 1 539 009

¹ Payments related to reduction of share capital.

   

CONSOLIDATED STATEMENT OF CASH FLOWS 

Unaudited, in thousands of EUR 9M 2017 9M 2016
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Net profit/loss for the period 45 426 40 592
Adjustments 84 328 79 014
Changes in:    
Receivables and prepayments related to operating activities -20 727 -9 914
Inventories -7 595 -8 427
Liabilities related to operating activities -5 238 -326
Changes in assets and liabilities -33 560 -18 667
Cash generated from operating activities 96 194 100 939
Income tax paid received/ paid 9 -1 621
NET CASH FROM OPERATING ACTIVITIES 96 203 99 318
     
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of property, plant, equipment and intangible assets (Notes 7, 8, 9) -212 031 -46 197
Proceeds from disposals of property, plant, equipment 224 144
Interest received 1 51
NET CASH USED IN INVESTING ACTIVITIES -211 806 -46 002
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from loans received (Note 9) 184 000 0
Repayment of loans received (Note 9) -51 241 -55 039
Change in overdraft (Note 9) 27 580 44 096
Payments for settlement of derivatives -2 698 -3 341
Payment of finance lease liabilities (Note 9) -78 -74
Interest paid -16 159 -18 434
Payment of transaction costs related to loans -216 0
Dividends paid (Note 11) -20 096 -13 398
Reduction of share capital -1 0
Income tax on dividends paid -4 100 -330
NET CASH FROM/USED IN FINANCING ACTIVITIES 116 991 -46 520
     
TOTAL NET CASH FLOW 1 388 6 796
     
Cash and cash equivalents at the beginning of period 78 773 81 976
Increase/decrease in cash and cash equivalents 1 388 6 796
Cash and cash equivalents at the end of period 80 161 88 772

 

         Veiko Haavapuu
         Finance Director
         
         AS Tallink Grupp
         Sadama 5/7
         10111 Tallinn, Estonia
         Tel. +372 640 9914
         E-mail veiko.haavapuu@tallink.ee


Tallink Grupp 2017-Q3 ENG.pdf