AS Tallinna Sadam financial results for 2018 3rd quarter and 9 months

The results of the third quarter were mainly driven by the following: Substantial increase of the liquid bulk volumes and revenueIn the ferry segment an additional ferry in the summer period on Saaremaa lineAdditional revenue from the M/V Botnica ice management and escort service chartering...

The results of the third quarter were mainly driven by the following:

• Substantial increase of the liquid bulk volumes and revenue
• In the ferry segment an additional ferry in the summer period on Saaremaa line
• Additional revenue from the M/V Botnica ice management and escort service chartering agreement starting from the end of June.

Key figures (in million EUR):

	Q3	Q3	+/-	9 months	9 months	+/-
	2018	2017		2018	2017
Revenue	38.9	32.7	19.0%	101.1	94.2	7.3%
Adjusted EBITDA	24.0	17.2	39.7%	59.7	53.7	11.2%
Adjusted EBITDA margin	61.7%	52.6%	9.1	59.1%	57.0%	2.1
Operating profit	18.1	11.8	54.0%	43.1	38.7	11.2%
Income tax	0	0	-	-26.3	-12.0	118.8%
Profit for the period	18.1	11.4	57.9%	15.8	25.4	-37.8%
Investments	2.9	4.9	-40.6%	8.1	29.5	-72.4%

	30.09.2018	31.12.2017	+/-
Total assets	647.1	597.1	8.4%
Interest bearing debt	225.4	235.6	-4.3%
Other liabilities	62.6	35.7	75.4%
Equity	359.1	325.8	10.2%
Number of shares	263.0	185.2	42.0%

Revenue
In the third quarter, revenue grew by EUR 6.2 million, i.e. 19%, generating most of the revenue growth in 9 months, which grew by EUR 6.9 million, i.e. 7% year-on-year, to EUR 101.1 million. In the third quarter there was revenue growth in all business segments, of which the most in the segment “other” (by EUR 2.9 million, i.e. 70% y-o-y) due to start of the summer season and began providing escort and ice management services in northern Canada from the end of June.
In the ferry segment the revenue grew in the third quarter by EUR 2.5 million, i.e. 13% year-on-year, mainly due to additional trips and the ferry put on the route for the high-season in summer.
In the cargo harbours' segment, the revenue increased, mainly due to significant growth in the volume of liquid bulk cargo in the third quarter, increasing the segment's 9-month revenue by EUR 1.5 million, i.e. 16%.
In the passenger harbours' segment the increase of revenue was caused by the growth in passenger numbers, which was mainly supported by the increase of cruise revenue.

EBITDA
In the third quarter, the adjusted EBITDA amounted to EUR 24 million, growing by EUR 6.8 million i.e. 40% year-on-year. In 9 months the adjusted EBITDA grew by EUR 6 million and totaled up to EUR 59.7 million. Based on the segments, the 9-months adjusted EBITDA increased in the ferry segment and the segment 'other' and decreased in the passenger harbours segment and cargo harbours segment. Adjusted EBITDA for the third quarter improved in all segments; growth was the strongest in the ferry segment and the segment 'other'. The adjusted EBITDA margin for the first 9 months rose expectedly from 26.6% to 43.2% in the ferry segment, from 43.8% to 60.8% in the segment 'other' and decreased slightly in other segments, which resulted a rise in the Group's overall margin from 57.0% to 59.1%.

Net profit
Net profit returned to growth in the third quarter due to the revenue increase, growing by EUR 6.6 million, or 58% year-on-year, amounting to EUR 18.1 million. In connection with the declaration of a record dividend of EUR 105 million in the second quarter of 2018 compared with EUR 48 million in 2017, income tax expense increased by EUR 14.3 million to EUR 26.3 million, which resulted in a profit of EUR 15.8 million for the 9 months, showing a decrease of EUR 9.6 million compared to the profit earned in the comparative period. According to the management estimates, the Group shall achieve the profit target set for the 2018 and there will be no deviations from the dividend policy.

Investments
Investments made in the third quarter totaled EUR 2.9 million, in 9 months the Group made investments of EUR 8.1 million. In the 9 months of 2017, the investments totaled EUR 29.5 million of which around EUR 20 million was related to the construction of new ferries. In the 9 months of 2018, the largest investments were made in the reconstruction of traffic areas and the implementation of automated traffic control systems at the Old City Harbour (Smart Port), the dry docking of M/V Botnica which is carried out every five years and the start of terminal D reconstruction works.

Interim condensed consolidated statement of financial position:

In thousands of euros	30 September 2018	31 December 2017
ASSETS
Current assets
Cash and cash equivalents	62,211	6,954
Trade and other receivables	8,892	9,271
Contract assets	723	0
Inventories	322	301
Total current assets	72,148	16,526
Non-current assets
Investments in associates	1,587	1,256
Other long-term receivables	235	272
Property, plant and equipment	571,064	577,125
Intangible assets	2,018	1,958
Total non-current assets	574,904	580,611
Total assets	647,052	597,137
LIABILITIES
Current liabilities
Loans and borrowings	18,166	21,989
Derivative financial instruments	417	609
Payables to owners	20,000	0
Provisions	1,358	1,503
Government grants	326	303
Taxes payable	1,512	698
Trade and other payables	12,343	7,777
Contract liabilities	2,130	33
Total current liabilities	56,252	32,912
Non-current liabilities
Loans and borrowings	207,228	213,611
Government grants	23,468	23,826
Other payables	73	64
Contract liabilities	950	932
Total non-current liabilities	231,719	238,433
Total liabilities	287,971	271,345
EQUITY
Share capital at par value	263,000	185,203
Share premium	44,477	0
Statutory capital reserve	18,520	18,520
Hedge reserve	-417	-609
Retained earnings	33,501	122,678
Total equity	359,081	325,792
Total liabilities and equity	647,052	597,137

Interim condensed consolidated statement of profit or loss:

In thousands of euros	Q3 2018	Q3 2017	9 months 2018	9 months 2017
Revenue	38,897	32,694	101,063	94,206
Other income	215	441	659	4,576
Operating expenses	-10,426	-11,582	-28,013	-31,692
Personnel expenses	-4,941	-4,455	-13,912	-12,994
Depreciation, amortisation and impairment	-5,567	-5,307	-16,516	-15,033
Other expenses	-65	-33	-217	-323
Operating profit	18,113	11,758	43,064	38,740
Finance income and costs
Finance income	5	5	13	23
Finance costs	-501	-611	-1,539	-1,699
Finance costs - net	-496	-606	-1,526	-1,676
Share of profit of an associate accounted for under the equity method	461	296	535	372
Profit before income tax	18,078	11,448	42,073	37,436
Income tax	0	0	-26,250	-12,000
Profit for the period	18,078	11,448	15,823	25,436
Attributable to owners of the Parent	18,078	11,448	15,823	25,436
Basic and diluted earnings per share (in euros)	0.07	0.06	0.07	0.14
Basic and diluted earnings per share - continuing operations (in euros)	0.07	0.06	0.07	0.14

Interim condensed consolidated statement of cash flows:

In thousands of euros	9 months 2018	9 months 2017
Cash receipts from sale of goods and services	108,685	101,438
Cash receipts related to other income	62	436
Payments to suppliers	-33,466	-35,849
Payments to and on behalf of employees	-12,364	-11,460
Payments for other expenses	-293	-711
Income tax paid on dividends	-21,405	-8,657
Cash from operating activities	41,219	45,197
Purchases of property, plant and equipment	-8,388	-19,887
Purchases of intangible assets	-509	-524
Proceeds from sale of property, plant and equipment	6	500
Government grants received	0	349
Dividends received	0	178
Interest received	3	14
Cash used in investing activities	-8,888	-19,370
Contributions to share capital	119,882	0
Redemption of debt securities	-1,250	-1,250
Repayments of loans received	-6,383	-6,383
Change in overdraft (liability)	-2,566	0
Repayments of finance lease principal	-7	-2
Dividends paid	-85,000	0
Interest paid	-1,704	-2,004
Other payments related to financing activities	-46	0
Cash from/used in financing activities	22,926	-9,639
NET CASH FLOW	55,257	16,188
Cash and cash equivalents at beginning of the period	6,954	49,918
Change in cash and cash equivalents	55,257	16,188
Cash and cash equivalents at end of the period	62,211	66,106

Tallinna Sadam is one of the largest cargo- and passenger port complexes in the Baltic Sea region, which in 2017 serviced 10.6 million passengers and 19.2 million tons of cargo. In addition to passenger and freight services, Tallinna Sadam group also operates in shipping business via its subsidiaries – OÜ TS Laevad provides ferry services between the Estonian mainland and the largest islands, and OÜ TS Shipping charters its multifunctional vessel m/v Botnica for icebreaking and construction services in Estonia and offshore projects abroad. Tallinna Sadam group is also a shareholder of an associate AS Green Marine, which provides waste management services. Tallinna Sadam group's sales in 2017 totaled EUR 121.3 million, adjusted EBITDA EUR 66.5 million and net profit EUR 26.4 million.
Additional information:

Marko Raid
CFO, Member of the Management Board

Additional information:

Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
[email protected]

Attachment

• Tallinna Sadam Q3 2018 ENG