AS Tallinna Sadam financial results for 2019 1st quarter

In the first quarter of 2019, the revenue of AS Tallinna Sadam (hereinafter “the Group”) amounted to EUR 28.5 million, declining by 3.0% compared to the same period last year. The Group's adjusted EBITDA was EUR 16.9 million in the first quarter, declining by 4.2% year-on-year. Net profit decreased by EUR 0.8 million to EUR 11.0 million in the first quarter.According to Valdo Kalm, Chairman of the Management Board of the Group, the most significant impact on the results of the first quarter...

In the first quarter of 2019, the revenue of AS Tallinna Sadam (hereinafter “the Group”) amounted to EUR 28.5 million, declining by 3.0% compared to the same period last year. The Group's adjusted EBITDA was EUR 16.9 million in the first quarter, declining by 4.2% year-on-year. Net profit decreased by EUR 0.8 million to EUR 11.0 million in the first quarter.

According to Valdo Kalm, Chairman of the Management Board of the Group, the most significant impact on the results of the first quarter was the planned maintenance of passenger vessels, which resulted in a temporary break of service of several passenger ships and a decrease in the number of vessel calls and passengers, the volume of ro-ro cargo and the revenue of the passenger harbours segment. “According to international maritime regulations, all passenger ships must undergo regular maintenance and dock. Due to the maintenance, Tallink, Viking Line and Eckerö Line vessels were out of service for a while and therefore the volumes of passengers as well as ro-ro cargo passing through the harbours declined in the first months of the year,” said Kalm.

The financial results were also impacted by a drop in the volume of liquid bulk by 11.9% in the cargo harbours segment. “The volume of liquid bulk handled at the harbours of the Group decreased mainly at the beginning of the year, as a result of which both vessel fees and cargo fees decreased. Liquid bulk volumes have stabilized at the end of the quarter, and we see this trend continuing,” noted Valdo Kalm.

In the first quarter, the investments also increased compared to the same period last year due to the reconstruction of the passenger terminal D.

Despite the modest decline in revenue and profit at the beginning of the year, the Management Board estimates that the profit target set for 2019 will be achieved and deviations from the set dividend policy will not occur.

Key figures (in million EUR):

	Q1	Q1	+/-	%
	2019	2018
Revenue	28.5	29.4	-0.9	-3.0%
Adjusted EBITDA	16.9	17.6	-0.7	-4.2%
Adjusted EBITDA margin	59.1%	59.8%	-0.7	-
Operating profit	11.5	12.3	-0.9	-7.1%
Income tax	0	0	-	-
Profit for the period	11.0	11.8	-0.8	-6.7%
Investments	3.9	1.9	2.0	105.2%

	31.03.2019	31.12.2018	+/-	%
Total assets	630.6	623.6	6.9	1.1%
Net debt	160.3	171.0	-10.7	-6.3%
Equity	378.8	367.7	11.1	3.0%
Number of shares	263.0	263.0	0	-

Revenue
Revenue for the first quarter of 2019 decreased by EUR 0.9 million, i.e. 3.0%, compared to the same period last year. In terms of revenue streams, the strongest decline occurred in vessel dues that decreased by EUR 0.9 million, i.e. 9%, and passenger fees that decreased by EUR 0.2 million, i.e. around 7%. Revenue increased in the segments of Ferry and Other but decreased in Passenger harbours and Cargo harbours segments.

Passenger harbours revenue decreased by EUR 0.6 million i.e. 7.2%, mainly because several passenger ferries operating on regular routes were temporarily out of service due to planned dry dock or wet berth maintenance. This reduced the number of trips and passengers, which also lowered revenue from vessel dues and passenger fees. The impact of the decrease in ro-ro cargo volume was smaller.

Cargo harbours revenue declined by EUR 0.5 million, i.e. by 4.9%, primarily because the volume of liquid bulk cargo decreased, which lowered vessel dues revenue. Cargo charge revenue was less affected by the drop of liquid bulk volume, as liquid bulk cargo charge rates are lower than those of other cargo types and, quarterly cargo charge revenue is based on the estimated annual cargo charge revenue (IFRS 15).

Ferry segment revenue grew by EUR 0.2 million i.e. by 2.9%, mainly because the fee rates, which are linked to the Estonian consumer and fuel price indices and wage inflation, were higher than in the comparative period.

The revenue of the segment Other grew through the indexation of the contractual fees of the icebreaker Botnica to the Estonian consumer price index. 

EBITDA
Adjusted EBITDA declined by EUR 0.7 million i.e. by 4.2 %, somewhat less than operating profit because growth in depreciation, amortisation and impairment expenses did not affect EBITDA. In terms of segments, adjusted EBITDA grew in the Ferry segment and decreased in all other segments. The decline was the sharpest in the Cargo harbours segment due to the decrease in its revenue. Adjusted EBITDA margin dropped from 59.8% to 59.1%.

Net profit
Net profit amounted to EUR 11.0 million, EUR 0.8 million less than in the comparative period.

Investments
The Group invested EUR 3.9 million in the first quarter of 2019. The figure is larger than in the same period last year when investments totalled EUR 1.9 million. Investments of the period were mostly related to the reconstruction of passenger terminal D at the Old City Harbour.

Interim condensed consolidated statement of financial position:

In thousands of euros	31 March 2019	31 December 2018
ASSETS
Current assets
Cash and cash equivalents	50,3,07	42,563
Trade and other receivables	8,602	8,017
Contract assets	218	0
Inventories	297	305
Total current assets	59,424	50,885
Non-current assets
Investments in associates	1,574	1,569
Other long-term receivables	196	196
Property, plant and equipment	567,425	568,965
Intangible assets	1,961	2,024
Total non-current assets	571,156	572,754
Total assets	630,580	623,639
LIABILITIES
Current liabilities
Loans and borrowings	15,766	15,766
Derivative financial instruments	382	425
Provisions	879	1,957
Government grants	188	174
Taxes payable	1,243	5,844
Trade and other payables	10,743	9,485
Contractual liabilities	3,479	32
Total current liabilities	32,680	33,683
Non-current liabilities
Loans and borrowings	194,846	197,846
Government grants	23,291	23,418
Other payables	79	79
Contract liabilities	929	939
Total non-current liabilities	219,145	222,282
Total liabilities	251,825	255,965
EQUITY
Share capital at par value	263,000	263,000
Share premium	44,478	44,478
Statutory capital reserve	18,520	18,520
Hedge reserve	-382	-425
Retained earnings (prior periods)	42,101	17,678
Profit for the period	11,038	24,423
Total equity	378,755	367,674
Total liabilities and equity	630,580	623,639

Interim condensed consolidated statement of profit or loss:

In thousands of euros	Q1 2019	Q1 2018
Revenue	28,527	29,414
Other income	275	203
Operating expenses	-7,397	-7,584
Personnel expenses	-4,291	-4,189
Depreciation, amortisation and impairment	-5,550	-5,403
Other expenses	-106	-102
Operating profit	11,458	12,339
Finance income and costs
Finance income	13	0
Finance costs	-438	-511
Finance costs - net	-425	-511
Share of profit of an associate accounted for under the equity method	5	0
Profit before income tax	11,038	11,828
Income tax	0	0
Profit for the period	11,038	11,828
Attributable to owners of the Parent	11,038	11,828
Basic and diluted earnings per share (in euros)	0.04	0.06
Basic and diluted earnings per share - continuing operations (in euros)	0.04	0.06

Interim condensed consolidated statement of cash flows:

	3 months	3 months
In thousands of euros	2019	2018
Cash receipts from sale of goods and services	33,009	35,237
Cash receipts related to other income	118	3
Payments to suppliers	-8,911	-8,987
Payments to and on behalf of employees	-3,910	-3,517
Payments for other expenses	-102	-99
Income tax paid on dividends	-4,949	0
Cash from operating activities	15,255	22,637
Purchases of property, plant and equipment	-3,837	-2,984
Purchases of intangible assets	-107	-130
Proceeds from sale of property, plant and equipment	16	0
Interest received	14	0
Cash used in investing activities	-3,914	-3,114
Repayments of loans received	-3,000	-3,000
Change in overdraft (liability)	0	-2,565
Repayments of finance lease principal	0	-1
Interest paid	-593	-707
Other payments related to financing activities	-4	-16
Cash from/used in financing activities	- 3,597	-6,289
NET CASH FLOW	7,744	13,234
Cash and cash equivalents at beginning of the period	42,563	6,954
Change in cash and cash equivalents	7,744	13,234
Cash and cash equivalents at end of the period	50,307	20,188

Tallinna Sadam is one of the largest cargo- and passenger port complexes in the Baltic Sea region, which in 2018 serviced 10.6 million passengers and 20.6 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 in an associate AS Green Marine, which provides waste management services. Tallinna Sadam group's sales in 2018 totaled EUR 130.6 million, adjusted EBITDA EUR 74.4 million and net profit EUR 24.4 million.

Additional information:

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

Attachment

• Tallinna Sadam Q1 2019 ENG