AS Tallinna Sadam financial results for 2018 2nd quarter and 6 months

In the second quarter and first half of 2018, the volume of cargo handled and the number of passengers served increased as did the Group's revenue, forming EUR 32.8 million in the second quarter and EUR 62.2 million in the first half of 2018. The adjusted EBITDA was stable, increasing 3.6% to EUR...

In the second quarter and first half of 2018, the volume of cargo handled and the number of passengers served increased as did the Group's revenue, forming EUR 32.8 million in the second quarter and EUR 62.2 million in the first half of 2018. The adjusted EBITDA was stable, increasing 3.6% to EUR 17.9 million in the second quarter, but the profit for the period decreased by EUR 13.8 million. The loss in the second quarter and first half of the year was caused by the impact of the anticipated income tax expense (EUR 26.3 million) on the record high dividend amount (EUR 105 million), which was announced in April 2018. Based on the management's estimates, the Group shall achieve the profit target set for 2018 and will be capable of paying dividends in 2019 in accordance with the set dividend policy, i.e. at least EUR 30 million.

The results of the second quarter were mainly driven by the following trends:

• The overall increase in passenger numbers, while the number of passengers on the Tallinn-Helsinki route decreased by 1%
• Stabilisation of the liquid bulk volumes
• In the cargo harbours segment the revenue per ton declined
• In the ferry segment the increase in the number of passengers and an additional ferry during the summer period on Saaremaa line
• Signing of the M/V Botnica chartering agreement for summer periods, impact on the financial results will start from the third quarter of 2018.

Key figures (in million EUR):

	Q2	Q2	+/-	6 months	6 months	+/-
	2018	2017		2018	2017
Revenue	32.8	31.7	3.4%	62.2	61.5	1.1%
Adjusted EBITDA	17.9	17.3	3.6%	35.5	36.5	-2.7%
Adjusted EBITDA margin	54.8%	54.7%	-0.1	57.2%	59.4%	2.2
Operating profit	12.6	12.3	2.9%	25.0	27.0	-7.5%
Income tax	-26.3	-12.0	118.8%	-26.3	-12.0	118.8%
Profit/loss for the period	-14.1	-0.3	4301.3%	-2.3	14.0	-116.1%
Investments	3.3	9.2	-64.4%	5.2	24.5	-78.8%

 

	30.06.2018	30.06.2017	+/-
Total assets	656.4	651.9	0.7%
Interest bearing debt	228.4	241.4	-5.4%
Other liabilities	87.1	93.6	-7.0%
Equity	340.9	316.9	7.6%
Number of shares	263.0	185.2	42.0%

Revenue
Revenue grew in second quarter by EUR 1.1 million, i.e. 3%, triggering a rise in the half-year revenue, which grew by EUR 0.7 million, i.e. 1% year on year, to EUR 62.2 million. In the second quarter the revenue grew the most in the ferry segment (by EUR 0.8 million, i.e. 11.8%) due to the additional ferry and trips added for the summer period.
In the passenger harbours' segment the half-year revenue decreased because in 2017 the average rate of vessel dues was higher and in October 2017 M/V Sea Wind was transferred from the Old City Harbour to Muuga Harbour.
In the cargo harbours' segment the half-year revenue decreased, mainly due to a decline in cargo charges and rental income (primarily rental income from the former Muuga coal terminal area).
In the segment “other” the revenue grew due to the indexation of the charter fee rate for M/V Botnica.

EBITDA
Both in the first half and second quarter of 2018, adjusted EBITDA grew in the ferry segment and decreased in other segments (year on year). In the second quarter adjusted EBITDA growth in the ferry segment exceeded the decreases in other segments but in the first half-year the impact of decreases proved stronger. In the ferry segment, the adjusted EBITDA margin for the first half-year improved as expected, rising from 31.5% to 42.1%, while in other segments the margins decreased. As a result, the Group's margin dropped from 59.4% to 57.2%. The changes in the segments' second-quarter margins were mostly of the same nature but the Group's margin rose slightly compared with the second quarter of 2017.

Net profit
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 loss of EUR 2.3 for the first half of 2018. The net result for the second quarter was a loss of EUR 14.1 million compared with a loss of EUR 0.3 million for the second quarter of 2017. 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 second quarter totaled EUR 3.3 million, in the first half of 2018 the Group made investments of EUR 5.2 million. In 2017 half-year the investments totaled EUR 24.5 million of which around EUR 20 million was related to the construction of new ferries. In the first half 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 and the dry docking of M/V Botnica which is carried out every five years.

Interim condensed consolidated statement of financial position:

In thousands of euros	30 June 2018	31 December 2017
ASSETS
Current assets
Cash and cash equivalents	68,404	6,954
Trade and other receivables	10,137	9,271
Contract assets	419	0
Inventories	407	301
Total current assets	79,367	16,526
Non-current assets
Investments in joint ventures	1,126	1,256
Other long-term receivables	198	272
Property, plant and equipment	573,657	577,125
Intangible assets	2,058	1,958
Total non-current assets	577,039	580,611
Total assets	656,406	597,137
LIABILITIES
Current liabilities
Loans and borrowings	18,172	21,989
Derivative financial instruments	511	609
Payables to owners	20,000	0
Provisions	1,027	1,503
Government grants	53	303
Taxes payable	21,931	698
Trade and other payables	15,116	7,777
Contract liabilities	3,860	33
Total current liabilities	80,671	32,912
Non-current liabilities
Loans and borrowings	210,228	213,611
Government grants	23,607	23,826
Other payables	64	64
Contract liabilities	928	932
Total non-current liabilities	234,827	238,433
Total liabilities	315,498	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	-511	-609
Retained earnings	15,422	122,678
Total equity	340,908	325,792
Total liabilities and equity	656,406	597,137

Interim condensed consolidated statement of profit or loss ans other comprehensive income:

In thousands of euros	Q2 2018	Q2 2017	6 months 2018	6 months 2017
Revenue	32,752	31,662	62,166	61,513
Other income	241	238	444	4,135
Operating expenses	-10,004	-9,948	-17,587	-20,110
Personnel expenses	-4,782	-4,483	-8,972	-8,541
Depreciation, amortisation and impairment	-5,546	-5,176	-10,949	-9,726
Other expenses	-50	-39	-152	-290
Operating profit	12,611	12,254	24,950	26,981
Finance income and costs
Finance income	8	14	8	18
Finance costs	-527	-613	-1,038	-1,088
Finance costs - net	-519	-599	-1,030	-1,070
Share of profit of a joint venture accounted for under the equity method	74	25	74	76
Profit before income tax	12,166	11,680	23,994	25,987
Income tax	-26,250	-12,000	-26,250	-12,000
Profit/loss for the period	-14,084	-320	-2,256	13,987
Of which attributable to owners of the Parent	-14,084	-320	-2,256	13,987
Basic and diluted earnings per share (in euros)	-0.07	0.00	-0.01	0.08
Basic and diluted earnings per share - continuing operations (in euros)	-0.07	0.00	-0.01	0.08

In thousands of euros	Q2 2018	Q2 2017	6 months 2018	6 months 2017
Profit/loss for the period	-14,084	-320	-2,256	13,987
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Net fair value gain on hedging instruments in cash flow hedges	33	107	98	276
Total other comprehensive income	33	107	98	276
Total comprehensive income/ expense for the period	-14,051	-213	-2,158	14,263
Of which attributable to owners of the Parent	-14,051	-213	-2,158	14,263

Interim condensed consolidated statement of cash flows:

In thousands of euros	6 months 2018	6 months 2017
Cash receipts from sale of goods and services	67,535	67,309
Cash receipts related to other income	56	433
Payments to suppliers	-20,676	-22,976
Payments to and on behalf of employees	-8,019	-7,631
Payments for other expenses	-185	-677
Income tax paid on dividends	0	-8,657
Cash from operating activities	38,711	27,801
Purchases of property, plant and equipment	-5,908	-15,854
Purchases of intangible assets	-385	-362
Proceeds from sale of property, plant and equipment	0	501
Interest received	2	8
Cash used in investing activities	-6,291	-15,707
Contributions to share capital	122,287	0
Redemption of debt securities	-1,250	-1,250
Repayments of loans received	-3,383	-3,383
Change in overdraft (liability)	-2,566	0
Repayments of finance lease principal	-1	-1
Dividends paid	-85,000	0
Interest paid	-1,020	-1,239
Other payments related to financing activities	-37	-1
Cash from/used in financing activities	29,030	-5,874
NET CASH FLOW	61,450	6,220
Cash and cash equivalents at beginning of the period	6,954	49,918
Change in cash and cash equivalents	61,450	6,220
Cash and cash equivalents at end of the period	68,404	56,138

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 a joint venture 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.

 

Marko Raid
CFO, Member of the Management Board

 

Additional information:

Marju Zirel
Head of Investor Relations
[email protected]

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