AS Tallink Grupp Unaudited Consolidated Interim Report Q1 2018

Management report In the first quarter (1 January - 31 March) of the 2018 financial year Tallink Grupp AS and its subsidiaries (the Group) carried 1.9 million passengers, which is 0.5% less than in the first quarter last year. The Group's unaudited revenue for the first quarter decreased by 3...

Tallinn, 18/05/2018 (informazione.news - comunicati stampa - turismo)

In the first quarter (1 January - 31 March) of the 2018 financial year Tallink Grupp AS and its subsidiaries (the Group) carried 1.9 million passengers, which is 0.5% less than in the first quarter last year. The Group's unaudited revenue for the first quarter decreased by 3.9 % to a total of EUR 184.2 million. Unaudited EBITDA for the first quarter was EUR 4.2 million (EUR 5.3 million in Q1 2017) and unaudited net loss was EUR 19.6 million (net loss of EUR 20.3 million in Q1 2017).

In the first quarter, which is also the low season, the Group's revenue and operating result were impacted by the following operational factors:

Sales and segments

In the first quarter, the number of passengers travelling on the Group's ships on the Estonia-Finland routes increased by 1.3% or 13.3 thousand to a total of 1 025 thousand. Due to the higher competition, there was pressure on ticket prices that resulted in a decline in average ticket prices and lower ticket revenue. The segment revenue decreased by 0.9% to EUR 72.3 million. The Estonia-Finland segment result increased by 7.0% and was EUR 8.6 million. The better segment result was achieved mainly due to lower marketing costs as in the first quarter last year there were marketing costs related to the launch of the Shuttle ferry Megastar.

The maintenance and repair of the cruise ferry Baltic Princess, which is one of the four ships operating on the Finland-Sweden routes, affected the routes' first-quarter carriage volumes and financial results. The number of passengers on the Finland-Sweden routes decreased by 9.9% to 523 thousand. The segment revenue decreased by 9.2% to EUR 62.7 million. The segment result improved by EUR 0.5 million as fewer trips resulted in lower ship operating and marketing costs.

The Estonia-Sweden route's first-quarter revenue increased by 6.2% compared to the same period last year. The growth was supported by a 5.7% rise in the number of passengers and 15.9% increase in transported cargo units.

The Latvia-Sweden route's first-quarter revenue increased by 24.0% compared to same period last year. The growth was supported by a 16.8% rise in the number of passengers and a 62.6% increase in transported cargo units.

The charter and charter related revenue decreased by EUR 2.8 million as fewer ships were chartered out compared to the first quarter in the previous year. Two Superfast ferries were sold in December 2017, and one Superfast ferry remains chartered out.

Earnings

In the first quarter of 2018, the Group's gross profit decreased by EUR 1.2 million compared to the same period last year, amounting to EUR 13.7 million. First-quarter EBITDA decreased by EUR 1.1 million to EUR 4.2 million. The Group's first quarter result from operations was impacted by charter and charter related revenue, which was EUR 2.8 million lower than in the same period last year because fewer ships were chartered out.

Amortisation and depreciation expense decreased by EUR 1.4 million to EUR 19.4 million compared to the first quarter of 2017. The decline is a result of less depreciation cost from two sold Superfast ferries and addition of depreciation cost of Shuttle ferry Megastar, compared to the first quarter last year.

Net finance costs decreased by EUR 0.5 million compared to the first quarter last year. The change includes decline of EUR 1.0 million in interest costs compared to same period the previous year and increase of EUR 0.5 million in losses from foreign exchange differences and the revaluation of cross currency and interest rate derivatives.

The Group's unaudited net loss for the first quarter of 2018 was EUR 19.6 million or EUR 0.029 per share compared to a net loss of EUR 20.3 million or EUR 0.030 per share in the same period last year.

Investments

In the first quarter, the Group's investments amounted to EUR 8.4 million. Most of the investments were made in the fleet's technical dockings and upgrades of the ships public areas. Investments were also made in the development of online booking and sales systems.

Dividends

To the shareholders' annual general meeting in 2018, the Management Board will propose a dividend of EUR 0.03 per share from net profit for 2017.

Financial position

In the last twelve months the Group has reduced its interest bearing liabilities by EUR 212.2 million to EUR 551.0 million (EUR 763.2 million at 31 March 2017). Total bank debt at the end of the first quarter of 2018 is comparable to the level at the end of 2016, before the drawdown of a EUR 184 million loan in January 2017, which was used to finance the purchase of the Shuttle ferry Megastar. The repayment of bank debt (scheduled and early repayment of loans and repayment of an overdraft) was supported by positive cash flow from operations and the sale of two Superfast ferries in December 2017.

In the first quarter, the Group's net debt increased by EUR 8.9 million to EUR 480.9 million and the net debt to EBITDA ratio was 3.1 at the reporting date.

At the end of the first quarter, total liquidity (cash, cash equivalents and unused credit facilities) amounted to EUR 142.8 million (EUR 74.7 million at 31 March 2017) providing a strong financial position for sustainable operations.

The Group had EUR 70.1 million (EUR 72.2 million at 31 March 2017) in cash and cash equivalents and EUR 72.7 million (EUR 2.5 million at 31 March 2017) in unused credit lines.

Key figures

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 or loss / revenue
Net debt: interest-bearing liabilities less cash and cash equivalents
Net debt to EBITDA: net debt / 12-months trailing EBITDA

Veiko Haavapuu
Financial Director

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

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