AS Tallinna Sadam financial results for 2018 4th quarter and 12 months

In 2018, adjusted EBITDA amounted to EUR 74.4 million, i.e. 11.8% increase compared to 2017. Due to EUR 14.2 million larger income tax expense on record high dividend, 2018 ended in a net profit of EUR 24.4 million, a decrease of EUR 2.0 million compared to the profit earned in 2017. According...

In 2018, adjusted EBITDA amounted to EUR 74.4 million, i.e. 11.8% increase compared to 2017. Due to EUR 14.2 million larger income tax expense on record high dividend, 2018 ended in a net profit of EUR 24.4 million, a decrease of EUR 2.0 million compared to the profit earned in 2017.

According to Valdo Kalm, Chairman of the Management Board, the increase in the Group's revenue in the fourth quarter as well as during the year was mainly influenced by the work of multifunctional icebreaker Botnica as an escort and ice management vessel in the northern part of Canada from June to November; and the growth of liquid cargo volumes and revenues. “The revenue from the trips of the additional ferry on the Saaremaa route in summer also contributed significantly to the annual results,” Kalm explained.

Key figures (in million EUR):

	Q4	Q4	+/-	2018	2017	+/-
	2018	2017
Revenue	29.6	27.1	9.2%	130.6	121.3	7.7%
Adjusted EBITDA	14.7	12.8	14.6%	74.4	66.5	11.8%
Adjusted EBITDA margin	49.7%	47.3%	2.4	56.9%	54.8%	2.1
Operating profit	9.0	1.6	471.4%	52.1	40.3	29.2%
Income tax	0.1	0.0	13.3%	-26.2	-12.0	119.1%
Profit for the period	8.6	1.0	769.6%	24.4	26.4	-7.6%
Investments	6.1	6.4	-4.1%	14.3	35.8	-60.2%

	31.12.2018	31.12.2017	+/-
Total assets	623.6	597.1	4.4%
Interest bearing debt	213.6	235.6	-9.3%
Other liabilities	42.4	35.7	18.8%
Equity	367.7	325.8	12.9%
Number of shares	263.0	185.2	42.0%

Revenue
Revenue for the fourth quarter improved by EUR 2.5 million, i.e. 9.2% year on year, and annual revenue for 2018 grew by EUR 9.3 million, i.e. by 7.7%, to a record-high EUR 130.6 million. The annual revenue growth was most affected by the segment “other” (by EUR 4.3 million, i.e. 95% y-o-y) due to the summer season work of the icebreaker Botnica providing escort and ice management services in northern Canada from the end of June until November.
In the ferry segment the revenue grew in the fourth quarter by EUR 0.4 million, i.e. 5% year-on-year, due to a rise in Estonia's consumer and fuel price indexes, which generated higher fee rates of the service. On annual basis, the revenue of the ferry segment increased by EUR 3.0 million, i.e. 11.1% mainly due to an additional ferry put in service for the summer season (June-August).
In the cargo harbours' segment, the revenue increased, mainly due to continuous growth in the volume of liquid bulk cargo in the fourth quarter, increasing the segment's annual revenue to EUR 41.7 million, i.e. 4.9% growth year-on-year.
In the passenger harbours' segment the revenue slightly decreased in fourth quarter. Still, annually it increased, due to the growth in passenger numbers, which was mainly supported by the increase of the number of cruise passengers.

EBITDA
Adjusted EBITDA for the fourth quarter grew by EUR 1.9 million year on year, mainly through the impact of revenue from chartering the icebreaker Botnica out for the summer season which ended in November, and growth in the volume of liquid bulk cargo. Adjusted EBITDA for 2018 grew by EUR 7.9 million to EUR 74.4 million. Adjusted EBITDA margin for 2018 rose from previous year's 54.8% to 56.9%, underpinned by the combined effect of an increase in revenue and a decrease in expenses.

Net profit
Profit before tax grew by EUR 12.2 million, i.e. 32% to EUR 50.6 million in 2018. Fourth-quarter profit before tax grew by EUR 7.6 million. In connection with the declaration of a record high dividend of EUR 105 million in 2018 (2917: EUR 48 million), income tax expense increased by EUR 14.2 million to EUR 26.2 million. Due to larger income tax expense, 2018 ended in a net profit of EUR 24.4 million, a decrease of EUR 2.0 million compared to the profit earned in 2017. The net result for the fourth quarter was a profit of EUR 8.6 million (2017: EUR 1.0 million). 

Investments
Investments made in the fourth quarter totalled EUR 3.7 million. In 2018, the Group invested EUR 14.3 million. The figure is 60% smaller than in 2017 when investments totalled EUR 35.8 million of which EUR 20 million was spent on the construction of new ferries. In 2018, the largest investments were made into the reconstruction of traffic areas and the implementation of automated traffic control system (Smart Port) as well as the starting of reconstruction of Terminal D building at the Old City Harbour.

Interim condensed consolidated statement of financial position:

In thousands of euros	31 December 2018	31 December 2017
ASSETS
Current assets
Cash and cash equivalents	42,563	6,954
Trade and other receivables	8,017	9,271
Inventories	305	301
Total current assets	50,885	16,526
Non-current assets
Investments in associates	1,569	1,256
Other long-term receivables	196	272
Property, plant and equipment	568,965	577,125
Intangible assets	2,024	1,958
Total non-current assets	572,754	580,611
Total assets	623,639	597,137
LIABILITIES
Current liabilities
Loans and borrowings	15,766	21,989
Derivative financial instruments	425	609
Provisions	1,957	1,503
Government grants	174	303
Taxes payable	5,844	698
Trade and other payables	9,517	7,810
Total current liabilities	33,683	32,912
Non-current liabilities
Loans and borrowings	197,846	213,611
Government grants	23,418	23,826
Other payables	1,018	996
Total non-current liabilities	222,282	238,433
Total liabilities	255,965	271,345
EQUITY
Share capital at par value	263,000	185,203
Share premium	44,478	0
Statutory capital reserve	18,520	18,520
Hedge reserve	-425	-609
Retained earnings (prior periods)	17,678	96,253
Profit for the period	24,423	26,425
Total equity	367,674	325,792
Total liabilities and equity	623,639	597,137

Interim condensed consolidated statement of profit or loss:

In thousands of euros	Q4 2018	Q4 2017	2018	2017
Revenue	29,572	27,089	130,635	121,295
Other income	158	231	816	4,808
Operating expenses	-9,347	-9,348	-37,360	-41,041
Personnel expenses	-5,508	-4,962	-19,420	-17,957
Depreciation, amortisation and impairment	-5,829	-11,397	-22,345	-26,430
Other expenses	-34	-35	-251	-358
Operating profit	9,012	1,578	52,075	40,317
Finance income and costs
Finance income	20	10	33	33
Finance costs	-464	-619	-2,003	-2,318
Finance costs - net	-444	-609	-1,970	-2,285
Share of profit of an associate accounted for under the equity method	-18	-24	517	348
Profit before income tax	8,550	945	50,622	38,380
Income tax	51	45	-26,199	-11,955
Profit for the period	8,601	990	24,423	26,425
Attributable to owners of the Parent	8,601	990	24,423	26,425
Basic and diluted earnings per share (in euros)	0.03	0.01	0.11	0.14
Basic and diluted earnings per share – continuing operations (in euros)	0.03	0.01	0.11	0.14

Interim condensed consolidated statement of cash flows:

In thousands of euros	2018	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	119,883	0
Issue of debt securities	0	105,000
Redemption of debt securities	-12,650	-111,250
Repayments of loans received	-6,766	-6,766
Change in overdraft (liability)	-2,565	2,565
Repayments of finance lease principal	-7	-3
Dividends paid	-105,000	-48,000
Interest paid	-2,023	-2,459
Other payments related to financing activities	-51	-30
Cash from/used in financing activities	-9,179	-60,943
NET CASH FLOW	35,609	-42,964
Cash and cash equivalents at beginning of the period	6,954	49,918
Change in cash and cash equivalents	35,609	-42,964
Cash and cash equivalents at end of the period	42,563	6,954

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.

Marko Raid
CFO, Member of the Management Board

Additional information:

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

Attachment

• Tallinna Sadam Q4 2018 ENG