AS Tallink Grupp Unaudited Consolidated Interim Report Q1 2023
In the first quarter (1 January – 31 March) of 2023 financial year, AS Tallink Grupp and its subsidiaries (the Group) carried 1 049 777 passengers, which is 45.7% more than in the first quarter 2022. The number of cargo units transported decreased by 14.9% compared to the same period a year ago. The Group’s unaudited consolidated revenue amounted to EUR 171.2 million (EUR 106.1 million in Q1 2022), up by 61.3%. Unaudited EBITDA was EUR 27.1 million (EUR -11.0 million in Q1 2022) and the unaudited net loss for the period was EUR 5.4 million (net loss of EUR 40.0 million in Q1 2022).
The following operational factors impacted the Group’s revenue and operating results in the first quarter of 2023:
Growing demand for travelling supported by improving consumer confidence levels in all Group’s core markets.
Ongoing war in Ukraine continues to impact the demand.
During the quarter the Group operated 15 vessels including 3 shuttle vessels, 2 cargo vessels, 4 cruise ferries and 6 vessels that were chartered out (2 vessels on long-term and 4 vessels on short-term charter).
The Group operated 3 hotels in Tallinn while the hotel in Riga remained closed since October 2020.
Planned maintenance works totalled 45 days which affected the Finland-Sweden segment’s first quarter passenger and cargo levels as well as the financial result.
The Group continues to focus on cost savings from previously implemented measures and achieving profitable operations on its core routes.
The Group regularly monitors the developments on its core routes including the capacity of each route and continues to look for chartering options for vessels not used on the main routes.
Sales and Segments
In the first quarter of 2023, the Group’s total revenue increased by EUR 65.1 million to EUR 171.2 million, compared to EUR 106.1 million a year ago.
Revenue from route operations (core business) increased by EUR 33.2 million to EUR 124.5 million compared to Q1 2022.
The number of passengers carried on the Estonia-Finland route increased by 46.6% year-on-year. The number of transported cargo units decreased by 8.8%. The revenue from the Estonia-Finland route increased by EUR 16.1 million to EUR 57.4 million. The segment result improved by EUR 7.5 million to EUR 6.2 million. The segment reflects the operations of three shuttle vessels. Shuttle vessel MyStar that was added to the Estonia-Finland route in mid-December 2022 has received a warm welcome from passengers. The cruise ferry Silja Europa stopped operating on the Tallinn-Helsinki route in August 2022 due to a charter agreement. The cargo vessel Sea Wind was sold at the end of April 2022.
In the first quarter of 2023, the number of passengers increased by 35.5% on Finland-Sweden routes year-on-year. The number of transported cargo units decreased by 53.8%. The routes’ revenue increased by EUR 10.0 million to EUR 47.7 million and the segment result improved by EUR 10.5 million to a loss of EUR 3.3 million. The segment reflects the operations of one cruise ferry on the Turku-Stockholm and two cruise ferries on the Helsinki-Stockholm route. The cruise ferry Galaxy stopped operating on Turku-Stockholm and Turku-Kapellskär routes from September 2022 due to a charter agreement.
On Estonia-Sweden routes the number of carried passengers increased by 77.4% year-on-year. The number of transported cargo units increased by 8.5% compared to Q1 2022. The revenue of Estonia-Sweden routes increased by EUR 7.1 million to EUR 19.4 million and segment result improved by EUR 5.3 million to a loss of EUR 1.5 million. Estonia-Sweden routes reflect operation of two cargo vessels and one cruise ferry in the first quarter of 2023.
Revenue from the segment Other increased by a total of EUR 32.5 million and amounted to EUR 47.8 million. The increase was mainly driven by chartering out vessels, accommodation sales and to a lesser extent by various catering and retail activities. The shuttle vessel Atlantic Vision was chartered to Canada in November 2008. The current agreement has been signed until May 2024 with an extension option for another 12 months. The agreement for chartering the cruise vessel Romantika was signed in March 2022 for three years and with the option to extend the agreement (3+1+1). Short-term charter agreements have been signed for cruise vessels Victoria I, Isabelle, Galaxy and Silja Europa.
Earnings
In the first quarter of 2023, the Group’s gross profit improved by EUR 44.7 million to EUR 24.8 million. EBITDA improved by EUR 38.1 million and amounted to EUR 27.1 million.
Amortisation and depreciation expense increased by EUR 1.6 million to EUR 25.2 million compared to the first quarter of the financial year 2022.
As a result of increased interest-bearing liabilities, net finance costs increased by EUR 1.9 million year-on-year to EUR 7.6 million in first quarter 2023.
The Group’s unaudited net loss for Q1 2023 was EUR 5.4 million or EUR 0.007 per share compared to a net loss of EUR 40.0 million or EUR 0.054 per share in Q1 2022.
Investments
The Group’s investments in the first quarter of 2023 amounted to EUR 11.5 million majority of which were critical maintenance and repair works on three vessels (Silja Serenade, Silja Symphony and Baltic Princess). Maintenance and repair work on these vessels lasted for a total of 45 days.
Investments were also made in the development of IT systems and shore-to-ship green power solution. The shore-to-ship green power solution allows shuttle vessel Megastar to use more environmentally friendly shore power during overnight stay in port.
Financial Position
At the end of Q1 2023, the Group’s net debt amounted to EUR 735.4 million having decreased by EUR 3.2 million compared to the end of 2022. The net debt to EBITDA ratio was 4.2 at the reporting date (5.4 as at 31 December 2022).
As at 31 March 2023, the Group’s cash and cash equivalents amounted to EUR 96.5 million (EUR 114.9 million as at 31 December 2022) and the Group had EUR 135.0 million in unused credit lines (EUR 135.0 million as at 31 December 2022). The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to EUR 231.5 million (EUR 249.9 million as at 31 December 2022). In the first quarter of 2023, the Group repaid loans in the total amount of EUR 19.3 million while no repayments were made during the same period a year ago. The current trade and other payables amounted to EUR 87.7 million (EUR 86.9 million as at 31 December 2022).
Key Figures
For the period | Q1 2023 | Q1 2022 | Change % |
Revenue (EUR million) | 171.2 | 106.1 | 61.3% |
Gross profit/loss (EUR million) | 24.8 | -19.9 | 224.5% |
EBITDA¹ (EUR million) | 27.1 | -11.0 | 347.2% |
EBIT¹ (EUR million) | 1.9 | -34.6 | 105.4% |
Net profit/loss for the period (EUR million) | -5.4 | -40.0 | 86.4% |
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Depreciation and amortisation (EUR million) | 25.2 | 23.7 | 6.6% |
Capital expenditures¹ ²(EUR million) | 11.5 | 8.9 | 4.0% |
Weighted average number of ordinary shares outstanding | 743 569 064 | 743 569 064 | 0.0% |
Earnings/loss per share¹ (EUR) | -0.007 | -0.054 | 86.4% |
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Number of passengers | 1 049 777 | 720 261 | 45.7% |
Number of cargo units | 86 732 | 101 938 | -14.9% |
Average number of employees | 4 883 | 4 634 | 5.4% |
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As at | 31.03.2023 | 31.12.2022 | Change % |
Total assets (EUR million) | 1672.1 | 1691.6 | -1.2% |
Total liabilities (EUR million) | 970.5 | 984.7 | -1.4% |
Interest-bearing liabilities (EUR million) | 831.8 | 853.5 | -2.5% |
Net debt¹ (EUR million) | 735.4 | 738.6 | -0.4% |
Net debt to EBITDA¹ | 4.2 | 5.4 | -22.2% |
Total equity (EUR million) | 701.6 | 706.9 | -0.8% |
Equity ratio¹ (%) | 42% | 42% |
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Number of ordinary shares outstanding | 743 569 064 | 743 569 064 | 0.0% |
Shareholders’ equity per share (EUR) | 0.94 | 0.95 | -0.8% |
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Ratios¹ | Q1 2023 | Q1 2022 |
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Gross margin (%) | 14.5% | -18.7% |
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EBITDA margin (%) | 15.8% | -10.3% |
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EBIT margin (%) | 1.1% | -32.6% |
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Net profit/loss margin (%) | -3.2% | -37.7% |
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ROA (%) | 4.6% | -2.7% |
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ROE (%) | 7.1% | -9.2% |
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ROCE (%) | 6.0% | -3.3% |
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1 Alternative performance measures based on ESMA guidelines are disclosed in the Alternative Performance Measures section of this Interim Report.
2 Does not include additions to right-of-use assets.
EBITDA: result from operating activities before net financial items, share of profit of equity-accounted investees, taxes, depreciation and amortization
EBIT: result from operating activities
Earnings/loss per share: net profit or loss/ weighted average number of shares outstanding
Equity ratio: total equity / total assets
Shareholder’s equity per share: shareholder’s equity / number of shares outstanding
Gross profit/loss margin: gross profit / net sales
EBITDA margin: EBITDA / net sales
EBIT margin: EBIT / net sales
Net profit/loss margin: net profit or loss / net sales
Capital expenditure: additions to property, plant and equipment – additions to right-of-use assets + additions to intangible assets
ROA: earnings before net financial items, taxes 12-months trailing / average total assets
ROE: net profit 12-months trailing / average shareholders’ equity
ROCE: earnings before net financial items, taxes 12-months trailing / (total assets – current liabilities (average for the period))
Net debt: interest-bearing liabilities less cash and cash equivalents
Net debt to EBITDA: net debt / EBITDA 12-months trailing
Consolidated statement of profit or loss and other comprehensive income
Unaudited, in thousands of EUR | Q1 2023 | Q1 2022 |
Revenue | 171 245 | 106 143 |
Cost of sales | -146 463 | -126 043 |
Gross profit/loss | 24 782 | -19 900 |
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Sales and marketing expenses | -9 090 | -7 329 |
Administrative expenses | -14 112 | -11 128 |
Impairment loss on receivables |
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Other operating income | 285 | 3 734 |
Other operating expenses | -8 | -5 |
Result from operating activities | 1 857 | -34 628 |
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Finance income | 355 | 39 |
Finance costs | -7 957 | -5 698 |
Share of profit/loss of equity-accounted investees | 0 | 0 |
Profit/loss before income tax | -5 745 | -40 287 |
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Income tax | 321 | 298 |
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Net profit/loss for the period | -5 424 | -39 989 |
Net profit/loss for the period attributable to equity holders of the Parent | -5 424 | -39 989 |
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Other comprehensive income |
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Items that may be reclassified to profit or loss |
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Exchange differences on translating foreign operations | 74 | -1 |
Other comprehensive income for the period | 74 | -1 |
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Total comprehensive profit/loss for the period | -5 350 | -39 990 |
Total comprehensive profit/loss for the period attributable to equity holders of the Parent | -5 350 | -39 990 |
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Profit/loss per share (in EUR) | -0.007 | -0.054 |
Consolidated statement of financial position
Unaudited, in thousands of EUR | 31.03.2023 | 31.03.2022 | 31.12.2022 |
ASSETS |
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Cash and cash equivalents | 96 455 | 100 977 | 114 935 |
Trade and other receivables | 33 492 | 30 622 | 31 380 |
Prepayments | 15 873 | 15 441 | 9 379 |
Prepaid income tax | 35 | 0 | 37 |
Inventories | 40 843 | 41 048 | 39 965 |
Current assets | 186 698 | 188 088 | 195 696 |
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Investments in equity-accounted investees | 75 | 165 | 75 |
Other financial assets and prepayments | 3 992 | 2 817 | 3 622 |
Deferred income tax assets | 21 840 | 21 840 | 21 840 |
Investment property | 300 | 300 | 300 |
Property, plant and equipment | 1 428 058 | 1 311 910 | 1 438 286 |
Intangible assets | 31 089 | 35 047 | 31 823 |
Non-current assets | 1 485 354 | 1 372 079 | 1 495 946 |
TOTAL ASSETS | 1 672 052 | 1 560 167 | 1 691 642 |
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LIABILITIES AND EQUITY |
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Interest-bearing loans and borrowings | 169 986 | 272 159 | 165 049 |
Trade and other payables | 87 668 | 84 625 | 86 934 |
Derivatives | 0 | 0 | 0 |
Payables to owners | 6 | 6 | 6 |
Income tax liability | 35 | 47 | 35 |
Deferred income | 50 928 | 33 508 | 44 222 |
Current liabilities | 308 623 | 390 345 | 296 246 |
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Interest-bearing loans and borrowings | 661 848 | 517 296 | 688 465 |
Derivatives | 0 | 0 | 0 |
Other liabilities | 0 | 0 | 0 |
Non-current liabilities | 661 848 | 517 296 | 688 465 |
Total liabilities | 970 471 | 907 641 | 984 711 |
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Share capital | 349 477 | 349 477 | 349 477 |
Share premium | 663 | 663 | 663 |
Reserves | 65 925 | 67 417 | 66 363 |
Retained earnings | 285 516 | 234 969 | 290 428 |
Equity attributable to equity holders of the Parent | 701 581 | 652 526 | 706 931 |
Total equity | 701 581 | 652 526 | 706 931 |
TOTAL LIABILITIES AND EQUITY | 1 672 052 | 1 560 167 | 1 691 642 |
Consolidated statement of cash flows
Unaudited, in thousands of EUR | Q1 2023 | Q1 2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net profit/loss for the period | -5 424 | -39 989 |
Adjustments | 32 502 | 29 037 |
Changes in: |
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Receivables and prepayments related to operating activities | -8 606 | -6 462 |
Inventories | -878 | -6 417 |
Liabilities related to operating activities | 8 039 | 5 561 |
Changes in assets and liabilities | -1 445 | -7 318 |
Cash generated from operating activities | 25 633 | -18 270 |
Income tax repaid/paid | -47 | -41 |
NET CASH FROM/USED OPERATING ACTIVITIES | 25 586 | -18 311 |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchase of property, plant, equipment and intangible assets | -11 510 | -8 891 |
Proceeds from disposals of property, plant, equipment | 79 | 41 |
Proceeds from other financial assets | 0 | 0 |
Interest received | 355 | 1 |
NET CASH USED IN INVESTING ACTIVITIES | -11 076 | -8 849 |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from loans received | 0 | 0 |
Repayment of loans received | -19 307 | 0 |
Repayment of bonds | 0 | 0 |
Change in overdraft | -15 | 11 431 |
Payments for settlement of derivatives | 0 | 0 |
Payment of lease liabilities | -4 435 | -4 215 |
Interest paid | -8 121 | -6 332 |
Payment of transaction costs related to loans | -1 112 | -303 |
Dividends paid | 0 | 0 |
Issue of shares | 0 | 0 |
Income tax on dividends paid | 0 | 0 |
NET CASH FROM/USED IN FINANCING ACTIVITIES | -32 990 | 581 |
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TOTAL NET CASH FLOW | -18 480 | -26 579 |
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Cash and cash equivalents at the beginning of period | 114 935 | 127 556 |
Change in cash and cash equivalents | -18 480 | -26 579 |
Cash and cash equivalents at the end of period | 96 455 | 100 977 |
Anneli Simm
Investor Relations Coordinator
AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail anneli.simm@tallink.ee
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