AS Tallink Grupp Unaudited Consolidated Interim Report Q1 2024
The Q1 2024 results of AS Tallink Grupp will be introduced at an Investor Webinar held today at 12:00 (EEST). To participate, please join via the following link; we kindly ask participants to provide their questions latest by 11:00 by email to: investor@tallink.ee. Further details are available in a previously published announcement.
In the first quarter (1 January – 31 March) of 2024 financial year, AS Tallink Grupp and its subsidiaries (the Group) carried 1 102 738 passengers, which is 5.0% more than in the first quarter 2023. The number of cargo units transported decreased by 2.1% compared to the same period a year ago. The Group’s unaudited consolidated revenue amounted to EUR 160.4 million (EUR 171.2 million in Q1 2023), down by 6.3%. Unaudited EBITDA was EUR 34.5 million (EUR 27.1 million in Q1 2023) and the unaudited net profit for the period was EUR 2.6 million (net loss of EUR 5.4 million in Q1 2023).
The following operational factors impacted the Group’s revenue and operating results in the first quarter of 2024:
· Demand was affected by low consumer and business confidence levels, and the weak economic environment in all of the Group’s core markets as well as global geopolitical instability.
· The Group sold the cruise ferry Isabelle in January 2024.
· As at the end of the quarter, the Group operated 14 vessels including 2 shuttle vessels, 2 cargo vessels and 5 operating cruise ferries as well as 4 vessels that were chartered out (2 vessels on long-term and 2 vessels on short-term charter) and 1 vessel in lay-up.
· The Group operated 3 hotels in Tallinn and 1 in Riga.
· The Group’s net debt to EBITDA ratio was 2.6 as at the end of the quarter (2.8 at the end of the financial year 2023). Net debt was down to EUR 581.0 million euros as at the end of the quarter (EUR 607.3 million at the end of the financial year 2023).
· The Group continues to focus on cost efficiencies from previously implemented measures and maintaining 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 seek new chartering options for vessels not used on the main routes, as well as working to extend the existing charter agreements.
*Sales and Segments*
In the first quarter of 2024, the Group’s total revenue decreased by EUR 10.8 million to EUR 160.4 million, compared to EUR 171.2 million a year ago.
Revenue from route operations (core business) increased by EUR 2.7 million to EUR 127.3 million compared to Q1 2023. The segment result from route operations (core business) amounted to a loss of EUR 2.1 million compared to a profit of EUR 1.3 million in the first quarter of 2023.
The number of passengers carried on the Estonia-Finland route increased by 14.6% year-on-year. The number of transported cargo units remained on the same level as in the first quarter 2023. The revenue from the Estonia-Finland route increased by EUR 7.9 million to EUR 65.4 million. The segment result improved by EUR 3.5 million to EUR 9.7 million. The segment reflects the operations of two shuttle vessels and one cruise ferry. The shuttle vessel Oscar Wilde (formerly Star) stopped operating on the route in May 2023 due to a charter agreement. The cruise ferry Victoria I was added to the route in October 2023.
In the first quarter of 2024, the number of passengers decreased by 10.5% on Finland-Sweden routes year-on-year. The number of transported cargo units increased by 5.5%. The routes’ revenue decreased by EUR 3.3 million to EUR 44.3 million and the segment result dropped by EUR 5.0 million to a loss of EUR 8.3 million. The segment reflects the operations of one cruise ferry on the Turku-Kapellskär and two cruise ferries on the Helsinki-Stockholm route.
On Estonia-Sweden routes the number of carried passengers decreased by 5.1% year-on-year. The number of transported cargo units decreased by 19.3% compared to the same period a year ago. The revenue of Estonia-Sweden routes decreased by EUR 1.9 million to EUR 17.6 million and segment result dropped by EUR 2.0 million to a loss of EUR 3.4 million. Estonia-Sweden routes reflect operation of two cargo vessels and one cruise ferry in the first quarter of 2024.
Revenue from the segment Other decreased by EUR 13.7 million and amounted to EUR 34.1 million. The segment result declined year-on-year by EUR 8.2 million amounting to EUR 6.1 million. The decrease was mainly driven by having less vessels on charter. In the first quarter of 2024, the Group had 5 vessels on charter, of which 3 were on long-term and 2 on short-term charter (Q1 2023: 6 vessels). During the quarter, the charter agreement of the cruise ferry Isabelle ended due to sale of the vessel at the end of January 2024.
At the end of the first quarter of 2024, long-term charters were as follows:
· The vessel Atlantic Vision has been charted out to Canada since November 2008. The current agreement runs until May 2024 and will not be extended.
· The shuttle vessel Oscar Wilde (formerly Star) was chartered out from 5 May 2023 for 20 months with an option to extend the charter by 2+2 years and an option to purchase the vessel.
At the end of the first quarter of 2024, short-term charters were as follows:
· The cruise ferry Galaxy I was chartered out in September 2022. In March 2024, the agreement was extended by six months until October 2024 with the option of extending the agreement at the end of the agreement period.
· The cruise ferry Silja Europa was chartered out in August 2022. In October 2023, the charter agreement was extended until the end of 2024.
*Earnings*
In the first quarter of 2024, the Group’s gross profit dropped by EUR 11.0 million to EUR 13.8 million. EBITDA improved by EUR 7.4 million and amounted to EUR 34.5 million.
Amortisation and depreciation expense decreased by EUR 0.6 million to EUR 24.6 million compared to the first quarter of the financial year 2023.
Net finance costs amounted to EUR 7.5 million remaining on the same level (EUR 7.6 million) as in first quarter 2023.
The Group’s unaudited net profit for the first quarter of 2024 was EUR 2.6 million or EUR 0.003 per share compared to a net loss of EUR 5.4 million or EUR 0.007 per share in Q1 2023.
*Investments*
The Group’s investments in the first quarter of 2024 amounted to EUR 6.3 million.
Main investments in vessels included maintenance and repair works i.e., technical works as well as interior upgrades. The Group also continued to invest in the improvement of its IT systems.
*Financial Position*
At the end of the first quarter of 2024, the Group’s net debt amounted to EUR 581.0 million having decreased by EUR 26.3 million compared to the end of 2023. The net debt to EBITDA ratio was 2.6 at the reporting date (2.8 as at 31 December 2023).
As at 31 March 2024, the Group’s cash and cash equivalents amounted to EUR 48.9 million (EUR 41.9 million as at 31 December 2023) and the Group had EUR 75.0 million in unused credit lines (EUR 75.0 million as at 31 December 2023). The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to EUR 123.9 million (EUR 116.9 million as at 31 December 2023). In the first quarter of 2024, the Group repaid loans in the total amount of EUR 16.0 million (EUR 19.3 million the during first of 2023). The current trade and other payables amounted to EUR 90.0 million (EUR 85.4 million as at 31 December 2023).
*Dividends*
In 2018, the Group adopted a dividend policy subject to which dividends of a minimum amount of EUR 0.05 per share would be paid if the economic performance enables it.
The Management Board of the Group has prepared a proposal to the Annual General Meeting of Shareholders to be held on 7 May 2024 to pay a dividend of 0.06 euros per share in 2024 for the financial year of 2023.
*Key Figures*
*For the period* *Q1 2024* *Q1 2023* *Q1 2022*
Revenue (EUR million) 160.4 171.2 106.1
Gross profit/loss (EUR million) 13.8 24.8 -19.9
EBITDA¹ (EUR million) 34.5 27.1 -11.0
EBIT¹ (EUR million) 9.8 1.9 -34.6
Net profit/loss for the period (EUR million) 2.6 -5.4 -40.0
Depreciation and amortisation (EUR million) 24.6 25.2 23.7
Capital expenditures¹ ²(EUR million) 6.3 11.5 0.0
Weighted average number of ordinary shares outstanding 743 569 064 743 569 064 743 569 064
Earnings/loss per share¹ (EUR) 0.003 -0.007 -0.054
Number of passengers 1 102 738 1 049 777 720 261
Number of cargo units 84 950 86 732 101 938
Average number of employees 4 888 4 883 4 634
*As at* *31.03.2024* *31.03.2023* *31.03.2022*
Total assets (EUR million) 1 548.6 1 672.1 1 560.2
Total liabilities (EUR million) 760.0 970.5 907.6
Interest-bearing liabilities (EUR million) 629.9 831.8 789.5
Net debt¹ (EUR million) 581.0 735.4 688.5
Net debt to EBITDA¹ 2.6 4.2 12.8
Total equity (EUR million) 788.6 701.6 652.5
Equity ratio¹ (%) 51% 42% 42%
Number of ordinary shares outstanding 743 569 064 743 569 064 743 569 064
Shareholders’ equity per share (EUR) 1.06 0.94 0.88
*Ratios¹* *Q1 2024* *Q1 2023* *Q1 2022*
Gross margin (%) 8.6% 14.5% -18.7%
EBITDA margin (%) 21.5% 15.8% -10.3%
EBIT margin (%) 6.1% 1.1% -32.6%
Net profit/loss margin (%) 1.6% -3.2% -37.7%
ROA (%) 7.6% 4.6% -2.7%
ROE (%) 11.4% 7.1% -9.2%
ROCE (%) 9.1% 6.0% -3.3%
^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 2024* *Q1 2023*
Revenue 160 402 171 245
Cost of sales -146 603 -146 463
Gross profit/loss 13 799 24 782
Sales and marketing expenses -9 769 -9 090
Administrative expenses -12 745 -14 112
Other operating income 19 377 285
Other operating expenses -827 -8
Result from operating activities 9 835 1 857
Finance income 228 355
Finance costs -7 683 -7 957
Profit/loss before income tax 2 380 -5 745
Income tax 192 321
Net profit/loss for the period 2 572 -5 424
Net profit/loss for the period attributable to equity holders of the Parent 2 572 -5 424
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations 191 74
Other comprehensive income for the period 191 74
Total comprehensive profit/loss for the period 2 763 -5 350
Total comprehensive profit/loss for the period attributable to equity holders of the Parent 2 763 -5 350
Basic and diluted profit/loss per share (in EUR) 0.003 -0.007
* *
*Consolidated* *statement of financial* *position*
*Unaudited, in thousands of EUR* *31.03.2024* *31.03.2023* *31.12.2023*
ASSETS
Cash and cash equivalents 48 872 96 455 41 921
Trade and other receivables 30 718 33 492 31 766
Prepayments 22 411 15 873 7 661
Prepaid income tax 193 35 193
Inventories 42 192 41 411
Short-term intangible assets 1 481
Current assets 145 867 186 698 122 952
Investments in equity-accounted investees 75
Other financial assets and prepayments 499 3 992 4 794
Deferred income tax assets 21 840 21 840 21 840
Investment property 300 300 300
Property, plant and equipment 1 353 435 1 428 058 1 377 664
Intangible assets 26 663 31 089 27 671
Non-current assets 1 402 737 1 485 354 1 432 269
TOTAL ASSETS 1 548 604 1 672 052 1 555 221
LIABILITIES AND EQUITY
Interest-bearing loans and borrowings 104 486 169 986 104 097
Trade and other payables 89 969 87 668 85 406
Payables to owners 6 6 6
Income tax liability 10 35 10
Deferred income 40 163 50 928 34 788
Current liabilities 234 634 308 623 224 307
Interest-bearing loans and borrowings 525 381 661 848 545 160
Non-current liabilities 525 381 661 848 545 160
Total liabilities 760 015 970 471 769 467
Share capital 349 477 349 477 349 477
Share premium 663 663 663
Reserves 66 807 65 925 67 056
Retained earnings 371 642 285 516 368 558
Equity attributable to equity holders of the Parent 788 589 701 581 785 754
Total equity 788 589 701 581 785 754
TOTAL LIABILITIES AND EQUITY 1 548 604 1 672 052 1 555 221
*
*
*Consolidated* *statement of cash* *flows*
*Unaudited, in thousands of EUR* *Q1 2024* *Q1 2023*
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit/loss for the period 2 572 -5 424
Adjustments 13 863 32 502
Changes in:
Receivables and prepayments related to operating activities -9 208 -8 606
Inventories -2 262 -878
Liabilities related to operating activities 11 625 8 039
Changes in assets and liabilities 155 -1 445
Cash generated from operating activities 16 590 25 633
Income tax repaid/paid -7 -47
NET CASH FROM/USED OPERATING ACTIVITIES 16 583 25 586
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, equipment and intangible assets -6 327 -11 510
Proceeds from disposals of property, plant, equipment 24 436 79
Interest received 228 355
NET CASH USED IN INVESTING ACTIVITIES 18 337 -11 076
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans received -15 970 -19 307
Change in overdraft -15
Payment of lease liabilities -4 669 -4 435
Interest paid -6 972 -8 121
Payment of transaction costs related to loans -358 -1 112
NET CASH FROM/USED IN FINANCING ACTIVITIES -27 969 -32 990
TOTAL NET CASH FLOW 6 951 -18 480
Cash and cash equivalents at the beginning of period 41 921 114 935
Change in cash and cash equivalents 6 951 -18 480
Cash and cash equivalents at the end of period 48 872 96 455
Anneli Simm
Investor Relations Manager
AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail anneli.simm@tallink.ee
*Attachments*
· Tallink Grupp 2024 Q1 Financial Data
· AS Tallink Grupp Q1 2024 Presentation
· Tallink Grupp 2024 Q1 ENG