Tallink Grupp reports nearly 25% higher net profit for the full financial year 2019
According to the unaudited financial results released to the stock exchange today, Tallink Grupp AS has reported the unaudited net profit for the 2019 financial year of EUR 49.7 million (EUR 40.0 million in 2018) and the highest fourth quarter result of EUR 5.5 million net profit in the last five years (a loss of EUR 1.8 million in the fourth quarter of 2018). Based on the positive financial results, the Management Board will propose a dividend of EUR 0.06 per share to the Tallink Grupp shareholders’ annual general meeting.
The group’s unaudited EBITDA for the financial year was also up in 2019, reaching EUR 171.1 million (EUR 142.8 million in 2018). This result was achieved despite the group’s unaudited consolidated revenue slightly decreasing in 2019 compared to the previous financial year and totalling EUR 949.1 million in 2019 (EUR 949.7 million in 2018).
The main contributors to the EUR 0.6 million decrease in revenue were the decrease in revenue of the company’s core business as a result of the dockings and planned maintenance works of seven of the company’s vessels at the beginning of the year, and lower revenue from the company’s hotels due to the number of hotels operated by the company reducing from five to four in late 2018.
As a whole, the company’s financial results in 2019 were positively impacted by record numbers of passengers transported in a number of months during the year and passenger numbers increasing in almost all the company’s geographical segments. On the other hand, the results were negatively impacted by the increased competition in maritime traffic, particularly on the Estonia-Finland routes, and a weaker than expected cargo market due to economic uncertainties in Europe and labour strikes in Finland at the end of the year.
Commenting on the results for 2019, Tallink Grupp’s CEO Paavo Nõgene, said:
“The result of another record-breaking year in terms of passenger figures, which we reported in January, and an increased profit compared to 2018 despite all the challenges we faced in 2019, is testament to a tremendous effort by the whole Tallink Grupp team. A strong fourth quarter result with a more than EUR 7 million higher net profit compared to the same period in 2018 is a good position to end the year with and could only be achieved with a huge team effort throughout the year.
“The overall positive outcome for 2019 is a result of strong cost control, more group-wide centralised procurement activities, business optimisation projects, automation of certain activities, investments already made into increased energy efficiency and reduced fuel consumption on our vessels and many other activities aimed at improving the profitability of our business. It is also clear that the partial fixing of the fuel price at a very favourable level for our business has been a good achievement and one that has contributed greatly to the overall financial result for the year.
“Despite the overall positive outcome, the year also presented us with many challenges. 2019 started with the planned docking of seven of our vessels, which is vital for keeping our fleet up-to-date from a technical point of view and fresh and exciting from the customer experience perspective, but also means less ships are operating as normal. All our dockings are always carefully planned to ensure the necessary works are carried out in the shortest possible time and to minimise disruption for our passengers. With vessels modernised and upgraded in the first quarters of the year, we then managed to deliver one of the most successful high seasons in the company’s history, achieving passenger records for several months in a row.
“In addition to the dockings, our results were somewhat impacted by the postal workers’ strike in Finland at the end of 2019 and our cargo revenues came increasingly under pressure throughout 2019 due to an increasingly competitive market, particularly on the Estonia-Finland routes. We have started to take concerted action in this area to ensure we are able to remain competitive in this increasingly challenging market and hope to see some positive developments in this area during the year ahead.
“On the positive developments side, some of the challenges of declining passenger numbers and revenue on the Finland-Estonia route were alleviated by the reduction of the alcohol excise duty in Estonia in the middle of 2019, leading to a recovery of passenger flow and an increase in the revenue in this segment in the second half of the year.
“Tallink Grupp also made several crucial investments in 2019 in the total amount of EUR 60.9 million, such as the technical upgrades and renovations to ships’ public areas for continuously reducing their impact on the environment, and the order of the new LNG-operated vessel MyStar to further develop the vital connection between Tallinn and Helsinki.
“As Tallink Grupp continues to grow both on sea and on land, developing its core business of maritime transport and expanding its retail and franchise portfolio and business on shore in the Baltics, Nordics and beyond, it is clear that we need to do this sustainably and responsibly. Our CSR strategy and goals, adopted in 2019, are helping us lay a strong foundation for a strong, responsible and prosperous Tallink Grupp in 2020 and in the future.”
To the shareholders’ annual general meeting in 2020 the Management Board will propose a dividend of EUR 0.06 per share from the financial year 2019 net profit.
AS Tallink Grupp is one of the leading providers of passenger transport and cargo transport services in the northern part of the Baltic Sea region. The company owns 14 vessels and operates seven ferry routes under the brand names of Tallink and Silja Line. AS Tallink Grupp employs over 7,400 people in Estonia, Finland, Sweden, Latvia, Russia and Germany. In 2019, Tallink Grupp provided services to 9.8 million travellers and transported approximately 380,000 freight units of goods. The shares of Tallink Grupp are listed on the Tallinn Stock Exchange and Nasdaq Helsinki Stock Exchange.