Tallink Grupp has today announced its unaudited financial results for the third quarter and first nine months of 2020, which confirm the group does not expect to make a profit in the full financial year in 2020.
In the third quarter of 2020, the company’s normal high season, the Group’s unaudited net loss was EUR 23.9 million (54.6 million profit in Q3 2019). Third quarter EBITDA remained positive due to significant activities and efforts from the company to pursue a number of different new business lines and routes and amounted to EUR 5.7 million (EUR 83.2 million in Q3 2019). The Group’s unaudited revenue for the third quarter decreased by a significant 50% compared to the same period last year and amounted to EUR 143.7 million (EUR 287.8 million in Q3 2019). During the quarter, the group’s ticket revenue decreased by 58.6%, on board sales by 50.6%, cargo revenue by 21.5% and hotel accommodation revenue by 73.2% compared to the same period in 2019. In contrast to the second quarter of 2020 there was significantly less direct and indirect financial support available.
During the quarter the company’s activities were oriented toward securing the long-term sustainability of the company including initiation of reorganisation, withdrawing the first EUR 40m instalment the EUR 100m working capital loan from KredEx and making prepayments for the new shuttle vessel MyStar. The Group’s total investments in Q3 amounted to EUR 53.8 million.
In the first 9 months of the year the group has made a EUR 81.5 million unaudited net loss (EUR 44.2 million net profit in the first 9 months of 2019). The group’s unaudited revenue for the nine months decreased by 49.7% compared to the same period in 2019 and was EUR 363.6 million. The unaudited EBITDA decreased significantly in the first 9 months of 2020 compared to the same period last year and amounted to EUR 6.9 million (EUR 137.7 million in the first 9 months of 2019).
Commenting on the third quarter financial result, Tallink Grupp’s CEO Paavo Nõgene said:
“The third quarter of this challenging year has been one of ups and downs. We started the quarter with great optimism, initiating new routes, activities and plans, hoping for some kind of recovery, but ended it almost where we landed at the end of the first quarter of this year. With the new routes, special cruises and a great team effort, we managed to claw back at least some of the lost time and business from the second quarter and the fact that the number of trips we managed to make in the third quarter this year was only 7% less than in the same period last year, is great testament to it.
“However, with maximum capacity restrictions on all the departures we made to guarantee everyone’s safety, it was impossible to achieve the same revenue levels as we have done during the high season in other years. And, as the advice against travelling and restrictions slowly started to re-emerge in mid-August, we have been forced to make some very difficult decisions in the organisation to secure the long-term sustainability of our company. As external support dwindled in the third quarter, amounting to a mere EUR 4.9 million mostly for salary compensation support in Sweden in Q3, and no further significant subsidies agreed in Q4, we have had no option to start difficult collective redundancy processes and significant restructuring in our business across the markets to bring our costs and income in line with each other.
“Having started the year with over 7,200 dedicated employees in the group this year, we are faced with the reality of this number of good employees, dedicated and passionate tourism sector people in our company falling below the 5000 mark by the end of this year. That is over 2 000 real people with families, commitments, futures now sadly facing an uncertain time. At the end of the third quarter alone we have 19.9% less employees in our ranks than at the end of Q3 in 2019. We were unable to initiate any redundancy processes before September as the government salary support scheme that the company was able to use in April, May and June this year prohibited beneficiaries of the scheme from carrying out redundancies for a specific period of time.
“We will continue as a much leaner, focused, streamlined company, to sail through this storm and the uncertain months ahead. We will hold a steady course for the future and towards realising the plans we have made for the spring and summer of 2021, taking every opportunity during the last months of this year and the first months of next year to run operations and do business where it is possible. We have already proved during these challenging times that we can be extremely resourceful, agile and quick in taking new products and services to the market this year, maximising every opportunity to secure income for our company, but more importantly to secure jobs, livelihoods and the futures of our employees and their families.”
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 15 vessels and operates seven ferry routes under the brand names of Tallink and Silja Line. AS Tallink Grupp employs over 6,000 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.