Tallink Grupp has today published its 2020 financial results to the stock exchange and reported an unaudited net loss of EUR 108.3 million for the 2020 financial year (net profit of EUR 49.7 million in 2019), resulting from travel restrictions, border closures and states of emergency due to the global COVID 19 pandemic.
The group’s unaudited consolidated revenue amounted to EUR 442.9 million in 2020, which is a 53% drop compared to the previous year (EUR 949.1 million in 2019) and the group’s unaudited EBITDA for the financial year also declined in 2020, reaching EUR 8.0 million (171.1 million in 2019). Considering the 62% reduction in the company’s passenger number for the year, the 5.2% decrease in the number of cargo units carried and a significant 20% reduction in the number of trips operated in 2020 compared to 2019, the results for the year, when the world was ravaged by a global health and financial crisis, are unsurprising.
As a result of travel restrictions that were in place to varying degrees throughout the year, several of the company’s normal daily operating routes have been suspended since March 2020 (Tallinn-Stockholm, Helsinki-Stockholm and Riga-Stockholm) and the company’s hotels and restaurants were closed for shorter or longer periods during 2020. The company attempted to boost its operations by setting up various temporary routes during summer 2020 and by operating a number of special cruises in areas where travel restrictions allowed operations, but these attempts were once again curbed in autumn 2020 with travel restrictions gradually re-imposed across the region.
Despite the extremely challenging operating conditions, the company continued to look towards the future and made investments during the year in the total amount of EUR 100.1 million. The majority of the investments were made to the company’s fleet with the completion of the prepayment instalments for the new LNG-fuelled vessel MyStar making up the largest part of the capital expenditure. A smaller proportion of the investments were made to enhance the existing fleet’s energy efficiency and emissions reductions projects, vital for meeting the company’s sustainable development goals, and into increasing the company’s cargo capacity by acquiring an additional cargo vessel Sailor. When MyStar starts operating on the Tallinn-Helsinki route in early 2022, a “green bridge” between Estonia and Finland will be established.
To carry out the investment commitments and to ensure the sustainability of operations, a key area of activity for the company throughout the year was negotiations with financial institutions. As a result of successful developments in this area, the group ended the year with a total liquidity buffer of EUR 147.1 million (EUR 128.9 million in 2019). Part of the efforts to ensure liquidity in 2020 also included omitting dividend distribution and the Management Board will propose not paying a dividend in 2021 as well.
The most significant challenge and impact of the crisis was on the company’s employees. Due to reduced operations and a critical need to bring the company’s income and costs in line, the company was forced to undertake a number of personnel related processes throughout the year, including lay-offs, temporary reductions in working hours and pay, as well as collective redundancies. As a result of the various processes in all the company’s home markets, employee numbers across the group reduced during the year from 7240 at the end of 2019 to 4237 at the end of 2020 (out of whom approximately a further 400 are currently on parental leave).
Commenting on the results for 2020, Tallink Grupp’s CEO Paavo Nõgene, said:
“A momentous effort has been made by every single employee in Tallink Grupp over the last 12 months to limit and reduce costs, create and find alternative revenue streams to substitute our suspended core operations, to secure liquidity and buffers to ensure we remain strong enough to restart our core activities as soon as the virus situation improves. We have paid a high price for the position we are in today and that price has been the loss of more than a third of our dedicated and loyal workforce. We continue to hope that some day we may be able to re-engage at least some of them in our future activities and welcome them back.
“We are grateful to every passenger who travelled with us in 2020, to every one of our 4050 suppliers and partners for working with us and for finding solutions through these unprecedented times, to our home market governments and our good partners in the finance sector for their support, and our investors, customers and employees for their continued faith in us and our future.
“With the support we have received, the tremendous effort from our team in developing and growing at least those business areas we have been able to take forward during the last year, such as our e-commerce, and by quick thinking and action with launching temporary routes and special cruises, we have at least managed to sustain a business we can restart. The crisis has enabled Tallink to become more cost efficient, which will hopefully help us recover faster.
“As we wait for the COVID storm to pass and borders to reopen for travelling, we continue to develop business areas we feel will give us a strategic advantage going forward and enable us to spread risks, make preparations for offering our services again with an even stronger focus on safety and sustainability and get ready to provide safe and happy journeys and to reunite people around the Baltic sea after a year of separation.”
Tallink GruppAS 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 a number of ferry routes on the Baltic Sea under the brand names of Tallink and Silja Line. AS Tallink Grupp employs around 4000 people in Estonia, Finland, Sweden, Latvia, Russia and Germany. In 2020, the year of the global COVID-19 pandemic, Tallink Grupp provided services to 3.7 million travellers and transported nearly 360 000 units of cargo. The shares of Tallink Grupp are listed on the Tallinn Stock Exchange and Nasdaq Helsinki Stock Exchange.