AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2024
The Q3 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 [https://teams.microsoft.com/dl/launcher/launcher.html?url=%2F_%23%2Fl%2Fmeetup-join%2F19%3Ameeting_NTgyYmQ2MjQtNzNiNS00ZjQxLWEyMDMtMjZjYzgyNjk3MTdi%40thread.v2%2F0%3Fcontext%3D%257B%2522Tid%2522%253A%252286359415-f0d5-4ea5-bb32-42128c4493be%2522%252C%2522Oid%2522%253A%2522fbc24b3a-8623-42c6-8311-65b8899e63dd%2522%252C%2522IsBroadcastMeeting%2522%253Atrue%252C%2522role%2522%253A%2522a%2522%257D%26btype%3Da%26role%3Da%26anon%3Dtrue&type=meetup-join&deeplinkId=f152d913-6f3d-4640-91a3-ab97519a6dcc&directDl=true&msLaunch=true&enableMobilePage=true&suppressPrompt=true]; we kindly ask participants to provide their questions latest by 11:00 by email to: [email protected]. Further details are available in a previously published announcement [https://view.news.eu.nasdaq.com/view?id=b3197709aa286a677048fcf2a7608e34d&lang=en].
In the third quarter (1 July – 30 September) of the 2024 financial year, AS Tallink Grupp and its subsidiaries (hereinafter referred to as “the Group”) carried 1 715 496 passengers, which is 3.4% less than in the third quarter of 2023. The number of cargo units transported decreased by 11.7% compared to the same period a year ago. The number of passenger vehicles was down by 8.3% year-on-year and amounted to 250 810. The Group’s unaudited consolidated revenue amounted to EUR 231.9 million (EUR 240.7 million in Q3 2023), down by 3.7%. Unaudited EBITDA was EUR 68.4 million (EUR 82.1 million in Q3 2023) and the unaudited net profit for the period was EUR 36.8 million (EUR 48.7 million in Q3 2023).
The following operational factors impacted the Group’s revenue and operating results in the third quarter of 2024:
-Demand continued to be affected by low consumer and business confidence levels, the economic challenges in the Group’s core markets as well as mounting global geopolitical tensions.
-As at the end of the quarter, the Group operated 14 vessels including 2 shuttle vessels, 2 cargo vessels, 5 operating cruise ferries as well as 3 vessels that were chartered out and 2 vessels that were in lay-up.
-During the quarter the Tallinn-Stockholm route was operated with two cruise ferries. The cruise ferry Victoria I returned to -Tallinn-Helsinki route on 31 August 2024.
-The Group operated 3 hotels in Tallinn and 1 in Riga.
-The Group’s net debt was EUR 555.7 million as at the end of the quarter (EUR 548.9 million as at 30 June 2024) bringing the net debt to EBITDA ratio to 2.98 as at 30 September 2024.
-Payment of dividends in the amount of EUR 44.6 million and related income tax in the amount of EUR 4.9 million impacted the cash balance.
-As a result of the voluntary takeover bid, the shareholding of AS Infortar, the core shareholder of the Group, increased from 46.8% to 68.5% as at 9 August 2024.
-The Group continues to focus on cost efficiencies from the 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 look for new chartering options for vessels not used on the main routes and to work on extending the existing chartering agreements.
Sales and Segments
In the third quarter of 2024, the Group’s total revenue decreased by EUR 8.8 million to EUR 231.9 million compared to EUR 240.7 million in the third quarter of 2023.
Revenue from route operations (the Group’s core business) decreased by EUR 2.0 million to EUR 193.6 million compared to the third quarter of 2023. The segment result from route operations (the Group’s core business) amounted to EUR 48.1 million, down by EUR 6.9 million compared to the third quarter of 2023.
The number of passengers carried on the Estonia-Finland route dropped by 1.7% in year-on-year comparison. The number of transported cargo units decreased by 13.0%. Revenue from the Estonia-Finland route increased by EUR 0.4 million compared to the same period a year ago and amounted to EUR 86.8 million. The segment result decreased by EUR 0.9 million amounting to EUR 31.4 million. The segment reflects the operations of two shuttle vessels until 31 August 2024 and two shuttle vessels and one cruise ferry from thereon. From 31 May 2024 until 31 August 2024, the cruise ferry Victoria I operated the Tallinn-Stockholm route.
In the third quarter of 2024, the year-on-year decrease in the number of passengers on Finland-Sweden routes was 18.1%. The number of transported cargo units increased by 9.9%. The routes’ revenue decreased by EUR 11.1 million to EUR 72.6 million and the segment result decreased by EUR 5.6 million to EUR 13.2 million, year-on-year. The segment reflects the operations of one cruise ferry on the Turku-Stockholm route and two cruise ferries on the Helsinki-Stockholm route.
On Estonia-Sweden routes the number of carried passengers increased by 34.2% while the number of transported cargo units decreased by 21.6% compared to the third quarter of 2023. Year-on-year, the revenue of Estonia-Sweden routes increased by EUR 8.6 million to EUR 34.2 million. The segment result declined by EUR 0.4 million compared to the third quarter of 2023 and amounted to EUR 3.5 million. Estonia-Sweden routes reflect the operation of two cargo vessels and two cruise ferries until 31 August 2024. The cruise ferry Victoria I returned to the Tallinn-Helsinki route on 31 August 2024 and the Tallinn-Stockholm route was from thereon operated by the cruise ferry Baltic Queen.
Revenue from the segment Other decreased by a total of EUR 7.2 million and amounted to EUR 40.2 million. The decrease was mainly driven by less vessels on charter. As at the end of the third quarter of 2024, the Group had 3 vessels on charter, of which one was on long-term and two on short-term charter (Q3 2023: 5 vessels including 3 on long-term and 2 on short-term).
At the end of the third quarter of 2024, the following vessels were chartered out:
-The shuttle vessel James Joyce (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.
-The cruise ferry Galaxy I was chartered out in September 2022. In October 2024, the agreement was extended by 12 months until October 2025 with the option of extending the agreement at the end of the agreement period by 6+6 months.
-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 third quarter of 2024, the Group’s gross profit declined by EUR 10.6 million to EUR 67.0 million compared to EUR 77.7 million in the third quarter of 2023. EBITDA declined by EUR 13.7 million and amounted to EUR 68.4 million.
Amortisation and depreciation expense decreased by EUR 0.9 million to EUR 24.4 million compared to the third quarter of the financial year 2023.
The Group’s unaudited net profit for the third quarter of 2024 was EUR 36.8 million or EUR 0.050 per share compared to EUR 48.7 million or EUR 0.065 per share in the third quarter of 2023.
Investments
The Group’s investments in the third quarter of 2024 amounted to EUR 5.6 million (EUR 6.1 million in Q3 2023). 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 Q3 2024, the Group’s net debt amounted to EUR 555.7 million, up by EUR 6.8 million compared to the end of second quarter of 2024. The net debt to EBITDA ratio was 2.98 at the reporting date (2.7 as at 30 June 2024).
As at 30 September 2024, the Group’s cash and cash equivalents amounted to EUR 32.6 million (EUR 70.9 million as at 30 June 2024) and the Group had EUR 75.0 million in unused credit lines (EUR 75.0 million as at 30 June 2024). The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to EUR 107.6 million (EUR 145.8 million as at 30 June 2024). The decline in cash and cash equivalents as well as in the liquidity buffer was driven by the payment of dividends and related income tax in the third quarter of 2024. In the third quarter of 2024, the Group repaid loans in the total amount of EUR 27.0 million (EUR 30.9 million in the third quarter of 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 Annual General Meeting of Shareholders held on 7 May 2024 adopted a resolution to pay dividends of EUR 0.06 per share for the financial year of 2023. The dividends in the amount of EUR 44.6 million were paid out on 3 July 2024.
Results of the first 9 months of 2024
In the first 9 months (1 January – 30 September) of the 2024 financial year, the Group carried 4.3 million passengers which is down by 2.2% compared to the same period last year. The Group’s unaudited revenue for the period decreased by 6.1% and amounted to EUR 602.3 million. Unaudited EBITDA for the first 9 months was EUR 149.5 million (EUR 177.7 million in January-September 2023) and unaudited net profit was EUR 45.5 million (EUR 76.7 million in January-September 2023).
The financial result of the first 9 months of 2024 was impacted by the following factors:
-Low consumer and business confidence in the home markets as well as mounting geopolitical tensions.
-The number of vessels on charter dropped from 5 in the beginning of the year to 3 as at the end of the third quarter.
-Sale of the cruise vessel Isabelle in the first quarter of 2024.
-Two vessels in lay-up including the cruise vessel Romantika the charter agreement of which was prematurely terminated in September 2023 and MV Superfast IX (formerly Atlantic Vision) the charter agreement of which ended in May 2024.
-Payment of dividends in the amount of EUR 44.6 million in the third quarter of 2024.
-Income tax expense on dividends in the amount of EUR 9.2 million was recorded in the second quarter of 2024. In the third quarter of 2024, income tax on dividends was paid in the amount of EUR 4.9 million (EUR 4.3 million of the dividend tax expense was offset by prepaid income tax).
-Repayment of long-term loans in the amount of EUR 59.5 million.
Key Figures
For the period Q3 2024 Q3 2023 Jan-Sep Jan-Sep
2024 2023
Revenue (EUR million) 231.9 240.7 602.3 641.6
Gross profit/loss (EUR million) 67.0 77.7 127.6 168.9
EBITDA¹ (EUR million) 68.4 82.1 149.5 177.7
EBIT¹ (EUR million) 44.0 56.8 76.1 101.9
Net profit/loss for the period
(EUR million) 36.8 48.7 45.5 76.7
Depreciation and amortisation
(EUR million) 24.4 25.2 73.3 75.7
Capital expenditures¹ ²(EUR million) 5.6 6.1 16.5 22.3
Weighted average number of ordinary
shares outstanding 743 569 064 743 569 064 743 569 064 743 569 064
Earnings/loss per share¹ (EUR) 0.050 0.065 0.061 0.103
Number of passengers 1 715 496 1 775 821 4 270 002 4 366 679
Number of cargo units 66 865 75 701 238 628 247 792
Average number of employees 5 063 4 756 5 004 4 878
As at 30.09.2024 30.06.2024 30.09.2023 30.06.2023
Total assets (EUR million) 1 498.9 1 567.0 1 597.4 1 613.6
Total liabilities (EUR million) 711.5 816.6 813.7 878.4
Interest-bearing liabilities
(EUR million) 588.3 619.8 684.8 722.5
Net debt¹ (EUR million) 555.7 548.9 620.4 664.9
Net debt to EBITDA¹ 3.0 2.7 2.7 3.1
Total equity (EUR million) 787.4 750.4 783.7 735.2
Equity ratio¹ (%) 53% 48% 49% 46%
Number of ordinary shares
outstanding 743 569 064 743 569 064 743 569 064 743 569 064
Shareholders’ equity per share (EUR) 1.06 1.01 1.05 0.99
Ratios¹ Q3 2024 Q3 2023 Jan-Sep Jan-Sep
2024 2023
Gross margin (%) 28.9% 32.3% 21.2% 26.3%
EBITDA margin (%) 29.5% 34.1% 24.8% 27.7%
EBIT margin (%) 19.0% 23.6% 12.6% 15.9%
Net profit/loss margin (%) 15.9% 20.2% 7.6% 12.0%
ROA (%) 5.6% 7.7% 5.6% 7.7%
ROE (%) 6.1% 12.9% 6.1% 12.9%
ROCE (%) 6.7% 9.6% 6.7% 9.6%
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 Q3 2024 Q3 2023 Jan-Sep Jan-Sep
2024 2023
Revenue 231 868 240 668 602 317 641 588
Cost of sales -164 849 -163 013 -474 695 -472 682
Gross profit/loss 67 019 77 655 127 622 168 906
Sales and marketing expenses -10 684 -10 399 -32 347 -30 781
Administrative expenses -12 770 -11 175 -39 009 -37 494
Other operating income 469 789 20 868 1 382
Other operating expenses -42 -35 -1 001 -68
Result from operating activities 43 992 56 835 76 133 101 945
Finance income 144 133 633 804
Finance costs -7 319 -8 507 -22 376 -26 803
Profit/loss before income tax 36 817 48 461 54 390 75 946
Income tax -1 222 -8 896 762
Net profit/loss for the period 36 816 48 683 45 494 76 708
Net profit/loss for the period
attributable to equity holders
of the Parent 36 816 48 683 45 494 76 708
Other comprehensive income
Items that may be reclassified to profit
or loss
Exchange differences on translating
foreign operations -11 -244 358 29
Other comprehensive income for the period -11 -244 358 29
Total comprehensive profit/loss for
the period 36 805 48 439 45 852 76 737
Total comprehensive profit/loss for the
period attributable to equity holders
of the Parent 36 805 48 439 45 852 76 737
EPS (in EUR) 0.050 0.065 0.061 0.103
Diluted EPD (in EUR) 0.049 0.065 0.061 0.103
Consolidated statement of financial position
Unaudited, in thousands of EUR 30.09.2024 30.09.2023 31.12.2023
ASSETS
Cash and cash equivalents 32 609 64 433 41 921
Trade and other receivables 30 290 34 577 31 766
Prepayments 11 018 11 485 7 661
Prepaid income tax 13 1 193
Inventories 45 180 39 758 41 411
Short-term intangible assets 5 166 0 0
Current assets 124 276 150 254 122 952
Investments in equity-accounted investees 0 75 0
Other financial assets and prepayments 515 4 510 4 794
Deferred income tax assets 21 840 21 840 21 840
Investment property 300 300 300
Property, plant and equipment 1 327 413 1 391 682 1 377 664
Intangible assets 24 556 28 734 27 671
Non-current assets 1 374 624 1 447 141 1 432 269
TOTAL ASSETS 1 498 900 1 597 395 1 555 221
LIABILITIES AND EQUITY
Interest-bearing loans and borrowings 104 508 126 148 104 097
Trade and other payables 88 940 83 593 85 406
Payables to owners 0 0 0
Income tax liability 6 6 6
Deferred income 9 35 10
Current liabilities 34 261 45 237 34 788
227 724 255 019 224 307
Interest-bearing loans and borrowings
Non-current liabilities 483 812 558 659 545 160
Total liabilities 711 536 813 678 769 467
Share capital 349 477 349 477 349 477
Share premium 663 663 663
Reserves 66 251 67 694 67 056
Retained earnings 370 973 365 883 368 558
Equity attributable to equity holders
of the Parent 787 364 783 717 785 754
Total equity 787 364 783 717 785 754
TOTAL LIABILITIES AND EQUITY 1 498 900 1 597 395 1 555 221
Consolidated statement of cash flows
Unaudited, in thousands of EUR Q3 2024 Q3 2023 Jan-Sept Jan-Sept
2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit/loss for the period 36 816 48 683 45 494 76 708
Adjustments 31 858 33 283 86 268 100 721
Changes in:
Receivables and prepayments related to
operating activities 5 341 2 480 -1 568 -5 282
Inventories 1 230 2 496 -8 935 207
Liabilities related to operating
activities -20 215 -27 274 5 970 -2 703
Changes in assets and liabilities -13 644 -22 298 -4 533 -7 778
Cash generated from operating activities 55 030 59 668 127 229 169 651
Income tax repaid/paid 178 -20 153 -111
NET CASH FROM/USED OPERATING ACTIVITIES 55 208 59 648 127 382 169 540
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, equipment
and intangible assets -5 575 -6 083 -16 337 -22 249
Proceeds from disposals of property,
plant, equipment 26 164 24 516 244
Interest received 144 133 633 804
NET CASH USED IN INVESTING ACTIVITIES -5 405 -5 786 8 812 -21 201
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans received -27 040 -30 858 -59 492 -155 477
Change in overdraft -26 -15 0 -15
Payment of lease liabilities -4 751 -8 219 -13 887 -17 025
Interest paid -6 722 -7 982 -22 159 -25 212
Payment of transaction costs related to loans 0 0 -450 -1 112
Dividends paid -44 614 0 -44 614 0
Income tax on dividends paid -4 904 0 -4 904 0
NET CASH FROM/USED IN FINANCING
ACTIVITIES -88 057 -47 074 -145 506 -198 841
TOTAL NET CASH FLOW -38 254 6 788 -9 312 -50 502
Cash and cash equivalents at the
beginning of period 70 863 57 645 41 921 114 935
Change in cash and cash equivalents -38 254 6 788 -9 312 -50 502
Cash and cash equivalents at the
end of period 32 609 64 433 32 609 64 433
Anneli Simm
Investor Relations Manager
AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail [email protected]