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The second quarter development of AS Tallink Grupp and its subsidiaries (hereinafter also referred to as “the Group”) was better by most of the key operational numbers in the comparison to the last financial year, which is very pleasing especially in the current high fuel price environment. Commonly to our business, the first half year and second quarter are the lowest seasons of the financial year. The Group revenues increased by 11% to 2,743 million EEK (175 million EUR) and EBITDA increased by 22% to 328 million EEK (21 million EUR) in the second quarter. The Group reached a new record breaking result in passenger transportation in February 2008.
During its first autumn and winter period the new, year around Tallink Shuttle service drove the increase in passenger transportation and revenues on the Estonia-Finland segment. The segment result has improved significantly. The speed, stable operating schedule and improved onboard services of a new shuttle vessel M/S Star are of great advantages over the old type fast crafts in the service between Tallinn and Helsinki. In fact, this translated into the first ever winter period when the customers have had the chance to enjoy fast crossings between Tallinn and Helsinki. At the time of this report the second shuttle vessel M/S Superstar has arrived to her home port in Tallinn. With the similar main characteristics she will join M/S Star whereby Tallink Shuttle service will then provide frequent daily departures from both of the ports, Tallinn and Helsinki.
The increased fuel prices have had pressure to the Group results. The fuel cost has risen by approximately 297 million EEK (19 million EUR) during the first half-year period which is a 47% increase. Given its long distance and fast service almost half of the fuel cost increase accounts to the Finland-Germany route. As a result of the increased fuel cost and lower cargo volumes resulting from the higher competition in the cargo transportation, the Finland-Germany segment result has declined. The Management is currently looking for a solution to optimize the operations of the Superfast vessels and to improve their utilisation. The target is to improve the return on the capital of the Superfast vessels and to maintain the overall Group's return ratios.
Based on the rather positive performance in the second quarter and the high season period ahead, the Group's business development looks promising. However, as the fuel prices have been increasing rapidly and more than expected, the fuel cost continues to have high pressure on the earnings margins. By today's estimations the negative impact to the previously set earnings targets should not be more than 10%.
KEY EVENTS IN 1st HALF-YEAR
- Implementation of new booking and check-in system;
- Sale of M/S Meloodia;
- Share buyback program;
- Annual General Meeting.
1st HALF-YEAR KEY FIGURES
| |
01.09.2007-29.02.2008 |
01.09.2006-28.02.2007 |
change |
| |
EEK |
EUR |
EEK |
EUR |
% |
| Net sales (million) |
5,663.2 |
361.9 |
5,448.8 |
348.2 |
3.9 |
| Gross profit (million) |
1,148.3 |
73.4 |
1,154.8 |
73.8 |
-0.6 |
| Gross margin (%) |
20.3 |
|
21.2 |
|
-1.0 |
| EBITDA (million) |
781.4 |
49.9 |
789.1 |
50.4 |
|
| EBITDA margin (%) |
13.8 |
|
14.5 |
|
|
| Net profit for the period (million) |
-108.8 |
-7.0 |
2.6 |
0.2 |
|
| Net profit margin (%) |
-1.9 |
|
0.0 |
|
|
| |
|
|
|
|
|
| Depreciation (million) |
464.9 |
29.7 |
509.1 |
32.5 |
-8.7 |
| Investments (million) |
494.4 |
31.6 |
413.6 |
26.4 |
19.5 |
| |
|
|
|
|
|
| Weighted average number of ordinary shares outstanding during 1st half-year |
672,623,111 |
673,817,040 |
-0.2% |
| Earnings per share |
-0.16 |
-0.01 |
0.00 |
0.00 |
|
| |
|
|
|
|
|
| Number of passengers |
3,080,334 |
2,978,815 |
3.4 |
| Cargo units |
171,271 |
175,935 |
-2.7 |
| Average number of employees |
6,309 |
5,972 |
5.6 |
| |
|
|
|
|
|
| |
29.02.2008 |
31.08.2007 |
change |
| |
EEK |
EUR |
EEK |
EUR |
% |
| Total assets (million) |
25,811.9 |
1,649.7 |
26,570.9 |
1,698.2 |
-2.9 |
| Total liabilities (million) |
15,847.7 |
1,012.9 |
16,436.0 |
1,050.4 |
-3.6 |
| Interest-bearing liabilities (million) |
14,284.8 |
913.0 |
14,831.7 |
947.9 |
-3.7 |
| Total equity (million) |
9,964.2 |
636.8 |
10,134.9 |
647.7 |
-1.7 |
| Liquidity ratio |
0.577 |
|
0.665 |
|
|
| Equity ratio (%) |
38.6 |
|
38.1 |
|
|
| |
|
|
|
|
|
| Number of ordinary shares outstanding |
669,882,040 |
673,817,040 |
-0.6 |
| Shareholders equity per share |
14.87 |
0.95 |
15.04 |
0.96 |
-1.1 |
SALES AND EARNINGS
Net sales of the Group amounted to 5,663.2 million EEK (361.9 million EUR) in the first half-year of 2007/2008 financial year (September 01, 2007 – February 29, 2008) compared to 5,448.8 million EEK (348.2 million EUR) in the first half-year of 2006/2007 financial year (September 01, 2006 - February 28, 2007).
The sales were positively affected by the first ever winter period of fast ferry operation between Tallinn and Helsinki provided by M/S Star and the Tallink Shuttle service. Also various campaigns helped to improve the revenues.
The Group's gross profit decreased 6.4 million EEK (0.4 million EUR) to 1,148.3 million EEK (73.4 million EUR), EBITDA decreased by 1.0% to 781.4 million EEK (49.9 million EUR) and the net profit decreased by 111.4 million EEK (7.1 million EUR) from 2.6 million EEK (0.2 million EUR) to -108.8 million EEK (-7.0 million EUR). In the second quarter the gross profit and EBITDA showed a 16% and 22% increase respectively compared to the second quarter of the previous financial year.
However, the lower marketing and sales activity during the transition period to the new Group-wide booking and check-in system mainly in October and November 2007 had a negative impact on the sales and earnings during the first quarter neutralizing the second quarter sales and EBITDA increase effect to the cumulative half-year performance.
CONSOLIDATED CONDENSED INCOME STATEMENT
| |
|
|
|
|
| (unaudited, in thousands of EEK) |
01.12.2007-29.02.2008 |
01.12.2006-28.02.2007 |
01.09.2007-29.02.2008 |
01.09.2006-28.02.2007 |
| Net sales |
2,743,058 |
793,969 |
5,448,778 |
1,786,023 |
| Cost of sales |
-2,244,210 |
-690,905 |
-4,294,028 |
-1,440,492 |
| Gross profit |
498,848 |
103,064 |
1,154,750 |
345,531 |
| |
|
|
|
|
| Marketing expenses |
-186,758 |
-56,940 |
-403,688 |
-160,433 |
| Administrative and general expenses |
-229,877 |
-30,123 |
-479,239 |
-68,336 |
| Other operating items |
14,700 |
555 |
8,250 |
441 |
| Income from negative goodwill |
0 |
0 |
689 |
0 |
| Financial income |
23,724 |
9,878 |
91,045 |
10,747 |
| Financial expenses |
-231,928 |
-34,136 |
-367,549 |
-72,145 |
| |
|
|
|
|
| Profit/-loss from normal operation before income tax |
-111,291 |
-7,702 |
4,258 |
55,805 |
| |
|
|
|
|
| Income tax |
-107 |
299 |
-1,653 |
-588 |
| |
|
|
|
|
| Net profit/-loss for the period |
-111,398 |
-7,403 |
2,605 |
55,217 |
| Attributable to: |
|
|
|
|
| Equity holders of the parent |
-111,398 |
-7,601 |
2,605 |
54,598 |
| |
|
|
|
|
| Earnings per share (in EEK per share) |
|
|
|
|
| - basic |
-0.17 |
-0.17 |
-0.16 |
0.00 |
| - diluted |
-0.17 |
-0.17 |
-0.16 |
0.00 |
| |
|
|
|
|
| (unaudited, in thousands of EUR) |
01.12.2007-29.02.2008 |
01.12.2006-28.02.2007 |
01.09.2007-29.02.2008 |
01.09.2006-28.02.2007 |
| Net sales |
175,313 |
157,984 |
361,942 |
348,240 |
| Cost of sales |
-143,431 |
-130,454 |
-288,550 |
-274,438 |
| Gross profit |
31,882 |
27,530 |
73,392 |
73,802 |
| |
|
|
|
|
| Marketing expenses |
-11,936 |
-10,721 |
-24,302 |
-25,800 |
| Administrative and general expenses |
-14,692 |
-15,958 |
-29,986 |
-30,629 |
| Other operating items |
940 |
53 |
1,120 |
527 |
| Income from negative goodwill |
0 |
0 |
0 |
44 |
| Financial income |
1,516 |
4,244 |
1,956 |
5,819 |
| Financial expenses |
-14,823 |
-12,197 |
-29,125 |
-23,491 |
| |
|
|
|
|
| Profit/-loss from normal operation before income tax |
-7,113 |
-7,049 |
-6,945 |
272 |
| |
|
|
|
|
| Income tax |
-7 |
-109 |
-7 |
-106 |
| |
|
|
|
|
| Net profit/-loss for the period |
-7,120 |
-7,158 |
-6,952 |
166 |
| Attributable to: |
|
|
|
|
| Equity holders of the parent |
-7,120 |
-7,158 |
-6,952 |
166 |
| |
|
|
|
|
| Earnings per share (in EUR per share) |
|
|
|
|
| - basic |
-0.01 |
-0.01 |
-0.01 |
0.00 |
| - diluted |
-0.01 |
-0.01 |
-0.01 |
0.00 |
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands of EEK)
| ASSETS |
29.02.2008 |
31.08.2007 |
| Current assets |
|
|
| Cash and cash equivalents |
420,538 |
1,303,609 |
| Receivables |
1,038,422 |
815,093 |
| Prepayments |
172,106 |
124,134 |
| Derivatives |
7,394 |
1,799 |
| Inventories |
276,085 |
272,352 |
| Total current assets |
1,914,545 |
2,516,987 |
| |
|
|
| Non-current assets |
|
|
| Investments in associates |
3,242 |
3,242 |
| Other financial assets and prepayments |
7,668 |
9,279 |
| Deferred income tax assets |
153,278 |
153,102 |
| Investment property |
4,694 |
4,694 |
| Property, plant and equipment |
22,453,005 |
22,600,001 |
| Intangible assets |
1,275,469 |
1,283,592 |
| Total non-current assets |
23,897,356 |
24,053,910 |
| |
|
|
| TOTAL ASSETS |
25,811,901 |
26,570,897 |
| |
|
|
| LIABILITIES AND EQUITY |
|
|
| Current liabilities |
|
|
| Current portion of interest-bearing liabilities |
1,823,732 |
2,247,390 |
| Payables |
1,329,383 |
1,408,369 |
| Deferred income |
166,822 |
121,008 |
| Derivatives |
0 |
7,980 |
| Total current liabilities |
3,319,937 |
3,784,747 |
| |
|
|
| Non-current liabilities |
|
|
| Interest bearing loans and borrowings |
12,461,082 |
12,584,261 |
| Deferred income tax liability |
63,447 |
63,463 |
| Pension liability |
3,254 |
3,489 |
| Total non-current liabilities |
12,527,783 |
12,651,213 |
| TOTAL LIABILITIES |
15,847,720 |
16,435,960 |
| |
|
|
| EQUITY |
|
|
| Equity attributable to equity holders of the parent |
|
|
| Share capital |
6,738,170 |
6,738,170 |
| Share premium |
9,999 |
9,999 |
| Reserves |
1,193,474 |
1,202,991 |
| Retained earnings |
2,022,538 |
2,183,777 |
| Total equity attributable to equity holders of the parent |
9,964,181 |
10,134,937 |
| TOTAL EQUITY |
9,964,181 |
10,134,937 |
| |
|
|
| TOTAL LIABILITIES AND EQUITY |
25,811,901 |
26,570,897 |
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands of EUR)
| ASSETS |
29.02.2008 |
31.08.2007 |
| Current assets |
|
|
| Cash and cash equivalents |
26,877 |
83,315 |
| Receivables |
66,367 |
52,094 |
| Prepayments |
11,000 |
7,934 |
| Derivatives |
473 |
115 |
| Inventories |
17,645 |
17,407 |
| Total current assets |
122,362 |
160,865 |
| |
|
|
| Non-current assets |
|
|
| Investments in associates |
207 |
207 |
| Other financial assets and prepayments |
490 |
594 |
| Deferred income tax assets |
9,796 |
9,785 |
| Investment property |
300 |
300 |
| Property, plant and equipment |
1,435,009 |
1,444,403 |
| Intangible assets |
81,517 |
82,036 |
| Total non-current assets |
1,527,319 |
1,537,325 |
| |
|
|
| TOTAL ASSETS |
1,649,681 |
1,698,190 |
| |
|
|
| LIABILITIES AND EQUITY |
|
|
| Current liabilities |
|
|
| Current portion of interest-bearing liabilities |
116,558 |
143,634 |
| Payables |
84,963 |
90,011 |
| Deferred income |
10,662 |
7,734 |
| Derivatives |
0 |
510 |
| Total current liabilities |
212,183 |
241,889 |
| |
|
|
| Non-current liabilities |
|
|
| Interest bearing loans and borrowings |
796,408 |
804,281 |
| Deferred income tax liability |
4,055 |
4,056 |
| Pension liability |
208 |
223 |
| Total non-current liabilities |
800,671 |
808,560 |
| TOTAL LIABILITIES |
1,012,854 |
1,050,449 |
| |
|
|
| EQUITY |
|
|
| Equity attributable to equity holders of the parent |
|
|
| Share capital |
430,648 |
430,648 |
| Share premium |
639 |
639 |
| Reserves |
76,276 |
76,885 |
| Retained earnings |
129,264 |
139,569 |
| Total equity attributable to equity holders of the parent |
636,827 |
647,741 |
| TOTAL EQUITY |
636,827 |
647,741 |
| |
|
|
| TOTAL LIABILITIES AND EQUITY |
1,649,681 |
1,698,190 |
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands of EEK)
|
01.09.2007-29.02.2008 |
01.09.2006-28.02.2007 |
| Cash flows from operating activities |
|
|
| Net profit/-loss for the period |
-108,774 |
2,605 |
| Adjustments |
880,913 |
791,295 |
| Changes in assets related to operating activities |
-270,924 |
144,588 |
| Changes in inventories |
-3,733 |
11,190 |
| Changes in liabilities related to operating activities |
-36,461 |
-451,185 |
| Income tax repaid/-paid |
344 |
-652 |
| |
461,365 |
497,841 |
| Cash flow used for investing activities |
|
|
| Purchase of property, plant, equipment and intangible assets |
-494,290 |
-413,633 |
| Proceeds from disposals of property, plant, equipment |
200,228 |
6,803 |
| Proceeds from settlement of derivatives |
9,683 |
15,682 |
| Payments of settlement of derivatives |
-18,146 |
-42 |
| Acquisition of of minority interests |
0 |
-1,157 |
| Interest received |
7,443 |
13,527 |
| |
-295,082 |
-378,820 |
| Cash flow from (+)/ used for (-) financing activities |
|
|
| Transaction costs of issue of shares |
0 |
-6,520 |
| Repurchase of own shares |
-65,067 |
0 |
| Redemption of loans and bonds |
-821,577 |
-602,014 |
| Change in overdraft |
270,935 |
27,978 |
| Repayment of finance lease liabilities |
-8,402 |
-23,130 |
| Interest paid |
-425,243 |
-343,024 |
| |
-1,049,354 |
-946,710 |
| TOTAL NET CASH FLOW |
-883,071 |
-827,689 |
| Cash and cash equivalents: |
|
|
| - at the beginning of period |
1,303,609 |
1,407,608 |
| - increase (+) / decrease (-) |
-883,071 |
-827,689 |
| Cash and cash equivalents at end of period |
420,538 |
579,919 |
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands of EUR)
|
01.09.2007-29.02.2008 |
01.09.2006-28.02.2007 |
| Cash flows from operating activities |
|
|
| Net profit/-loss for the period |
-6,952 |
166 |
| Adjustments |
56,301 |
50,573 |
| Changes in assets related to operating activities |
-17,315 |
9,241 |
| Changes in inventories |
-239 |
715 |
| Changes in liabilities related to operating activities |
-2,330 |
-28,836 |
| Income tax repaid/-paid |
22 |
-41 |
| |
29,487 |
31,818 |
| Cash flow used for investing activities |
|
|
| Purchase of property, plant, equipment and intangible assets |
-31,591 |
-26,436 |
| Proceeds from disposals of property, plant, equipment |
12,797 |
435 |
| Proceeds from settlement of derivatives |
619 |
1,003 |
| Payments of settlement of derivatives |
-1,160 |
-3 |
| Acquisition of of minority interests |
0 |
-74 |
| Interest received |
476 |
864 |
| |
-18,859 |
-24,211 |
| Cash flow from (+)/ used for (-) financing activities |
|
|
| Transaction costs of issue of shares |
0 |
-417 |
| Repurchase of own shares |
-4,159 |
0 |
| Redemption of loans and bonds |
-52,508 |
-38,476 |
| Change in overdraft |
17,316 |
1,788 |
| Repayment of finance lease liabilities |
-537 |
-1,478 |
| Interest paid |
-27,178 |
-21,923 |
| |
-67,066 |
-60,506 |
| TOTAL NET CASH FLOW |
-56,438 |
-52,899 |
| Cash and cash equivalents: |
|
|
| - at the beginning of period |
83,315 |
89,963 |
| - increase (+) / decrease (-) |
-56,438 |
-52,899 |
| Cash and cash equivalents at end of period |
26,877 |
37,064 |
Janek Stalmeister
Financial Director
AS Tallink Grupp
Tel. +372 6409 800
e-mail: janek.stalmeister@tallink.ee
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