|
The 2007/2008 financial year for AS Tallink Grupp and its subsidiaries (hereinafter also referred to as “the Group”) was one of the most eventful. In one year the Group took a delivery of two brand new ferries - M/S Superstar and M/S Baltic Princess as the peak of the Group's fleet renewal program. This increased the total of the Group's investments to 4,260 million EEK (272 million EUR) during the 2007/2008 financial year. As is typical for the Group's business, the full impact of these new investments will be seen after a full year in operation and after all start up related costs and challenges have been addressed.
The areas of focus during the 2007/2008 year were the launch of the new booking and check-in system, the optimization of the operations in a very high fuel price environment and the restructuring of the Finland-Germany route as a consequence of the significantly increased bunker cost.
During the 2007/2008 financial year, the Group's revenues increased by 3.4% to 12,310 million EEK (786.8 million EUR). The passengers volume transported by the Group vessels exceeded 7 million, being 2.9% more than in the previous financial year.
The earnings during the 2007/2008 financial year were weaker compared to the 2006/2007 financial year and the initially set targets were not met. EBITDA decreased by 20.3% to 1,982.4 million EEK (126.7 million EUR) and the net profit decreased by 69.7% to 318.0 million EEK (20.3 million EUR). The decrease in earnings was largely influenced by significantly increased fuel costs, higher interest costs and weak traffic volumes on some routes. Delivery of the new cruise ferry M/S Baltic Princess was delayed until the middle of the high season. This further delayed other re-routings which compounded the negative effect on the Group earnings as the associated start-up costs were not covered by the end of the financial year and exceeded the incremental revenues.However these were important changes which have set strong cornerstone for the operations in the 2008/2009 financial year.
The most significant events in the 2007/2008 financial year were the following:
- Implementation of the new booking and check-in system
- Sale of M/S Meloodia
- Share buyback
- Delivery and successful launch of M/S Superstar
- Starting operations in third hotel in Tallinn
- Sale of M/S Fantaasia
- Delivery and successful launch of M/S Baltic Princess
- Important re-routings
| KEY FIGURES OF FINANCIAL YEAR |
2007/2008 |
2007/2008 |
CHANGE % |
| |
EEK |
EUR |
EEK |
EUR |
|
| NET SALES (MILLION) |
12, 310.0 |
786.8 |
11, 903.3 |
760.8 |
3.4% |
| GROSS PROFIT (MILLION) |
2, 580.9 |
165.0 |
3, 136.6 |
200.5 |
-17.7% |
| EBITDA (MILLION) |
1, 982.4 |
126.7 |
2, 487.3 |
159.0 |
-20.3% |
NET PROFIT FOR THE PERIOD 318.0 20.3 1,049.3 67.1 -69.7%
(MILLION) |
318.0 |
20.3 |
1, 049.3 |
67.1 |
-69.7% |
| DEPRECIATION (MILLION) |
964.3 |
61.6 |
925.5 |
59.1 |
4.2% |
| INVESTMENTS (MILLION) |
4, 260.0 |
272.0 |
2, 203.5 |
140.8 |
93.3% |
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING DURING 12 MONTHS* |
671, 245, 086 |
673, 817, 040 |
|
| EARNINGS PER SHARE |
0.47 |
0.03 |
1.56 |
0.10 |
-69.8% |
| |
| NUMBER OF PASSENGERS |
7, 070, 264 |
6, 873, 339 |
2.9% |
| CARGO UNITS |
331, 149 |
359, 781 |
-8% |
| AVERAGE NUMBER OF EMPLOYEES |
6, 564 |
6, 227 |
5.4% |
| |
31.08.2008 |
31.08.2007 |
CHANGE % |
| TOTAL ASSETS (MILLION) |
29, 701.8 |
1, 898.3 |
26, 570.9 |
1, 698.2 |
11.8% |
| TOTAL LIABILITIES (MILLION) |
19, 308.2 |
1, 234.0 |
16, 436.0 |
1, 050.4 |
17.5% |
| INTEREST-BEARING LIABILITIES 17,524.6 1,120.0 14,831.7 947.9 18.1% (MILLION) |
17, 524.6 |
1, 120.0 |
14, 831.7 |
947.9 |
18.1% |
| TOTAL EQUITY (MILLION) |
10, 393.6 |
664.3 |
10, 134.9 |
647.7 |
2.6% |
| EQUITY RATIO (%) |
35.0% |
|
38.1% |
|
|
| |
| NUMBER OF ORDINARY SHARES 669,882,040 673,817,040 -0.6% OUTSTANDING* |
669, 882, 040 |
673, 817, 040 |
-0.6% |
| SHAREHOLDERS' EQUITY PER SHARE |
15.5 |
0.99 |
15.04 |
0.96 |
3.1% |
| |
|
|
|
|
|
| GROSS MARGIN (%) |
20.9% |
|
26.4% |
|
|
| EBITDA MARGIN (%) |
16.1% |
|
20.9% |
|
|
| NET PROFIT MARGIN (%) |
2.6% |
|
8.8% |
|
|
| RETURN ON ASSETS (ROA) |
3.8% |
|
6.1% |
|
|
| RETURN ON EQUITY (ROE) |
3.1% |
|
11.3% |
|
|
| RETURN ON CAPITAL EMPLOYED (ROCE) |
4.4% |
|
7.0% |
|
|
EBITDA - EARNINGS BEFORE NET FINANCIAL ITEMS, SHARE OF PROFIT OF ASSOCIATES, TAXES, DEPRECIATION AND AMORTIZATION, INCOME FROM NEGATIVE GOODWILL;
EARNINGS PER SHARE - NET PROFIT / WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING;
EQUITY RATIO - TOTAL EQUITY / TOTAL ASSETS;
SHAREHOLDERRS EQUITY PER SHARE V SHAREHOLDERRS EQUITY / NUMBER OF SHARES OUTSTANDING.
GROSS MARGIN - GROSS PROFIT / NET SALES
EBITDA MARGIN - EBITDA / NET SALES;
NET PROFIT MARGIN - NET PROFIT / NET SALES;
ROA V EARNINGS BEFORE NET FINANCIAL ITEMS, TAXES, INCOME FROM NEGATIVE
GOODWILL/AVERAGE OF TOTAL ASSETS
ROE - NET PROFIT/AVERAGE SHAREHOLDERSR EQUITY
ROCE - EARNINGS BEFORE NET FINANCIAL ITEMS, TAXES, INCOME FROM NEGATIVE
GOODWILL/TOTAL ASSETS - CURRENT LIABILITIES (AVERAGE FOR THE PERIOD).
* SHARE NUMBERS HAVE BEEN ADJUSTED IN CONNECTION WITH THE BONUS ISSUE IN
JANUARY 2007. EXCLUDING OWN SHARES.
SALES & EARNINGS
Consolidated net sales amounted to 12,310.0 million EEK (786.8 million EUR) in the 2007/2008 financial year (1 September 2007 - 31 August 2008) compared to 11,903.3 million EEK (760.8 million EUR) in the 2006/2007 financial year (1 September 2006 - 31 August 2007). The Group's revenues increased strongly on the newest Sweden-Latvia route and also on the Finland-Estonia route where the new Tallink Shuttle service is the main contributing factor. This was partly offset by weaker than expected performance on the Finland - Sweden route and on the Germany - Finland route.
During the 2007/2008 financial year the Group's gross profit decreased by 555.7 million EEK (35.5 million EUR) to 2,580.9 million EEK (165.0 million EUR), EBITDA decreased by 504.9 million EEK to 1,982.4 million EEK (126.7 million EUR) and the net profit decreased by 731.3 million EEK (46.8 million EUR) from 1,049.3 million EEK (67.0 million EUR) to 318.0 million EEK (20.3 million EUR). Basic earnings per share and diluted earnings per share were 0.47 EEK (0.03 EUR) in the 12 months of 2007/2008 financial year compared to 1.56 EEK (0.10 EUR) in the 2006/2007 financial year.
The largest contributor to the decrease in Group's earnings was the high fuel price. Compared to the previous financial year the Group's bunker costs increased by 680.8 million EEK (43.5 million EUR). Around 35% of the increase came from the Finland-Germany route operations. As the fuel price has significantly decreased since the summer and given the high market volatility the Group has hedged a portion of the fuel price risk in October and November 2008 for the 2009 year.
In the 2007/2008 financial year, personnel expenses increased by 3.5% from 2,477.1 million EEK (158.3 million EUR) to 2,563.8 million EEK (163.9 million EUR) primarily due to an increase in the number of personnel. The average number of employees for the 2007/2008 financial year was 6,564 (6,227 in 2006/2007).
The administrative costs decreased by 108.0 million EEK (6.9 million EUR) mainly as a result of the Silja integration.
Financial expenses increased due to the increase in borrowings and thereby higher interest-bearing liabilities on average and a rise in interest rates.
Financial expenses increased by 16.5% from 801.2 million EEK (51.2 million EUR) in 2006/2007 to 933.3 million EEK (59.7 million EUR) in the 2007/2008 financial year. Due to effective financial risk management, net income on interest rate derivatives amounted to 119.1 million EEK (7.6 million EUR), being the main contributor to financial income. Net financial expense for the period was 790.2 million EEK (50.5 million EUR) compared to 597.3 million EEK (38.2 million EUR) for the prior financial year.
The Group exposure to the credit risk, liquidity risk and market risks and the financial risk management activities are described in the notes to the financial statements.
OUTLOOK
During the 2008/2009 financial year the new cruise ferry M/S Baltic Princess and the route changes of M/S Galaxy and M/S Silja Festival are expected to have a positive impact to the Group's sales and earnings. In addition, the reduced competition and fully launched Shuttle service will further improve the operations on the Tallinn-Helsinki route. The change on the Finland-Germany route and the chartering of one Superfast vessel will improve the Germany route operations. In spring 2009 the last new cruise ferry M/S Baltic Queen in the series of new builds under the fleet renewal programme will be delivered. After that the Group will operate with a high quality fleet on all its routes.
Several of the past issues such as new booking system implementation and high fuel prices are not influential any more.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 AUGUST
|
IN THOUSANDS OF EEK |
IN THOUSANDS OF EUR |
|
2008 |
2007 |
2008 |
2007 |
|
|
|
|
|
| REVENUE |
12, 310, 015 |
11, 903, 286 |
786, 753 |
760, 759 |
| COST OF SALES |
-9, 729, 085 |
-8, 766, 651 |
-621, 802 |
- 560, 291 |
| GROSS PROFIT |
2, 580, 930 |
3, 136, 635 |
164, 951 |
200, 468 |
|
|
|
|
|
| MARKETING EXPENSES |
-850, 988 |
-792, 381 |
-54, 388 |
-50, 643 |
| ADMINISTRATIVE EXPENSES |
-889, 377 |
-997, 361 |
-56, 841 |
-63, 743 |
| OTHER INCOME |
199, 467 |
209, 029 |
12, 748 |
13, 359 |
| OTHER EXPENSES |
-18, 352 |
-1, 764 |
-1, 173 |
-113 |
| INCOME FROM NEGATIVE GOODWILL |
0 |
689 |
0 |
44 |
| FINANCIAL INCOME |
143, 124 |
203, 884 |
9, 147 |
13, 031 |
| FINANCIAL EXPENSES |
-933, 332 |
-801, 219 |
-59, 650 |
-51, 207 |
| PROFIT/-LOSS OF ASSOCIATES |
-3, 060 |
7, 698 |
-196 |
492 |
| FROM EQUITY ACCOUNTED ASSOCIATES PROFIT BEFORE INCOME TAX |
228, 412 |
965, 210 |
14, 598 |
61, 688 |
|
|
|
|
|
| INCOME TAX |
89, 564 |
84, 077 |
5, 724 |
5, 374 |
| NET PROFIT FOR THE FINANCIAL YEAR |
317, 976 |
1, 049, 287 |
20, 322 |
67, 062 |
| ATTRIBUTABLE TO: |
|
|
|
|
| EQUITY HOLDERS OF THE PARENT |
317, 976 |
1, 049, 287 |
20, 322 |
67, 062 |
|
|
|
|
|
|
|
|
|
|
| BASIC AND DILUTED EARNINGS PER SHARE (IN EEK/EUR PER SHARE) |
0.47 |
1.56 |
0.03 |
0.10 |
| CONSOLIDATED BALANCE SHEET |
IN THOUSANDS OF EEK |
IN THOUSANDS OF EUR |
| AS OF 31 AUGUST |
2008 |
2007 |
2008 |
2007 |
| ASSETS |
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
| CASH AND CASH EQUIVALENTS |
1, 043, 785 |
1, 303, 609 |
66, 710 |
83, 315 |
| RECEIVABLES |
1, 177, 342 |
815, 093 |
75, 246 |
52, 094 |
| PREPAYMENTS |
111, 522 |
124, 134 |
7, 127 |
7, 934 |
| DERIVATIVES |
51, 884 |
1, 799 |
3, 316 |
115 |
| INVENTORIES |
358, 480 |
272, 352 |
22, 911 |
17, 407 |
|
2, 743, 013 |
2, 516, 987 |
175, 310 |
160, 865 |
| NON-CURRENT ASSETS |
|
|
|
|
| INVESTMENTS IN ASSOCIATES |
2, 222 |
3, 242 |
142 |
207 |
| OTHER FINANCIAL ASSETS AND PREPAYMENTS |
7, 700 |
9, 279 |
492 |
594 |
| DEFERRED INCOME TAX ASSETS |
199, 851 |
153, 102 |
12, 773 |
9, 785 |
| INVESTMENT PROPERTY |
4, 694 |
4, 694 |
300 |
300 |
| PROPERTY, PLANT AND EQUIPMENT |
25, 518, 298 |
22, 600, 001 |
1, 630, 917 |
1, 444, 403 |
| INTANGIBLE ASSETS |
1, 226, 023 |
1, 283, 592 |
78, 357 |
82, 036 |
|
26, 958, 788 |
24, 053, 910 |
1, 722, 981 |
1, 537, 325 |
| TOTAL ASSETS |
29, 701, 801 |
26, 570, 897 |
1, 898, 291 |
1, 698, 190 |
| |
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
| CURRENT LIABILITIES |
|
|
|
|
| INTEREST-BEARING LOANS AND BORROWINGS |
2, 200, 220 |
2, 247, 390 |
140, 620 |
143, 634 |
| PAYABLES |
1, 621, 711 |
1, 408, 369 |
103, 646 |
90, 011 |
| DEFERRED INCOME |
138, 752 |
121, 008 |
8, 868 |
7, 734 |
| DERIVATIVES |
5, 351 |
7, 980 |
342 |
510 |
|
3, 966, 034 |
3, 784, 747 |
253, 476 |
241, 889 |
| NON-CURRENT LIABILITIES |
|
|
|
|
| INTEREST-BEARING LOANS AND BORROWINGS |
15, 324, 355 |
12, 584, 261 |
979, 405 |
804, 281 |
| DEFERRED INCOME TAX LIABILITIES |
16, 147 |
63, 463 |
1, 032 |
4, 056 |
| OTHER LIABILITIES |
1, 643 |
3, 489 |
105 |
223 |
|
15, 342, 145 |
12, 651, 213 |
980, 542 |
808, 560 |
| TOTAL LIABILITIES |
19, 308, 179 |
16, 435, 960 |
1, 234, 018 |
1, 050, 449 |
|
|
|
|
|
| |
|
|
|
|
| EQUITY |
|
|
|
|
| EQUITY ATTRIBUTABLE TO EQUITY |
|
|
|
|
| HOLDERS OF THE PARENT SHARE CAPITAL |
6, 738, 170 |
6, 738, 170 |
430, 648 |
430, 648 |
| SHARE PREMIUM |
9, 999 |
9, 999 |
639 |
639 |
| RESERVES |
1, 151, 071 |
1, 202, 991 |
73, 566 |
76, 885 |
| RETAINED EARNINGS |
2, 494, 382 |
2, 183, 777 |
159, 420 |
139, 569 |
| TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
10, 393, 622 |
10, 134, 937 |
664, 273 |
647, 741 |
| TOTAL EQUITY |
10, 393, 622 |
10, 134, 937 |
664, 273 |
647, 741 |
| |
|
|
|
|
| TOTAL LIABILITIES AND EQUITY |
29, 701, 801 |
26, 570, 907 |
1, 898, 291 |
1, 698, 190 |
CONSOLIDATED STATEMENT OF CASH FLOWS
| FOR THE YEAR ENDED 31 AUGUST |
IN THOUSANDS OF EEK |
IN THOUSANDS OF EUR |
|
2008 |
2007 |
2008 |
2007 |
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| NET PROFIT FOR THE FINANCIAL YEAR |
317, 976 |
1, 049, 287 |
20, 322 |
67, 062 |
| ADJUSTMENTS: |
1, 661, 987 |
1, 252, 908 |
106, 221 |
80, 076 |
| DEPRECIATION AND AMORTISATION |
964, 266 |
925, 485 |
61, 628 |
59, 150 |
| NET GAIN ON DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT |
-19, 344 |
-178, 466 |
-1, 236 |
-11, 406 |
| CHANGE IN FAIR VALUE OF INVESTMENT PROPERTY |
0 |
-4, 412 |
0 |
-282 |
| NET INTEREST EXPENSE |
903, 715 |
764, 585 |
57, 758 |
48, 866 |
| NET INTEREST REVENUE FROM SWAPS |
-107, 097 |
-162, 998 |
-6, 844 |
-10, 417 |
| PROFIT/-LOSS OF ASSOCIATES FROM EQUITY ACCOUNTED ASSOCIATES |
3, 060 |
-7, 698 |
195 |
-492 |
| INCOME FROM NEGATIVE GOODWILL |
0 |
-689 |
0 |
-44 |
NET FOREIGN EXCHANGE GAIN / LOSS RELATED TO INVESTING AND
FINANCING ACTIVITIES |
-184 |
1, 178 |
-12 |
75 |
| INCOME TAX |
-82, 429 |
-84, 077 |
-5, 268 |
-5, 374 |
| CHANGES IN RECEIVABLES AND PREPAYMENTS RELATED TO OPERATING ACTIVITIES |
-339, 402 |
203, 468 |
-21, 692 |
13, 004 |
| CHANGES IN INVENTORIES |
-85, 110 |
-34, 964 |
-5, 439 |
-2, 235 |
| CHANGES IN LIABILITIES RELATED TO OPERATING ACTIVITIES |
158, 379 |
-346, 867 |
10, 122 |
-22, 169 |
| INCOME TAX PAID |
-1, 800 |
-4, 057 |
-115 |
-259 |
|
1, 712, 030 |
2, 119, 775 |
109, 419 |
135, 479 |
| CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
| PURCHASE OF PROPERTY, PLANT, EQUIPMENT AND INTANGIBLE ASSETS |
-4, 240, 289 |
-2, 201, 608 |
-271, 004 |
-140, 708 |
| PROCEEDS FROM DISPOSALS OF PROPERTY, PLANT, EQUIPMENT |
453, 242 |
687, 423 |
28, 967 |
43, 934 |
| PROCEEDS FROM DISPOSALS OF ASSOCIATES |
0 |
15, 162 |
0 |
969 |
| PROCEEDS FROM SETTLEMENT OF DERIVATIVES |
45, 879 |
164, 481 |
2, 933 |
10, 512 |
| ACQUISITION OF SUBSIDIARIES, NET OF CASH ACQUIRED |
1, 885 |
-1, 157 |
120 |
-74 |
| ACQUISITION OF ASSOCIATES |
-2, 040 |
-1, 020 |
-130 |
-65 |
| INTEREST RECEIVED |
11, 511 |
21, 636 |
736 |
1, 383 |
|
-3, 729, 812 |
-1, 315, 083 |
-238, 378 |
-84, 049 |
| CASH FLOWS FROM /USED IN FINANCING ACTIVITIES |
|
|
|
|
| REPURCHASE OF TREASURY SHARES |
-65, 132 |
0 |
-4, 163 |
0 |
| TRANSACTION COSTS OF ISSUE OF SHARES |
0 |
-6, 520 |
0 |
-417 |
| PROCEEDS FROM LOANS AND BONDS |
3, 756, 212 |
1, 357, 847 |
240, 066 |
86, 782 |
| REDEMPTION OF LOANS AND BONDS |
-1, 518, 433 |
-1, 555, 385 |
-97, 045 |
-99, 407 |
| CHANGE IN OVERDRAFT |
443, 199 |
74, 143 |
28, 325 |
4, 739 |
| REPAYMENT OF FINANCE LEASE LIABILITIES |
-14, 855 |
-27, 010 |
-949 |
-1, 727 |
| INTEREST PAID |
-843, 033 |
-751, 766 |
-53, 880 |
-48, 047 |
|
1, 757, 958 |
-908, 691 |
112, 354 |
-58, 077 |
|
|
|
|
|
| TOTAL NET CASH FLOW |
-259, 824 |
-103, 999 |
-16, 605 |
-6, 647 |
|
|
|
|
|
| CASH AND CASH EQUIVALENTS: |
|
|
|
|
| - AT THE BEGINNING OF PERIOD |
1, 303, 609 |
1, 407, 608 |
83, 315 |
89, 963 |
| - INCREASE / DECREASE |
-259, 824 |
-103, 999 |
-16, 605 |
-6, 647 |
| - AT THE END OF PERIOD |
1, 043, 785 |
1, 303, 609 |
66, 710 |
83, 316 |
Janek Stalmeister
Financial Director
AS Tallink Grupp
Tel. +372 6409 800
e-mail: janek.stalmeister@tallink.ee |