Fjord1 Continued Stable Operations in Q2/H1

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  • Fjord1 has operated in a safe and responsible manner throughout the Covid-19 pandemic, protecting the safety and security of its employees, customers and suppliers while fulfilling its responsibilities as a provider of critical transport infrastructure in coastal Norway.
  • Revenue in Q2 amounted to NOK 708 million, a decrease of 6%. The reduction is mainly attributable to the phasing out of the Molde-Vestnes ferry contract. (operated by Boreal as from 1 September 2021)
  • EBITDA in Q2 was NOK 190 million, down from NOK 245 million. The EBITDA margin declined to 27% from 33%, reflecting lower revenue and higher maintenance cost in Ferry, and continued weak results in the Tourism segment due to Covid-19 travel restrictions.
  • For the first half year, revenue declined 7% to NOK 1,399 million, with the EBITDA declining 12% to NOK 387 million.
  • Investments amounted to NOK 81 million in Q2 and NOK 154 million in H1.
  • Investments are significantly reduced from 2020, as the company is passed the peak of its vessel newbuilding and electrification program.
  • Fjord1’s long-term contract portfolio, worth NOK 22.7 billion, together with long-term ambitions for the Tourism segment provide a solid base for further development of the company.

Ferry Segment

  • Ferry passengers -9% in Q2 and -0.6% in H1
  • Vehicles -6,2% in Q2 and +1.3% in H1

This mainly reflects the phasing-out of the Molde-Vestnes contract.

  • Ferry revenue declined by 7% both in Q2 and H1
  • The majority of Fjord1’s contracts are based on capacity and sailing frequency rather than traffic volumes, which largely insulates revenue and earnings in the Ferry segment from changes in traffic volumes on routes under contract.

Fjord1 Fully Privatised

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The privatization of Fjord1 has been completed. Fjord1 was delisted from the Oslo Stock Exchange.

The Norwegian ferry operator is now owned 50/50 by Vision Ridge Partners, an alternative asset manager focused on sustainable real assets, and Havila Holding, an investment company owned by the Sævik family in Norway.

Vision Ridge has offices in Colorado and New York.

Finnlines’ New RoRo Vessels Celebrate Launching and Keel Laying

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  • Finnlines’ Newbuilding Programme proceeds as planned.
  • 30 August 2021: launch of second hybrid ro-ro vessel
  • 31 August 2021: keel laying ceremony for the third vessel
  • The series of three ro-ro vessels are being built at the Chinese Jinling shipyard located in Nanjing.
  • Better service for truck drivers: gym and sauna, a dining and recreation room and a laundry for drivers to use. Single cabins.
  • 40% more cargo capacity (5,800 lane metres)
  • The vessels will be fitted with state-of-the-art engines with emission abatement technology, an air lubrication system, lithium-ion batteries and solar panels.
  • Ice class 1A Super

FINNECO I: sea trials in September, in service end of 2021.

FINNECO II and III in 2022. All three vessels will sail under the Finnish flag.

Green Biodiesel for the Fanø Ferry Line

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The Fanø Line ferries FENJA and MENJA will be powered by fossil-free biodiesel, reducing the total CO2 emissions up to 90%.

The plan is to let the ferries sail partly on HVO(*) biofuel from August 2021. If the start-up goes satisfactorily, the share of the new biodiesel will be increased rapidly towards the autumn, when the new electric ferry GROTTE will be put into operation by October 2021.

The Fanø line will thus be the first ferry route in Denmark, which will be completely shifted to HVO.

The environmentally friendly biodiesel comes from the Finnish manufacturer, Neste.

(*) HVO = Hydrotreated Vegetable Oil

Stena Line Renews Contract for SaaS Terminal Operating System Surikat

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Stena Line has renewed a 5-year contract with Surikat, suppliers of a Terminal Operating System for roro, lolo, rail, intermodal and passenger vehicles. The strategic partnership enables Stena Line to enhance their terminal operations and improve the customer experience across Europe.

Surikat and Stena Line signed their first contract in 2016, with the initial task to simplify and digitalize the damage checks and claims handling processes across their European network. From small beginnings, the product range grew until Surikat was supplying Stena Line with a fully comprehensive portfolio of tools to aid the running of operations across their 20+ terminals in Europe.

Carsten Nørland Succeeds Søren Poulsgaard Jensen as Scandlines’ CEO

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“Søren has done an excellent job and positioned Scandlines well for the future as a green and competitive provider of critical infrastructure connecting Continental Europe and Scandinavia. Carsten Nørland brings the right commercial and international skills and experience to carry on the good results in the coming years towards the opening of the Fehmarn tunnel and beyond,” says Chairman of Scandlines’ Supervisory Board, Vagn Sørensen.

Carsten Nørland is 52 years old and holds a MSc. in Economics and Business Administration from Copenhagen Business School. Before his seven years at Royal Unibrew, he held leading positions with international responsibilities in Copenhagen Airports, Flügger and Masterfoods/MARS inc.

City of Turku Redeems the Terminal in Turku

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August 31, 2021. The City of Turku has redeemed the terminal in Turku owned by Viking Line. The terminal and related facilities are located in an area in the Port of Turku leased by Viking Line.

Under the original lease agreement, the buildings were to be redeemed on December 31, 2025, but since the Port of Turku decided to begin a major refurbishment of the port and its facilities, the City of Turku now redeems the properties.

The redemption entails an accounting profit of EUR 13.5 million for Viking Line Abp and strengthens the company’s liquidity with EUR 7.9 million.

Interesting Remarks from SEEN about the Hellenic Coastal Shipping

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Last week, the Association of Hellenic Passenger Shipping Companies (SEEN) underlined some interesting points through a letter sent to the Hellenic Ministry of Shipping and Island Policy.

In brief:

  • There are pending issues, even from the summer of 2020, while the total unpaid amount to the Ferry Companies is estimated to exceed EUR 60 million.
  • Ferry Companies paid and still paying VAT liabilities (24%) for the above amount, despite the fact that they haven’t collected the agreed money yet.
  • The ferry operator’s forecasts for their financial results are not at all positive.
  • In the first half of 2021, passenger traffic, which accounts for 70% of Coastal Shipping revenue, was lower compared to 2020.
  • Ferry traffic in August 2021 is reduced by 42% compared to August 2019, while passenger traffic on the Adriatic lines -for the same period- is reduced by 41% as well.
  • Fuel prices are significantly increased -by 30%- in 2021, burdening further the ship’s operational cost by EUR 80 million.
  • Total losses for the years 2020/2021 are expected to exceed EUR 200 million.
  • From March 2020 to June 2021, ferry companies performed exemplary all the approved sailings, despite the fact that they were unprofitable.

Grimaldi: “There’s often no need for taxpayer subsidies on island routes”

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In the latest issue of Grimaldi News, there is an editorial dedicated to what is called as “a battle against the nonsensical handing out of taxpayer money to loss-making carriers on routes that are perfectly viable without them.”

According to the Naples-based ferry company, “whereas subsidies for non-viable services may be justified to ensure vital maritime connectivity, in some cases, on other routes, governments tend to throw money out of the window while propping up poor performers. This has long been the case on routes between mainland Italy and its major islands, in particular Sardinia, where subsidies of over EUR 70 million a year have traditionally been doled out.”

Grimaldi Group underlined its decision to set up commercial services (“without a penny of taxpayer funding”) in competition with subsidized carriers plying Sardinia routes from Italy mainland as well as between Ravenna, Brindisi and Catania. “Our venture succeeded in that we quickly took market share from our rivals. The market reacted positively to a better service based on professionalism and quality tonnage.”

Today the subsidy framework for island services in Italy has been reworked and the amounts on offer have been reduced, generating yearly savings of EUR 45 million for the State. The Naples-Palermo, Ravenna-Brindisi-Catania, Livorno-Cagliari and Genoa-Olbia services operate without public State subsidy.

“If national governments are determined to continue with direct subsidy schemes, so be it. It would, however, be advisable to involve maritime operators in the drafting of the public tenders, thus meeting the real needs of the market” Grimaldi stated. Then also added: “Still today, some requirements of the public tenders concerning the frequency of the service, the age and the characteristics of the vessels deployed, as well as the service speed, are often in contradiction with the urgent need to reduce CO2 emissions and reach environmental sustainability”.

For the service between Naples, Cagliari and Palermo, Grimaldi continues its dialogue with national institutions in order to be able to ply the route under better environmental conditions: “The existing contract stipulates a high speed on this route. We believe the same quality service could be achieved at slower speed, which would see vessels consuming less fuel. The benefits of such a change would impact both our bunker fuel bill and, more importantly, on the CO2 emissions produced on the route”.

The Italian shipowner also underlined that “it might be sensible for authorities to include efficiency criteria in public tenders in the future”.