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2024 Newsletter week 33

Aug 17
2

DFDS Q2: higher revenues offset by challenging environment

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The Q2 results were below expectations in spite of organic growth and increased revenue. 

Trend: Freight Ferry down, Passenger ferry up. 

 Main elements: 

  • Revenue up 9% to DKK 7.6bn 
  • EBIT reduced 28% to DKK 519m 
  • Ferry Q2 EBIT decreased 21% or DKK 133m to DKK 508m driven by lower freight result 
  • Logistics Q2 EBIT decreased 41% or DKK 60m to DKK 85m driven by margin pressures, shift in customer flows, and underperformance in Nordic Cold Chain. 
  • EBITDA decreased 10% or DKK 137m following lower results in both the Ferry Division and the Logistics Division. 
  • Freight Ferry EBITDA down 8% or DKK 60m excluding DKK 54m decrease in oil spread hedging income. Organic decrease driven by rate pressures and adverse cost development 
  • Passenger EBITDA up DKK 25m due to higher volumes and spending in Channel. 

  Comments from CEO Torben Carlsen: 

  • We revised the earnings outlook for 2024 while maintaining the adjusted free cash flow outlook. 
  • The top priorities for the rest of the year are to continue to protect our key ferry market positions and turn Logistics’ earnings trend around. 
  • In parallel with addressing these priorities, we will continue to unlock the value of our expanded network and to move our green transition forward. 
  • We continued in Q2 to protect our strategic Baltic and Channel ferry market positions in market environments with rate pressure from overcapacity and limited volume growth. Our ability to fully pass on cost increases is therefore currently reduced. 
  • We are confident that the short-term protection of our route network will ensure long-term growth and resilience as markets over time move to rebalance supply and demand. 
  • A large part of our Logistics’ network is performing well in the face of a challenging market environment with heightened margin pressure and large shifts in customer flows in our Belgian and Dutch operations. Key focus areas in the rest of the year are to further adapt the cost base to the current pricing environment and to grow volumes organically. 
  • In addition to market impacts, Logistics’ Q2 result was lowered by underperformance of the Nordic Cold Chain business unit. We expect to complete the ongoing turnaround of the Nordic unit by year-end. 
  • Overall, we expect Logistics Division’s Q3 result to remain below 2023 while the Q4 2024 result is expected to exceed 2023. 

Outlook 2024 

  • The EBIT outlook range was lowered to DKK 1.7-2.1bn from previously DKK 2.0-2.4bn following a Q2 result below expectations and continued market headwinds expected for the rest of year.  
  • Revenue growth of 8-11% (unchanged) 
  • The adjusted free cash flow outlook is unchanged around DKK 1.5bn. 

 Green Strategy 2024-2030 

  • 45% reduction in ferry emission intensity. 
  • Six green ferries in operation by the end of 2030. 
  • 75% reduction of land emission intensity. 

 

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Aug 17
2

DFDS July volumes: Freight up 9%

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Ferry – freight:  

  • Total volumes in July 2024 were 9.4% above 2023 and up 6.3% adjusted for the addition of Strait of Gibraltar routes in 2024 and closure of the Calais-Tilbury route in 2023. 
  • North Sea volumes were just above 2023 as volumes between the Continent and the UK picked up offsetting lower automotive volumes. 
  • Mediterranean volumes were in July above 2023 driven by higher volumes between Türkiye and France. 
  • Channel volumes continued in July to be above 2023 as did volumes on the Baltic Sea routes. 
  • For the last twelve months 2024-23, the total transported freight lane metres increased 4.1% to 40.4m from 38.8m in 2023-22. The increase was 2.0% adjusted for the addition of Strait of Gibraltar routes and the Calais-Tilbury route closure. 

Ferry – passenger: 

  • The number of passengers in July 2024 was 40.0% above 2023 and down 3.1% adjusted for the addition of the Strait of Gibraltar routes. 
  • The adjusted decrease was due to lower Channel and Baltic Sea volumes.  
  • The number of cars were 24.7% above 2023 and down 4.4% adjusted for Strait of Gibraltar. 
  • For the last twelve months 2024-23, the total number of passengers increased 30.8% to 5.8m compared to 4.4m for 2023-22. The increase was 6.6% adjusted for Strait of Gibraltar. 
Aug 17
2

XRTC’s annual report on the Greek ferry industry for 2024

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“Greek Ferry Industry 2024: The Green Journey Begins.”  

It is the 23rd annual study conducted by XRTC Business Consultants Ltd. The report (in Greek) provides an economic analysis of major ferry companies such as ANEK, ATTICA, and Minoan Lines, as well as smaller and medium-sized companies within the Greek ferry market. 

 

Key Highlights: 

  1. Mergers and Acquisitions: The report discusses the significant merger of ANEK by ATTICA, making ATTICA the largest ferry operator worldwide in terms of passenger capacity. 
  2. Market Dynamics: The Greek ferry market has evolved into an oligopoly, dominated by ATTICA and Seajets, with a significant presence from the Grimaldi Group through Minoan Lines. 
  3. Financial Performance: The financial performance of major companies in 2023 showed significant improvement, driven by a reduction in fuel costs and an increase in demand. ATTICA and Minoan Lines, in particular, posted strong results. 
  4. Challenges and Investments: The report identifies challenges such as the need for fleet renewal and environmental upgrades, with companies like ATTICA and Minoan Lines planning investments in new ships to meet environmental standards. However, smaller companies face difficulties in accessing financing. 
  5. Fuel and Environmental Regulations: New European regulations, including the “FuelEU Maritime” initiative, require the use of low-sulfur fuels, posing additional challenges for the industry. 
  6. Ticket Prices: The report highlights a significant increase in ferry ticket prices over recent years, with some routes seeing up to a 60% increase compared to 2019. The high cost of ferry travel in Greece is noted as being significantly higher than in other parts of Europe. 
  7. Tourism: While the tourism sector in Greece saw a record 33 million visitors in 2023, this has not fully translated into increased ferry usage, as many tourists arrive by air and only use ferries for inter-island travel. 
  8. Hydroplanes: The report also mentions the slow development of hydroplane services in Greece, with only a few water aerodromes fully licensed, though progress is being made. 
Aug 17
2

Brittany Ferries to become majority shareholder of Condor Ferries

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Brittany Ferries is to become the majority owner of Condor Ferries following recent changes in the ownership structure. (see also Ferry Shipping News, week 32)  

Condor Ferries is the passenger and freight ferry operator between the UK (Poole, Portsmouth), the Channel Islands and St. Malo in France. Condor was originally acquired in November 2019 by a consortium comprising Brittany Ferries and the London-based Columbia Threadneedle European Sustainable Infrastructure Fund. 

Subject to approval by the regulatory authorities in Jersey and Guernsey, the French ferry operator will assume majority ownership and operational control of the Channel Islands-based company in the next few weeks. 

In January this year, the Government of Jersey and States of Guernsey confirmed a procurement process for a new long-term operating agreement. Brittany Ferries is actively leading this bid and believes it and Condor are the right operators, with the right vessels and experience, to serve the Islands for many years to come. 

Once approved, Brittany Ferries will own 51% of Condor Ferries, with Columbia Threadneedle retaining a minority shareholding. 

Aug 17
2

Fred. Olsen Express continue with their expansion plans

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Last March, Fred. Olsen Express announced the purchase of two Finnlines RoRo vessels. 

The first vessel, BENTAYGA CARGO, began operations in May. 

The company now confirms that the planned improvement in service, including the connection with Tenerife, will be operational in November. 

This new connection is possible thanks to the incorporation of the second ship, BAHIA CARGO. 

She will reinforce the service offered by her sister ship, BENTAYGA CARGO. Since May, BENTAYGA CARGO has been operating between the Canary Island ports of Las Palmas de Gran Canaria, Arrecife, and Puerto del Rosario. 

With the addition of the second ship, Tenerife, Gran Canaria, Fuerteventura, and Lanzarote will be linked on a daily basis.  

BENTAYGA CARGO is the former FINNKRAFT. 

BAHIA CARGO is the former FINNHAWK. 

Aug 17
2

Tasmania: when the ferries will be ready before the infrastructure

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The Tasmanian Government has requested and accepted the immediate resignation of the Chair of TT-Line amid delays in the Spirit of Tasmania port infrastructure project. They did not mention Michael Grainger by name. 

Premier Jeremy Rockliff appointed two infrastructure experts to manage the completion of the project, aiming to resolve ongoing issues and expedite the delivery of the new Spirit of Tasmania vessels under construction in Finland. 

The new ferries will temporarily use an upgraded berth due to delays in completing the designated berth, expected by January 2026. They will only be able to carry as much freight, passengers and caravans as the current vessels. 

Aug 17
2

Intermarine (Immsi Group) delivers SIRIUS, the new high-speed ferry for the Bay of Naples, to SNAV

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Intermarine S.p.A. (a subsidiary of the Immsi industrial group – IMS.MI) has delivered the new High-Speed Craft (HSC) SNAV SIRIUS to the SNAV shipping company (MSC Group). The SNAV SIRIUS is a latest-generation ferry for short sea crossings, which will operate in the Bay of Naples. 

The SNAV SIRIUS is constructed entirely in lightweight aluminium and its Italian design gives it a distinctive personality in the world of high-speed craft. The quality of its technological solutions and its performance capabilities make it a reference model. 

While the new boat is similar in size to the HSC SNAV ORION, which has been in service with SNAV for a number of years on links with the islands in the Bay of Naples, it has been completely upgraded. The propulsion system consists of 4 engines and 3 IMO III type-approved generators (Marpol Convention) for electric combustion control, fitted with a selective catalytic reduction (SCR) system for significant emissions reduction. The engines and the generators can also be powered with biofuel, whose use contributes to a well-to-wake emissions reduction of up to 90%. The boat is also equipped with a cold ironing dock socket for shore-to-ship energy supply, and can accommodate a hybrid propulsion system for zero-emission port entry and exit manoeuvres. 

Source: IMMSI