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2024 Newsletter week 45

Nov 14
2

Finnlines Financial Summary: January–September 2024

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  • Revenue: Reached €547.2 million, a 7% increase from €513.2 million in 2023.
  • EBITDA: Improved by 7% to €140.8 million, up from €131.7 million in the previous year.
  • Net Income: Decreased by 8%, resulting in €52.1 million, compared to €56.9 million in 2023.
  • Debt Reduction: Interest-bearing debt dropped by €70.1 million to €387 million.

Q3 2024 Highlights:

  • Revenue: Increased by 7% to €189.2 million.
  • EBITDA Growth: Saw a substantial 36% rise to €57.1 million.
  • Net Income: Notably grew by 85%, reaching €27.9 million.

Operational Updates:

  • Passenger travel surged, especially on the Naantali–Långnäs–Kapellskär route, with a 122% increase.
  • A new UK freight route was launched, connecting Finland and Sheerness.
  • Fleet modernisation continues, aligning with environmental regulations; three new green-fuelled vessels are in procurement.

Outlook: Finnlines anticipates improved performance, supported by EU economic recovery, operational efficiencies, and green initiatives. However, some concerns:

  • Economic Headwinds: The beginning of 2024 saw challenges from high interest rates, inflation, and slow economic growth, especially in key markets such as Finland, Germany, and Sweden. These factors have affected freight and passenger demand, though signs of recovery are emerging.
  • Geopolitical Tensions: Ongoing conflicts, particularly the Ukraine crisis, add uncertainty to the business environment. Any escalation could impact trade flows within the EU and Finnlines’ routes.
  • Labour Disruptions: Early 2024 saw strikes in Finland that disrupted cargo volumes. Although impacts seem contained, further labour issues could hinder operations and revenue growth.
  • Cybersecurity Risks: The increased likelihood of cyberattacks has led Finnlines to focus on cybersecurity measures, essential for safeguarding operations but requiring continuous investment and vigilance.
  • Environmental Compliance Costs: Finnlines is aligning with the EU’s new environmental regulations, including the Emissions Trading Scheme and Fuel EU Maritime regulations starting in 2025. Compliance necessitates significant investment in new vessels and technology, increasing capital expenditures.
  • High Debt Levels: While debt decreased, Finnlines still carries substantial interest-bearing debt (€387 million), making it sensitive to any future interest rate increases that could impact financial expenses.

Overall, Finnlines is navigating these risks by investing in fleet modernisation, expanding routes, and implementing efficiency measures, which should help mitigate some of these concerns over time.

Nov 14
2

DFDS Q3 2024 Interim Report – Working Through Headwinds

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“Despite market headwinds, we continued in line with our organic growth ambitions to protect and grow volumes in Q3 on the back of our network strength,” says Torben Carlsen, CEO.

Q3 2024

  • Revenue up 11% to DKK 8.0bn Organic growth was 4%
  • EBIT reduced 11% to DKK 785m
  • Adjusted free cash flow of DKK 396m
  • CO2 ferry emission intensity lowered 1.6%

Outlook 2024 (updated 1 November 2024)

  • EBIT of DKK 1.5-1.7bn
  • Revenue growth of 8-10%
  • Adjusted free cash flow of around DKK 1.2bn

Read the Q3 2024 interim report here:

Nov 14
2

DFDS Terminates EKOL Acquisition

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In April 2024, DFDS entered into a share purchase agreement to acquire the international transport network of Ekol Logistics.

As certain contractual conditions (company announcement no. 24 of 9 April 2024), have not been satisfied by the agreed deadline, DFDS has terminated the share purchase agreement and the transaction will consequently not take place.

Nov 14
2

DFDS 2024 Outlook Lowered by Market Slowdown and Termination EKOL Acquisition

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DFDS’ EBIT outlook range for 2024 is revised following results below expectations driven by mainly a more widespread slowdown in Europe than previously expected as well as intensified competition in northern European land transport markets and the Mediterranean freight ferry market.

The current market conditions are expected to continue for the rest of the year whilst a rebound in activity was previously expected for the rest of the year.

The termination of the share purchase agreement to acquire the international transport network of EKOL Logistics may moreover in Q4 2024 entail some financial impact.

As a consequence, the EBIT 2024 outlook range is lowered to DKK 1.5-1.7bn from previously DKK 1.7-2.1bn, and the outlook for the adjusted free cash flow is changed to around DKK 1.2bn from previously around DKK 1.5bn.

The revenue growth 2024 outlook is changed to 8-10% from previously 8-11% as revenue from EKOL Logistics was previously included in the revenue outlook.

Nov 14
2

DFDS October Volumes: Solid Freight Growth

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Ferry – freight:

  • Total volumes in October 2024 were 10.3% above 2023 and up 5.6% adjusted for the addition of Strait of Gibraltar routes in 2024 and closure of the Calais-Tilbury route in 2023.
  • North Sea, Channel, and Baltic Sea volumes were all above 2023 following solid growth on most routes. Mediterranean volumes were in October also above 2023.
  • For the last twelve months 2024-23, the total transported freight lane metres increased 6.7% to 41.0m from 38.5m in 2023-22. The increase was 3.4% adjusted for the addition of Strait of Gibraltar routes and the Calais-Tilbury route closure.

Ferry – passenger:

  • The number of passengers in October 2024 was 33.0% above 2023 and down 1.3% adjusted for the addition of the Strait of Gibraltar routes. The adjusted decrease was due to smaller variances across routes.
  • The number of cars was 16.0% above 2023 and down 10.9% adjusted for Strait of Gibraltar.
  • For the last twelve months 2024-23, the total number of passengers increased 45.9% to 6.5m compared to 4.5m for 2023-22. The increase was 6.1% adjusted for Strait of Gibraltar.
Nov 14
2

Stena Line Announces Strategic Restructuring to Secure Future Amidst Economic Pressures

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Stena Line has announced the launch of a strategic programme aimed at future-proofing the company and enabling essential investments. This move comes in response to the significant economic pressures impacting the industry, including high inflation and rising costs linked to the European Emission Trading Scheme (ETS). These factors have dampened the purchasing power of Stena Line’s passenger and freight customers, resulting in a decline in volumes for both segments.

The programme will involve the reduction of approximately 80 positions and the departure of around 30 consultants in 2025. This restructuring, pending union negotiations, will predominantly affect support functions. The company underscores that these difficult measures are part of a comprehensive review of their current organisation and cost structure.

Niclas Mårtensson, CEO of Stena Line, emphasised the weight of this decision, stating, “It is with a heavy heart that we have made this choice. Stena Line has experienced years of success, but now we must ensure we have a cost base that allows us to secure the company’s future. With 40 vessels operating across ten countries, we face significant sustainability challenges. The programme we are launching today is essential to tackle these challenges and execute necessary future investments.”

Looking ahead, Stena Line is also preparing for substantial investments in energy supply and the shift to alternative fuels, as well as enhancements in digital solutions to meet evolving customer expectations. This forward-looking strategy aims to balance immediate cost savings with the long-term need for sustainable growth and operational excellence.

Nov 14
1

IMAGE CARDS

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On 3 November 2024, the HSC MAX arrived at the Port of Piraeus from Denmark. The ship was sold by Molslinjen to Seajets last May and was delivered to the Greek-Cypriot ferry operator last week. She was sent to Ambelakia Salaminas for future conversion before entering service in the Hellenic Coastal Shipping. The HSC MAX was built in Australia in 1998 by Incat. She has a carrying capacity of 900 passengers and 240 cars, and can operate at speeds exceeding 40 knots.

Photo: Kostas Papadopoulos

On November 1st, Damen Shipyards Galati in Romania laid the keel for the first two of four fully electric ferries for BC Ferries. The keel laying ceremony marked an important milestone in the third phase of construction of the Island Class Ferries, which will bring the total number of Damen vessels in the BC Ferries fleet to ten.

During the recent second phase of the programme, Damen delivered four hybrid diesel-electric ferries. These reduced emissions vessels were intended to pave the way to the development of fully electric vessels.

Now, with availability of renewable shore power to charge the vessels, the four fully electric vessels will be able to conduct their services with zero emissions. As such, the ferries are making an important contribution to BC Ferries’ goal to reduce emissions by 10,000 tons of CO2 equivalent by 2030.

Source: Damen

Brittany Ferries’ RoPax NORMANDIE will sail on the Marseille – Tangier Med route for La Méridionale in summer 2025.