City of Turku Redeems the Terminal in Turku

By | 2021 Newsletter week 35 | No Comments

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.

Viking Line, Another Six Months with the Pandemic

By | 2021 Newsletter week 34 | No Comments

Half-year Financial Report January–June 2021 (compared to January–June 2020)

  • Sales EUR 71.5 million (97.5)
  • Passenger-related revenue decreased 34.1% to EUR 50.1 million (76.0), while cargo revenue was EUR 20.4 million (20.7)
  • Other operating revenue EUR 33.6 million (16.1)
  • Operating income EUR 4.5 million (-27.4)
  • Net financial items EUR -2.4 million (-2.1)
  • Income before taxes EUR 2.2 million (-29.5)
  • Income after taxes EUR 2.7 million (-23.7)

Key Figures H1

Passengers 538,348 (998,483)

Market share pax 32.1% (27.0%)

Cargo units 65,214 (62,409)

Market share cargo 16.8% (17.1%)

Market share pax cars 31.4% (24.1%)

Outlook

  • The outlook for the financial year 2021 is better than the outcome for 2020.
  • Improved demand starting late in Q2, 2021 together with one-off items in the form of the sale of MARIELLA and the anticipated redemption of Viking Line’s terminal buildings including fixtures and fittings with the City of Turku will boost income.
  • Uncertainty about how authority requirements, State aid, the impact of vaccination programmes and related restrictions on passenger traffic as well as market demand will affect Viking Line’s operations, results and financial position for the full-year 2021, but on the whole the Board of Directors believes operating income will be positive.

Second quarter 2021 (compared to second quarter 2020)

  • Sales amounted to EUR 46.9 million (22.6)
  • Operating income EUR 12.2 million (-5.9)
  • Covid-19 continues to dominate the company’s operations and results, but at the end of Q2 Viking Line saw increased demand for services between Åland, Finland and Sweden.
  • Traffic between Finland and Estonia has been greatly affected by restrictions.
  • Results for the second quarter were dominated by Viking Line’s public service obligations (*) and cargo transports, but an increase in demand in the passenger sector was also discernible at the end of the period.

(*) During H1, the Group received aid for its public service obligations from Traficom for the Group’s vessels on the Turku–Mariehamn/Långnäs–Stockholm, Mariehamn-Kapellskär and Helsinki–Tallinn routes. It also received aid from the Development and Management Centre of Finland’s Centres for Economic Development, Transport and the Environment (known as ELY centres) and from Finland’s Local Employment and Economic Development Offices. The aid is recognized as State aid under other operating revenue.

Irish Continental Group H1 Results: Increase in RoRo Revenue versus Challenging Pandemic and Customs Distortion

By | 2021 Newsletter week 34 | No Comments

Key highlights in H1, 2021

  • Group revenue generated totalling €141.6 million, €10.8 million more than HY 2020
  • RoRo freight travel patterns affected by new customs requirements following the exit of the UK from the EU.
  • EBIT generated was a loss of €10.3 million, €0.8 million worse than HY 2020.
  • EBITDA generated of €12.7 million, €2.7 million more than HY 2020.
  • Gross cash balances of €131.1 million (31 December 2020: €150.4 million).
  • Net debt at €112.1 million, €23.6 million higher than at the beginning of the year.
  • No interim dividend declared (2020: nil).
  • Commencement of a new ferry service between Dover (UK) and Calais (France) on 29 June. Second ship to be added in September.
  • Further investment in environmentally friendly port equipment at Dublin Ferryport Terminals and increased capacity from 2022.

Commenting on the results, Chairman John B. McGuckian noted;

  • Covid-19 pandemic continued to create an exceptionally challenging trading environment for the Group.
  • The Group welcomes the introduction of the EU Digital Covid Certificate and the easing of restrictions on non-essential passenger travel, however, the timing of its introduction limits the benefits for the key summer season.
  • On 31 December 2020, the UK and EU ended the post Brexit transition period. While trade flows have decreased between Ireland and Britain, our flexible fleet has allowed us to adjust capacity on our direct continental RoRo and container shipping services. While this has led to a reduction in RoRo volumes, the change in yield mix has resulted in increased RoRo revenues. This increase in revenue is particularly encouraging as it is against the backdrop of both the Covid-19 pandemic and the introduction of customs requirements on the Irish Sea.
  • Still of concern to the Group is the lack of implementation of appropriate checks on goods arriving into Northern Ireland from Britain, which are required under the Northern Ireland Protocol. To the extent that goods are destined for the Republic of Ireland, this is causing a distortion in the level playing field as goods that arrive directly into the Republic of Ireland ports from Britain are being checked on arrival.

Some figures for ICG subsidiary Irish Ferries

-47.3% Car volumes (‘000) 29.8 (56.6)

-43.2% Passenger volumes (‘000) 132.8 (233.9)

-15.2% RoRo freight volumes (‘000) 126.7 (149.4)

Viking Line Invests in Fleet Management System Sertica

By | 2021 Newsletter week 34 | No Comments

Viking Line has invested in Fleet Management System SERTICA, which will be implemented on their 6 existing vessels and the newbuild VIKING GLORY.

Jonas Rosenqvist, Technical Superintendent at Viking Line tells, “We are looking forward to start using SERTICA. I believe the app will have great impact on our daily work as it supports us both in maintenance and in relation to inspections. In the end, this means improved safety and comfort to our passengers.”

The fleet management system includes maintenance, procurement, safety and apps.

Ferry Shipping

By | 2021 Newsletter week 7 | No Comments

Viking Line Reports 2020: “A Difficult, Challenging Year

January–December 2020 (2019) in EUR

188.8 million (496.4) Sales

26.9 million (0.4) Other operating revenue

-49.3 million (17.4) Operating income

-3.6 million (-3.8) Net financial items

-52.9 million (13.6) Income before taxes

-42.3 million (10.8). Income after taxes

-69.4% Passengers 1,927,302 (6,300,480)

-6.2% Cargo units 125,693 (133,940)

Cargo market share of approximately 17.1% (18.4)

Comments from President and CEO Jan Hanses

  • Because of the pandemic, the Group was forced to report a loss in 2020.
  • The challenge in 2020 was to run operations when demand evaporated due to various restrictions.
  • At year-end we recorded a loss of four million passengers.
  • Of our four operating areas – cargo, passenger cars, cruise passengers and passengers in scheduled service – only cargo functioned normally.
  • Focus on cutting costs. Furlough measures.
  • State aid measures from Finland, Sweden and Estonia
  • Liquidity loans totalling EUR 38.7 M, which are backed by State guarantees.
  • Deferral of loan repayments was also obtained from Finnvera and Finlands Exportkredit Ab.

Outlook for the full financial year 2021: It is too soon to quantify the impact of all the pandemic-related issues on earnings since there is great uncertainty about the trend. As a result, no earnings forecast is provided for 2021.

Viking Line Concludes a Challenging Year

By | 2021 Newsletter week 2 | No Comments

Due to the pandemic, Viking Line’s business environment was extremely unfavorable, with enormous economic consequences for the shipping company.

  • Only 4 of Viking Line’s 7 vessels were in regular service during the year
  • -70% passengers = 1.9 million (6.3)
  • -6.1% cargo units = 125,693 (133,940)
  • High levels of freight on Turku–Mariehamn–Stockholm and Helsinki–Tallinn routes.
  • Also good news: In autumn, Viking Line’s new, climate-smart vessel VIKING GLORY will be delivered and is already attracting great interest.

Viking Line’s Cooperation Negotiations Have Concluded

By | 2020 Newsletter week 44 | No Comments

Viking Line has concluded its cooperation negotiations concerning land-based staff in Finland and Åland. Similar negotiations in Sweden were concluded in September, while negotiations with land-based staff in Estonia are expected to be completed in October.

The negotiations have involved the entire company’s land-based staff of about 570 people in Finland, Sweden, Estonia and Åland. The measures have led to a reorganization, cuts, centralization and streamlining of some functions as well as changes in some people’s job descriptions in order to better meet the company’s needs. Nearly 200 people have been affected by the negotiations, and staff cuts amounts to a number of 180.

About 70 people will be offered new jobs and contracts.  In addition to the staff cuts, most of Viking Line’s land-based and shipboard staff will continue to be on part-time or full-time furlough.

As for shipboard staff, the Swedish-flagged VIKING CINDERELLA concluded negotiations in accordance with the Swedish Act on Co-Determination in the Workplace in October, with the result being a staff reduction of 76 jobs. Some of these people may be offered work in jobs that have changed. On the Estonian-flagged Viking XPRS, negotiations on staff reductions were concluded, with the result being a staff reduction of 56 jobs.

Deterioration in Viking Line’s Results Due to the Impact of the Pandemic

By | 2020 Newsletter week 43 | No Comments

January–September 2020

  • Sales €154.2 million (380.8)
  • Operating revenue €16.7 million (0.2)
  • Operating income €-35.2 million (17.5)
  • Net financial items €-3.1 million (-3.6)
  • Income before taxes €-38.3 million (13.9)
  • Income after taxes €-30.8 million (11.1)

Q3, 2020

Sales €56.6 million (153.8)

Operating income totalled €-7.8 million (26.2)

  • Q3 = most of the Group’s income is usually generated, this year negative
  • A large percentage of the staff in Finland was furloughed.
  • Travel restrictions, inconsistent communication from authorities affected travel and sales.
  • Uninterrupted passenger and cargo service in spite of pandemic
  • Liquidity at end of Q3 was stretched and remained at same level since then. Negotiations with financiers were conducted. On October 15, the Finnish Government issued State guarantees for additional loans totalling €38.7 million, which will secure liquidity.
  • The Finnish Transport and Communication Agency (Traficom) launched a tender process for a public transport service provider on Turku–Mariehamn–Stockholm, Mariehamn–Kapellskär and Helsinki–Tallinn routes. Viking Line intends to take part in the tender process.

Future prospects unchanged: Income for the full financial year will be negative.