Eimskip Reports Second Quarter 2024 Financial Results
Q2 2024 Results Highlights
- Results were acceptable in light of softened demand, while International Forwarding showed strong performance.
- This quarter's revenue remained steady at EUR 210 million, consistent with last year.
- Liner revenue decreased by EUR 12.9 million, whereas Forwarding revenue saw an increase of EUR 13.0 million.
- The drop in Liner revenue is attributed to lower Trans-Atlantic rates, reduced import volumes, and shifts in the export cargo mix.
- Forwarding revenue growth was driven by higher global freight rates, particularly in trade lanes connected to Asia.
- Expenses totaled EUR 186 million, rising by EUR 10.9 million, mainly due to increased costs for third-party logistics services, which rose by EUR 10.8 million.
- Bunker expenses saw a slight increase of EUR 0.6 million, while the newly imposed ETS expense was EUR 0.9 million, managed through revenue strategies.
- Salary expenses rose by 2.9% or EUR 1.1 million, although this was partially offset by a 2% reduction in the number of Full-Time Equivalents compared to the previous year.
- EBITDA for the quarter was EUR 23.5 million, down from EUR 34.3 million during a strong quarter last year.
- Liner EBITDA decreased by EUR 10.8 million to EUR 15.1 million, with a calculated Liner EBITDA ratio of 10.6% and an EBIT ratio of 1.6%.
- The negative impact on EBITDA from the four-week strike in the Faroe Islands is estimated at EUR 1.8 million.
- Forwarding EBITDA remained stable from last year at EUR 8.4 million, with a calculated Forwarding EBITDA ratio of 10.0%.
- EBIT for the quarter was EUR 8.6 million, compared to EUR 19.4 million in Q2 2023.
- Net earnings reached EUR 7.9 million, down from EUR 17.0 million during the same period last year.
Highlights of 6M 2024 Results
- Revenue for the first half totaled EUR 405.5 million, reflecting a decline of EUR 18.6 million or 4.4% compared to the same period in 2023.
- Total expenses increased to EUR 367.8 million, up by EUR 9.8 million from last year.
- EBITDA was EUR 37.7 million, down from EUR 66.2 million during the same period last year, marking a decrease of EUR 28.4 million.
- EBIT was recorded at EUR 7.7 million, compared to EUR 35.2 million for the same period last year.
- Net earnings were EUR 8.4 million, down from EUR 29.5 million in the same period of 2023.
CEO Statement on Current Trends
“We achieved acceptable results in the second quarter of 2024. The EBITDA for the quarter was EUR 23.5 million, reflecting a decrease due to lower performance in Container Liner services, where a combination of reduced rates and volumes negatively impacted revenue. However, Container liner results saw significant improvement compared to the first quarter. We are committed to maintaining cost control, although inflationary pressures have made substantial reductions challenging. While we experienced an increase in export volume from Iceland, the mix of categories led to a slight decline in unit revenue. Demand for certain imports, such as cars and building materials, has decreased, which was anticipated due to persistently high interest rates. Additionally, a four-week strike in the Faroe Islands significantly impacted operations, particularly affecting import and export volumes, with an estimated EUR 1.8 million negative effect on EBITDA at the Group level.
Market Forecasts and Operational Insights
The global shipping markets have experienced volatility, with a surge in freight rates driven by various factors affecting traffic through major trade routes and recoveries in large economies. While Trans-Atlantic services performed comparably to last year, an increase in volume was noted from the first quarter. Our operations have benefited from strong Norwegian Reefer Liner services, with robust exports of whitefish and shrimp. Despite these challenges, we remain optimistic about improving results as a new fishing quota year begins, which could enhance export volumes.
Investor Meeting Announcement
The Board of Directors of Eimskipafélag Íslands hf. has approved the Company's interim financial statements for the second quarter. Investors and market participants are invited to a meeting where the financial results will be presented. A recording and presentation materials will be accessible on the Company's investor relations website.
Further Information
For more information, please reach out to Guðbjörg Birna Björnsdóttir, Head of Treasury and Investor Relations, at +354 844 4752 or via email.
Frequently Asked Questions
What were the main highlights of Eimskip's Q2 2024 results?
The report noted acceptable results despite softened demand, with revenue remaining steady at EUR 210 million and stable growth in Forwarding revenue.
How did Eimskip's expenses change in Q2 2024?
Total expenses rose to EUR 186 million, primarily due to increased costs for third-party logistics services and salary expenses.
What impact did the strike in the Faroe Islands have on EBITDA?
The four-week strike in the Faroe Islands had a negative impact on EBITDA, estimated at EUR 1.8 million at the Group level.
How did external market conditions affect Eimskip's performance?
Global shipping markets were volatile, contributing to fluctuating freight rates and impacting revenue from Container Liner services.
What future is expected for Eimskip's operations?
Looking forward, the beginning of a new fishing quota year and stable demand for imports are expected to enhance results, despite some external uncertainties.
