Tallinn, 2017-04-26 16:00 CEST (GLOBE NEWSWIRE) -- AS Tallink Grupp Audited Annual Report of the 2016 Financial Year
In the 2016 financial year the Group carried an all-time high number, a total of 9.5 million passengers which is 5.4% more than the year before (2015: 9.0 million). The number of cargo units transported increased by 6.5% and the number of passenger vehicles transported increased by 4.2% compared to the previous financial year. The Group’s consolidated revenue amounted to EUR 937.8 million (2015: EUR 945.2 million) and EBITDA to EUR 149.5 million (2015: EUR 181.4 million). Net profit amounted to EUR 44.1 million or EUR 0.066 per share (2015: EUR 59.1 million or EUR 0.088 per share).
The Group increased the number of passengers on all operated routes and the majority of the routes had strong growth in passenger volumes throughout the year. The Group deployed previously chartered out ship Silja Europa to the Tallinn - Helsinki route and on top of that, three ships were rerouted in December 2016. Through these actions optimal carriage capacity was achieved on all operated routes.
On the Estonia-Finland route the annual passenger number increased in 2016 by 7.0% to a record level of 5.1 million (2015: 4.7 million). Thanks to the higher capacity and passenger number, the Group increased its market share on the route by 2 percentage points to 58%. On the Finland-Sweden routes the passenger number increased by 2.1% to 2.9 million passengers, the Group increased its market share on the route by 1 percentage point to 54%. The Group’s total passenger market share on the North Baltic Sea increased to 48%.
The positive development of the Estonia-Sweden and Latvia-Sweden routes throughout the 2016 financial year resulted in a higher passenger number, revenue and segment result. The Estonia-Sweden route passenger number increased by 3.8% to 1.0 million passengers. The Latvia-Sweden route passenger number increased by 11.1% to 0.5 million passengers.
In the 2016 financial year the Group increased revenue on all operated routes. The revenue growth in core operations from onboard and ticket sale was supported by the larger number of passengers travelling with ships operated by the Group.
The revenue from chartering activities decreased throughout the 2016 financial year as fewer ships were chartered out compared to the previous financial year. Two of the chartered out ships Silja Festival and Regina Baltica were sold in the first half of the 2015 financial year and cruise ferry Silja Europa returned from charter to the Tallinn – Helsinki route on March 2016. Three Superfast ferries remain chartered out.
Due to the changes in chartering and the routes’ operating capacity the Group´s profits declined as chartering activity where profitability is higher was replaced by route operations that involve higher ship operating costs. In addition the Group incurred the charter costs of fast ferry Superstar, which was sold at the end of 2015 and chartered back until the delivery of a new fast ferry, Megastar, in January 2017.
In the 2016 financial year the Group’s investments amounted to EUR 68.9 million. The majority of investments were made in the renewal and upgrade of the fleet: down payment for the new LNG fast ferry Megastar, large scale renovation of cruise ferry Silja Europa, upgrade of a number of restaurants, shops and cabins in older vessels of the Group’s fleet. Investments were also made in the ships’ technical maintenance, energy efficient technical solutions for ships, and development of online booking and sales systems.
In February 2015 Tallink Grupp AS and Meyer Turku Oy signed a contract for the construction of the new LNG powered fast ferry Megastar for the Tallinn-Helsinki route shuttle service. The production of the Megastar continued throughout 2016 and the vessel was delivered to the Group in January 2017. The cost of the ship is over EUR 230 million and EUR 23 million of it was paid to the shipyard during 2016. Total prepayment for the ship as at 31 December 2016 was EUR 46 million.
The key highlights of the 2016 financial year were the following: - Higher passenger number and revenue - Lower chartering revenues compared to last year - Market share growth on routes - Cruise ferry Silja Europa’s return from charter to the Tallinn-Helsinki route - A new logistics centre launched in Maardu, Harjumaa - New passenger terminals opened in Stockholm and Helsinki - Ships re-rerouted in December 2016 - Group-wide ship renovation programme continued - Construction of the new LNG fast ferry Megastar finalised
KEY FIGURES OF THE FINANCIAL YEAR 2016
| For the year ended 31 December | 2016 | 2015 | Change % |
| Revenue (million euros) | 937.8 | 945.2 | -0.8% |
| Gross profit (million euros) | 192.6 | 223.4 | -13.8% |
| Net profit for the period (million euros) | 44.1 | 59.1 | -25.4% |
| EBITDA (million euros) | 149.5 | 181.4 | -17.6% |
| Depreciation and amortisation (million euros) | 77.9 | 78.1 | -0.3% |
| Investments (million euros) | 68.9 | 43.6 | 58.0% |
| Weighted average number of ordinary shares outstanding1 | 669 882 040 | 669 882 040 | 0.0% |
| Earnings per share | 0.066 | 0.088 | -25.0% |
| Number of passengers | 9 457 522 | 8 976 226 | 5.4% |
| Number of cargo units | 328 190 | 308 029 | 6.5% |
| Average number of employees | 7 163 | 6 835 | 4.8% |
| As at 31 December | 2016 | 2015 | Change % |
| Total assets (million euros) | 1 539.0 | 1 538.8 | 0.0% |
| Total liabilities (million euros) | 725.5 | 714.3 | 1.6% |
| Interest-bearing liabilities (million euros) | 558.9 | 549.3 | 1.7% |
| Net debt (million euros) | 480.1 | 467.3 | 2.7% |
| Total equity (million euros) | 813.6 | 824.4 | -1.3% |
| Equity ratio (%) | 52.9% | 53.6% | |
| Number of ordinary shares outstanding1 | 669 882 040 | 669 882 040 | 0.0% |
| Shareholders’ equity per share | 1.21 | 1.23 | -1.6% |
| Ratios | 2016 | 2015 | Change % |
| Gross margin (%) | 20.5% | 23.6% | |
| EBITDA margin (%) | 15.9% | 19.2% | |
| Net profit margin (%) | 4.7% | 6.3% | |
| Return on assets (ROA) | 4.7% | 6.3% | |
| Return on equity (ROE) | 5.4% | 7.4% | |
| Return on capital employed (ROCE) | 5.4% | 7.7% | |
| Net debt to EBITDA | 3.2 | 2.6 | 23.1% |
SALES
The Group’s consolidated revenue amounted to EUR 937.8 million in 2016 (945.2 million in 2015). Restaurant and shop sales on-board and on mainland of EUR 521.5 million (500.6 million in 2015) contributed more than half of total revenue. Ticket sales amounted to EUR 236.0 million (228.0 million in 2015) and sales of cargo transport to EUR 103.9 million (104.4 million in 2015).
In the 2016 financial year the revenue structure of the Group changed compared to the previous financial year. After the expiry of the cruise ferry Silja Europa charter contract in February 2016 the Group increased the capacity of its route operations by deploying the ship on Tallinn-Helsinki route. Therefore, in 2016 a decrease in chartering revenue was expected and by increasing the capacity of its core route operations the Group increased the passenger number to an all-time high level and earned total annual revenue comparable to the year before.
Geographically, 37.7% or EUR 353.3 million of revenue came from the Estonia-Finland route and 36.0% or EUR 337.4 million from the Finland-Sweden route. Revenue from the Estonia-Sweden route was EUR 110.1 million or 11.7% and from the Latvia-Sweden route EUR 44.6 million or 4.8%. The share of revenue generated by other geographical segments decreased to 9.9% or EUR 92.5 million.
EARNINGS
Gross profit was EUR 192.6 million (EUR 223.4 million in 2015), EBITDA EUR 149.5 million (EUR 181.4 million in 2015). Net profit for 2016 was EUR 44.1 million (EUR 59.1 million in 2015). Basic and diluted earnings per share were EUR 0.066 (EUR 0.088 in 2015).
The cost of goods related to sales at shops and restaurants, which is the largest operating cost item, amounted to EUR 225.0 million (EUR 215.4 million in 2015).
Fuel cost for 2016 was EUR 74.2 million (EUR 94.2 million in 2015). Fuel cost was impacted by lower fuel price level throughout the year and efficiencies from continuous efforts to optimize the fleet’s fuel cost, the total annual fuel cost decreased by 21.2%.
The Group’s personnel expenses amounted to EUR 210.0 million (EUR 193.8 million in 2015). The average number of employees in the 2016 financial year was 7 163 (6 835 in 2015).
Administrative expenses for 2016 amounted to EUR 51.0 million, and sales and marketing expenses to EUR 72.3 million (EUR 47.3 million and 63.6 million respectively in 2015).
Depreciation and amortisation of the Group’s assets was EUR 77.9 million (EUR 78.1 million in 2015). There were no impairment losses related to the Group’s property, plant, equipment and intangible assets.
The Group’s net finance costs for 2016 amounted to EUR 26.8 million (EUR 34.2 million in 2015).
The Group’s exposure to credit risk, liquidity risk and market risks, and its financial risk management activities are described in the notes to the financial statements.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| For the year ended 31 December, in thousands of EUR | 2016 | 2015 | Notes |
| Revenue | 937 805 | 945 203 | 4 |
| Cost of sales | -745 223 | -721 780 | 5 |
| Gross profit | 192 582 | 223 423 | |
| Sales and marketing expenses | -72 268 | -63 578 | 5 |
| Administrative expenses | -50 973 | -47 311 | 5 |
| Other operating income | 2 450 | 983 | |
| Other operating expenses | -184 | -10 254 | |
| Result from operating activities | 71 607 | 103 263 | |
| Finance income | 10 514 | 12 808 | 5 |
| Finance costs | -37 289 | -46 964 | 5 |
| Share of profit of equity-accounted investees | 13 | 64 | 12 |
| Profit before income tax | 44 845 | 69 171 | |
| Income tax | -741 | -10 101 | 6 |
| Net profit attributable to equity holders of the Parent | 44 104 | 59 070 | |
| Other comprehensive income | |||
| Exchange differences on translating foreign operations | -469 | 160 | |
| Other comprehensive income for the year | -469 | 160 | |
| Total comprehensive income attributable to equity holders of the Parent | 43 635 | 59 230 | |
| Basic and diluted earnings per share (in EUR per share) | 0.066 | 0.088 | 7 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| As at 31 December, in thousands of EUR | 2016 | 2015 | Notes |
| ASSETS | |||
| Cash and cash equivalents | 78 773 | 81 976 | 8 |
| Trade and other receivables | 38 674 | 36 583 | 9 |
| Prepayments | 7 926 | 5 274 | 10 |
| Prepaid income tax | 91 | 1 224 | |
| Inventories | 38 719 | 29 197 | 11 |
| Current assets | 164 183 | 154 254 | |
| Investments in equity-accounted investees | 363 | 350 | 12 |
| Other financial assets | 348 | 308 | 13 |
| Deferred income tax assets | 18 791 | 19 410 | 6 |
| Investment property | 300 | 300 | |
| Property, plant and equipment | 1 304 897 | 1 311 418 | 14 |
| Intangible assets | 50 127 | 52 726 | 15 |
| Non-current assets | 1 374 826 | 1 384 512 | |
| TOTAL ASSETS | 1 539 009 | 1 538 766 | |
| LIABILITIES AND EQUITY | |||
| Interest-bearing loans and borrowings | 106 112 | 81 889 | 16 |
| Trade and other payables | 103 280 | 88 480 | 17 |
| Dividends payable to shareholders | 4 | 0 | |
| Income tax liability | 10 | 4 567 | 6 |
| Deferred income | 30 895 | 28 906 | 18 |
| Current liabilities | 240 301 | 203 842 | |
| Interest-bearing loans and borrowings | 452 793 | 467 447 | 16 |
| Derivatives | 32 359 | 42 863 | 24 |
| Other liabilities | 0 | 192 | |
| Non-current liabilities | 485 152 | 510 502 | |
| Total liabilities | 725 453 | 714 344 | |
| Share capital | 361 736 | 404 290 | 19 |
| Share premium | 639 | 639 | 19 |
| Reserves | 68 774 | 65 083 | 19 |
| Retained earnings | 382 407 | 354 410 | |
| Equity attributable to equity holders of the Parent | 813 556 | 824 422 | |
| Equity | 813 556 | 824 422 | |
| TOTAL LIABILITIES AND EQUITY | 1 539 009 | 1 538 766 |
CONSOLIDATED STATEMENT OF CASH FLOWS
| For the year ended 31 December, in thousands of EUR | 2016 | 2015 | Notes |
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net profit for the period | 44 104 | 59 070 | |
| Adjustments for: | |||
| Depreciation and amortisation | 77 858 | 78 102 | 14, 15 |
| Net gain/loss on disposals of property, plant and equipment | -83 | 9 164 | |
| Net interest expense | 27 980 | 36 099 | 5 |
| Net income/expense from derivatives | -6 215 | 4 926 | 5 |
| Gain on disposal of financial assets | 0 | -186 | |
| Profit from equity-accounted investees | -13 | -64 | 12 |
| Net unrealised foreign exchange gain | 4 889 | -5 591 | |
| Share option programme reserve | -910 | 300 | |
| Income tax | 741 | 10 101 | 6 |
| Adjustments | 104 247 | 132 851 | |
| Changes in: | |||
| Receivables and prepayments related to operating activities | -4 969 | 1 463 | |
| Inventories | -9 522 | 2 118 | |
| Liabilities related to operating activities | 16 785 | -4 139 | |
| Changes in assets and liabilities | 2 294 | -558 | |
| Cash generated from operating activities | 150 645 | 191 363 | |
| Income tax paid | -3 265 | 553 | |
| NET CASH FROM OPERATING ACTIVITIES | 147 380 | 191 916 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of property, plant, equipment and intangible assets | -68 638 | -43 629 | |
| Proceeds from disposals of property, plant, equipment | 169 | 115 370 | |
| Proceeds from other financial assets | 0 | 229 | |
| Interest received | 74 | 74 | |
| NET CASH USED IN/FROM INVESTING ACTIVITIES | -68 395 | 72 044 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from loans | 280 000 | 0 | |
| Repayment of loans | -313 524 | -133 263 | |
| Change in overdraft | 36 713 | -59 052 | 16 |
| Payments for settlement of derivatives | -4 289 | -4 045 | |
| Payment of finance lease liabilities | -99 | -80 | |
| Interest paid | -24 083 | -33 210 | |
| Payment of transaction costs related to loans | -2 989 | -1 429 | |
| Dividends paid | -13 398 | -13 398 | 19 |
| Reduction of share capital | -40 189 | 0 | 19 |
| Income tax on dividends paid | -330 | -2 818 | 19 |
| NET CASH USED IN FINANCING ACTIVITIES | -82 188 | -247 295 | |
| TOTAL NET CASH FLOW | -3 203 | 16 665 | |
| Cash and cash equivalents at the beginning of period | 81 976 | 65 311 | |
| Decrease/increase in cash and cash equivalents | -3 203 | 16 665 | 8 |
| Cash and cash equivalents at the end of period | 78 773 | 81 976 |
Janek Stalmeister Chairman of the Management Board AS Tallink Grupp Tel +372 640 9800 E-mail janek.stalmeister@tallink.ee Veiko Haavapuu Finance Director AS Tallink Grupp Sadama 5/7, 10111 Tallinn Tel +372 640 9914 E-mail veiko.haavapuu@tallink.ee
