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Tallink Grupp
Quarterly Report • Oct 24, 2024
2225_10-q_2024-10-24_6935fe06-a1ba-4ba9-9bfa-477a625f9d25.pdf
Quarterly Report
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Q3 2024 AS TALLINK GRUPP
| Beginning of the financial year | 1 January 2024 |
|---|---|
| End of the financial year | 31 December 2024 |
| Interim reporting period | 1 July 2024 – 30 September 2024 |
CONTENTS
| MANAGEMENT REPORT 3 |
|---|
| MANAGEMENT BOARD'S CONFIRMATION 17 |
| UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS18 |
| Consolidated Statement of Profit or Loss and Other Comprehensive Income 18 |
| Consolidated Statement of Financial Position 19 |
| Consolidated Statement of Cash Flows 20 |
| Consolidated Statement of Changes in Equity 21 |
| NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 22 |
| Note 1 Corporate Information 22 |
| Note 2 Basis of Preparation 22 |
| Note 3 Segment Information 22 |
| Note 4 Financial Items 24 |
| Note 5 Earnings Per Share 24 |
| Note 6 Property, Plant, and Equipment 25 |
| Note 7 Intangible Assets 27 |
| Note 8 Interest-Bearing Loans and Borrowings27 |
| Note 9 Share Capital 28 |
| Note 10 Dividends 28 |
| Note 11 Share Option Programme 29 |
| Note 12 Related Party Disclosures 29 |
| STATEMENT BY THE MANAGEMENT BOARD 30 |
| ALTERNATIVE PERFORMANCE MEASURES 31 |
| CONTACT INFORMATION 34 |
MANAGEMENT REPORT
In the third quarter (1 July – 30 September) of the 2024 financial year, AS Tallink Grupp and its subsidiaries (hereinafter referred to as "the Group") carried 1 715 496 passengers, which is 3.4% less than in the third quarter of 2023. The number of cargo units transported decreased by 11.7% compared to the same period a year ago. The number of passenger vehicles was down by 8.3% year-on-year and amounted to 250 810. The Group's unaudited consolidated revenue amounted to EUR 231.9 million (EUR 240.7 million in Q3 2023), down by 3.7%. Unaudited EBITDA was EUR 68.4 million (EUR 82.1 million in Q3 2023) and the unaudited net profit for the period was EUR 36.8 million (EUR 48.7 million in Q3 2023).
The following operational factors impacted the Group's revenue and operating results in the third quarter of 2024:
- → Demand continued to be affected by low consumer and business confidence levels, the economic challenges in the Group's core markets as well as mounting global geopolitical tensions.
- → As at the end of the quarter, the Group operated 14 vessels including 2 shuttle vessels, 2 cargo vessels, 5 operating cruise ferries as well as 3 vessels that were chartered out and 2 vessels that were in lay-up.
- → During the quarter the Tallinn-Stockholm route was operated with two cruise ferries. The cruise ferry Victoria I returned to Tallinn-Helsinki route on 31 August 2024.
- → The Group operated 3 hotels in Tallinn and 1 in Riga.
- → The Group's net debt was EUR 555.7 million as at the end of the quarter (EUR 548.9 million as at 30 June 2024) bringing the net debt to EBITDA ratio to 2.98 as at 30 September 2024.
- → Payment of dividends in the amount of EUR 44.6 million and related income tax in the amount of EUR 4.9 million impacted the cash balance.
- → As a result of the voluntary takeover bid, the shareholding of AS Infortar, the core shareholder of the Group, increased from 46.8% to 68.5% as at 9 August 2024.
- → The Group continues to focus on cost efficiencies from the previously implemented measures and maintaining profitable operations on its core routes.
- → The Group regularly monitors the developments on its core routes including the capacity of each route and continues to look for new chartering options for vessels not used on the main routes and to work on extending the existing chartering agreements.
Sales and Segments
In the third quarter of 2024, the Group's total revenue decreased by EUR 8.8 million to EUR 231.9 million compared to EUR 240.7 million in the third quarter of 2023.
Revenue from route operations (the Group's core business) decreased by EUR 2.0 million to EUR 193.6 million compared to the third quarter of 2023. The segment result from route operations (the Group's core business) amounted to EUR 48.1 million, down by EUR 6.9 million compared to the third quarter of 2023.
The number of passengers carried on the Estonia-Finland route dropped by 1.7% in year-on-year comparison. The number of transported cargo units decreased by 13.0%. Revenue from the Estonia-Finland route increased by EUR 0.4 million compared to the same period a year ago and amounted to EUR 86.8 million. The segment result decreased by EUR 0.9 million amounting to EUR 31.4 million. The segment reflects the operations of two shuttle vessels until 31 August 2024 and two shuttle vessels and one cruise ferry from thereon. From 31 May 2024 until 31 August 2024, the cruise ferry Victoria I operated the Tallinn-Stockholm route.
In the third quarter of 2024, the year-on-year decrease in the number of passengers on Finland-Sweden routes was 18.1%. The number of transported cargo units increased by 9.9%. The routes' revenue decreased by EUR 11.1 million to EUR 72.6 million and the segment result decreased by EUR 5.6 million to EUR 13.2 million, year-on-year. The segment reflects the operations of one cruise ferry on the Turku-Stockholm route and two cruise ferries on the Helsinki-Stockholm route.
On Estonia-Sweden routes the number of carried passengers increased by 34.2% while the number of transported cargo units decreased by 21.6% compared to the third quarter of 2023. Year-on-year, the revenue of Estonia-Sweden routes increased by EUR 8.6 million to EUR 34.2 million. The segment result declined by EUR 0.4 million compared to the third quarter of 2023 and amounted to EUR 3.5 million. Estonia-Sweden routes reflect the operation of two cargo vessels and two cruise ferries until 31 August 2024. The cruise ferry Victoria I returned to the Tallinn-Helsinki route on 31 August 2024 and the Tallinn-Stockholm route was from thereon operated by the cruise ferry Baltic Queen.
Revenue from the segment Other decreased by a total of EUR 7.2 million and amounted to EUR 40.2 million. The decrease was mainly driven by less vessels on charter. As at the end of the third quarter of 2024, the Group had 3 vessels on charter, of which one was on long-term and two on short-term charter (Q3 2023: 5 vessels including 3 on long-term and 2 on short-term).
At the end of the third quarter of 2024, the following vessels were chartered out:
- → The shuttle vessel James Joyce (formerly Star) was chartered out from 5 May 2023 for 20 months with an option to extend the charter by 2+2 years and an option to purchase the vessel.
- → The cruise ferry Galaxy I was chartered out in September 2022. In October 2024, the agreement was extended by 12 months until October 2025 with the option of extending the agreement at the end of the agreement period by 6+6 months.
- → The cruise ferry Silja Europa was chartered out in August 2022. In October 2023, the charter agreement was extended until the end of 2024.
Earnings
In the third quarter of 2024, the Group's gross profit declined by EUR 10.6 million to EUR 67.0 million compared to EUR 77.7 million in the third quarter of 2023. EBITDA declined by EUR 13.7 million and amounted to EUR 68.4 million.
Amortisation and depreciation expense decreased by EUR 0.9 million to EUR 24.4 million compared to the third quarter of the financial year 2023.
The Group's unaudited net profit for the third quarter of 2024 was EUR 36.8 million or EUR 0.050 per share compared to EUR 48.7 million or EUR 0.065 per share in the third quarter of 2023.
Investments
The Group's investments in the third quarter of 2024 amounted to EUR 5.6 million (EUR 6.1 million in Q3 2023). Main investments in vessels included maintenance and repair works i.e., technical works as well as interior upgrades. The Group also continued to invest in the improvement of its IT systems.
Financial Position
At the end of Q3 2024, the Group's net debt amounted to EUR 555.7 million, up by EUR 6.8 million compared to the end of second quarter of 2024. The net debt to EBITDA ratio was 2.98 at the reporting date (2.7 as at 30 June 2024).
As at 30 September 2024, the Group's cash and cash equivalents amounted to EUR 32.6 million (EUR 70.9 million as at 30 June 2024) and the Group had EUR 75.0 million in unused credit lines (EUR 75.0 million as at 30 June 2024). The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to EUR 107.6 million (EUR 145.8 million as at 30 June 2024). The decline in cash and cash equivalents as
well as in the liquidity buffer was driven by the payment of dividends and related income tax in the third quarter of 2024. In the third quarter of 2024, the Group repaid loans in the total amount of EUR 27.0 million (EUR 30.9 million in the third quarter of 2023).
Dividends
In 2018, the Group adopted a dividend policy subject to which dividends of a minimum amount of EUR 0.05 per share would be paid if the economic performance enables it.
The Annual General Meeting of Shareholders held on 7 May 2024 adopted a resolution to pay dividends of EUR 0.06 per share for the financial year of 2023. The dividends in the amount of EUR 44.6 million were paid out on 3 July 2024.
Results of the first 9 months of 2024
In the first 9 months (1 January – 30 September) of the 2024 financial year, the Group carried 4.3 million passengers which is down by 2.2% compared to the same period last year. The Group's unaudited revenue for the period decreased by 6.1% and amounted to EUR 602.3 million. Unaudited EBITDA for the first 9 months was EUR 149.5 million (EUR 177.7 million in January-September 2023) and unaudited net profit was EUR 45.5 million (EUR 76.7 million in January-September 2023).
The financial result of the first 9 months of 2024 was impacted by the following factors:
- → Low consumer and business confidence in the home markets as well as mounting geopolitical tensions.
- → The number of vessels on charter dropped from 5 in the beginning of the year to 3 as at the end of the third quarter.
- → Sale of the cruise vessel Isabelle in the first quarter of 2024.
- → Two vessels in lay-up including the cruise vessel Romantika the charter agreement of which was prematurely terminated in September 2023 and MV Superfast IX (formerly Atlantic Vision) the charter agreement of which ended in May 2024.
- → Payment of dividends in the amount of EUR 44.6 million in the third quarter of 2024.
- → Income tax expense on dividends in the amount of EUR 9.2 million was recorded in the second quarter of 2024. In the third quarter of 2024, income tax on dividends was paid in the amount of EUR 4.9 million (EUR 4.3 million of the dividend tax expense was offset by prepaid income tax).
- → Repayment of long-term loans in the amount of EUR 59.5 million.
Key Figures
| Jan-Sep | Jan-Sep | |||
|---|---|---|---|---|
| For the period | Q3 2024 | Q3 2023 | 2024 | 2023 |
| Revenue (EUR million) | 231.9 | 240.7 | 602.3 | 641.6 |
| Gross profit/loss (EUR million) | 67.0 | 77.7 | 127.6 | 168.9 |
| EBITDA¹ (EUR million) | 68.4 | 82.1 | 149.5 | 177.7 |
| EBIT¹ (EUR million) | 44.0 | 56.8 | 76.1 | 101.9 |
| Net profit/loss for the period (EUR million) | 36.8 | 48.7 | 45.5 | 76.7 |
| Depreciation and amortisation (EUR million) | 24.4 | 25.2 | 73.3 | 75.7 |
| Capital expenditures¹ ²(EUR million) | 5.6 | 6.1 | 16.5 | 22.3 |
| Weighted average number of ordinary shares outstanding | 743 569 064 | 743 569 064 | 743 569 064 | 743 569 064 |
| Earnings/loss per share¹ (EUR) | 0.050 | 0.065 | 0.061 | 0.103 |
| Number of passengers | 1 715 496 | 1 775 821 | 4 270 002 | 4 366 679 |
| Number of cargo units | 66 865 | 75 701 | 238 628 | 247 792 |
| Average number of employees | 5 063 | 4 756 | 5 004 | 4 878 |
| As at | 30.09.2024 | 30.06.2024 | 30.09.2023 | 30.06.2023 |
| Total assets (EUR million) | 1 498.9 | 1 567.0 | 1 597.4 | 1 613.6 |
| Total liabilities (EUR million) | 711.5 | 816.6 | 813.7 | 878.4 |
| Interest-bearing liabilities (EUR million) | 588.3 | 619.8 | 684.8 | 722.5 |
| Net debt¹ (EUR million) | 555.7 | 548.9 | 620.4 | 664.9 |
| Net debt to EBITDA¹ | 2.98 | 2.74 | 2.72 | 3.10 |
| Total equity (EUR million) | 787.4 | 750.4 | 783.7 | 735.2 |
| Equity ratio¹ (%) | 53% | 48% | 49% | 46% |
| Number of ordinary shares outstanding | 743 569 064 | 743 569 064 | 743 569 064 | 743 569 064 |
| Shareholders' equity per share (EUR) | 1.06 | 1.01 | 1.05 | 0.99 |
| Jan-Sep | Jan-Sep | |||
| Ratios¹ | Q3 2024 | Q3 2023 | 2024 | 2023 |
| Gross margin (%) | 28.9% | 32.3% | 21.2% | 26.3% |
| EBITDA margin (%) | 29.5% | 34.1% | 24.8% | 27.7% |
| EBIT margin (%) | 19.0% | 23.6% | 12.6% | 15.9% |
| Net profit/loss margin (%) | 15.9% | 20.2% | 7.6% | 12.0% |
| ROA (%) | 5.6% | 7.7% | 5.6% | 7.7% |
| ROE (%) | 6.1% | 12.9% | 6.1% | 12.9% |
| ROCE (%) | 6.7% | 9.6% | 6.7% | 9.6% |
1 Alternative performance measures based on ESMA guidelines are disclosed in the Alternative Performance Measures section of this Interim Report.
2 Does not include additions to right-of-use assets.
Sales & Results by Segments
The following table provides an overview of the quarterly sales and result development by geographical segments.
| Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q3 Change 2024 vs 2023 |
|
|---|---|---|---|---|---|---|
| Passengers (thousands) | 1 077 | 831 | 719 | 922 | 1 059 | -1.7% |
| Cargo units (thousands) | 56 | 56 | 64 | 65 | 48 | -13.0% |
| Revenue (EUR million) | 86.4 | 74.3 | 65.4 | 84.4 | 86.8 | 0.5% |
| Segment result¹ (EUR million) | 32.3 | 15.7 | 9.7 | 24.9 | 31.4 | -2.7% |
| Passengers (thousands) | 539 | 374 | 279 | 355 | 442 | -18.1% |
| Cargo units (thousands) | 9 | 9 | 9 | 11 | 10 | 9.9% |
| Revenue (EUR million) | 83.7 | 55.4 | 44.3 | 58.6 | 72.6 | -13.3% |
| Segment result¹ (EUR million) | 18.9 | -1.7 | -8.3 | 1.5 | 13.2 | -29.8% |
| Passengers (thousands) | 160 | 133 | 105 | 174 | 215 | 34.2% |
| Cargo units (thousands) | 11 | 11 | 11 | 11 | 9 | -21.6% |
| Revenue (EUR million) | 25.5 | 21.0 | 17.6 | 25.8 | 34.2 | 33.9% |
| Segment result¹ (EUR million) | 3.9 | -1.3 | -3.4 | -0.9 | 3.5 | -10.0% |
| Revenue (EUR million) | 47.4 | 44.3 | 34.1 | 42.9 | 40.2 | -15.2% |
| Segment result¹ (EUR million) | 12.2 | 10.9 | 6.1 | 9.3 | 8.2 | -33.0% |
| Intersegment revenue (EUR million) | -2.4 | -1.2 | -1.0 | -1.6 | -1.9 | 17.8% |
| Total revenue (EUR million) | 240.7 | 193.7 | 160.4 | 210.0 | 231.9 | -3.7% |
| EBITDA (EUR million) | 82.1 | 36.8 | 34.5 | 46.6 | 68.4 | -16.7% |
| Total segment result¹ (EUR million) | 67.3 | 23.5 | 4.0 | 34.9 | 56.3 | -16.2% |
| Net profit/loss | 48.7 | 2.2 | 2.6 | 6.1 | 36.8 | -24.4% |
¹ Segment result is the result before administrative expenses, finance costs and taxes.
The following table provides an overview of the quarterly sales development by operating segments:
| Revenue (EUR million) | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q3 Change 2024 vs 2023 |
|---|---|---|---|---|---|---|
| Restaurant and shop sales on-board and onshore | 111.4 | 97.1 | 75.0 | 101.7 | 105.9 | -4.9% |
| Ticket sales | 76.0 | 47.2 | 39.5 | 58.0 | 78.6 | 3.4% |
| Sales of cargo transportation | 20.7 | 21.2 | 22.7 | 25.5 | 20.9 | 0.8% |
| Accommodation sales | 5.4 | 3.4 | 2.3 | 4.3 | 5.9 | 8.7% |
| Income from charter of vessels | 22.1 | 19.3 | 17.5 | 15.7 | 14.7 | -33.5% |
| Other sales | 5.1 | 5.6 | 3.4 | 4.8 | 5.9 | 15.5% |
| Total revenue | 240.7 | 193.7 | 160.4 | 210.0 | 231.9 | -3.7% |
The following charts provide an overview of the Group's third quarter of 2024 sales by operational and geographical segments.
Market Developments
The following table provides an overview of the passengers, cargo units and passenger vehicles transported during the third quarter and nine months of 2024 and 2023.
| Passengers | Q3 2024 | Q3 2023 | Change | Jan-Sep 2024 |
Jan-Sep 2023 |
Change |
|---|---|---|---|---|---|---|
| Estonia-Finland | 1 058 909 | 1 076 675 | -1.7% | 2 699 788 | 2 625 237 | 2.8% |
| Finland-Sweden | 441 758 | 539 121 | -18.1% | 1 076 137 | 1 300 603 | -17.3% |
| Estonia-Sweden | 214 829 | 160 025 | 34.2% | 494 077 | 440 839 | 12.1% |
| Total | 1 715 496 | 1 775 821 | -3.4% | 4 270 002 | 4 366 679 | -2.2% |
| Cargo units | Q3 2024 | Q3 2023 | Change | Jan-Sep 2024 |
Jan-Sep 2023 |
Change |
|---|---|---|---|---|---|---|
| Estonia-Finland | 48 363 | 55 601 | -13.0% | 177 258 | 180 683 | -1.9% |
| Finland-Sweden | 9 581 | 8 718 | 9.9% | 30 145 | 28 122 | 7.2% |
| Estonia-Sweden | 8 921 | 11 382 | -21.6% | 31 225 | 38 987 | -19.9% |
| Total | 66 865 | 75 701 | -11.7% | 238 628 | 247 792 | -3.7% |
| Passenger vehicles | Q3 2024 | Q3 2023 | Change | Jan-Sep 2024 |
Jan-Sep 2023 |
Change |
|---|---|---|---|---|---|---|
| Estonia-Finland | 207 878 | 223 335 | -6.9% | 530 417 | 571 083 | -7.1% |
| Finland-Sweden | 29 379 | 39 189 | -25.0% | 55 544 | 72 615 | -23.5% |
| Estonia-Sweden | 13 553 | 10 990 | 23.3% | 27 045 | 24 211 | 11.7% |
| Total | 250 810 | 273 514 | -8.3% | 613 006 | 667 909 | -8.2% |
The Group's estimated market shares on the routes operated during the 12-month period ended on 30 September 2024 were as follows:
- → the Group carried approximately 48% of the passengers and 50% of the ro-ro cargo on the route between Tallinn and Helsinki.
- → the Group carried approximately 38% of the passengers and 16% of the ro-ro cargo on the routes between Finland and Sweden.
- → the Group was the only provider of passenger transportation between Tallinn and Stockholm.
Group Structure
At the reporting date, the Group consisted of 46 companies. All subsidiaries are wholly owned by AS Tallink Grupp. The following diagram represents the Group's structure as at the reporting date:
Personnel
As at 30 September 2024, the Group had 4 811 employees (4 619 as at 30 September 2023). The number of employees includes 112 employees on maternity leave. The following table provides a more detailed overview of the Group's personnel.
| Average of Q3 | Average of Jan-Sep | End of Q3 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | |
| Onshore total | 1 070 | 1 125 | -4.9% | 1 080 | 1 109 | -2.6% | 1 052 | 1 103 | -4.6% |
| Estonia | 721 | 744 | -3.1% | 726 | 736 | -1.4% | 720 | 731 | -1.5% |
| Finland | 234 | 262 | -10.7% | 239 | 258 | -7.4% | 221 | 254 | -13.0% |
| Sweden | 99 | 103 | -3.9% | 100 | 98 | 2.0% | 96 | 102 | -5.9% |
| Latvia | 8 | 9 | -7.4% | 8 | 11 | -22.4% | 8 | 9 | -11.1% |
| Russia | 1 | 1 | 0.0% | 1 | 1 | 0.0% | 1 | 1 | 0.0% |
| Germany | 6 | 6 | 0.0% | 6 | 5 | 20.0% | 6 | 6 | 0.0% |
| Onboard | 3 262 | 2 897 | 12.6% | 3 204 | 3 055 | 4.9% | 3 063 | 2 801 | 9.4% |
| Burger King¹ | 333 | 368 | -9.7% | 344 | 369 | -6.9% | 325 | 359 | -9.5% |
| Hotel¹ | 399 | 365 | 9.3% | 376 | 345 | 9.0% | 371 | 356 | 4.2% |
| Total | 5 063 | 4 756 | 6.5% | 5 004 | 4 878 | 2.6% | 4 811 | 4 619 | 4.2% |
1 The number of Burger King and hotel personnel is not included in the total number of onshore personnel.
In the third quarter of 2024, staff costs amounted to EUR 49.1 million (EUR 43.0 million in Q3 2023), which is a 14.0% increase compared to the same period a year ago.
Shareholders & Share Price Development
The following chart displays the shareholder structure of AS Tallink Grupp as at 30 September 2024.
The shares of AS Tallink Grupp have been listed on the Nasdaq Tallinn stock exchange since 9 December 2005, where the shares are traded under the ticker symbol TAL1T. Starting from 3 December 2018, the shares of AS Tallink Grupp are listed as Finnish Depository Receipts (FDRs) also on Nasdaq Helsinki stock exchange, where the FDRs are traded under the ticker symbol TALLINK. At the reporting date, the closing share price on Nasdaq Baltic was EUR 0.585 and the closing price of the FDR on Nasdaq Helsinki was EUR 0.592. The following charts give an overview of the share and FDR price and turnover
developments in the past twelve months. The account NORDEA BANK ABP / CLIENTS FDR represented 8 510 FDR-holders on 30 September 2024. The total number of shareholders and FDR-holders was 38 640.
Key Management Personnel
The Supervisory Board of AS Tallink Grupp consists of six members:
- → Mr Enn Pant, Chairman of the Supervisory Board
- → Mr Toivo Ninnas → Ms Elise Nassar
- → Mr Raino Paron
Supervisory Board Management Board
The Management Board of AS Tallink Grupp consists of five members:
- → Mr Paavo Nõgene, Chairman of the Management Board
- → Ms Eve Pant → Mr Harri Hanschmidt
- → Mr Ain Hanschmidt → Mrs Piret Mürk-Dubout
- → Mr Kalev Järvelill → Mr Margus Schults
Economic Environment
The Group's operations in the third quarter of 2024 were predominantly impacted by shifts in consumer behaviour and the economic conditions in its primary markets of Finland, Sweden, and Estonia, but also by the global geopolitical situation and the ongoing war in Europe.
According to UNWTO, economic and geopolitical headwinds continue to pose significant challenges to international tourism and overall confidence levels. Tourists are expected to prioritize value for money and opt for closer-to-home destinations in response to rising prices and the broader economic difficulties. Additionally, extreme weather events, such as high temperatures, could impact the destination preferences of many travellers.
The OECD measured consumer and business confidence index remains low across households and businesses. While consumer confidence, which hit a record low in September 2022, has gradually improved, it still lags behind historical averages in all of the Group's key markets, indicating continued pessimism regarding future personal finances. Higher unemployment and the general economic and political situation both locally and globally have a direct effect on consumer confidence and purchasing power.
Business confidence follows a similar trend, with Estonia reporting the lowest levels among the Group's core markets. The war in Ukraine, tight monetary policy, persistently high inflation, and the prospect of economic recession continue to be key concerns globally.
The Group's operational environment was also impacted by changes in VAT tax rates in Estonia and Finland. Finland saw an increase in VAT rate from 24% to 25.5% as of 1 September 2024. The increase did not impact the goods and services currently subject to reduced VAT of 10%. In Estonia, standard VAT rate increased from 20% to 22% on 1 January 2024. The reduced VAT rate of accommodation services will increase to 22% from 1 January 2025. Additionally, income tax for both natural persons and business entities will increase from the current 20% to 22% from 1 January 2025.
For the foreseeable future and according to current best knowledge and estimates, the key risks for the business continue to be related to the geopolitical tensions, uncertainties about the global economy, fluctuations in fuel prices, high interest rates and changing customer travel and consumption habits.
Events in the Third Quarter 2024
Change in Substantial Shareholding
As of 9 August 2024, AS Infortar holds 509,092,817 shares of AS Tallink Grupp which represent 68.5% of the aggregate votes represented by the shares of AS Tallink Grupp. Before the substantial change AS Infortar held 347,696,887 shares of AS Tallink Grupp which represented 46.8% of the aggregate votes represented by the shares of AS Tallink Grupp.
Resignation of a Member of the Supervisory Board
On 9 August 2024, Colin Douglas Clark, a member of the Supervisory Board of AS Tallink Grupp, notified the Management Board of the Company and the Supervisory Board of the Company of his resignation from the Supervisory Board of the Company. The Supervisory Board of AS Tallink Grupp continues with 6 members.
Events After the Reporting Period and Outlook
Extension of Galaxy I Charter Agreement
In October 2024, the charter agreement of the cruise ferry Galaxy I was extended for 12 months until October 2025 with the option of extending the agreement for another 6+6 months at the end of the agreement period.
Earnings
The Group's earnings are not generated evenly throughout the year. The summer period is the high season in the Group's operations. In management's opinion and based on prior experience, most of the Group's earnings are generated during the summer months (June-August). In 2024, seasonal fluctuations in revenue generation are smoothed by Group's earnings from chartering services.
The war in Ukraine has a negative impact on the demand of certain customer groups, mainly customers from the countries directly participating in the conflict and from Asian countries, together with the risk of an increase in some input prices, mainly fuel and raw materials. The exact magnitude and duration of the potential effects from the conflict remain difficult to assess.
Despite the uncertainties in the outlook of the economic environment the management is continuously looking for ways to manage risks for the low season (for example through charters).
Research and Development Projects
The Group does not have any substantial ongoing research and development projects. The Group is continuously seeking opportunities for expanding its operations to improve its results.
The Group is continuously looking for innovative ways to upgrade the ships and passenger area technology to improve its overall performance through modern solutions. The most recent technical projects are focusing on the solutions for reducing the CO2 footprint of the ships.
Risks
The Group's business, financial position and operating results could be materially affected by various risks. These risks are not the only ones that we face. Additional risks and uncertainties not presently known to us, or that we currently believe are immaterial or unlikely, could also impair the business. The order of presentation of the risk factors below is not intended to be an indication of the probability of their occurrence or of their potential effect on our business.
- → Protracted geopolitical and military conflict in Europe;
- → Changes in the Estonian tax environment no longer support the stability of tax environment, the key advantage to the Estonian economy until now;
- → Governmental restrictions on business activities;
- → Impact of high inflation on consumer habits;
- → Accidents, disasters;
- → Macroeconomic and labour market developments;
- → Changes in laws and regulations;
- → Relations with trade unions;
- → Increase in the fuel prices and interest rates;
- → Market and customer behaviour;
- → Impact of variations in labour legislation on competitiveness while sailing under different flags.
MANAGEMENT BOARD'S CONFIRMATION
We confirm that to the best of our knowledge, the management report of AS Tallink Grupp for the third quarter and 9 months of 2024 presents a true and fair view of the Group's development, results and financial position and includes an overview of the main risks and uncertainties.
Paavo Nõgene Chairman of the Management Board
Elise Nassar Member of the Management Board
Harri Hanschmidt Member of the Management Board
Piret Mürk-Dubout Member of the Management Board
This Interim Report has been signed digitally.
Margus Schults Member of the Management Board
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss and Other Comprehensive Income
| Unaudited, in thousands of EUR | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
|---|---|---|---|---|
| Revenue (Note 3) | 231 868 | 240 668 | 602 317 | 641 588 |
| Cost of sales | -164 849 | -163 013 | -474 695 | -472 682 |
| Gross profit | 67 019 | 77 655 | 127 622 | 168 906 |
| Sales and marketing expenses | -10 684 | -10 399 | -32 347 | -30 781 |
| Administrative expenses | -12 770 | -11 175 | -39 009 | -37 494 |
| Other operating income | 469 | 789 | 20 868 | 1 382 |
| Other operating expenses | -42 | -35 | -1 001 | -68 |
| Result from operating activities | 43 992 | 56 835 | 76 133 | 101 945 |
| Finance income (Note 4) | 144 | 133 | 633 | 804 |
| Finance costs (Note 4) | -7 319 | -8 507 | -22 376 | -26 803 |
| Profit before income tax | 36 817 | 48 461 | 54 390 | 75 946 |
| Income tax | -1 | 222 | -8 896 | 762 |
| Net profit for the period | 36 816 | 48 683 | 45 494 | 76 708 |
| Net profit for the period attributable to equity holders of the Parent |
36 816 | 48 683 | 45 494 | 76 708 |
| Other comprehensive income | ||||
| Items that may be reclassified to profit or loss | ||||
| Exchange differences on translating foreign operations | -11 | -244 | 358 | 29 |
| Other comprehensive income for the period | -11 | -244 | 358 | 29 |
| Total comprehensive profit for the period Total comprehensive profit for the period attributable to |
36 805 | 48 439 | 45 852 | 76 737 |
| equity holders of the Parent | 36 805 | 48 439 | 45 852 | 76 737 |
| EPS (in EUR, Note 5) | 0.050 | 0.065 | 0.061 | 0.103 |
| Diluted EPS (in EUR, Note 5) | 0.049 | 0.065 | 0.061 | 0.103 |
Consolidated Statement of Financial Position
| Unaudited, in thousands of EUR | 30.09.2024 | 30.09.2023 | 31.12.2023 | |
|---|---|---|---|---|
| ASSETS | ||||
| Cash and cash equivalents | 32 609 | 64 433 | 41 921 | |
| Trade and other receivables | 30 290 | 34 577 | 31 766 | |
| Prepayments | 11 018 | 11 485 | 7 661 | |
| Prepaid income tax | 13 | 1 | 193 | |
| Inventories | 45 180 | 39 758 | 41 411 | |
| Short-term intangible assets | 5 166 | 0 | 0 | |
| Current assets | 124 276 | 150 254 | 122 952 | |
| Investments in equity-accounted investees | 0 | 75 | 0 | |
| Other financial assets and prepayments | 515 | 4 510 | 4 794 | |
| Deferred income tax assets | 21 840 | 21 840 | 21 840 | |
| Investment property | 300 | 300 | 300 | |
| Property, plant and equipment (Note 6) | 1 327 413 | 1 391 682 | 1 377 664 | |
| Intangible assets (Note 7) | 24 556 | 28 734 | 27 671 | |
| Non-current assets | 1 374 624 | 1 447 141 | 1 432 269 | |
| TOTAL ASSETS | 1 498 900 | 1 597 395 | 1 555 221 | |
| LIABILITIES AND EQUITY | ||||
| Interest-bearing loans and borrowings (Note 8) | 104 508 | 126 148 | 104 097 | |
| Trade and other payables | 88 940 | 83 593 | 85 406 | |
| Payables to owners | 6 | 6 | 6 | |
| Income tax liability | 9 | 35 | 10 | |
| Deferred income | 34 261 | 45 237 | 34 788 | |
| Current liabilities | 227 724 | 255 019 | 224 307 | |
| Interest-bearing loans and borrowings (Note 8) | 483 812 | 558 659 | 545 160 | |
| Non-current liabilities | 483 812 | 558 659 | 545 160 | |
| Total liabilities | 711 536 | 813 678 | 769 467 | |
| Share capital (Note 9) | 349 477 | 349 477 | 349 477 | |
| Share premium | 663 | 663 | 663 | |
| Reserves | 66 251 | 67 694 | 67 056 | |
| Retained earnings | 370 973 | 365 883 | 368 558 | |
| Equity attributable to equity holders of the Parent | 787 364 | 783 717 | 785 754 | |
| Total equity | 787 364 | 783 717 | 785 754 | |
| TOTAL LIABILITIES AND EQUITY | 1 498 900 | 1 597 395 | 1 555 221 |
Consolidated Statement of Cash Flows
| Unaudited, in thousands of EUR | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
|
|---|---|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||
| Net profit for the period | 36 816 | 48 683 | 45 494 | 76 708 | |
| Adjustments | 31 858 | 33 283 | 86 268 | 100 721 | |
| Changes in: Receivables and prepayments related to operating activities |
5 341 | 2 480 | -1 568 | -5 282 | |
| Inventories | 1 230 | 2 496 | -8 935 | 207 | |
| Liabilities related to operating activities | -20 215 | -27 274 | 5 970 | -2 703 | |
| Changes in assets and liabilities | -13 644 | -22 298 | -4 533 | -7 778 | |
| Cash generated from operating activities | 55 030 | 59 668 | 127 229 | 169 651 | |
| Income tax paid/ repaid | 178 | -20 | 153 | -111 | |
| NET CASH FROM/USED OPERATING ACTIVITIES | 55 208 | 59 648 | 127 382 | 169 540 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||
| Purchase of property, plant, equipment and intangible assets (Notes 6, 7) |
-5 575 | -6 083 | -16 337 | -22 249 | |
| Proceeds from disposals of property, plant, equipment | 26 | 164 | 24 516 | 244 | |
| Interest received | 144 | 133 | 633 | 804 | |
| NET CASH USED IN INVESTING ACTIVITIES | -5 405 | -5 786 | 8 812 | -21 201 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Repayment of loans received (Note 8) | -27 040 | -30 858 | -59 492 | -155 477 | |
| Change in overdraft (Note 8) | -26 | -15 | 0 | -15 | |
| Payment of lease liabilities (Note 8) | -4 751 | -8 219 | -13 887 | -17 025 | |
| Interest paid | -6 722 | -7 982 | -22 159 | -25 212 | |
| Payment of transaction costs related to loans | 0 | 0 | -450 | -1 112 | |
| Dividends paid (Note 10) | -44 614 | 0 | -44 614 | 0 | |
| Income tax on dividends paid | -4 904 | 0 | -4 904 | 0 | |
| NET CASH FROM/USED IN FINANCING ACTIVITIES | -88 057 | -47 074 | -145 506 | -198 841 | |
| TOTAL NET CASH FLOW | -38 254 | 6 788 | -9 312 | -50 502 | |
| Cash and cash equivalents at the beginning of period | 70 863 | 57 645 | 41 921 | 114 935 | |
| Change in cash and cash equivalents | -38 254 | 6 788 | -9 312 | -50 502 | |
| Cash and cash equivalents at the end of period | 32 609 | 64 433 | 32 609 | 64 433 |
Consolidated Statement of Changes in Equity
| Unaudited, in thousands of EUR | Share capital | Share premium |
Translation reserve |
Ships re valuation reserve |
Mandatory legal reserve |
Share option programme reserve |
Retained earnings |
Equity attributable to equity holders of the Parent |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| As at 31 December 2023 | 349 477 | 663 | 668 | 31 317 | 34 948 | 123 | 368 558 | 785 754 | 785 754 |
| Net profit for the period | 0 | 0 | 0 | 0 | 0 | 0 | 45 494 | 45 494 | 45 494 |
| Other comprehensive income for the period | |||||||||
| Exchange differences on translating foreign operations |
0 | 0 | 358 | 0 | 0 | 0 | 0 | 358 | 358 |
| Total comprehensive profit for the period | 0 | 0 | 358 | 0 | 0 | 0 | 45 494 | 45 852 | 45 852 |
| Transactions with owners of the Company recognised directly in equity |
|||||||||
| Transfer from revaluation reserve | 0 | 0 | 0 | -1 535 | 0 | 0 | 1 535 | 0 | 0 |
| Dividends (Note 10) | 0 | 0 | 0 | 0 | 0 | 0 | -44 614 | -44 614 | -44 614 |
| Share options | 0 | 0 | 0 | 0 | 0 | 372 | 0 | 372 | 372 |
| Transactions with owners of the Company | |||||||||
| recognised directly in equity | 0 | 0 | 0 | -1 535 | 0 | 372 | -43 079 | -44 242 | -44 242 |
| As at 30 September 2024 | 349 477 | 663 | 1 026 | 29 782 | 34 948 | 495 | 370 973 | 787 364 | 787 364 |
| As at 31 December 2022 | 349 477 | 663 | 840 | 33 364 | 32 159 | 0 | 290 428 | 706 931 | 706 931 |
| Net profit for the period | 0 | 0 | 0 | 0 | 0 | 0 | 76 708 | 76 708 | 76 708 |
| Other comprehensive income for the period | |||||||||
| Exchange differences on translating foreign operations |
0 | 0 | 29 | 0 | 0 | 0 | 0 | 29 | 29 |
| Total comprehensive profit for the period | 0 | 0 | 29 | 0 | 0 | 0 | 76 708 | 76 737 | 76 737 |
| Transactions with owners of the Company recognised directly in equity |
|||||||||
| Transfer from profit for 2022 | 0 | 0 | 0 | 0 | 2 789 | 0 | -2 789 | 0 | 0 |
| Transfer from revaluation reserve | 0 | 0 | 0 | -1 536 | 0 | 0 | 1 536 | 0 | 0 |
| Transactions with owners of the Company recognised directly in equity |
0 | 0 | 0 | -1 536 | 2 789 | 49 | -1 253 | 49 | 49 |
| As at 30 September 2023 | 349 477 | 663 | 869 | 31 828 | 34 948 | 49 | 365 883 | 783 717 | 783 717 |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Note 1 Corporate Information
The consolidated interim financial statements of AS Tallink Grupp (the "Parent") and its subsidiaries (together referred to as the "Group") for the third quarter and 9 months of 2024 were authorised for issue by the Management Board on 24 October 2024.
AS Tallink Grupp is a public limited company incorporated and domiciled in Estonia, with a registered office at Sadama 5, Tallinn. AS Tallink Grupp shares have been publicly traded on the Nasdaq Tallinn Stock Exchange since 9 December 2005. Starting from 3 December 2018 the shares of AS Tallink Grupp are also listed as Finnish Depository Receipts (FDRs) on the Nasdaq Helsinki Stock Exchange.
The principal activities of the Group are related to marine transportation in the Baltic Sea (passenger and cargo transportation). As of 30 September 2024, the Group employed 4 811 people (4 619 as of 30 September 2023).
Note 2 Basis of Preparation
These interim consolidated financial statements of AS Tallink Grupp have been prepared in a condensed form in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting".
These interim consolidated financial statements have been prepared using the same accounting policies and measurement bases that were applied in the preparation of the consolidated financial statements of AS Tallink Grupp for the financial year ended on 31 December 2023. The Group prepares its consolidated annual financial statements in accordance with IFRS as adopted by the EU.
The interim consolidated financial statements are presented in thousand euros (EUR).
Note 3 Segment Information
The Group's operations are organized and managed separately according to the nature of the different markets. Different routes represent different business segments.
The following tables present the Group's revenue and profit by reportable segments for the reporting and the comparative period.
Geographical Segments – by the Location of Assets
| Estonia-Finland | Estonia-Sweden | Finland-Sweden | Intersegment | |||
|---|---|---|---|---|---|---|
| For the period 1 January - 30 September, in thousands of EUR | routes | routes | routes | Other | elimination | Total |
| 2024 | ||||||
| Sales to external customers | 236 644 | 77 503 | 175 513 | 112 657 | 0 | 602 317 |
| Intersegment sales | 0 | 0 | 0 | 4 528 | -4 528 | 0 |
| Revenue | 236 644 | 77 503 | 175 513 | 117 185 | -4 528 | 602 317 |
| Segment result | 65 999 | -827 | 6 436 | 23 667 | 0 | 95 275 |
| Unallocated expenses | -19 142 | |||||
| Net financial items (Note 4) | -21 743 | |||||
| Profit before income tax | 54 390 |
| For the period 1 January - 30 September, in thousands of EUR | Estonia-Finland routes |
Estonia-Sweden routes |
Finland-Sweden routes |
Other | Intersegment elimination |
Total |
|---|---|---|---|---|---|---|
| 2023 | ||||||
| Sales to external customers | 223 675 | 69 778 | 201 688 | 146 447 | 0 | 641 588 |
| Intersegment sales | 0 | 0 | 0 | 5 286 | -5 286 | 0 |
| Revenue | 223 675 | 69 778 | 201 688 | 151 733 | -5 286 | 641 588 |
| Segment result | 63 294 | 5 731 | 25 484 | 43 616 | 0 | 138 125 |
| Unallocated expenses | -36 180 | |||||
| Net financial items (Note 4) | -25 999 | |||||
| Profit before income tax | 75 946 |
Revenue by Service
| In thousands of EUR | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
|---|---|---|---|---|
| Restaurant and shop sales on-board and onshore | 105 934 | 111 397 | 282 615 | 293 856 |
| Ticket sales | 78 588 | 75 971 | 176 105 | 170 352 |
| Sales of cargo transport | 20 875 | 20 713 | 69 154 | 69 809 |
| Sales of accommodation | 5 871 | 5 401 | 12 459 | 11 580 |
| Income from charter of vessels | 14 674 | 22 053 | 47 896 | 81 918 |
| Other | 5 926 | 5 133 | 14 088 | 14 073 |
| Total revenue of the Group | 231 869 | 240 668 | 602 317 | 641 588 |
Note 4 Financial Items
| In thousands of EUR | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
|---|---|---|---|---|
| Income from other financial assets | 144 | 133 | 633 | 804 |
| Total finance income | 144 | 133 | 633 | 804 |
| Net foreign exchange loss | 119 | 35 | -197 | -218 |
| Interest expense on financial liabilities measured at amortised cost |
-6 892 | -7 996 | -20 269 | -24 892 |
| Interest expense on right-of-use asset lease liabilities | -546 | -546 | -1 910 | -1 693 |
| Total finance costs | -7 319 | -8 507 | -22 376 | -26 803 |
| Net finance costs | -7 175 | -8 374 | -21 743 | -25 999 |
Note 5 Earnings Per Share
Earnings per share (EPS) are calculated by dividing the net profit/loss for the period attributable to ordinary shareholders of the Parent by the weighted average number of ordinary shares outstanding during the period.
| At the end of the period, in thousands | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
|---|---|---|---|---|
| Shares issued | 743 569 | 743 569 | 743 569 | 743 569 |
| Shares outstanding | 743 569 | 743 569 | 743 569 | 743 569 |
| For the period, in thousands of EUR | Q3 2024 | Q3 2023 | Jan-Sep 2024 |
Jan-Sep 2023 |
| Weighted average number of ordinary shares outstanding (in thousands) |
743 569 | 743 569 | 743 569 | 743 569 |
| Effect of share options on issue | 3 134 | 2 165 | 3 074 | 1 566 |
| Weighted average number of ordinary shares outstanding (in thousands, diluted) |
746 703 | 745 735 | 746 643 | 745 135 |
| Net profit attributable to equity holders of the Parent | 36 816 | 48 683 | 45 494 | 76 708 |
| Profit per share | 0.050 | 0.065 | 0.061 | 0.103 |
| Diluted EPS (EUR) | 0.049 | 0.065 | 0.061 | 0.103 |
Note 6 Property, Plant, and Equipment
| In thousands of EUR | Land and buildings |
Ships | Plant and equipment |
Right-of-use assets |
Assets under construction |
Total |
|---|---|---|---|---|---|---|
| Book value as at 31 December 2023 | 2 556 | 1 238 149 | 45 156 | 87 480 | 4 323 | 1 377 664 |
| Additions | 0 | 0 | 8 094 | 11 891 | 6 912 | 26 897 |
| Reclassification | 0 | 2 040 | 1 930 | -11 | -3 970 | -11 |
| Disposals | 0 | -7 593 | -726 | -49 | 0 | -8 368 |
| Depreciation for the period | -165 | -44 076 | -10 600 | -13 928 | 0 | -68 769 |
| Book value as at 30 September 2024 | 2 391 | 1 188 520 | 43 854 | 85 383 | 7 265 | 1 327 413 |
| As at 30 September 2024 | ||||||
| Gross carrying amount | 10 065 | 1 885 409 | 147 580 | 175 798 | 7 265 | 2 226 117 |
| Accumulated depreciation | -7 674 | -696 889 | -103 726 | -90 415 | 0 | -898 704 |
| Book value as at 31 December 2022 | 2 785 | 1 287 715 | 47 932 | 96 504 | 3 350 | 1 438 286 |
| Additions | 0 | 317 | 7 357 | 4 029 | 12 644 | 24 347 |
| Reclassification | 0 | 9 371 | 583 | 0 | -9 954 | 0 |
| Disposals | 0 | 0 | -168 | -33 | 0 | -201 |
| Depreciation for the period | -172 | -46 090 | -11 127 | -13 361 | 0 | -70 750 |
| Book value as at 30 September 2023 | 2 613 | 1 251 313 | 44 577 | 87 139 | 6 040 | 1 391 682 |
| As at 30 September 2023 | ||||||
| Gross carrying amount | 10 065 | 1 915 588 | 138 445 | 159 979 | 6 040 | 2 230 117 |
| Accumulated depreciation | -7 452 | -664 275 | -93 868 | -72 840 | 0 | -838 435 |
Right-of-Use Assets
| In thousands of EUR | Buildings and premises |
Plant and equipment |
Total right-of use assets |
|---|---|---|---|
| Book value as at 31 December 2023 | 87 022 | 458 | 87 480 |
| Additions | 11 588 | 303 | 11 891 |
| Reclassification | -11 | 0 | -11 |
| Disposals | 0 | -49 | -49 |
| Depreciation for the period | -13 668 | -260 | -13 928 |
| Book value as at 30 September 2024 | 84 931 | 452 | 85 383 |
| As at 30 September 2024 | |||
| Gross carrying amount | 174 151 | 1 647 | 175 798 |
| Accumulated depreciation | -89 220 | -1 195 | -90 415 |
| Book value as at 31 December 2022 | 95 707 | 797 | 96 504 |
| Additions | 4 027 | 2 | 4 029 |
| Disposals | -31 | -2 | -33 |
| Depreciation for the period | -13 107 | -254 | -13 361 |
| Book value as at 30 September 2023 | 86 596 | 543 | 87 139 |
| As at 30 September 2023 | |||
| Gross carrying amount | 158 465 | 1 514 | 159 979 |
| Accumulated depreciation | -71 869 | -971 | -72 840 |
Note 7 Intangible Assets
| In thousands of EUR | Goodwill | Trademark | Other | Assets under construction |
Total |
|---|---|---|---|---|---|
| Book value as at 31 December 2023 | 11 066 | 7 258 | 8 748 | 599 | 27 671 |
| Additions | 0 | 0 | 87 | 1 376 | 1 463 |
| Reclassification | 0 | 0 | 1 002 | -1 002 | 0 |
| Amortisation for the period | 0 | -2 187 | -2 391 | 0 | -4 578 |
| Book value as at 30 September 2024 | 11 066 | 5 071 | 7 446 | 973 | 24 556 |
| As at 30 September 2024 | |||||
| Cost | 11 066 | 58 288 | 39 768 | 973 | 110 095 |
| Accumulated amortisation | 0 | -53 217 | -32 322 | 0 | -85 539 |
| Book value as at 31 December 2022 | 11 066 | 10 174 | 10 045 | 538 | 31 823 |
| Additions | 0 | 0 | 489 | 1 477 | 1 966 |
| Reclassification | 0 | 0 | 914 | -914 | 0 |
| Disposals | 0 | 0 | 0 | -61 | -61 |
| Amortisation for the period | 0 | -2 187 | -2 807 | 0 | -4 994 |
| Book value as at 30 September 2023 | 11 066 | 7 987 | 8 641 | 1 040 | 28 734 |
| As at 30 September 2023 | |||||
| Cost | 11 066 | 58 288 | 45 474 | 1 040 | 115 868 |
| Accumulated amortisation | 0 | -50 301 | -36 833 | 0 | -87 134 |
Note 8 Interest-Bearing Loans and Borrowings
| In thousands of EUR | 31.12.2023 | Addition Repayments | Exchange differences |
Other changes¹ |
30.09.2024 | |
|---|---|---|---|---|---|---|
| Lease liabilities | 126 | 132 | -33 | 2 | -18 | 209 |
| Right-of-use assets lease liabilities | 94 418 | 11 891 | -13 854 | -46 | -52 | 92 357 |
| Long-term bank loans | 554 713 | 0 | -59 492 | 0 | 533 | 495 754 |
| Total borrowings | 649 257 | 12 023 | -73 379 | -44 | 463 | 588 320 |
| Current portion | 104 097 | 104 508 | ||||
| Non-current portion | 545 160 | 483 812 | ||||
| Total borrowings | 649 257 | 588 320 |
| In thousands of EUR | 31.12.2022 | Addition Repayments | Exchange differences |
Other changes¹ |
30.09.2023 | |
|---|---|---|---|---|---|---|
| Lease liabilities | 77 | 35 | -18 | -2 | 0 | 92 |
| Right-of-use assets lease liabilities | 107 095 | 4 029 | -17 012 | -111 | -20 | 93 981 |
| Overdrafts | 15 | 0 | -15 | 0 | 0 | 0 |
| Long-term bank loans | 746 327 | 0 | -155 477 | 0 | -116 | 590 734 |
| Total borrowings | 853 514 | 4 064 | -172 522 | -113 | -136 | 684 807 |
| Current portion | 165 049 | 126 148 | ||||
| Non-current portion | 688 465 | 558 659 | ||||
| Total borrowings | 853 514 | 684 807 |
1 Capitalisation and amortisation of transaction costs and the termination of lease agreements.
Bank overdrafts are secured with commercial pledges (in the total amount of EUR 20 204 thousand) and ship mortgages. AS Tallink Grupp has given guarantees to Nordea Bank Plc and KfW IPEX-Bank GmbH for loans of EUR 236 898 thousand granted to its ship-owning subsidiaries. Ship-owning subsidiaries have given guarantees to Nordea Bank Finland Plc for loan of EUR 258 856 thousand granted to AS Tallink Grupp. The primary securities for this loan are pledges of the shares in the shipowning subsidiaries and mortgages on the ships belonging to the aforementioned subsidiaries.
Note 9 Share Capital
AS Tallink Grupp has 743 569 064 registered shares without nominal value and the notional value of each share is EUR 0.47.
Each share grants one vote at the shareholders' general meeting. Shares acquired by the transfer of ownership are eligible for participating in and voting at a general meeting only if the ownership change is recorded in the Estonian Central Registry of Securities at the time used to determine the list of shareholders for the given shareholders' general meeting.
Note 10 Dividends
Shareholders' annual general meeting of 2024 decided to pay dividends of EUR 0.06 per share from the net profit for 2023. The total dividend amount of EUR 44 614 thousand was paid out on 3 July 2024.
Note 11 Share Option Programme
On 13 June 2023, the Group's General Meeting of Shareholders adopted a resolution to approve the 3-year share option program and subject to which the Group has the right to issue share options for acquiring shares, which represent a total of up to 3% of AS Tallink Grupp's share capital (maximum 1% of share capital annually).
On 1 August 2023, the Group issued 7 270 thousand share options of which 3 300 thousand were issued to the members of the Management and the Supervisory Board and 3 970 thousand to the key employees of the Group. On 13 June 2024, the Group issued 7 055 thousand share options of which 3 300 thousand were issued to the members of the Management and the Supervisory Board and 3 755 thousand to the key employees of the Group. As at 30 September 2024, the effective number of share options was 14 190 thousand. Each option entitles to the acquiring of one share of AS Tallink Grupp at a price equal to the notional value of the share at the time of exercise of the share option (EUR 0.47 as at 30 September 2024).
The share options are non-transferable with the vesting period of three years from issuing of the share options. Exercising of share options is carried out by increasing the share capital of AS Tallink Grupp and issuing of new shares, which is decided by the General Meeting of Shareholders of AS Tallink Grupp or by the Supervisory Board of AS Tallink Grupp on the basis of the Articles of Association.
The fair value of the share options is measured by using the Black-Scholes model as of the grant date and is recorded as an expense during the vesting period of 36 months from the date of issue. The cost of share options issued amounted to EUR 372 thousand in the first nine months of 2024.
The outstanding share options have diluting effect due to their exercise price being lower than average price in stock market during the reporting period (see Note 5).
Note 12 Related Party Disclosures
The Group has conducted transactions with related parties and has outstanding balances with related parties.
| For the period ended 30 September 2024, in thousands of EUR |
Sales to related parties |
Purchases from related parties |
Receivables from related parties |
Payables to related parties |
|---|---|---|---|---|
| Companies controlled by the Key Management Personnel |
442 | 31 684 | 41 | 81 171 |
| Associated companies | 16 | 105 | 2 | 11 |
| Total | 458 | 31 789 | 43 | 81 182 |
| For the period ended 30 September 2023, in thousands of EUR |
Sales to related parties |
Purchases from related parties |
Receivables from related parties |
Payables to related parties |
|---|---|---|---|---|
| Companies controlled by the Key Management Personnel |
467 | 23 089 | 50 | 81 472 |
| Associated companies | 17 | 112 | 2 | 10 |
| Total | 484 | 23 201 | 52 | 81 482 |
STATEMENT BY THE MANAGEMENT BOARD
Hereby we acknowledge our responsibility for the AS Tallink Grupp Unaudited Condensed Consolidated Interim Financial Statements for the third quarter and 9 months of 2024 and confirm that these financial statements have been prepared in accordance with IAS 34 and give a true and fair view of the Group's financial position, financial performance, and cash flows.
Based on today's knowledge, the Management Board is of the opinion that AS Tallink Grupp and its subsidiaries are able to continue as going concerns for a period of at least one year after the date of approval of these interim financial statements.
Paavo Nõgene Chairman of the Management Board
Elise Nassar Member of the Management Board
Harri Hanschmidt Member of the Management Board
Piret Mürk-Dubout Member of the Management Board
This Interim Report has been signed digitally.
Margus Schults Member of the Management Board
ALTERNATIVE PERFORMANCE MEASURES
AS Tallink Grupp presents certain performance measures as key figures, which in accordance with the "Alternative Performance Measures" guidance by the European Securities and Markets Authority (ESMA) are not accounting measures of historical financial performance, financial position and cash flows, defined or specified in IFRS, but which are instead non-financial measures and alternative performance measures (APMs).
The non-financial measures and APMs provide the management, investors, securities analysts and other parties significant additional information related to the Group's operating results, financial position and/or cash flows and are often used by analysts, investors and other parties.
The non-financial measures and APMs should not be considered in isolation or as substitute to the measures under IFRS. The APMs are unaudited.
Calculation Formulas of Alternative Performance Measures
EBITDA: result from operating activities before net financial items, share of profit of equityaccounted investees, taxes, depreciation and amortization
EBIT: result from operating activities before net financial items and taxes
Earnings/loss per share: net profit or loss / weighted average number of shares outstanding
Equity ratio: total equity / total assets
Shareholder's equity per share: shareholder's equity / number of shares outstanding
Gross margin: gross profit or loss / revenue
EBITDA margin: EBITDA / revenue
EBIT margin: EBIT / revenue
Net profit/loss margin: net profit or loss / revenue
Capital expenditure: additions to property, plant and equipment – additions to right-of-use assets + additions to intangible assets
ROA: earnings before net financial items, taxes 12-months trailing / average total assets
ROE: net profit or loss 12-months trailing / average shareholders' equity
ROCE: earnings before net financial items, taxes 12-months trailing / (total assets – current liabilities (average for the period))
Net debt: interest-bearing liabilities less cash and cash equivalents
Net debt to EBITDA: net debt / EBITDA 12-months trailing
Reconciliations of Certain Alternative Performance Measures
| In thousands of EUR | Q3 2024 | Q3 2023 |
|---|---|---|
| Depreciation | 22 891 | 23 640 |
| Amortisation | 1 498 | 1 607 |
| Depreciation and amortisation | 24 389 | 25 247 |
| Result from operating activities | 43 992 | 56 835 |
| Depreciation and amortisation | 24 389 | 25 247 |
| EBITDA | 68 381 | 82 082 |
| EBITDA | 68 381 | 82 082 |
| IFRS 16 adoption effect | -5 220 | -5 017 |
| Adjusted EBITDA | 63 161 | 77 065 |
| Additions to property, plant and equipment | 5 168 | 5 672 |
| Additions to intangible assets | 407 | 446 |
| Capital expenditures | 5 575 | 6 118 |
| Net profit/loss for the period | 36 816 | 48 683 |
| Weighted average number of shares outstanding | 743 569 064 | 743 569 064 |
| Earnings/loss per share (EUR) | 0.050 | 0.065 |
| Lease liabilities | 209 | 92 |
| Lease liabilities related to right-of-use assets | 92 357 | 93 981 |
| Overdraft | 0 | 0 |
| Long-term bank loans | 495 754 | 590 734 |
| Interest-bearing liabilities | 588 320 | 684 807 |
| Gross profit/loss | 67 019 | 77 655 |
| Revenue | 231 868 | 240 668 |
| Gross margin (%) | 28.9% | 32.3% |
| EBITDA | 68 381 | 82 082 |
| Revenue | 231 868 | 240 668 |
| EBITDA margin (%) | 29.5% | 34.1% |
| Adjusted EBITDA | 63 161 | 77 065 |
| Revenue | 231 868 | 240 668 |
| Adjusted EBITDA margin (%) | 27.2% | 32.0% |
| EBIT | 43 992 | 56 835 |
| Revenue | 231 868 | 240 668 |
| EBIT margin (%) | 19.0% | 23.6% |
| Net profit/loss | 36 816 | 48 683 |
| Revenue | 231 868 | 240 668 |
| Net profit/loss margin (%) | 15.9% | 20.2% |
| Result from operating activities 12-months trailing | 87 493 | 125 401 |
| Total assets 30 September (previous year) | 1 597 395 | 1 535 300 |
| Total assets 31 December | 1 555 221 | 1 691 642 |
| Total assets 31 March | 1 548 604 | 1 672 052 |
| Total assets 30 June | 1 567 018 | 1 613 646 |
| Total assets 30 September | 1 498 900 | 1 597 395 |
| Average assets | 1 553 428 | 1 622 007 |
| ROA (%) | 5.6% | 7.7% |
| In thousands of EUR | Q3 2024 | Q3 2023 |
|---|---|---|
| Net profit/loss 12-months trailing | 47 658 | 93 431 |
| Total equity 30 September (previous year) | 783 717 | 690 219 |
| Total equity 31 December | 785 754 | 706 931 |
| Total equity 31 March | 788 589 | 701 581 |
| Total equity 30 June | 750 371 | 735 229 |
| Total equity 30 September | 787 364 | 783 717 |
| Average equity | 779 159 | 723 535 |
| ROE (%) | 6.1% | 12.9% |
| Result from operating activities 12-months trailing | 87 493 | 125 401 |
| Total assets 30 September (previous year) | 1 597 395 | 1 535 300 |
| Total assets 31 December | 1 555 221 | 1 691 642 |
| Total assets 31 March | 1 548 604 | 1 672 052 |
| Total assets 30 June | 1 567 018 | 1 613 646 |
| Total assets 30 September | 1 498 900 | 1 597 395 |
| Current liabilities 30 September (previous year) | 255 019 | 383 316 |
| Current liabilities 31 December | 224 307 | 296 246 |
| Current liabilities 31 March | 234 634 | 308 623 |
| Current liabilities 30 June | 301 433 | 325 820 |
| Current liabilities 30 September | 227 724 | 255 019 |
| Total assets - current liabilities 30 September (previous year) | 1 342 376 | 1 151 984 |
| Total assets - current liabilities 31 December | 1 330 914 | 1 395 396 |
| Total assets - current liabilities 31 March | 1 313 970 | 1 363 429 |
| Total assets - current liabilities 30 June | 1 265 585 | 1 287 826 |
| Total assets - current liabilities 30 September | 1 271 176 | 1 342 376 |
| Average assets - current liabilities | 1 304 804 | 1 308 202 |
| ROCE (%) | 6.7% | 9.6% |
| In thousands of EUR | 30.09.2024 | 30.06.2024 |
| Interest-bearing liabilities | 588 320 | 619 796 |
| Cash and cash equivalents | 32 609 | 70 863 |
| Net debt | 555 711 | 548 933 |
| Total equity | 787 364 | 750 371 |
| Total assets | 1 498 900 | 1 567 018 |
| Equity ratio (%) | 52.5% | 47.9% |
| Equity attributable to equity holders of the Parent | 787 364 | 750 371 |
| Number of ordinary shares outstanding | 743 569 064 | 743 569 064 |
| Shareholders' equity per share (EUR) | 1.06 | 1.01 |
| Net debt | 555 711 | 548 933 |
| 12-months trailing | ||
| Depreciation | 92 654 | 93 404 |
| Amortisation | 6 173 | 6 282 |
| Depreciation and amortisation | 98 827 | 99 686 |
| EBITDA | 186 320 | 200 022 |
| Net debt to EBITDA | 3.0 | 2.7 |
CONTACT INFORMATION
| Commercial Registry no. | 10238429 |
|---|---|
| Address | Sadama 5 |
| 10111, Tallinn | |
| Republic of Estonia | |
| Phone | +372 6 409 800 |
| Fax | +372 6 409 810 |
| Website | www.tallink.com |
| Main activity | maritime transport |
| (passenger & cargo transport) |