Tallink Grupp

AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2016

Tallinn, 2016-11-10 08:50 CET (GLOBE NEWSWIRE) --

AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2016

In the third quarter (1 July - 30 September) of the 2016 financial year AS

Tallink Grupp and its subsidiaries? (the Group) carried 2.9 million passengers

which is 5.7% more compared to the third quarter last year. The number of cargo

units transported increased by 6.7% and the number of passenger vehicles

transported increased by 6.2% compared to same period last year.

The Group?s unaudited consolidated revenue for the third quarter was EUR 273.5

million, which is on the same level with the third quarter last year. The

Group?s unaudited EBITDA for the third quarter amounted to EUR 67.1 million

compared to EUR 76.8 million last year and unaudited net profit was EUR 42.8

million compared to EUR 45.2 million in same period last year.

In the third quarter, the revenue increased in all Group?s operated routes. The

revenue growth of core operations from onboard and ticket sale was supported by

the larger number of passengers travelling with the Group?s operated ships. The

revenue from chartering of ships is visibly lower as there were fewer ships

chartered out compared to third quarter last year. The Group?s operating result

is lower compared to same period last year mainly due to lower result from

chartering and cost of charter of the fast ferry Superstar.

The new LNG fast ferry Megastar was christened and launched in July 2016. The

construction is proceeding according to the schedule and the interior works of

the ship have started. The new LNG fast ferry Megastar will be delivered to the

Group in January 2017 and the vessel will start to operate the Shuttle service

on Tallinn-Helsinki route. At the same time, the Group has initiated number of

marketing activities to introduce the new vessel and its qualities to main

markets, more info on project http://megastar.tallink.com/.

In expectation of the new LNG fast ferry Megastar to the market next year, the

Group operated the cruise ferry Silja Europa on Tallinn-Helsinki route day

cruise service in 2016 third quarter July and August. This operational change

has enabled the Group to increase its market share on the route by 2% to 58%,

compared to same period last year. The Estonia-Finland route?s third quarter

revenue increased by 7.0%, the increase is driven mainly by growth in the

passenger number and cargo volume from the added capacity, compared to last

year. The Estonia-Finland segment result for the third quarter was lower

compared to the same period last year due to the cost of charter of the fast

ferry Superstar.

The Finland-Sweden routes third quarter revenue increased by 0.9%, compared to

same period last year. The revenue growth was supported by the higher passenger

number on the routes. The Group?s Finland-Sweden routes market share increased

in the third quarter by 2% to 54%. The number of cargo units transported on

Finland-Sweden routes increased by 5.2% compared to same period last year. The

segment result for the third quarter is slightly lower due to higher marketing

and operating costs.

Similarly to previous quarters of 2016, the Estonia-Sweden and Latvia-Sweden

routes positive development continues, the routes revenue growth was driven

mainly by higher ticket revenue and on-board sales. The Estonia-Sweden routes

revenue increased by 2.5% and segment result improved by 10.9% or EUR 0.7

million. The Latvia-Sweden route revenue increased by 3.2% and segment result

improved by 10.9% or EUR 0.4 million compared to third quarter last year.

In the third quarter the Group?s total ticket revenue increased by 5.4% or EUR

4.3 million and restaurants and shop sales increased by 4.0% or EUR 5.7

million, compared to the same period last year. The sales growth is supported

mainly by the higher number of passengers travelling with the Group?s operated

ships.

The revenue from chartering activities has reduced in total by EUR 7.3 million

in the third quarter due to fewer ships are chartered out, compared to the same

period last year.

In the third quarter of the 2016 financial year the Group?s gross profit

decreased by EUR 8.0 million and amounted to EUR 76.8 million, compared to the

same period last year, EBITDA decreased by EUR 9.7 million to the total of EUR

67.1 million. The third quarter profitability was impacted by less revenue from

chartering, higher marketing costs, cost of charter of the fast ferry Superstar

and higher ships operating costs.

In the third quarter the Group?s net debt decreased by EUR 8.3 million to a

total of EUR 457.9 million and the net debt to EBITDA ratio was a solid 3.1 at

the end of third quarter. The third quarter interest cost was EUR 1.4 million

lower compared to same period last year from regular repayment of loans and

also repayment of loans related to sale of ships. Combined with gain from

revaluation of cross currency and interest derivatives, the total finance costs

decreased by EUR 4.2 million compared to the third quarter last year.

The unaudited net profit for the third quarter of the 2016 financial year was

EUR 42.8 million or EUR 0.064 per share compared to the net profit of EUR 45.2

million or EUR 0.067 per share in the same period last year.

In June 2016 the shareholders annual general meeting decided to pay a dividend

of EUR 0.02 per share from financial year 2015 profits. The total dividend

amount of EUR 13.4 million was paid out on 05 July 2016 (third quarter). In

addition to dividend payment the annual general meeting decided the share

capital reduction in amount of EUR 40.2 million or EUR 0.06 per share.

According to the procedures set out in Commercial Code the share capital

reduction payments to the shareholders will be made on 23 December 2016.

The total liquidity, cash and unused credit facilities, at the end of the third

quarter was EUR 116.3 million providing a strong financial position for

sustainable operations. The Group had EUR 88.8 million in cash and equivalents

and the total of unused credit lines were at EUR 27.5 million.

Q3 KEY FIGURES

2016 2015 Change

July-Sep July-Sep

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Revenue EUR million 273.5 273.6 -0.0%

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Gross profit EUR million 76.8 84.8 -9.4%

--------------------------------------------------------------------------------

Gross margin 28.1% 31.0%

--------------------------------------------------------------------------------

EBITDA EUR million 67.1 76.8 -12.6%

--------------------------------------------------------------------------------

EBITDA margin 24.6% 28.1%

--------------------------------------------------------------------------------

Net profit for the EUR million 42.8 45.2 -5.3%

period

--------------------------------------------------------------------------------

Net profit margin 15.7% 16.5%

--------------------------------------------------------------------------------

Depreciation and EUR million 19.3 18.4 4.5%

amortization

--------------------------------------------------------------------------------

Investments EUR million 15.1 11.3 33.6%

--------------------------------------------------------------------------------

Weighted average number of ordinary shares 669,882,040 669,882,040 0.0%

outstanding 1

--------------------------------------------------------------------------------

Earnings per share EUR 0.06 0.07 -5.3%

--------------------------------------------------------------------------------

Number of passengers 2,855,112 2,701,412 5.7%

--------------------------------------------------------------------------------

Number of cargo 81,170 76,062 6.7%

units

--------------------------------------------------------------------------------

Average number of 7,366 7,040 4.6%

employees

--------------------------------------------------------------------------------

----------------------------------------------- -------

--------------------------

30.09.2016 30.06.2016

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Total assets EUR million 1,552.0 1,567.4 -1.0%

--------------------------------------------------------------------------------

Interest-bearing EUR million 546.7 558.5 -2.1%

liabilities

--------------------------------------------------------------------------------

Net debt EUR million 457.9 466.2 -1.8%

--------------------------------------------------------------------------------

Total equity EUR million 811.2 807.7 0.4%

--------------------------------------------------------------------------------

Equity ratio 52.3% 51.5%

--------------------------------------------------------------------------------

Net debt to EBITDA 3.1 2.9

--------------------------------------------------------------------------------

Number of ordinary shares outstanding 1 669,882,040 669,882,040 0.0%

--------------------------------------------------------------------------------

Shareholders? equity EUR 1.21 1.21 0.4%

per share

--------------------------------------------------------------------------------

EBITDA: Earnings before net financial items, taxes, depreciation and

amortization;

Earnings per share: net profit / 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 / net sales;

EBITDA margin: EBITDA / net sales;

Net profit margin: net profit / net sales;

Net debt: Interest bearing liabilities less cash and cash equivalents;

Net debt to EBITDA: Net debt / 12-months trailing EBITDA.

1 Share numbers exclude own shares.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(unaudited, in thousands of 01.07.2016- 01.07.2015- 01.01.2016- 01.01.2015-

euros)

30.09.2016 30.09.2015 30.09.2016 30.09.2015

\================================================================================

Revenue (Note 3) 273,615 273,557 711,670 717,572

Cost of sales -196,839 -188,803 -560,154 -544,341

Gross profit 76,776 84,754 151,516 173,231

--------------------------------------------------------------------------------

Sales and marketing expenses -16,571 -15,085 -53,166 -46,801

Administrative expenses -12,548 -10,992 -38,825 -34,310

Other operating income 180 -125 1,753 1,360

Other operating expenses 22 -156 -6 -737

--------------------------------------------------------------------------------

Result from operating 47,859 58,396 61,272 92,743

activities

--------------------------------------------------------------------------------

Finance income (Note 4) 4,398 2,210 8,760 9,507

Finance costs (Note 4) -9,999 -12,039 -29,685 -32,647

Profit/-loss before income 42,258 48,567 40,347 69,603

tax

--------------------------------------------------------------------------------

Income tax 580 -3,355 245 -9,205

--------------------------------------------------------------------------------

Net profit/-loss for the 42,838 45,212 40,592 60,398

period

--------------------------------------------------------------------------------

Other comprehensive

income/-expense

Items that may be

reclassified to profit or

loss

Exchange differences on -99 -202 -264 -256

translating foreign

operations

Other comprehensive -99 -202 -264 -256

income/-expense for the

period

--------------------------------------------------------------------------------

Total comprehensive 42,739 45,010 40,328 60,142

income/-expense for the

period

--------------------------------------------------------------------------------

Earnings per share (in EUR

per share)

- basic (Note 5) 0.064 0.067 0.061 0.090

- diluted (Note 5) 0.064 0.067 0.061 0.090

--------------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited, in thousands of euros)

ASSETS 30.09.2016 31.12.2015

\================================================================================

Current assets

--------------------------------------------------------------------------------

Cash and cash equivalents 88,772 81,976

Trade and other receivables 41,986 36,583

Prepayments 9,592 5,274

Income tax prepayment 1,482 1,224

Inventories 37,624 29,197

Total current assets 179,456 154,254

--------------------------------------------------------------------------------

Non-current assets

--------------------------------------------------------------------------------

Investments in equity-accounted investees 350 350

Other financial assets 361 308

Deferred income tax assets 19,410 19,410

Investment property 300 300

Property, plant and equipment (Note 7) 1,301,226 1,311,418

Intangible assets (Note 8) 50,904 52,726

---------------------------------------------------------

Total non-current assets 1,372,551 1,384,512

--------------------------------------------------------------------------------

---------------------------------------------------------

TOTAL ASSETS 1,552,007 1,538,766

--------------------------------------------------------------------------------

LIABILITIES AND EQUITY

\================================================================================

Current liabilities

--------------------------------------------------------------------------------

Interest bearing loans and borrowings (Note 9) 125,995 81,889

Trade and other payables 83,257 88,480

Payments to shareholders (Note 14) 40,193 0

Income tax liability 2,500 4,567

Deferred income 33,986 28,906

Total current liabilities 285,931 203,842

--------------------------------------------------------------------------------

Non-current liabilities

-----------------------

--------------------------------------------------------------------------------

Interest bearing loans and borrowings (Note 9) 420,685 467,447

Derivatives (Note 6) 34,232 42,863

Other payables 0 192

--------------------------------------------------------------------------------

Total non-current liabilities 454,917 510,502

--------------------------------------------------------------------------------

TOTAL LIABILITIES 740,848 714,344

--------------------------------------------------------------------------------

EQUITY

--------------------------------------------------------------------------------

Equity attributable to equity holders of the parent

--------------------------------------------------------------------------------

Share capital 361,736 404,290

Share premium 639 639

Reserves 71,026 65,083

Retained earnings 377,758 354,410

--------------------------------------------------------------------------------

Total equity attributable to equity holders of the 811,159 824,422

parent

--------------------------------------------------------------------------------

TOTAL EQUITY 811,159 824,422

--------------------------------------------------------------------------------

TOTAL LIABILITIES AND EQUITY 1,552,007 1,538,766

--------------------------------------------------------------------------------

CONSOLIDATED CASH FLOW STATEMENT

(unaudited, in thousands of euros) 01.01.2016- 01.01.2015-

30.09.2016 30.09.2015

Cash flows from operating activities

Net profit/-loss for the period 40,592 60,398

Adjustments 79,014 91,250

Changes in receivables and prepayments related to -9,914 -8,089

operating activities

Changes in inventories -8,427 2,639

Changes in liabilities related to operating activities -326 -7,103

Income tax paid -1,621 -490

--------------------------------------------------------------------------------

99,318 138,605

--------------------------------------------------------------------------------

-------------------------------------------------------

Cash flow from/used in investing activities

Purchase of property, plant and equipment and -46,197 -29,823

intangible assets (Notes 7, 8, 9)

Proceeds from disposals of property, plant and 144 25,004

equipment

Interest received 51 57

--------------------------------------------------------------------------------

-46,002 -4,762

--------------------------------------------------------------------------------

-------------------------------------------------------

Cash flows used in financing activities

Repayment of loans (Note 9) -55,039 -68,962

Change in overdraft (Note 9) 44,096 -8,700

Payment of finance lease liabilities (Note 9) -74 -60

Interest paid -18,434 -21,485

Payments for settlement of derivatives -3,341 -3,195

Payments of transaction costs related to loans 0 -1,429

Dividend paid (Note 12) -13,398 -13,398

Income tax on dividends paid -330 -2,818

-46,520 -120,047

--------------------------------------------------------------------------------

TOTAL NET CASH FLOW 6,796 13,796

--------------------------------------------------------------------------------

------------------------------------------------------- ------------

Cash and cash equivalents:

- at the beginning of period 81,976 65,311

- increase (+) / decrease (-) 6,796 13,796

--------------------------------------------------------------------------------

- at the end of period 88,772 79,107

--------------------------------------------------------------------------------

Veiko Haavapuu

Finance Director

AS Tallink Grupp

Sadama 5/7

10111 Tallinn, Estonia

Tel. +372 640 9914

E-mail [email protected]

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AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2016

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