Tallink Grupp

AS Tallink Grupp Unaudited Consolidated Interim Report Q2 2016

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

AS Tallink Grupp Unaudited Consolidated Interim Report Q2 2016

In the second quarter (1 April - 30 June) of the 2016 financial year AS Tallink

Grupp and its subsidiaries? (the Group) carried 2.4 million passengers which is

2.8% more compared to the second quarter last year. The number of cargo units

transported increased by 7.3% and the number of passenger vehicles transported

increased by 3.8% compared to same period as last year.

The Group?s unaudited consolidated revenue for the second quarter was EUR 245.2

million, which is 3.4% less compared to same period last year. The Group?s

unaudited EBITDA for the second quarter amounted to EUR 36.2 million compared

to EUR 55.2 million last year and unaudited net profit was EUR 9.8 million

compared to EUR 28.5 million in same period last year.

In the second quarter the revenue of core operations increased from higher

on-board sales which was supported by the larger number of passengers

travelling with the Group?s operated ships. The second quarter total revenue

and operating result were lower compared to the same period last year mainly

due to less revenue from chartering related to the sale of vessels Regina

Baltica and Silja Festival and termination of cruise ferry Silja Europa

charter. The fast ferry Superstar sale and charter back transaction affects the

result of the current financial year. As a result of these operational changes,

in the second quarter there are lower amortization and interest costs but

higher operating costs compared to same period last year.

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

Group brought the cruise ferry Silja Europa to Tallinn-Helsinki route cruise

service in March 2016. This operational change has enabled the Group to

increase its market share on the route by 2% to 57%, compared to the second

quarter last year. The Estonia-Finland routes second quarter revenue increased

by 3.4% compared to same period last year. 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 second

quarter was lower compared to the same period last year due to the cost of

charter of the fast ferry Superstar, lower profitability of cruise ferry Silja

Europa and scheduled maintenance of cruise ferry Baltic Queen in the second

quarter.

The Finland-Sweden routes second quarter revenue decreased by 3.7%, compared to

same period last year. Fewer passengers travelled on the routes compared to

same period last year due to the spread of the noro virus in the beginning of

June 2016. However the Group?s market share increased by 1% to 53%, as there

was more departures compared to second quarter last year. The number of cargo

units transported on Finland-Sweden routes increased by 6.7% in the second

quarter.

The Estonia-Sweden route revenue increase of 7.1% was mainly driven by higher

on-board sales and higher cargo volume. The Latvia-Sweden route showed slightly

higher revenue compared with the second quarter last year. Driven by the higher

revenue, the second quarter segment result improved for both routes.

In the second quarter the Group?s total restaurants and shop sales increased by

EUR 3.6 million or 2.7%, 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. Throughout the second quarter there was a price

pressure from competition on all routes. Despite the increase in passenger

number the average ticket price per passenger was lower and the total revenue

from the ticket sale is on level with the second quarter last year.

The revenue from the leases of vessels and other revenues related to the leases

has reduced total by EUR 11.8 million in the second quarter due to fewer ships

are chartered out, compared to the same period last year.

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

decreased by 22.6% and amounted to EUR 48.3 million, compared to the same

period last year, EBITDA decreased by EUR 19.0 million to the total of EUR 36.2

million. The second quarter profitability was impacted by lower revenue due to

the change in revenue structure; by lower total fuel cost but also higher

marketing costs, cost of charter of the fast ferry Superstar and higher ships

operating costs.

In the second quarter, the depreciation and amortization cost reduced by EUR

0.5 mainly due to the sale of three vessels in 2015.

In the second quarter the Group?s net debt decreased by EUR 6.2 million to a

total of EUR 466.2 million and the net debt to EBITDA ratio was a solid 2.9 at

the end of second quarter.

The total finance costs increased by EUR 4.3 million mainly from revaluation of

cross currency and interest derivatives. The lower interest cost from regular

repayment of loans and also repayment of loans related to sale of ships was

offset by one time cost of EUR 1.5 million related to the charges of

bondholders? waiver allowing the Group to pay higher equity distributions in

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

EUR 9.8 million or EUR 0.015 per share compared to the net profit of EUR 28.5

million or EUR 0.043 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 and estimated time of

the proceedings in Commercial Registry the share capital reduction payments to

the shareholders will be made in December 2016.

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

second quarter was EUR 123.6 million providing a strong financial position for

sustainable operations. The Group had EUR 92.3 million in cash and equivalents

and the total of unused credit lines were at EUR 31.3 million.

Q2 KEY FIGURES

2016 2015 Change

Apr-Jun Apr-Jun

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

Revenue EUR million 245.2 253.9 -3.4%

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Gross profit EUR million 48.3 62.4 -22.6%

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

Gross margin 19.7% 24.6%

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

EBITDA EUR million 36.2 55.2 -34.5%

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

EBITDA margin 14.7% 21.7%

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

Net profit for the EUR million 9.8 28.5 -65.7%

period

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

Net profit margin 4.0% 11.2%

adjusted

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

Depreciation and EUR million 19.4 19.9 -2.6%

amortization

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

Investments EUR million 18.7 14.9 25.5%

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

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

outstanding 1

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

Earnings per share EUR 0.01 0.04 -65.7%

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

Number of passengers 2,423,057 2,356,039 2.8%

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

Number of cargo 84,392 78,659 7.3%

units

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

Average number of 7,281 6,903 5.5%

employees

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

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

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

30.06.2016 31.03.2016

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

Total assets EUR million 1,567.4 1,554.8 0.8%

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

Interest-bearing EUR million 558.5 564.1 -1.0%

liabilities

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

Net debt EUR million 466.2 472.4 -1.3%

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

Total equity EUR million 807.7 812.3 -0.6%

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

Equity ratio 51.5% 52.2%

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

Net debt to EBITDA 2.9 2.7

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

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

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

Shareholders? equity EUR 1.21 1.21 -0.6%

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 01.04.2016- 01.04.2015- 01.01.2016- 01.01.2015-

euros)

30.06.2016 30.06.2015 30.06.2016 30.06.2015

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

Revenue (Note 3) 245,234 253,862 438,055 444,015

Cost of sales -196,972 -191,489 -363,315 -355,538

Gross profit 48,262 62,373 74,740 88,477

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

Sales and marketing expenses -18,303 -16,481 -36,595 -31,716

Administrative expenses -14,259 -11,603 -26,277 -23,318

Other operating income 1,073 1,362 1,573 1,485

Other operating expenses -12 -390 -28 -581

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

Result from operating 16,761 35,261 13,413 34,347

activities

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

Finance income (Note 4) 1,766 1,621 4,362 7,297

Finance costs (Note 4) -8,413 -4,000 -19,686 -20,608

Profit/-loss before income 10,114 32,882 -1,911 21,036

tax

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

Income tax -333 -4,350 -335 -5,850

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

Net profit/-loss for the 9,781 28,532 -2,246 15,186

period

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

Other comprehensive

income/-expense

Items that may be

reclassified to profit or

loss

Exchange differences on -107 28 -165 -54

translating foreign

operations

Other comprehensive -107 28 -165 -54

income/-expense for the

period

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

Total comprehensive 9,674 28,560 -2,411 15,132

income/-expense for the

period

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

Earnings per share (in EUR

per share)

- basic (Note 5) 0.015 0.043 -0.003 0.023

- diluted (Note 5) 0.015 0.043 -0.003 0.023

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited, in thousands of euros)

ASSETS 30.06.2016 31.12.2015

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

Current assets

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

Cash and cash equivalents 92,275 81,976

Trade and other receivables 43,871 36,583

Prepayments 11,835 5,274

Income tax prepayment 1,426 1,224

Inventories 39,330 29,197

Total current assets 188,737 154,254

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

Non-current assets

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

Investments in equity-accounted investees 350 350

Other financial assets 365 308

Deferred income tax assets 19,410 19,410

Investment property 300 300

Property, plant and equipment (Note 7) 1,304,994 1,311,418

Intangible assets (Note 8) 51,533 52,726

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

Total non-current assets 1,376,952 1,384,512

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

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

TOTAL ASSETS 1,565,689 1,538,766

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

LIABILITIES AND EQUITY

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

Current liabilities

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

Interest bearing loans and borrowings (Note 9) 122,148 81,889

Trade and other payables 101,354 88,480

Dividends (Note 12, 14) 13,398 0

Income tax liability 2,830 4,567

Deferred income 42,316 28,906

Total current liabilities 282,046 203,842

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

Non-current liabilities

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

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

Interest bearing loans and borrowings (Note 9) 436,317 467,447

Derivatives (Note 6) 39,623 42,863

Other payables 0 192

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

Total non-current liabilities 475,940 510,502

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

TOTAL LIABILITIES 757,986 714,344

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

EQUITY

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

Equity attributable to equity holders of the parent

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

Share capital 404,290 404,290

Share premium 639 639

Reserves 66,962 65,083

Retained earnings 335,812 354,410

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

Total equity attributable to equity holders of the 807,703 824,422

parent

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

TOTAL EQUITY 807,703 824,422

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

TOTAL LIABILITIES AND EQUITY 1,565,689 1,538,766

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

CONSOLIDATED CASH FLOW STATEMENT

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

30.06.2016 30.06.2015

Cash flows from operating activities

Net profit/-loss for the period -2,246 15,186

Adjustments 54,141 59,282

Changes in receivables and prepayments related to -13,999 -10,917

operating activities

Changes in inventories -10,133 891

Changes in liabilities related to operating activities 26,228 14,097

Income tax paid -2,138 -246

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

51,853 78,293

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

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

Cash flow from/used in investing activities

Purchase of property, plant and equipment and -31,325 -18,499

intangible assets (Notes 7, 8, 9)

Proceeds from disposals of property, plant and 121 25,001

equipment

Interest received 35 41

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

-31,169 6,543

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

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

Cash flows used in financing activities

Repayment of loans (Note 9) -35,458 -49,381

Change in overdraft (Note 9) 40,246 -2,644

Payment of finance lease liabilities (Note 9) -49 -40

Interest paid -12,944 -14,744

Payments for settlement of derivatives -2,180 -2,290

-10,385 -69,099

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

TOTAL NET CASH FLOW 10,299 15,737

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

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

Cash and cash equivalents:

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

- increase (+) / decrease (-) 10,299 15,737

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

- at the end of period 92,275 81,048

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

Veiko Haavapuu

Finance Director

AS Tallink Grupp

Sadama 5/7, 10111 Tallinn

Tel +372 640 9914

E-mail veiko.haavapuu@tallink

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AS Tallink Grupp Unaudited Consolidated Interim Report Q2 2016

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