Tallink Grupp

Q2 results of the 2014 financial year

Tallinn, 2014-08-14 08:50 CEST (GLOBE NEWSWIRE) --

Q2 results of the 2014 financial year

In the second quarter (1 April - 30 June) of the 2014 financial year AS Tallink

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

which is 0.5% more compared to the same period last year. The number of cargo

units transported decreased by 1.0% and the number of passenger vehicles

transported increased by 0.7% for the same period as last year.

The Group?s consolidated revenue in the second quarter was EUR 246.5 million,

being 1.0% or EUR 2.6 million less than a year ago. In the second quarter of

the 2014 financial year the Group?s gross profit amounted to EUR 51.0 million

and EBITDA to EUR 41.1 million being respectively EUR 6.0 million and EUR 5.7

million less compared to the same period last year. The decline in the Group?s

results is related to maintenance and upgrade works on the vessels Star, Galaxy

and Baltic Princess. In the second quarter there were less trips due to ships

being out of the operation when compared to the same period in the last year.

In the second quarter the Estonia-Finland route showed a slight decline with

passengers numbers decreasing by 2.7%, cargo units transported increased by

6.6%, the sales numbers remained on the last year?s level. The operations were

affected by the shuttle vessel Star being out of operation for 68 trips in

April, undergoing car deck ramp repairs, the ship was only partially replaced

during that time. In the same time the competitors on the route have increased

the number of departures.

In the second quarter the segment result for the Finland-Sweden segment was EUR

4.9 million lower than last year. The decline came from the Turku-Stockholm

route, where revenue decreased due to the vessels Galaxy and Baltic Princess

being out of operations for scheduled maintenance works and passengers?

spending showing weaknesses in an overall weak macroeconomic development.

Meanwhile the recently upgraded cruise ferry Silja Serenade on the

Helsinki-Stockholm route has delivered positive developments. Higher customer

satisfaction and on-board spending levels are confirming that the investment

was successful and has a positive effect to the business in the longer run.

The amortization cost for the 2014 financial year is higher due to the new

vessel Isabelle and the group has also changed the useful life estimation of

some vessels. In the second quarter the amortization cost was EUR 1.8 million

higher when compared to the same period in the last year.

The unaudited net profit for the second quarter of the 2014 financial year was

EUR 6.1 million or EUR 0.01 per share compared to the net profit of EUR 9.3

million or EUR 0.01 per share in the same period last year.

In June 2014 the shareholders annual general meeting decided to pay a dividend

of 0.03 euros per share. The total dividend amount of EUR 20.1 million was paid

out in the beginning of July 2014 (third quarter).

The unstable macro-economic situation in Europe has had a negative impact to

the Groups operations. In the first six months of the financial year a

noticeable drop in passenger numbers from the Russian market has been observed.

Working together with ship fuel suppliers the Group is preparing for a smooth

transition from 1.0% sulphur marine fuel to low sulphur marine fuel in order to

meet the new 2015 sulphur emissions regulation.

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

quarter were EUR 75.2 million providing a strong position for sustainable

operations. At the end of the second quarter 2014 the Group had EUR 70.2

million in cash and equivalents and the total of unused credit lines were at

EUR 5.0 million.

Q2 KEY FIGURES 2014 2013 Change

Apr-Jun Apr-Jun

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Revenue EUR million 246.5 249.0 -1.0%

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Gross profit EUR million 51.0 57.0 -10.6%

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Gross margin (%) 20.7% 22.9%

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EBITDA EUR million 41.1 46.8 -12.3%

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

EBITDA margin (%) 16.7% 18.8%

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Net profit for the EUR million 6.1 9.3 -34.2%

period

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

Net profit margin (%) 2.5% 3.7%

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

Depreciation and EUR million 20.0 18.2 9.6%

amortization

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

Investments EUR million 20.4 35.9 -43.3%

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Weighted average number of ordinary shares 669 882 040 669 882 040

outstanding

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Earnings per share EUR 0.01 0.01 -34.2%

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

Number of passengers 2 363 510 2 352 487 0.5%

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

Number of cargo units 79 055 79 843 -1.0%

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Average number of 7 124 7 029 1.6%

employees

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

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

30.06.2014 31.03.2014

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Total assets EUR million 1 712.0 1 711.8 0.0%

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Interest-bearing EUR million 782.0 811.5 -3.6%

liabilities

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Net debt EUR million 711.8 748.9 -5.0%

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Total equity EUR million 733.9 747.8 -1.9%

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

Equity ratio (%) 42.9% 43.7%

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

Net debt to EBITDA 4.8 4.9

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Number of ordinary 669 882 040 669 882 040 0%

shares outstanding1

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Shareholders? equity per EUR 1.10 1.12 -1.9%

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

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 01.04.2014- 01.04.2013- 01.01.2014- 01.01.2013-

euros)

30.06.2014 30.06.2013 30.06.2014 30.06.2013

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

Revenue (Note 3) 246,463 249,027 434,669 439,610

Cost of sales -195,503 -192,055 -371,922 -366,394

Gross profit 50,960 56,972 62,747 73,216

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Marketing expenses -16,001 -17,583 -31,799 -33,716

Administrative expenses -13,888 -11,161 -25,277 -22,401

Other income 312 482 525 808

Other expenses -292 -117 -340 -129

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

Result from operating 21,091 28,593 5,856 17,778

activities

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

Finance income (Note 4) 551 8,609 3,867 11,213

Finance costs (Note 4) -10,192 -19,017 -21,637 -28,323

Profit/-loss before income 11,450 18,185 -11,914 668

tax

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

Income tax -5,349 -8,911 -5,359 -8,919

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Net profit/-loss for the 6,101 9,274 -17,273 -8,251

period

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

Other comprehensive

income/-expense

Items that may be

reclassified to profit or

loss

Exchange differences on -51 68 8 77

translating foreign

operations

Other comprehensive -51 68 8 77

income/-expense for the

period

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

Total comprehensive 6,050 9,342 -17,265 -8,174

income/-expense for the

period

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

Earnings per share (in EUR

per share)

- basic (Note 5) 0.01 0.01 -0.03 -0.01

- diluted (Note 5) 0.01 0.01 -0.03 -0.01

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited, in thousands of euros)

ASSETS 30.06.2014 31.12.2013

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

Current assets

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

Cash and cash equivalents 70,214 72,012

Trade and other receivables 46,544 40,544

Prepayments 10,171 3,185

Derivatives 0 679

Inventories 32,189 33,457

Total current assets 159,118 149,877

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Non-current assets

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

Investments in equity-accounted investees 262 262

Other financial assets 252 385

Deferred income tax assets 17,413 17,413

Investment property 300 300

Property, plant and equipment (Note 7) 1,478,535 1,495,895

Intangible assets (Note 8) 56,095 57,925

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Total non-current assets 1,552,857 1,572,180

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

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

TOTAL ASSETS 1,711,975 1,722,057

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LIABILITIES AND EQUITY

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

Current liabilities

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

Interest bearing loans and borrowings (Note 9) 132,445 106,014

Trade and other payables 104,680 97,387

Dividends payable (Note 12, 14) 20,096 0

Deferred income 41,646 28,315

Derivatives (Note 6) 29,600 30,888

Total current liabilities 328,467 262,604

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Non-current liabilities

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

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

Interest bearing loans and borrowings (Note 9) 649,591 688,327

Other liabilities 61 63

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

Total non-current liabilities 649,652 688,390

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

TOTAL LIABILITIES 978,119 950,994

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

EQUITY

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

Equity attributable to equity holders of the parent

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

Share capital 404,290 404,290

Share premium 639 639

Reserves 72,444 70,111

Retained earnings 256,483 296,023

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

Total equity attributable to equity holders of the 733,856 771,063

parent

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

TOTAL EQUITY 733,856 771,063

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

TOTAL LIABILITIES AND EQUITY 1,711,975 1,722,057

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CONSOLIDATED CASH FLOW STATEMENT

(unaudited, in thousands of euros) 01.01.2014 - 01.01.2013-

30.06.2014 30.06.2013

Cash flows from operating activities

Net profit/-loss for the period -17,273 -8,251

Adjustments 64,136 66,397

Changes in receivables and prepayments related to -12,844 -15,320

operating activities

Changes in inventories 1,268 -561

Changes in liabilities related to operating 15,615 18,778

activities

Income tax paid -4 -203

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50,898 60,840

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Cash flow used for investing activities

Purchase of property, plant and equipment and -20,351 -35,865

intangible assets (Notes 7, 8, 9)

Proceeds from disposals of property, plant and 114 265

equipment

Interest received 9 16

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-20,228 -35,584

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Cash flow from (+)/ used for (-) financing activities

Proceeds from loans 0 24,000

Redemption of loans (Note 9) -39,920 -148,205

Change in overdraft (Note 9) 26,589 4,812

Proceeds from bonds 0 115,487

Repayment of finance lease liabilities (Note 9) -97 -3

Interest paid -17,040 -16,006

Payments for settlement of derivatives -2,000 -2,247

Payment of transaction costs related to loans 0 -565

-32,468 -22,727

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TOTAL NET CASH FLOW -1,798 2,529

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Cash and cash equivalents:

- at the beginning of period 72,012 65,600

- increase (+) / decrease (-) -1,798 2,529

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Cash and cash equivalents at the end of period 70,214 68,129

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Harri Hanschmidt

Head of the Finance Department

AS Tallink Grupp

Sadama 5/7. 10111 Tallinn

Tel +372 640 8981

E-mail [email protected]

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Q2 results of the 2014 financial year

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