Tallink Grupp

Q3 results of the 2014 financial year

Tallinn, 2014-11-13 08:50 CET (GLOBE NEWSWIRE) --

Q3 results of the 2014 financial year

In the third quarter (1 July - 30 September) of the 2014 financial year AS

Tallink Grupp and its subsidiaries? (the Group) carried nearly 2.6 million

passengers which is 5.8% less compared to the same period last year. The number

of cargo units transported increased by 1.0% and the number of passenger

vehicles transported decreased by 3.7% for the same period as last year.

The Group?s consolidated revenue in the third quarter was EUR 262.7 million,

being 5.7% or EUR 15.7 million less than a year ago. In the third quarter of

the 2014 financial year the Group?s gross profit amounted to EUR 69.6 million

and EBITDA to EUR 64.0 million being respectively EUR 10.2 million and EUR 8.6

million less compared to the same period last year.

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

the Group?s operations. The decline in the passenger volume from the Russian

market continuous to be visible, decreasing by 25% in the third quarter,

compared to the same period last year.

The Group has been working for a smoother transition facing the sulphur

regulations and one of the goals has been to reduce fuel consumption by

optimising our current operations, therefore several re-routings were made: the

cruise ferry Silja Europa was chartered out, the cruise ferry Baltic Queen

changed to the Tallinn-Helsinki route and the cruise ferry Romantika changed to

Tallinn-Stockholm route, leaving the Riga-Stockholm route with the cruise ferry

Isabelle as the only vessel. Majority of the decline of the third quarter

results was a direct one-off effect related to the re-routing of the vessels,

chartering out Silja Europa and the Silja Symphony docking. These changes in

the operations are a good reference of the flexibility of our business and

ensure that we are better prepared for the upcoming year.

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

passenger?s numbers decreasing by 3.3%, cargo units transported increased by

11.5% and the sales numbers remained on the last year?s level. The results were

affected by a competitor bringing more capacity to the Tallinn-Helsinki route.

The Finland-Sweden route showed a decline with passenger?s numbers decreasing

by 5.5%, cargo units transported decreased by 11.0%, the sales numbers

decreased by 7.4%. The results were affected by Silja Symphony being out of

operations in September. The Latvia-Sweden route showed a decline with

passenger?s numbers decreasing by 23.3%, cargo units transported decreased by

42.5%, the sales numbers decreased by 24.5%. The results were affected by

Romantika changing to Tallinn-Stockholm route, leaving Isabelle as the only

operating vessel on the route.

In the third quarter the charter revenue increased by 58.9% or EUR 5.2 million,

this is a result of more vessels being in charter and is expected to have a

positive effect to the profitability in the forthcoming quarters. The total

number of vessels currently chartered out is six, while last year at the same

time four vessels were chartered out.

While pricing the cargo services for next year the upcoming rise in the fuel

price related to the switch to the low sulphur fuel has been taken into

account. Pricing of the passenger service will depend on market demand,

competition and seasonality.

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

EUR 36.2 million or EUR 0.05 per share compared to the net profit of EUR 44.0

million or EUR 0.07 per share in the same period last year.

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

quarter were EUR 66.7 million providing a strong position for sustainable

operations. At the end of the third quarter 2014 the Group had EUR 66.1 million

in cash and equivalents and the total of unused credit lines were at EUR 0.5

million.

Q3 KEY FIGURES 2014 2013 Change

July-Sep July-Sep

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

Revenue EUR million 262.7 278.4 -5.7%

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Gross profit EUR million 69.6 79.8 -12.8%

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Gross margin (%) 26.5% 28.7%

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EBITDA EUR million 64.0 72.5 -11.8%

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

EBITDA margin (%) 24.4% 26.1%

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

Net profit for the EUR million 36.2 44.0 -17.9%

period

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

Net profit margin (%) 13.8% 15.8%

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

Depreciation and EUR million 19.3 18.5 4.8%

amortization

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

Investments EUR million 10.6 2.5 328.4%

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

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

outstanding

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Earnings per share EUR 0.05 0.07 -17.9%

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Number of passengers 2 561 257 2 718 778 -5.8%

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Number of cargo units 76 830 76 043 1.0%

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

Average number of 7 181 7 185 -0.1%

employees

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

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

30.09.2014 30.06.2014

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Total assets EUR million 1 688.4 1 712.0 -1.4%

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

Interest-bearing EUR million 770.9 782.0 -1.4%

liabilities

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

Net debt EUR million 704.8 711.8 -1.0%

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

Total equity EUR million 770.1 733.9 4.9%

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

Equity ratio (%) 45.6% 42.9%

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

Net debt to EBITDA 5.1 4.8

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

Number of ordinary 669 882 040 669 882 040 0%

shares outstanding1

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

Shareholders? equity per EUR 1.15 1.01 4.9%

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

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 01.07.2014- 01.07.2013- 01.01.2014- 01.01.2013-

euros)

30.09.2014 30.09.2013 30.09.2014 30.09.2013

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

Revenue 262,656 278,391 697,325 718,001

Cost of sales -193,085 -198,574 -565,007 -564,968

Gross profit 69,571 79,817 132,318 153,033

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

Marketing expenses -15,084 -15,926 -46,883 -49,642

Administrative expenses -10,296 -10,068 -35,573 -32,469

Other income 462 277 987 1,085

Other expenses -18 -12 -358 -141

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

Result from operating 44,635 54,088 50,491 71,866

activities

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

Finance income 3,270 4,577 7,137 15,790

Finance costs -11,747 -14,642 -33,384 -42,965

Profit/-loss before income 36,158 44,023 24,244 44,691

tax

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

Income tax -8 16 -5,367 -8,903

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

Net profit/-loss for the 36,150 44,039 18,877 35,788

period

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

Other comprehensive

income/-expense

Items that may be

reclassified to profit or

loss

Exchange differences on 36 3 44 80

translating foreign

operations

Other comprehensive 36 3 44 80

income/-expense for the

period

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

Total comprehensive 36,186 44,042 18,921 35,868

income/-expense for the

period

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

Earnings per share (in EUR

per share)

- basic 0.05 0.07 0.03 0.05

- diluted 0.05 0.07 0.03 0.05

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(unaudited, in thousands of euros)

ASSETS 30.09.2014 31.12.2013

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

Current assets

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

Cash and cash equivalents 66,105 72,012

Trade and other receivables 42,712 40,544

Prepayments 7,214 3,185

Derivatives 0 679

Inventories 28,380 33,457

Total current assets 144,411 149,877

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

Non-current assets

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

Investments in equity-accounted investees 262 262

Other financial assets 253 385

Deferred income tax assets 17,413 17,413

Investment property 300 300

Property, plant and equipment 1,470,224 1,495,895

Intangible assets 55,545 57,925

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

Total non-current assets 1,543,997 1,572,180

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

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

TOTAL ASSETS 1,688,408 1,722,057

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

LIABILITIES AND EQUITY

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

Current liabilities

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

Interest bearing loans and borrowings 136,933 106,014

Trade and other payables 86,170 97,387

Deferred income 35,879 28,315

Derivatives 25,297 30,888

Total current liabilities 284,279 262,604

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

Non-current liabilities

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

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

Interest bearing loans and borrowings 633,949 688,327

Other liabilities 61 63

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

Total non-current liabilities 634,010 688,390

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

TOTAL LIABILITIES 918,289 950,994

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

EQUITY

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

Equity attributable to equity holders of the parent

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

Share capital 404,290 404,290

Share premium 639 639

Reserves 72,557 70,111

Retained earnings 292,633 296,023

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

Total equity attributable to equity holders of the 770,119 771,063

parent

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

TOTAL EQUITY 770,119 771,063

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

TOTAL LIABILITIES AND EQUITY 1,688,408 1,722,057

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CONSOLIDATED CASH FLOW STATEMENT

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

30.09.2014 30.09.2013

Cash flows from operating activities

Net profit/-loss for the period 18,877 35,788

Adjustments 92,806 95,069

Changes in receivables and prepayments related to -6,165 -14,128

operating activities

Changes in inventories 5,077 776

Changes in liabilities related to operating -3,973 2,720

activities

Income tax paid/repaid 108 -200

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

106,730 120,025

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Cash flow used for investing activities

Purchase of property, plant and equipment and -30,919 -38,332

intangible assets

Proceeds from disposals of property, plant and 180 270

equipment

Interest received 78 17

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-30,661 -38,045

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

Proceeds from loans 0 24,000

Redemption of loans -59,946 -168,230

Change in overdraft 31,069 0

Proceeds from bonds 0 115,487

Repayment of finance lease liabilities -54 -4

Interest paid -24,574 -22,472

Payments for settlement of derivatives -3,033 -3,374

Payment of transaction costs related to loans 0 -567

Dividends paid -20,096 -33,494

Income tax on dividends paid -5,342 -8,903

-81,976 -97,557

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TOTAL NET CASH FLOW -5,907 -15,577

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

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

Cash and cash equivalents:

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

- increase (+) / decrease (-) -5,907 -15,577

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Cash and cash equivalents at the end of period 66,105 50,023

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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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Q3 results of the 2014 financial year

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