Finnlines Plc Stock Exchange Release 28 October, 2008 INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2008 (unaudited) The Finnlines Group recorded revenue totalling EUR 577.9 (505.4) million. Operating profit was EUR 42.1 (57.2, including vessel sales gain of EUR 12,3 million) million. Profit before taxes was EUR 16.5 (35.9, incl. vessels sales gain of 12,3 million) million. Return on equity (ROE) was 4.3 (8.8) % and return on investment (ROI) was 4.5 (7.5) %. Market development During the year, the unitized sea transport via Finnish ports have been continuously pacing down with imports growing constantly more than exports thus increasing the imbalance in the traffic. The restructuring of the Finnish forest industry has also had an impact on the export volumes. In January-August, the paper exports transported by sea were 8,8% less than during the comparable period in 2007. Similar pacing down has been apparent in trailer and lorry volumes between Southern Sweden and Germany. The cumulative growth rate for January-September was still 3%, but during July and September decrease was -2%. The passenger traffic between Finland and Germany increased by 7,8% and decreased by 1,7% between Finland and Sweden during January-August. Bunker prices have increased substantially in 2008. The price for the Rotterdam LS180 used as a reference reached its peak in mid-July, when the price was 100 per cent higher than the 2007 average prices (quoted in USD). Since July, the bunker prices have come down but at the end of September were still 44 percent above the 2007 average. Group structure Finnlines is one of the largest European shipping companies specialising in liner cargo services. The Group's operations are centred on sea transports in the Baltic Sea and North Sea areas and on providing port services mainly in Finland. Through its subsidiaries and associated companies, the Group has operations in eight northern European countries and in Russia. The Group's services are also offered throughout Europe via an extensive network of agents. There were no significant changes in the Group structure during the reporting period. Significant events during the reporting period The Annual General Meeting The Board of Directors of Finnlines Plc proposed to the AGM held on 15 April 2008 that no dividend be paid out for the fiscal year 2007 due to the sizeable investment in the five vessels already in operation and the commitments of the vessel renewal programme as well as to the investments in the Vuosaari harbour. The minority shareholders (more than 10% of the shares) used their rights to require the postponement of the handling of the closing of the books and the discharge of the Board to a continued meeting. The meeting also decided to postpone the Board of Directors' proposal for authorization to increase the share capital to the same meeting. The AGM decided that the company's Board of Directors has seven members. Mr. Emanuele Grimaldi, Mr. Gianluca Grimaldi, Mr. Diego Pacella, Mr. Heikki Laine, Mr. Antti Pankakoski, Mr. Olav K. Rakkenes and Mr. Jon-Aksel Torgersen were unanimously re-elected. Finnlines' Board of Directors elected Mr. Jon-Aksel Torgersen as Chairman and Mr. Diego Pacella as Vice Chairman of the Board. The firm of authorised public accountants Deloitte & Touche Oy was appointed as the company's auditors, with Mikael Leskinen, APA, as the principally responsible auditor. The Continued Annual General Meeting was held on 20 May, 2008. In his speech at the Meeting, Christer Antson, President and CEO, explained that Group contribution has been given, like in previous years, to Finnlines' 100% owned ship-owning companies, which have invested in new vessels or converted older vessels. The Continued AGM approved, after voting, the financial statements and discharged the company's officers from liability for the financial year 2007. Ilmarinen Mutual Pension Insurance Company informed that it will apply for a special audit in the company. The Meeting decided, after voting, that the minimum dividend required by the minority (more than 10% of shares) will be paid. The total amount of dividends paid is EUR 180,216.40 ie. EUR 0.00443 per share. The dividend record date was 23 May 2008 and the dividend payment date was 30 May 2008. The Board of Directors was, after voting, authorized to resolve on the issuance of shares. The company may, on the basis of the authorization, issue new shares in one or several instalments, so that the aggregate maximum number of new shares will be 10,000,000 shares. The authorization includes the right for direct issue of shares, in deviation from the shareholders' pre-emptive subscription right on the terms and conditions prescribed by law. The authorization is valid until the next Annual General Meeting. Fleet In April, Finnlines bought MS Finnmill and MS Finnpulp and two other vessels, MS Finnkraft and MS Finnhawk, which all were under time charter in Finnlines traffic, at the total amount of EUR 121 million. This deal settled the litigation process relating to the purchase options of Finnpulp and Finnmill. Finnkraft and Finnhawk are currently plying under the Finnish flag and Finnmill and Finnpulp under the Swedish flag. Traffic The operations at the terminals of Lübecker Hafengesellschaft (LHG) in Lübeck harbours suffered from actions of the stevedoring workers' union during the first quarter of the year. The union protested against the planned privatisation of LHG. The cargo volumes transported during January-September totalled approximately 629,000 (584,000 in 2007) units (lorries, trailers), 92,000 (72,000) cars (not including cars of the passengers) and, in addition, 2,247,000(1,941,000) tonnes of freight not possible to measure by the unit. In addition, some 482,000 (337,000) passengers (including freight-related passengers) were transported in 2008. Financial performance The Finnlines Group recorded revenue totalling EUR 577.9 (505.4 in 2007) million. Shipping and Sea Transport Services generated revenue amounting to EUR 503.6 (429.5) million and Port Operations EUR 96.6 (100.4) million. Other income from operations amounted to EUR 1.8 (14.4) million. The main part (EUR 12 million) of the 2007 amount generated from the sales gain of the two vessels sold during the third quarter of 2007. This was also the main reason for the considerably lower third quarter result than to the third quarter result in 2007. The expenses were mostly affected by the fuel oil price increases. Operating profit was EUR 42.1 (57.2, incl. sales gain of vessels) million. The port operations in Oslo (Norsteve) were moved to a new location resulting in losses of revenue and one-time expenses for the Port Operations segment. Financial income was EUR 2.2 (3.3) million and financial expenses totalled EUR -27.8 (-24.6) million. Profit before taxes was EUR 16.5 (35.9, incl. vessel sales gain 12,3) million. Return on equity (ROE) was 4.3 (8.8) % and return on investment (ROI) was 4.5 (7.5) %. Investments and financing The Group's investments were EUR 208.4 (368.3) million, consisting mainly of the down-payments for the six roro/vessels ordered from Jinling shipyard, from the purchased four roro vessels and of investments in the Vuosaari harbour. Interest-bearing net debt amounted to EUR 896.3 (738.5) million. The next year's payments for the Jingling newbuilding project, totalling approximately EUR 8 million, are due during the second half of 2009. At the end of September, 55% of the loans were fixed rate and the rest were floating rate loans. The duration (average interest rate period) of the debt portfolio was approximately. 56 months. On 30 September 2008, the granted but non-utilised credit facilities totalled EUR 179 million. The equity ratio calculated from the balance sheet was 28.8 (31.0) %. Gearing was 199.4 (170.9) %. Personnel The Group employed an average of 2,461 (2,340) people during the period, consisting of 1,496 (1,478) employees on shore and 965 (862) persons at sea. The Finnlines share The Company's registered share capital on 30 September 2008 was EUR 81,383,916 divided into 40,691,958 shares. A total of 7.1 (8.6) million Finnlines shares were traded on the NASDAQ OMX Helsinki Ltd during the period. The market capitalisation of the Company's stock at the end of September was EUR 477.3 (594.1) million. Earnings per share (EPS) during the period were EUR 0.34 (0.69). Shareholders' equity per share was EUR 11.01 (10.57). Risks In addition to the earlier published investment programme, Finnlines purchased four roro vessels at the price of EUR 121 million in April. The deal was financed with long-term debts. The company has invested and will invest during 2003-2011 over one billion euros in the renewal of the fleet and ports. Due to the investment programme the net interest-bearing debt has increased and will continue to increase. This is also reflected on the consolidated equity ratio. Otherwise there are no material changes in the risks disclosed in the notes to the financial statements 2007. Litigation The arbitration proceedings commenced last year between the owners of MS Finnmill and MS Finnpulp and Finnlines Plc were withdrawn in April when the parties closed the deal on these vessels. The main dispute concerned the validity and terms of the purchase options of the vessels. On 26 June 2008, Finnlines Plc received a request for a statement of reply from the County Administrative Board of South-Finland to the application made by Mutual Pension Insurance Company Ilmarinen on executing a special audit of accounts. The application letter of Ilmarinen, addressed to the County Administrative Board was dated 19 June, 2008. In the application letter Ilmarinen demands that the County Administrative Board orders a special audit to be executed in Finnlines Plc's administration and accounting between 1.1. - 31.12.2007 as it is prescribed in The Companies Act (21.7.2006/624) 7:7 §. Finnlines Plc submitted its reply by the given time limit of 15 September, 2008. Mutual Pension Insurance Company Ilmarinen has initiated action against Finnlines Plc in the City Court of Helsinki. Ilmarinen objects to the decision of Finnlines' Annual General Meeting held on 20 May 2008 to distribute EUR 180,216.39 as a minimum dividend. Ilmarinen demands primarily that the minimum dividend is to be altered to EUR 17,181,000. Secondarily Ilmarinen demands that the resolution taken by the AGM on 20 May, 2008 is to be declared null and void. Additionally, Ilmarinen demands Finnlines to pay its legal expenses. Finnlines considers the action groundless. The company considers that the measures taken have had commercial grounds and that it has in all respects acted in the best interest of the company and its shareholders. The company prepared a detailed response together with its legal adviser and submitted it to the City Court of Helsinki within the given time limit of 30 days. Mr. Tomas Lindholm, attorney at law from Roschier Attorneys Ltd., acts as legal adviser to Finnlines. Outlook for 2008 The new Vuosaari harbour will start operations as planned at the end November 2008. The project has tied up a lot of resources and expenses over the year and additional non-recurring expenses will arise from the move and the start-up phase of the new harbour. The economic environment in Europe has worsened rapidly and creates uncertainty for business development. It is expected that Finnlines' whole year operating profit will fall behind the comparable figure in previous year. Due to the investments in the new vessels, vessel conversions and the Vuosaari harbour, there will be a substantial increase in the depreciation and interest expenses compared to 2007. The next report, financial statement bulletin for the year 2008, will be published on 18 February 2009. Finnlines Plc The Board of Directors ENCLOSURES Profit and loss account Balance sheet Changes in shareholders equity Cash flow statement Revenue and operating result by business segments Property, plant and equipment Financial indicators Contingencies and commitments Revenue and operating profit by quarter DISTRIBUTION NASDAQ OMX Helsinki Ltd Main media All figures unaudited -------------------------------------------------------------------------------- | CONSOLIDATED PROFIT AND LOSS | | | | | | ACCOUNT | | | | | -------------------------------------------------------------------------------- | 1,000 EUR | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | 193,849 | 176,525 | 577,898 | 505,410 | 685,464 | -------------------------------------------------------------------------------- | Other income from | 668 | 13,479 | 1,808 | 14,388 | 15,320 | | operations | | | | | | -------------------------------------------------------------------------------- | Materials and services | -75,176 | -55,324 | -206,570 | -146,206 | -205,904 | -------------------------------------------------------------------------------- | Personnel expenses | -31,031 | -29,276 | -91,073 | -87,359 | -116,648 | -------------------------------------------------------------------------------- | Depreciation, | -15,243 | -14,035 | -44,059 | -39,046 | -53,081 | | amortisation and | | | | | | | other write-offs | | | | | | -------------------------------------------------------------------------------- | Other operating | -62,507 | -64,641 | -195,913 | -190,003 | -256,334 | | expenses | | | | | | -------------------------------------------------------------------------------- | Total operating | -183,95 | -163,27 | -537,616 | -462,615 | -631,968 | | expenses | 8 | 4 | | | | -------------------------------------------------------------------------------- | Operating profit | 10,559 | 26,730 | 42,090 | 57,183 | 68,816 | -------------------------------------------------------------------------------- | Financial income | -1,008 | 557 | 2,176 | 3,300 | 5,258 | -------------------------------------------------------------------------------- | Financial expenses | -9,282 | -9,961 | -27,776 | -24,553 | -33,956 | -------------------------------------------------------------------------------- | Profit before taxes | 270 | 17,325 | 16,489 | 35,930 | 40,118 | -------------------------------------------------------------------------------- | Income taxes *) | 658 | -3,637 | -2,099 | -7,544 | -5,725 | -------------------------------------------------------------------------------- | Profit for the | 928 | 13,688 | 14,390 | 28,386 | 34,393 | | reporting period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution: | | | | | | -------------------------------------------------------------------------------- | Parent company | 680 | 13,512 | 13,914 | 28,030 | 33,900 | | shareholders | | | | | | -------------------------------------------------------------------------------- | Minority interest | 248 | 176 | 476 | 356 | 493 | -------------------------------------------------------------------------------- | | 928 | 13,688 | 14,390 | 28,386 | 34,393 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit attributable to parent company shareholders | | | -------------------------------------------------------------------------------- | calculated as earnings per share | | | | | (EUR/share) | | | | -------------------------------------------------------------------------------- | Undiluted earnings per | 0.02 | 0.33 | 0.34 | 0.69 | 0.83 | | share | | | | | | -------------------------------------------------------------------------------- | Diluted earnings per | 0.02 | 0.33 | 0.34 | 0.69 | 0,83 | | share | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- *)Taxes have been estimated based on the profit for the reporting period. -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET, IFRS | | | | -------------------------------------------------------------------------------- | 1,000 EUR | 30/9/08 | 30/9/07 | 31/12/07 | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 1,300,775 | 1,130,773 | 1,139,576 | -------------------------------------------------------------------------------- | Goodwill | 108,660 | 108,660 | 108,660 | -------------------------------------------------------------------------------- | Other intangible assets | 8,798 | 10,007 | 9,899 | -------------------------------------------------------------------------------- | Investment properties | 1,581 | 1,585 | 1,584 | -------------------------------------------------------------------------------- | Share of associated companies | 1,526 | 1,526 | 1,526 | -------------------------------------------------------------------------------- | Other financial assets | 4,797 | 4,797 | 4,797 | -------------------------------------------------------------------------------- | Receivables | 3,856 | 10,612 | 9,173 | -------------------------------------------------------------------------------- | Deferred tax assets | 1,941 | 1,862 | 2,051 | -------------------------------------------------------------------------------- | | 1,431,934 | 1,269,822 | 1,277,265 | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 8,325 | 6,121 | 6,908 | -------------------------------------------------------------------------------- | Accounts receivable and other | 102,258 | 101,348 | 91,191 | | receivables | | | | -------------------------------------------------------------------------------- | Income tax receivables | 52 | 505 | 63 | -------------------------------------------------------------------------------- | Bank and cash | 18,339 | 17,998 | 26,913 | -------------------------------------------------------------------------------- | | 128,974 | 125,972 | 125,075 | -------------------------------------------------------------------------------- | Total assets | 1,560,908 | 1,395,794 | 1,402,340 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDER'S EQUITY | | | | -------------------------------------------------------------------------------- | Equity attributable to parent company shareholders | -------------------------------------------------------------------------------- | Share capital | 81,384 | 81,384 | 81,384 | -------------------------------------------------------------------------------- | Share premium account | 24,525 | 24,525 | 24,525 | -------------------------------------------------------------------------------- | Fair value reserves | -4,625 | -2,838 | -4,544 | -------------------------------------------------------------------------------- | Translation differences | 233 | 210 | 152 | -------------------------------------------------------------------------------- | Retained earnings | 346,335 | 326,730 | 332,601 | -------------------------------------------------------------------------------- | | 448,105 | 430,012 | 434,118 | -------------------------------------------------------------------------------- | Minority interest | 1,543 | 1,995 | 1,534 | -------------------------------------------------------------------------------- | Total shareholders' equity | 449,395 | 432,006 | 435,652 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Long-term liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 104,870 | 96,409 | 103,910 | -------------------------------------------------------------------------------- | Interest free liabilities | 827 | 0 | 1,314 | -------------------------------------------------------------------------------- | Pension liabilities | 2,736 | 2,454 | 2,358 | -------------------------------------------------------------------------------- | Provisions | 2,281 | 3,656 | 2,284 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 762,813 | 610,841 | 593,817 | -------------------------------------------------------------------------------- | | 873,527 | 713,360 | 703,682 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Accounts payable and other | 85,036 | 94,584 | 99,459 | | liabilities | | | | -------------------------------------------------------------------------------- | Income tax liabilities | 331 | 9,123 | 491 | -------------------------------------------------------------------------------- | Provisions | 1,901 | 435 | 672 | -------------------------------------------------------------------------------- | Current interest-bearing | 150,718 | 146,284 | 162,384 | | liabilities | | | | -------------------------------------------------------------------------------- | | 237,986 | 250,428 | 263,006 | -------------------------------------------------------------------------------- | Total liabilities | 1,111,513 | 963,787 | 966,688 | -------------------------------------------------------------------------------- | Total shareholders' equity and | 1,560,908 | 1,395,794 | 1,402,340 | | liabilities | | | | -------------------------------------------------------------------------------- Changes in Consolidated Shareholders' Equity -------------------------------------------------------------------------------- | 1,000 EUR | Share | Share issue | Fair value | Trans- | | | capital | premium | reserves | lation | | | | | | diffe- | | | | | | rences | -------------------------------------------------------------------------------- | Shareholders´ | 81,384 | 24,525 | 0 | 28 | | equity 1.1.2007 | | | | | -------------------------------------------------------------------------------- | Cash flow | | | -2,838 | | | hedges | | | | | -------------------------------------------------------------------------------- | Translation | | | | 182 | | differences | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | reporting period | | | | | -------------------------------------------------------------------------------- | Total recognised | | | -2,838 | 182 | | income for the | | | | | | period | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -------------------------------------------------------------------------------- | Shareholders´ | 81,384 | 24,525 | -2,838 | 210 | | equity 30.9.2007 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1,000 EUR | Retained | Total | Minority | Total | | | earnings | | interest | equity | -------------------------------------------------------------------------------- | Shareholders´ | 315,791 | 421,728 | 2,028 | 423,757 | | equity | | | | | | 1.1.2007 | | | | | -------------------------------------------------------------------------------- | Cash flow | | -2,838 | | -2,838 | | hedges | | | | | -------------------------------------------------------------------------------- | Translation | | 182 | 3 | 185 | | differences | | | | | -------------------------------------------------------------------------------- | Profit for | 28,030 | 25,374 | 356 | 28,386 | | reporting period | | | | | -------------------------------------------------------------------------------- | Total | 28,030 | 25,374 | 359 | 25,733 | | recognised | | | | | | income for | | | | | | the period | | | | | -------------------------------------------------------------------------------- | Dividend | -17,091 | -17,091 | -392 | -17,483 | -------------------------------------------------------------------------------- | | -17,091 | -17,091 | -392 | -17,483 | -------------------------------------------------------------------------------- | Shareholders´ | 326,730 | 430,012 | 1,995 | 432,007 | | equity | | | | | | 30.9.2007 | | | | | -------------------------------------------------------------------------------- Changes in Consolidated Shareholders' Equity -------------------------------------------------------------------------------- | 1,000 EUR | Share | Share issue | Fair value | Trans- | | | capital | premium | reserves | lation | | | | | | diffe- | | | | | | rences | -------------------------------------------------------------------------------- | Shareholders´ | 81,384 | 24,525 | -4,544 | 152 | | equity 1.1.2008 | | | | | -------------------------------------------------------------------------------- | Cash flow hedges | | | -81 | | -------------------------------------------------------------------------------- | Translation | | | | 81 | | differences | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | reporting period | | | | | -------------------------------------------------------------------------------- | Total recognised | | | -81 | 81 | | income for the | | | | | | period | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders´ | 81,384 | 24,525 | -4,625 | 233 | | equity 30.9.2008 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1,000 EUR | Retained | Total | Minority | Total | | | earnings | | interest | equity | -------------------------------------------------------------------------------- | Shareholders´ | 332,601 | 434,118 | 1,534 | 435,652 | | equity | | | | | | 1.1.2008 | | | | | -------------------------------------------------------------------------------- | Cash flow hedges | | -81 | | -81 | -------------------------------------------------------------------------------- | Translation | | 81 | | 81 | | differences | | | | | -------------------------------------------------------------------------------- | Profit for | 13,914 | 13,914 | 476 | 14,390 | | reporting period | | | | | -------------------------------------------------------------------------------- | Total | 13,914 | 14,167 | 476 | 14,390 | | recognised | | | | | | income for | | | | | | the period | | | | | -------------------------------------------------------------------------------- | Dividend | -180 | -180 | -467 | -647 | -------------------------------------------------------------------------------- | | -180 | -180 | -467 | -647 | -------------------------------------------------------------------------------- | Shareholders´ | 346,335 | 447,852 | 1,543 | 449,395 | | equity | | | | | | 30.9.2008 | | | | | -------------------------------------------------------------------------------- Consolidated Cash Flow Statement -------------------------------------------------------------------------------- | 1,000 EUR | 1-9/08 | 1-9/07 | 1-12/07 | -------------------------------------------------------------------------------- | Cash flow from operations: | | | | -------------------------------------------------------------------------------- | Profit for reporting period | 14,390 | 28,386 | 34,393 | -------------------------------------------------------------------------------- | Adjustments: | | | | -------------------------------------------------------------------------------- | Non-cash transactions | 43,088 | 27,623 | 39,561 | -------------------------------------------------------------------------------- | Interest expense and other | 25,708 | 19,978 | 28,937 | | financial expenses | | | | -------------------------------------------------------------------------------- | Taxes | 2,099 | 7,544 | 5,725 | -------------------------------------------------------------------------------- | Changes in working capital: | | | | -------------------------------------------------------------------------------- | Change in accounts | -10,500 | -11,406 | 66 | | receivable and other | | | | | receivables | | | | -------------------------------------------------------------------------------- | Change in current assets | -1,206 | -709 | -1,496 | -------------------------------------------------------------------------------- | Change in accounts payable | -7,441 | 15,120 | 11,766 | | and other liabilities | | | | -------------------------------------------------------------------------------- | Change in provisions | 1,602 | 86 | 197 | -------------------------------------------------------------------------------- | Interest paid | -28,579 | -19,968 | -20,988 | -------------------------------------------------------------------------------- | Interest received | 1,026 | 1,020 | 1,397 | -------------------------------------------------------------------------------- | Taxes | -1,256 | -1,152 | -1,087 | -------------------------------------------------------------------------------- | Other financing items | -1,497 | -2,278 | -3,948 | -------------------------------------------------------------------------------- | Net cash flow from operations | 37,434 | 64,244 | 94,524 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from investing activities: | | | -------------------------------------------------------------------------------- | Investments in tangible and | -208,195 | -369,776 | -392,780 | | intangible assets | | | | -------------------------------------------------------------------------------- | Sale of tangible assets | 1,230 | 29,823 | 30,819 | -------------------------------------------------------------------------------- | Acquisition of subsidiaries | -194 | 200 | 200 | | Disposal of associated companies | | | | -------------------------------------------------------------------------------- | Proceed sale of investment | | 243 | 243 | -------------------------------------------------------------------------------- | Reduction in share capital, | | | -598 | | minority interest | | | | -------------------------------------------------------------------------------- | Dividends received | 6 | 3 | 16 | -------------------------------------------------------------------------------- | Net cash flow from investing | -207,153 | -339,507 | -362,099 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from financing activities: | | | -------------------------------------------------------------------------------- | Borrowing | 237,000 | 309,307 | 309,307 | -------------------------------------------------------------------------------- | Net change in current | -14,840 | 64,277 | 79,907 | | interest-bearing liabilities | | | | -------------------------------------------------------------------------------- | Repayment of loans | -60,715 | -81,663 | -96,440 | -------------------------------------------------------------------------------- | Increase / decrease of long-term | 352 | 383 | 770 | | receivables | | | | -------------------------------------------------------------------------------- | Dividends paid | -647 | -17,483 | -17,483 | -------------------------------------------------------------------------------- | Net cash flow from financing | 161,150 | 274,821 | 276,062 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -8,569 | -442 | 8,487 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 26,913 | 18,436 | 18,436 | | on 1 January | | | | -------------------------------------------------------------------------------- | Effect of foreign exchange rate | -5 | 3 | 10 | | changes | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents on | 18,339 | 17,998 | 26,913 | | September 30 / December 31 | | | | -------------------------------------------------------------------------------- REVENUE AND OPERATING RESULT BY BUSINESS SEGMENTS (PRIMARY SEGMENT) -------------------------------------------------------------------------------- | 1,000 EUR | 1-9/08 | % | 1-9/07 | % | 1-12/07 | % | -------------------------------------------------------------------------------- | Sales | | | | | | | -------------------------------------------------------------------------------- | Shipping and sea | 503,587 | 87,1 | 429,480 | 85.0 | 585,067 | 85.3 | | transport | | | | | | | -------------------------------------------------------------------------------- | Port operations | 96,557 | 16,7 | 100,396 | 19.9 | 133,155 | 19.4 | -------------------------------------------------------------------------------- | Eliminations | -22,246 | -3,8 | -24,466 | -4.8 | -32,758 | -4.8 | | (intragroup) | | | | | | | -------------------------------------------------------------------------------- | External sales | 577,898 | 100.0 | 505,410 | 100.0 | 685,464 | 100.0 | -------------------------------------------------------------------------------- | Operating profit | | | | | | | -------------------------------------------------------------------------------- | Shipping and sea | 42,255 | | 50,453 | | 61,653 | | | transport | | | | | | | -------------------------------------------------------------------------------- | Port operations | -166 | | 6,730 | | 7,163 | | -------------------------------------------------------------------------------- | Operating profit | 42,090 | | 57,183 | | 68,816 | | | total | | | | | | | -------------------------------------------------------------------------------- | Financial items | -25,601 | | -21,253 | | -28,698 | | -------------------------------------------------------------------------------- | Profit | 16,489 | | 35,930 | | 40,118 | | | before taxes | | | | | | | -------------------------------------------------------------------------------- | Income taxes | -2,099 | | -7,544 | | -5,725 | | -------------------------------------------------------------------------------- | Profit for | 14,390 | | 28,386 | | 34,393 | | | reporting period | | | | | | | | continuing | | | | | | | | operations | | | | | | | -------------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------------------------- | 1,000 EUR | 30/9/08 | 30/9/07 | 31/12/07 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Historical cost at the | 1,410,479 | 1,084,491 | 1,084,491 | | beginning of the period | | | | -------------------------------------------------------------------------------- | Translation differences | -408 | 159 | -8 | -------------------------------------------------------------------------------- | Additions | 204,206 | 367,004 | 389,559 | -------------------------------------------------------------------------------- | Disposals | -4,914 | -60,732 | -63,598 | -------------------------------------------------------------------------------- | Reclassifications | | | 19 | -------------------------------------------------------------------------------- | Historical cost at the end of | 1,609,363 | 1,390,923 | 1,410,479 | | the period | | | | -------------------------------------------------------------------------------- | Accumulated depreciation at | -269,319 | -264,926 | -264,926 | | the beginning of the period | | | | -------------------------------------------------------------------------------- | Translation differences | 234 | -108 | 11 | -------------------------------------------------------------------------------- | Cumulative depreciation on | 4,554 | 44,082 | 46,694 | | reclassifications and | | | | | disposals | | | | -------------------------------------------------------------------------------- | Depreciations | -42,476 | -37,612 | -51,098 | -------------------------------------------------------------------------------- | Accumulated depreciations at | -307,007 | -258,564 | -269,319 | | the end of the period | | | | -------------------------------------------------------------------------------- | Book value | 1,302,356 | 1,132,358 | 1,141,160 | -------------------------------------------------------------------------------- FINANCIAL INDICATORS -------------------------------------------------------------------------------- | | 1-9/08 | 1-9/07 | 1-12/07 | -------------------------------------------------------------------------------- | Operating profit as % of | 7.3 | 11.3 | 10.0 | | revenue | | | | -------------------------------------------------------------------------------- | ROE, % | 4.3 | 8.8 | 8.0 | -------------------------------------------------------------------------------- | ROI, % | 4.5 | 7.5 | 6.9 | -------------------------------------------------------------------------------- | Gearing, % | 199.4 | 170.9 | 167.4 | -------------------------------------------------------------------------------- | Gross capital | 204.2 | 368.3 | 391.3 | | expenditure, MEUR | | | | -------------------------------------------------------------------------------- | % of revenue | 35.3 | 72.9 | 57.1 | -------------------------------------------------------------------------------- | Equity ratio, % | 28.8 | 31.0 | 31.1 | -------------------------------------------------------------------------------- | Shareholders' equity/ | 11.01 | 10.57 | 10.67 | | share, EUR | | | | -------------------------------------------------------------------------------- | Number of shares during | 40,692 | 40,692 | 40,692 | | period, average (1000) | | | | -------------------------------------------------------------------------------- | Number of shares at | 40,692 | 40,692 | 40,692 | | end of period (1000) | | | | -------------------------------------------------------------------------------- | Market capitalisation, | 477.3 | 594.1 | 620.6 | | EUR million | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Average personnel | | | | -------------------------------------------------------------------------------- | Shore-based personnel | 1,496 | 1,478 | 1,470 | -------------------------------------------------------------------------------- | Sea-borne personnel | 965 | 862 | 865 | -------------------------------------------------------------------------------- | Personnel total | 2,461 | 2,340 | 2,335 | -------------------------------------------------------------------------------- Financial ratios have been calculated according to the same principles as in financial statements 2007. -------------------------------------------------------------------------------- | CONTINGENCIES AND COMMITMENTS | 30/9/08 | 30/9/07 | 31/12/07 | -------------------------------------------------------------------------------- | 1,000 EUR | | | | -------------------------------------------------------------------------------- | Vessel hires | | | | -------------------------------------------------------------------------------- | Within 12 months | 68,459 | 89,821 | 89,899 | -------------------------------------------------------------------------------- | Between one and five years | 98,745 | 67,105 | 51,614 | -------------------------------------------------------------------------------- | After five years | 0 | 0 | 0 | -------------------------------------------------------------------------------- | | 167,204 | 156,926 | 141,513 | -------------------------------------------------------------------------------- | Other leases | | | | -------------------------------------------------------------------------------- | Within 12 months | 7,172 | 5,278 | 5,673 | -------------------------------------------------------------------------------- | Between one and five years | 22,111 | 11,955 | 21,537 | -------------------------------------------------------------------------------- | After five years | 38,925 | 8,462 | 42,689 | -------------------------------------------------------------------------------- | | 68,208 | 25,695 | 69,899 | -------------------------------------------------------------------------------- Collateral given: Borrowings secured by given mortgages -------------------------------------------------------------------------------- | Loans from financial | 670,181 | 540,681 | 531,461 | | institutions | | | | -------------------------------------------------------------------------------- | Vessel mortgages provided as | 843,500 | 723,500 | 723,500 | | guarantees for the above loans | | | | -------------------------------------------------------------------------------- Other guarantees given on behalf of the Group: -------------------------------------------------------------------------------- | Collateral | 1,675 | 2,518 | 2,517 | -------------------------------------------------------------------------------- | Mortgages | 606 | 606 | 606 | -------------------------------------------------------------------------------- Other guarantees given on behalf of the others: -------------------------------------------------------------------------------- | Collateral | 0 | 1,027 | 1,200 | -------------------------------------------------------------------------------- | Mortgages | 0 | 431 | | -------------------------------------------------------------------------------- Other commitments given by group on behalf of subsidiaries: -------------------------------------------------------------------------------- | Commitments | 6,000 | 6,000 | 6,000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Obligations for capital | 137,488 | 211,319 | 197,137 | | expenditure | | | | -------------------------------------------------------------------------------- | Other obligations | 84 | 107 | 101 | -------------------------------------------------------------------------------- Open derivative instruments: -------------------------------------------------------------------------------- | 1,000 EUR | 30/9/0 | 30/9/0 | 31/12/07 | 30/9/08 | 30/9/07 | 31/12/07 | | | 8 | 7 | | | | | -------------------------------------------------------------------------------- | | Fair value | Contract amount | -------------------------------------------------------------------------------- | Currency | -270 | -2,495 | -3,845 | 20,555 | 86,325 | 64,126 | | forwards | | | | | | | -------------------------------------------------------------------------------- | Interest rate | 146 | -513 | -327 | 120,000 | 120,000 | 120,000 | | swaps | | | | | | | -------------------------------------------------------------------------------- Contingent liabilities Finnsteve's Leasehold Agreement: When the new Vuosaari harbour is operational, Finnsteve Oy will transfer its port operations from Helsinki's West Harbour and North Harbour to Vuosaari. Finnsteve and the Port of Helsinki have made a leasehold agreement, which obliges the leaseholder to dismantle and remove any buildings, plants and equipment (including foundations) located in the area. The extent of the liabilities arising from this depends on future town planning and is therefore difficult to estimate. According to the managements present estimate, it is not material, however. REVENUE AND OPERATING RESULT BY QUARTER -------------------------------------------------------------------------------- | MEUR | Q1/08 | Q1/07 | Q2/08 | Q2/07 | Q3/08 | Q3/07 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shipping and sea | 160.0 | 132.5 | 173.4 | 146.4 | 170.2 | 150.6 | | transport | | | | | | | -------------------------------------------------------------------------------- | Port operations | 32.4 | 33.3 | 33.5 | 33.5 | 30.7 | 33.5 | -------------------------------------------------------------------------------- | Eliminations | -7.3 | -8.4 | -7.9 | -8.5 | -7.0 | -7.6 | | (intragroup) | | | | | | | -------------------------------------------------------------------------------- | External sales | 185.1 | 157.4 | 199.0 | 171.4 | 193.8 | 176.5 | -------------------------------------------------------------------------------- | Operating profit | | | | | | | -------------------------------------------------------------------------------- | Shipping and sea | 12.7 | 11.0 | 17.5 | 14.9 | 12.0 | 24.5 | | transport | | | | | | | -------------------------------------------------------------------------------- | Port operations | 1.3 | 2.5 | 0.0 | 2.0 | -1.4 | 2.2 | -------------------------------------------------------------------------------- | Operating profit | 14.0 | 13.5 | 17.5 | 16.9 | 10.6 | 26.7 | | total | | | | | | | -------------------------------------------------------------------------------- | Financial items | -8.5 | -5.2 | -6.8 | -6.7 | -10.3 | -9.4 | -------------------------------------------------------------------------------- | Profit | 5.5 | 8.3 | 10.7 | 10.2 | 0.3 | 17.3 | | before taxes | | | | | | | -------------------------------------------------------------------------------- | Income taxes | -1.0 | -1.7 | -1.8 | -2.2 | 0.7 | -3.6 | -------------------------------------------------------------------------------- | Profit for the | 4.6 | 6.6 | 8.9 | 8.1 | 0.9 | 13.7 | | reporting period | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EPS (undiluted) | 0.11 | 0.16 | 0.22 | 0.20 | 0.02 | 0.33 | -------------------------------------------------------------------------------- | EPS (diluted) | 0.11 | 0.16 | 0.22 | 0.20 | 0.02 | 0.33 | -------------------------------------------------------------------------------- Related Party Transactions There were no material related party transactions during the reporting period. Reporting The interim report includes a summary of the financial statements for the period in accordance with the IAS 34. The accounting principles are the same as in the financial statements of 2007. This interim report is unaudited.