Tallinn, 2016-04-27 08:50 CEST (GLOBE NEWSWIRE) -- AS Tallink Grupp Audited Annual Report of the 2015 Financial Year
In the 2015 financial year the Group carried a total of 9.0 million passengers which is 1.1% more compared to the year before. The Group’s revenue increased by 2.6% to all-time high of EUR 945.2 million (EUR 921.5 million in 2014) and EBITDA increased by 20.5% to a record EUR 181.4 million (EUR 150.6 million in 2014). Net profit more than doubled compared to last year and amounted to EUR 59.1 million (EUR 27.3 million in 2014) or EUR 0.09 per share (EUR 0.04 in 2014). The cash flow from operating activities increased by EUR 41.2 million and totalled to EUR 191.9 million. The increase in the Group’s results is mainly attributed to the growth in passenger number, higher on-board revenue per passenger, higher charter revenue and lower operating costs. The results improved in all geographical segments compared to the previous financial year.
In 2015 financial year the proactive marketing and sales activities led to an increase of the passenger number. The number of passengers traveling with the Tallink and Silja Line branded ships grew steadily in most of the operated routes and the Group regained market share from the direct competition. On Tallinn-Helsinki route all time high number of 4.7 million passengers travelled with the Group’s vessels during the year. Tallink and Enterprise Estonia joint campaign “Epic Estonia” targeting Swedish market was recognised as the „Best marketing campaign of the year“ in Estonia, it is biggest ever Estonian campaign made in collaboration of public and private sector organizations.
More passengers with higher average on-board sales per passenger resulted in increase of shop and restaurant sales. The on-board sales growth was achieved thanks to the Group’s continuous focus on development of the product offering and expansion of the shops and restaurants in the vessels. The large scale investments to the vessels Silja Symphony and Silja Serenade shops, restaurants and cabins in the previous financial year showed positive impact on the earnings in 2015 by attracting more passengers and increasing on-board sales per passenger. In 2015 the Group continued with the updates of the public areas and introduced new concepts in number of vessels, also the existing successful shop and restaurant concepts are expanded to more vessels. The modernisation program is extended over several years and the Group will continue to update the shops, restaurants and cabins in selected vessels to develop and improve the product offering. In 2015 the Group took the next step and entered into partnership with world known fast food brand BURGER KING®. The world’s first floating BURGER KING® restaurant on Tallink Shuttle ferry Star opened in January 2016.
The charter revenue increased compared to the previous period as more vessels were chartered out in 2015. Two of the chartered out vessels Silja Festival and Regina Baltica were sold in the first half of financial year 2015. Three Superfast ferries remain chartered out. Cruise ferry Silja Europa returned from charter to Tallinn-Helsinki route on March 2016.
The Group signed a contract with Meyer Turku Oy in February 2015 for the construction of its new EUR 230 million LNG powered fast ferry. The production of the new LNG fast ferry started on the 4th of August 2015 at Meyer Turku shipyard and the delivery of the vessel is planned in the beginning of 2017. In order to be ready for the delivery of the new generation LNG fast ferry to the Tallinn-Helsinki route Shuttle service early 2017, the Group decided to sell and charter back the fast ferry Superstar. The ownership of the vessel was transferred to the buyer in December 2015. The Group continues to operate the vessel under the charter agreement until the beginning of 2017, when the new LNG fast ferry will start to operate on Tallinn-Helsinki route Shuttle service.
In 2015 financial year the lower energy prices globally enabled smooth adoption to the more environmental friendly low sulphur fuel and the previously highlighted risk of increasing fuel cost did not materialise. Following the market prices the Group’s average fuel price in 2015 was 5% lower compared to 2014. The total annual fuel consumption reduced by 13%, the saving is attributed to optimisations in vessel operations and changes in the fleet. Lower total fuel consumption and price resulted in EUR 20 million less fuel cost compared to previous year.
Following the Group’s strategy to ensure cost efficient operations, the Tallink Logistics Center project was started and one of the most modern logistics centres in the region was launched in January 2016. The Group operated logistics centre will consolidate the logistics of the goods and will be the single hub for distribution of majority of the goods for the fleet, hotels and offices. In addition, the Group is in final phase with the implementation of its new enterprise resource planning system. The system improves the Groups resource management capacity and enables further efficiencies in operations and support functions.
The key highlights of the 2015 financial year were the following:
- Record revenue and EBITDA result, net profit more than doubled
- All time high passenger number on Tallinn-Helsinki route
- Positive effect from charters and re-routings
- Positive feedback from upgraded vessels
- Adoption to the new EU Sulphur Directive
- Lower fuel price and lower total fuel consumption
- Sale of vessels Silja Festival and Regina Baltica
- Start of production of the new generation LNG powered fast ferry
- Sale and charter-back of fast ferry Superstar
KEY FIGURES OF THE FINANCIAL YEAR 2015
| 2015 | 2014 | Change | |
| EUR | EUR | % | |
| Revenue (million) | 945.2 | 921.5 | 2.6% |
| Gross profit (million) | 223.4 | 181.7 | 23.0% |
| Net profit for the period (million) | 59.1 | 27.3 | 116.7% |
| EBITDA (million) | 181.4 | 150.6 | 20.5% |
| Depreciation and amortisation (million) | 78.1 | 79.9 | -2.3% |
| Investments (million) | 43.6 | 49.1 | -11.2% |
| Weighted average number of ordinary shares outstanding1 | 669,882,040 | 669,882,040 | 0% |
| Earnings per share | 0.088 | 0.041 | 116.7% |
| Number of passengers | 8,976,226 | 8,881,732 | 1.1% |
| Number of cargo units | 308,029 | 310,492 | -0.8% |
| Average number of employees | 6,835 | 6,952 | -1.7% |
| 31.12.2015 | 31.12.2014 | ||
| Total assets (million) | 1,538.8 | 1,685.6 | -8.8% |
| Total liabilities (million) | 714.3 | 907.3 | -21.3% |
| Interest-bearing liabilities (million) | 549.3 | 743.4 | -26.1% |
| Net debt (million) | 467.3 | 678.1 | -31.1% |
| Total equity (million) | 824.4 | 778.3 | 5.9% |
| Equity ratio (%) | 53.6% | 46.2% | |
| Number of ordinary shares outstanding1 | 669,882,040 | 669,882,040 | 0% |
| Shareholders’ equity per share | 1.23 | 1.16 | 6.0% |
| Ratios | |||
| Gross margin (%) | 23.6% | 19.7% | |
| EBITDA margin (%) | 19.2% | 16.3% | |
| Net profit margin (%) | 6.3% | 3.0% | |
| Return on assets (ROA) | 6.3% | 4.1% | |
| Return on equity (ROE) | 7.4% | 3.6% | |
| Return on capital employed (ROCE) | 7.7% | 5.0% | |
| Net debt to EBITDA | 2.6 | 4.5 | -42.2% |
EBITDA: Earnings before net financial items, share of profit of equity accounted investees, taxes, depreciation and amortisation
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
ROA: Earnings before net financial items, taxes /Average total assets
ROE: Net profit/Average shareholders’ equity
ROCE: Earnings before net financial items, taxes / (Total assets – Current liabilities (average for the period))
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.
SALES
The Group’s consolidated revenue amounted to EUR 945.2 million in 2015 (921.5 million in 2014). Restaurant and shop sales on-board and on mainland of EUR 500.6 million (487.6 million in 2014) contributed more than half of total revenue. Ticket sales amounted to EUR 228.0 million (230.5 million in 2014) and sales of cargo transport to EUR 104.4 million (103.1 million in 2014).
The revenue growth 2.6% was driven by higher restaurant and shop sales and charter revenues. The restaurant and shop sales increase 2.7% or EUR 13.1 million was supported by higher passenger number and also higher on-board sales per passenger. The charter revenues increased by 13.6% or EUR 6.4 million and the cargo revenues by 1.3% compared to 2014. Marketing and sales activities led to an increase of passenger number and resulted in lower ticket revenue per passenger, the total ticket revenue declined by 1.1%.
Geographically, 35.8% or EUR 338.2 million of revenue came from the Estonia-Finland route and 35.3% or EUR 333.3 million from the Finland-Sweden route. Revenue from the Sweden-Estonia route was EUR 104.3 million or 11.0% and from the Sweden-Latvia route EUR 42.0 million or 4.4%. The share of revenue generated by other geographical segments increased to 13.5% (EUR 127.4 million).
EARNINGS
Gross profit was EUR 223.4 million (EUR 181.7 million in 2014), EBITDA EUR 181.4 million (EUR 150.6 million in 2014). Net profit for 2015 was EUR 59.1 million (EUR 27.3 million in 2014). Basic and diluted earnings per share were EUR 0.088 (EUR 0.041 in 2014).
The cost of goods related to sales at shops and restaurants, which is the largest operating cost item, amounted to EUR 215.4 million (EUR 211.2 million in 2014).
Fuel cost for 2015 was EUR 94.2 million (EUR 114.0 million in 2014). Fuel cost was impacted by lower fuel price levels throughout the year. Measured in euros, in 2015 the Group’s average fuel price was approximately 5% lower than in the 2014 calendar year. Combined with one vessel less in Riga-Stockholm route and savings from more efficient vessel operations, the total annual fuel cost reduced by 17%.
The Group’s personnel expenses amounted to EUR 193.8 million (EUR 189.8 million in 2014). The average number of employees in the 2015 financial year was 6,835 (6,952 in 2014).
Administrative expenses for 2015 amounted to EUR 47.3 million, and sales and marketing expenses to EUR 63.6 million (EUR 49.2 million and 62.7 million respectively in 2014).
Depreciation and amortisation of the Group’s assets was EUR 78.1 million (EUR 79.9 million in 2014). There were no impairment losses related to the Group’s property, plant, equipment and intangible assets.
The Group’s net finance costs for 2015 amounted to EUR 34.2 million (EUR 40.7 million in 2014).
The Group’s exposure to credit risk, liquidity risk and market risks, and its financial risk management activities are described in the notes to the financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| In thousands of EUR | ||||
|
2015 |
2014 |
|||
| Revenue | 945,203 | 921,466 | ||
| Cost of sales | -721,780 | -739,789 | ||
| Gross profit | 223,423 | 181,677 | ||
| Sales and marketing expenses | -63,578 | -62,654 | ||
| Administrative expenses | -47,311 | -49,211 | ||
| Other operating income | 983 | 1,696 | ||
| Other operating expenses | -10,254 | -854 | ||
| Result from operating activities | 103,263 | 70,654 | ||
| Finance income | 12,808 | 11,760 | ||
| Finance costs | -46,964 | -52,443 | ||
| Share of profit of equity-accounted investees | 64 | 24 | ||
| Profit before income tax | 69,171 | 29,995 | ||
| Income tax | -10,101 | -2,734 | ||
| Net profit for the year | 59,070 | 27,261 | ||
| Other comprehensive income | ||||
| Items that may be reclassified to profit or loss | ||||
| Exchange differences on translating foreign operations | 160 | 286 | ||
| Other comprehensive income for the year | 160 | 286 | ||
| Total comprehensive income for the year | 59,230 | 27,547 | ||
|
Basic and diluted earnings per share (in EUR per share) |
0.088 | 0.041 | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| In thousands of EUR | ||
| As at 31 December |
2015 |
2014 restated |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 81,976 | 65,311 |
| Trade and other receivables | 36,583 | 38,210 |
| Prepayments | 5,274 | 3,798 |
| Income tax prepayment | 1,224 | 1,650 |
| Inventories | 29,197 | 31,315 |
| 154,254 | 140,284 | |
| Non-current assets | ||
| Investments in equity-accounted investees | 350 | 286 |
| Other financial assets | 308 | 252 |
| Deferred income tax assets | 19,410 | 21,338 |
| Investment property | 300 | 300 |
| Property, plant and equipment | 1,311,418 | 1,467,964 |
| Intangible assets | 52,726 | 55,174 |
| 1,384,512 | 1,545,314 | |
| TOTAL ASSETS | 1,538,766 | 1,685,598 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Interest-bearing loans and borrowings | 81,889 | 149,850 |
| Trade and other payables | 88,480 | 91,236 |
| Income tax liability | 4,567 | 1,300 |
| Deferred income | 28,906 | 29,408 |
| 203,842 | 271,794 | |
| Non-current liabilities | ||
| Interest-bearing loans and borrowings | 467,447 | 593,532 |
| Derivatives | 42,863 | 41,982 |
| Other liabilities | 192 | 0 |
| 510,502 | 635,514 | |
| Total liabilities | 714,344 | 907,308 |
| Equity | ||
| Equity attributable to equity holders of the Parent | ||
| Share capital | 404,290 | 404,290 |
| Share premium | 639 | 639 |
| Reserves | 65,083 | 70,129 |
| Retained earnings | 354,410 | 303,232 |
| Total equity attributable to equity holders of the Parent | 824,422 | 778,290 |
| Total equity | 824,422 | 778,290 |
| TOTAL LIABILITIES AND EQUITY | 1,538,766 | 1,685,598 |
CONSOLIDATED STATEMENT OF CASH FLOWS
| For the year ended 31 December | In thousands of EUR | |
| 2015 | 2014 | |
| Cash flows from operating activities | ||
| Net profit for the period | 59,070 | 27,261 |
| Adjustments for: | ||
| Depreciation and amortisation | 78,102 | 79,908 |
| Net gain/loss on disposals of property, plant and equipment | 9,164 | -76 |
| Net interest expense | 36,099 | 35,336 |
| Net expense from derivatives | 4,926 | 15,758 |
| Gain on disposal of financial assets | -186 | 0 |
| Profit from equity-accounted investees | -64 | -24 |
| Net unrealised foreign exchange gain | -5,591 | -7,783 |
| Share option programme reserve | 300 | -224 |
| Income tax | 10,101 | 2,734 |
| 132,851 | 125,629 | |
| Changes in: | ||
| Receivables and prepayments related to operating activities | 1,463 | -2,291 |
| Inventories | 2,118 | 2,142 |
| Liabilities related to operating activities | -4,139 | -2,103 |
|
Cash generated from operating activities |
191,363 | 150,638 |
| Income tax paid | 553 | 71 |
| 191,916 | 150,709 | |
| Cash flows from/used in investing activities | ||
| Purchase of property, plant, equipment and intangible assets | -43,629 | -49,148 |
| Proceeds from disposals of property, plant, equipment | 115,370 | 215 |
| Proceeds from other financial assets | 229 | 0 |
| Interest received | 74 | 140 |
| 72,044 | -48,793 | |
| Cash flows used in financing activities | ||
| Repayment of loans | -133,263 | -89,842 |
| Change in overdraft | -59,052 | 43,993 |
| Payments for settlement of derivatives | -4,045 | -3,985 |
| Payment of finance lease liabilities | -80 | -75 |
| Interest paid | -33,210 | -33,270 |
| Payment of transaction costs related to loans | -1,429 | 0 |
| Dividends paid | -13,398 | -20,096 |
| Income tax on dividends paid | -2,818 | -5,342 |
| -247,295 | -108,617 | |
| TOTAL NET CASH FLOW | 16,665 | -6,701 |
| Cash and cash equivalents: | ||
| - at the beginning of period | 65,311 | 72,012 |
| - increase / decrease | 16,665 | -6,701 |
| - at the end of period | 81,976 | 65,311 |
Janek Stalmeister
Chairman of the Management Board
AS Tallink Grupp
Tel +372 640 9800
E-mail janek.stalmeister@tallink.ee
Veiko Haavapuu
Finance Director
AS Tallink Grupp
Sadama 5/7, 10111 Tallinn
Tel. +372 640 9914
E-mail veiko.haavapuu@tallink.ee
