In the third quarter and 9 months of 2018, the volumes of cargo handled and the number of passengers served by AS Tallinna Sadam (hereafter: “the Group”) increased as did the Group’s revenue and adjusted EBITDA. Revenue amounted to EUR 38.9 million in the third quarter and EUR 101.1 million in the 9 months in total. The adjusted EBITDA increased 40% to EUR 24.0 million in the third quarter, the profit increased by EUR 6.6 million year-on-year.
The results of the third quarter were mainly driven by the following:
- Substantial increase of the liquid bulk volumes and revenue
- In the ferry segment an additional ferry in the summer period on Saaremaa line
- Additional revenue from the M/V Botnica ice management and escort service chartering agreement starting from the end of June.
Key figures (in million EUR):
| Q3 | Q3 | +/- | 9 months | 9 months | +/- | |
| 2018 | 2017 | 2018 | 2017 | |||
| Revenue | 38.9 | 32.7 | 19.0% | 101.1 | 94.2 | 7.3% |
| Adjusted EBITDA | 24.0 | 17.2 | 39.7% | 59.7 | 53.7 | 11.2% |
| Adjusted EBITDA margin | 61.7% | 52.6% | 9.1 | 59.1% | 57.0% | 2.1 |
| Operating profit | 18.1 | 11.8 | 54.0% | 43.1 | 38.7 | 11.2% |
| Income tax | 0 | 0 | - | -26.3 | -12.0 | 118.8% |
| Profit for the period | 18.1 | 11.4 | 57.9% | 15.8 | 25.4 | -37.8% |
| Investments | 2.9 | 4.9 | -40.6% | 8.1 | 29.5 | -72.4% |
| 30.09.2018 | 31.12.2017 | +/- | |
| Total assets | 647.1 | 597.1 | 8.4% |
| Interest bearing debt | 225.4 | 235.6 | -4.3% |
| Other liabilities | 62.6 | 35.7 | 75.4% |
| Equity | 359.1 | 325.8 | 10.2% |
| Number of shares | 263.0 | 185.2 | 42.0% |
Revenue
In the third quarter, revenue grew by EUR 6.2 million, i.e. 19%, generating most of the revenue growth in 9 months, which grew by EUR 6.9 million, i.e. 7% year-on-year, to EUR 101.1 million. In the third quarter there was revenue growth in all business segments, of which the most in the segment “other” (by EUR 2.9 million, i.e. 70% y-o-y) due to start of the summer season and began providing escort and ice management services in northern Canada from the end of June.
In the ferry segment the revenue grew in the third quarter by EUR 2.5 million, i.e. 13% year-on-year, mainly due to additional trips and the ferry put on the route for the high-season in summer.
In the cargo harbours’ segment, the revenue increased, mainly due to significant growth in the volume of liquid bulk cargo in the third quarter, increasing the segment’s 9-month revenue by EUR 1.5 million, i.e. 16%.
In the passenger harbours’ segment the increase of revenue was caused by the growth in passenger numbers, which was mainly supported by the increase of cruise revenue.
EBITDA
In the third quarter, the adjusted EBITDA amounted to EUR 24 million, growing by EUR 6.8 million i.e. 40% year-on-year. In 9 months the adjusted EBITDA grew by EUR 6 million and totaled up to EUR 59.7 million. Based on the segments, the 9-months adjusted EBITDA increased in the ferry segment and the segment ‘other’ and decreased in the passenger harbours segment and cargo harbours segment. Adjusted EBITDA for the third quarter improved in all segments; growth was the strongest in the ferry segment and the segment ‘other’. The adjusted EBITDA margin for the first 9 months rose expectedly from 26.6% to 43.2% in the ferry segment, from 43.8% to 60.8% in the segment ‘other’ and decreased slightly in other segments, which resulted a rise in the Group’s overall margin from 57.0% to 59.1%.
Net profit
Net profit returned to growth in the third quarter due to the revenue increase, growing by EUR 6.6 million, or 58% year-on-year, amounting to EUR 18.1 million. In connection with the declaration of a record dividend of EUR 105 million in the second quarter of 2018 compared with EUR 48 million in 2017, income tax expense increased by EUR 14.3 million to EUR 26.3 million, which resulted in a profit of EUR 15.8 million for the 9 months, showing a decrease of EUR 9.6 million compared to the profit earned in the comparative period. According to the management estimates, the Group shall achieve the profit target set for the 2018 and there will be no deviations from the dividend policy.
Investments
Investments made in the third quarter totaled EUR 2.9 million, in 9 months the Group made investments of EUR 8.1 million. In the 9 months of 2017, the investments totaled EUR 29.5 million of which around EUR 20 million was related to the construction of new ferries. In the 9 months of 2018, the largest investments were made in the reconstruction of traffic areas and the implementation of automated traffic control systems at the Old City Harbour (Smart Port), the dry docking of M/V Botnica which is carried out every five years and the start of terminal D reconstruction works.
Interim condensed consolidated statement of financial position:
| In thousands of euros | 30 September 2018 | 31 December 2017 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 62,211 | 6,954 |
| Trade and other receivables | 8,892 | 9,271 |
| Contract assets | 723 | 0 |
| Inventories | 322 | 301 |
| Total current assets | 72,148 | 16,526 |
| Non-current assets | ||
| Investments in associates | 1,587 | 1,256 |
| Other long-term receivables | 235 | 272 |
| Property, plant and equipment | 571,064 | 577,125 |
| Intangible assets | 2,018 | 1,958 |
| Total non-current assets | 574,904 | 580,611 |
| Total assets | 647,052 | 597,137 |
| LIABILITIES | ||
| Current liabilities | ||
| Loans and borrowings | 18,166 | 21,989 |
| Derivative financial instruments | 417 | 609 |
| Payables to owners | 20,000 | 0 |
| Provisions | 1,358 | 1,503 |
| Government grants | 326 | 303 |
| Taxes payable | 1,512 | 698 |
| Trade and other payables | 12,343 | 7,777 |
| Contract liabilities | 2,130 | 33 |
| Total current liabilities | 56,252 | 32,912 |
| Non-current liabilities | ||
| Loans and borrowings | 207,228 | 213,611 |
| Government grants | 23,468 | 23,826 |
| Other payables | 73 | 64 |
| Contract liabilities | 950 | 932 |
| Total non-current liabilities | 231,719 | 238,433 |
| Total liabilities | 287,971 | 271,345 |
| EQUITY | ||
| Share capital at par value | 263,000 | 185,203 |
| Share premium | 44,477 | 0 |
| Statutory capital reserve | 18,520 | 18,520 |
| Hedge reserve | -417 | -609 |
| Retained earnings | 33,501 | 122,678 |
| Total equity | 359,081 | 325,792 |
| Total liabilities and equity | 647,052 | 597,137 |
Interim condensed consolidated statement of profit or loss:
| In thousands of euros | Q3 2018 | Q3 2017 | 9 months 2018 | 9 months 2017 |
| Revenue | 38,897 | 32,694 | 101,063 | 94,206 |
| Other income | 215 | 441 | 659 | 4,576 |
| Operating expenses | -10,426 | -11,582 | -28,013 | -31,692 |
| Personnel expenses | -4,941 | -4,455 | -13,912 | -12,994 |
| Depreciation, amortisation and impairment | -5,567 | -5,307 | -16,516 | -15,033 |
| Other expenses | -65 | -33 | -217 | -323 |
| Operating profit | 18,113 | 11,758 | 43,064 | 38,740 |
| Finance income and costs | ||||
| Finance income | 5 | 5 | 13 | 23 |
| Finance costs | -501 | -611 | -1,539 | -1,699 |
| Finance costs - net | -496 | -606 | -1,526 | -1,676 |
| Share of profit of an associate accounted for under the equity method | 461 | 296 | 535 | 372 |
| Profit before income tax | 18,078 | 11,448 | 42,073 | 37,436 |
| Income tax | 0 | 0 | -26,250 | -12,000 |
| Profit for the period | 18,078 | 11,448 | 15,823 | 25,436 |
| Attributable to owners of the Parent | 18,078 | 11,448 | 15,823 | 25,436 |
| Basic and diluted earnings per share (in euros) | 0.07 | 0.06 | 0.07 | 0.14 |
| Basic and diluted earnings per share - continuing operations (in euros) | 0.07 | 0.06 | 0.07 | 0.14 |
Interim condensed consolidated statement of cash flows:
| In thousands of euros | 9 months 2018 | 9 months 2017 |
| Cash receipts from sale of goods and services | 108,685 | 101,438 |
| Cash receipts related to other income | 62 | 436 |
| Payments to suppliers | -33,466 | -35,849 |
| Payments to and on behalf of employees | -12,364 | -11,460 |
| Payments for other expenses | -293 | -711 |
| Income tax paid on dividends | -21,405 | -8,657 |
| Cash from operating activities | 41,219 | 45,197 |
| Purchases of property, plant and equipment | -8,388 | -19,887 |
| Purchases of intangible assets | -509 | -524 |
| Proceeds from sale of property, plant and equipment | 6 | 500 |
| Government grants received | 0 | 349 |
| Dividends received | 0 | 178 |
| Interest received | 3 | 14 |
| Cash used in investing activities | -8,888 | -19,370 |
| Contributions to share capital | 119,882 | 0 |
| Redemption of debt securities | -1,250 | -1,250 |
| Repayments of loans received | -6,383 | -6,383 |
| Change in overdraft (liability) | -2,566 | 0 |
| Repayments of finance lease principal | -7 | -2 |
| Dividends paid | -85,000 | 0 |
| Interest paid | -1,704 | -2,004 |
| Other payments related to financing activities | -46 | 0 |
| Cash from/used in financing activities | 22,926 | -9,639 |
| NET CASH FLOW | 55,257 | 16,188 |
| Cash and cash equivalents at beginning of the period | 6,954 | 49,918 |
| Change in cash and cash equivalents | 55,257 | 16,188 |
| Cash and cash equivalents at end of the period | 62,211 | 66,106 |
Tallinna Sadam is one of the largest cargo- and passenger port complexes in the Baltic Sea region, which in 2017 serviced 10.6 million passengers and 19.2 million tons of cargo. In addition to passenger and freight services, Tallinna Sadam group also operates in shipping business via its subsidiaries – OÜ TS Laevad provides ferry services between the Estonian mainland and the largest islands, and OÜ TS Shipping charters its multifunctional vessel m/v Botnica for icebreaking and construction services in Estonia and offshore projects abroad. Tallinna Sadam group is also a shareholder of an associate AS Green Marine, which provides waste management services. Tallinna Sadam group's sales in 2017 totaled EUR 121.3 million, adjusted EBITDA EUR 66.5 million and net profit EUR 26.4 million.
Additional information:
Marko Raid
CFO, Member of the Management Board
Additional information:
Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
m.zirel@ts.ee
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