In the first 9 months of 2019, the Group’s key performance indicators moved in different directions but, through their combined effect, revenue and profit figures for Q3 and 9 months did not change significantly. In the third quarter, the Group’s revenue was EUR 39.2 million (0.7% y-o-y), adjusted EBITDA was EUR 23.7 million (-1.1% y-o-y) and net profit was EUR 17.7 million (-1.8% y-o-y).
According to Marko Raid, CFO of Tallinna Sadam, Q3 results were affected by a sharp decline in cargo volume due to liquid bulk, but on the other hand by an increase in the number of ship calls and a longer summer season charter period of the icebreaker Botnica in Canada. The volume of dry bulk cargo also increased rapidly, which somewhat mitigated the decline in overall cargo volume caused by the drop in liquid cargo. “In the third quarter, the number of passengers increased mainly due to the Tallinn-Helsinki and Muuga-Vuosaari routes. At the end of June, Eckerö Line started operating on the Muuga-Vuosaari route with its vessel MS Finbo Cargo, which serves both trucks and passengers with cars and in addition, Tallink also started to serve passengers with cars on this route with its vessel Sea Wind. The high occupancy rate of the vessels shows that the route has been properly launched and that passengers with cars also appreciate the lower cost alternative to avoid city center congestion when travelling between Estonia and Finland,” said Raid.
The highest growth in revenue and profitability was generated by the icebreaker Botnica due to increase in the number of charter days for summer season and the largest decline was in the Cargo harbours segment, mostly attributable to lower liquid cargo volumes, which led to decrease in revenue from vessel dues.
In the first 9 months, the Group generated EUR 100.5 million revenue and EUR 35.9 million net profit. Revenue and adjusted EBITDA remained at the comparable level with the previous year, decreasing by -0.5% and -0.4% respectively. The strong growth in net profit in 9 months year-on-year was due to EUR 20.5 million lower dividend income tax expense in 2019.
In the third quarter, the investments also increased compared to the same period last year due to the reconstruction of the passenger terminal D, dredging works at the Paldiski South Harbour and the co-financing of the construction of Reidi road at the Old City Harbour.
The Management Board estimates that Tallinna Sadam will achieve the profit target set for 2019, and there will be no deviations from the dividend policy to pay at least EUR 30 million dividends in 2020.
Tallinna Sadam will present the financial results of the Group at a webinar on 15 November at 11:00, to attend, please register here. The webinar will be held in English.
Key figures (in million EUR):
| Q3 | Q3 | +/- | 9 months | 9 months | +/- | ||||
| 2019 | 2018 | 2019 | 2018 | ||||||
| Revenue | 39.2 | 38.9 | 0.7% | 100.5 | 101.1 | -0.5% | |||
| Adjusted EBITDA | 23.7 | 24.0 | -1.1% | 59.5 | 59.7 | -0.4% | |||
| Adjusted EBITDA margin | 60.6% | 61.7% | -1.1 | 59.1% | 59.1% | 0.0 | |||
| Operating profit | 17.9 | 18.1 | -1.4% | 42.6 | 43.1 | -1.1% | |||
| Income tax | 0 | 0 | - | -5.8 | -26.3 | -78.0% | |||
| Profit for the period | 17.7 | 18.1 | -1.8% | 35.9 | 15.8 | 127.2% | |||
| Investments | 7.7 | 2.9 | 164.0% | 18.8 | 8.1 | 131.6% | |||
| 30.09.2019 | 31.12.2018 | +/- | |||||||
| Total assets | 616.2 | 623.6 | -1.2% | ||||||
| Net debt | 178.3 | 171.0 | 4.2% | ||||||
| Equity | 368.5 | 367.7 | 0.2% | ||||||
| Number of shares | 263.0 | 263.0 | 0.0% | ||||||
Revenue
Revenue for the 9 months of 2019 decreased by EUR 0.5 million (-0.5% y-o-y) and was EUR 100.5 million. The decline is mostly attributable to the decline in liquid cargo volume and the decline in the number of ship calls during the first quarter due to planned repairs of passenger ships. Revenue increased from general and dry bulk vessels, through growth in cargo volumes, and passenger vessels, where an additional ROPAX type vessel started operating on the Muuga-Vuosaari line at the end of the second quarter. In terms of segments, nine-month revenue grew in the Ferry segment and the segment Other but declined in the Passenger harbours and Cargo harbours segments.
Passenger harbours revenue increased in Q3 but decreased in 9 months year-on-year caused by the lower number of ship calls in Q1 due to planned maintenance of passenger vessels and due to the discounts for the vessels with lower level of emissions.
Cargo harbours revenue for Q3 and 9 months decreased, mainly due to the drop of liquid cargo volume.
The revenue of the Ferry segment grew because of a rise in fee rates, which are linked to the Estonian consumer and fuel price indices and wage inflation.
The revenue of the segment Other grew, mostly through growth in the revenue generated by the icebreaker Botnica during the summer season, as well as the indexation of the contractual fees to the Estonian and Canadian consumer price indices.
EBITDA
Compared to Q3 2018, adjusted EBITDA decreased by EUR 0.3 million (-1,1%) influenced by Cargo harbours segment. In 9 months of 2019, adjusted EBITDA decreased by 0.4% to EUR 59.5 million. In terms of segments, adjusted EBITDA grew in the Ferry segment and the segment Other, decreased in the Cargo harbours segment and remained stable in the Passenger harbours segment. The adjusted EBITDA margin for the first 9 months of the year remained stable at 59.1% despite a slight decrease from 61.7% to 60.6% in Q3.
Net profit
In the third quarter, the Group earned EUR 17.7 million net profit (-1.8% y-o-y), in the first 9 months the net profit was EUR 35.9 million (127.2% y-o-y). The strong growth in net profit in 9 months year-on-year was due to the decline in dividend income tax expense in 2019.
In the second quarter of 2019, the Group declared a dividend of EUR 35.2 million. Related income tax expense amounted to EUR 5.76 million, being EUR 20.5 million smaller than in the previous year when the Group declared a record-high dividend (EUR 105 million).
Investments
In the first 9 months of 2019, the Group invested EUR 18.8 million, including EUR 7.7 million in Q3 (9 months 2018: EUR 8.1 million). Investments of the period were mostly related to the reconstruction of passenger terminal D at the Old City Harbour, dredging works at the Paldiski South Harbour and the co-financing of the construction of Reidi road at the Old City Harbour.
Interim condensed consolidated statement of financial position:
| In thousands of euros | 30 Sept 2019 | 31 December 2018 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 28,955 | 42,563 |
| Trade and other receivables | 11,445 | 8,017 |
| Contract assets | 678 | 0 |
| Inventories | 287 | 305 |
| Total current assets | 41,365 | 50,885 |
| Non-current assets | ||
| Investments in associates | 1,782 | 1,569 |
| Other long-term receivables | 151 | 196 |
| Property, plant and equipment | 570,844 | 568,965 |
| Intangible assets | 2,034 | 2,024 |
| Total non-current assets | 574,811 | 572,754 |
| Total assets | 616,176 | 623,639 |
| LIABILITIES | ||
| Current liabilities | ||
| Loans and borrowings | 15,766 | 15,766 |
| Derivative financial instruments | 349 | 425 |
| Provisions | 1,426 | 1,957 |
| Government grants | 344 | 174 |
| Taxes payable | 1,495 | 5,844 |
| Trade and other payables | 10,521 | 9,485 |
| Contractual liabilities | 2,203 | 32 |
| Total current liabilities | 32,104 | 33,683 |
| Non-current liabilities | ||
| Loans and borrowings | 191,463 | 197,846 |
| Government grants | 23,149 | 23,418 |
| Other payables | 81 | 79 |
| Contract liabilities | 924 | 939 |
| Total non-current liabilities | 215,617 | 222,282 |
| Total liabilities | 247,721 | 255,965 |
| EQUITY | ||
| Share capital at par value | 263,000 | 263,000 |
| Share premium | 44,478 | 44,478 |
| Statutory capital reserve | 18,520 | 18,520 |
| Hedge reserve | -349 | -425 |
| Retained earnings (prior periods) | 6,859 | 17,678 |
| Profit for the period | 35,947 | 24,423 |
| Total equity | 368,455 | 367,674 |
| Total liabilities and equity | 616,176 | 623,639 |
Interim condensed consolidated statement of profit or loss:
| 9 months | 9 months | |||
| In thousands of euros | Q3 2019 | Q3 2018 | 2019 | 2018 |
| Revenue | 39,181 | 38,897 | 100,531 | 101,063 |
| Other income | 209 | 215 | 789 | 659 |
| Operating expenses | -10,741 | -10,426 | -27,457 | -28,013 |
| Personnel expenses | -5,019 | -4,941 | -14,127 | -13,912 |
| Depreciation, amortisation and impairment | -5,719 | -5,567 | -16,912 | -16,516 |
| Other expenses | -44 | -65 | -226 | -217 |
| Operating profit | 17,867 | 18,113 | 42,598 | 43,064 |
| Finance income and costs | ||||
| Finance income | 2 | 5 | 29 | 13 |
| Finance costs | -452 | -501 | -1,333 | -1,539 |
| Finance costs - net | -450 | -496 | -1,304 | -1,526 |
| Share of profit of an associate accounted for under the equity method | 331 | 461 | 417 | 535 |
| Profit before income tax | 17,748 | 18,078 | 41,711 | 42,073 |
| Income tax | 0 | 0 | -5,764 | -26,250 |
| Profit for the period | 17,748 | 18,078 | 35,947 | 15,823 |
| Attributable to owners of the Parent | 17,748 | 18,078 | 35,947 | 15,823 |
| Basic and diluted earnings per share (in euros) | 0.07 | 0.07 | 0.14 | 0.07 |
| Basic and diluted earnings per share - continuing operations (in euros) | 0.07 | 0.07 | 0.14 | 0.07 |
Interim condensed consolidated statement of cash flows:
| 9 months | 9 months | |
| In thousands of euros | 2019 | 2018 |
| Cash receipts from sale of goods and services | 105,558 | 108,685 |
| Cash receipts related to other income | 156 | 62 |
| Payments to suppliers | -34,030 | -33,466 |
| Payments to and on behalf of employees | -13,248 | -12,364 |
| Payments for other expenses | -299 | -293 |
| Income tax paid on dividends | -10,713 | -21,405 |
| Cash from operating activities | 47,424 | 41,219 |
| Purchases of property, plant and equipment | -17,909 | -8,388 |
| Purchases of intangible assets | -360 | -509 |
| Proceeds from sale of property, plant and equipment | 39 | 6 |
| Interest received | 27 | 3 |
| Cash used in investing activities | -18,203 | -8,888 |
| Contributions to share capital | 0 | 119,882 |
| Redemption of debt securities | 0 | -1,250 |
| Repayments of loans received | -6,383 | -6,383 |
| Change in overdraft (liability) | 0 | -2,566 |
| Repayments of finance lease principal | 0 | -7 |
| Dividends paid | -34,970 | -85,000 |
| Interest paid | -1,461 | -1,704 |
| Other payments related to financing activities | -15 | -46 |
| Cash from/used in financing activities | -42,829 | 22,926 |
| NET CASH FLOW | -13,608 | 55,257 |
| Cash and cash equivalents at beginning of the period | 42,563 | 6,954 |
| Change in cash and cash equivalents | -13,608 | 55,257 |
| Cash and cash equivalents at end of the period | 28,955 | 62,211 |
Tallinna Sadam is one of the largest cargo- and passenger port complexes in the Baltic Sea region, which in 2018 serviced 10.6 million passengers and 20.6 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 in an associate AS Green Marine, which provides waste management services. Tallinna Sadam group's sales in 2018 totaled EUR 130.6 million, adjusted EBITDA EUR 74.4 million and net profit EUR 24.4 million.
Additional information:
Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
m.zirel@ts.ee
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