During the nine months of the 2007/2008 financial year AS Tallink Grupp's
(Hereinafter also referred to as the Group) performance was largely influenced
by significantly increased fuel costs, higher interest costs and weak traffic
volumes on some routes.
The addition of fuel surcharges to the passenger tickets in February 2008 has
helped to increase the ticket revenues but not in the full extent of the fuel
cost increase. In the third quarter the total fuel cost increase was
approximately 156 million EEK (10 million EUR) compared to the third quarter of
the previous financial year. Since the beginning of the current financial year
in September 2007 until today the price of the fuel for our vessels has
increased by approximately 115%. The average fuel price in the third quarter
was about 93% higher than in the third quarter of last financial year.
Although the Group was able to improve the EBITDA by 7% which reached 425
million EEK (27 million EUR) in the third quarter of the 2007/2008 financial
year, the result after the increased interest costs and depreciation is a net
loss of 34 million EEK (2.2 million EUR).
Strong positive development came from Estonia-Finland operations where the new
Shuttle service has improved traffic volumes and increased revenues by almost
35%. The segment result shows an increase of 28 million EEK (1.8 million EUR).
Following the integration of our sales offices in Finland and Sweden and partly
also from the implementation of the new booking system the sales activities
have not been as effective as expected and consequently the traffic volumes
between Finland and Sweden have stayed below previous year levels. It is
expected that re-routing of M/S Galaxy to Turku-Stockholm route will increase
the attractiveness of the route in the market and helps to reach higher
passenger volumes. Also additional changes in the sales strategies are
currently being implemented to improve the traffic numbers.
9 MONTHS KEY FIGURES
01.09.2007- 01.09.2006- change %
31.05.2008 31.05.2007
EEK EUR EEK EUR
Net sales (million) 8,599.2 549.6 8,351.3 533.7 3.0
Gross profit (million) 1,761.6 112.6 1,838.7 117.5 -4.2
Gross margin (%) 20.5 22.0
EBITDA (million) 1,206.0 77.1 1,185.3 75.8 1.7
EBITDA margin (%) 14.0 14.2
Net profit for the period -142.9 -9.1 41.4 2.6 -445.4
(million)
Net profit margin (%) -1.7 0.5
Depreciation (million) 690.0 44.1 712.0 45.5 -3.1
Investments (million) 2,142.9 137.0 2,145.0 137.1 -0.1
Weighted average number 671,702,752 673,817,040 -0.3
of ordinary shares
outstanding during nine
months
Earnings per share -0.21 -0.01 0.06 0.004 -446.5
Number of passengers 4,707,546 4,541,160 3.7
Cargo units 256,032 270,912 -5.5
Average number of 6,428 6,093 5.5
employees
31.05.2008 31.08.2007 change %
EEK EUR EEK EUR
Total assets (million) 27,468.6 1,755.6 26,570.9 1,698.2 3.4
Total liabilities 17,539.6 1,121.0 16,436.0 1,050.4 6.7
(million)
Interest-bearing 15,586.8 996.2 14,831.7 947.9 5.1
liabilities (million)
Total equity (million) 9,929.0 634.6 10,134.9 647.7 -2.0
Liquidity ratio 0.520 0.665
Equity ratio (%) 36.1 38.1
Number of ordinary shares 669,882,040 673,817,040 -0.6
outstanding
Shareholders equity per 14.82 0.95 15.04 0.96 -1.5
share
Number of ordinary shares outstanding 669,882,040 673,817,040 -0.6
Shareholders equity per share 14.82 0.95 15.04 0.96 -1.5
Net profit margin - net profit / net sales;
EBITDA - Earnings before net financial items, share of profit of associates,
taxes, depreciation and amortization, income from negative goodwill;
EBITDA margin - EBITDA / net sales;
Gross margin - gross profit / net sales
Liquidity ratio - current assets / current liabilities
Equity ratio - total equity / total assets;
Earnings per share - net profit / weighted average number of shares outstanding;
Shareholder's equity per share - shareholder's equity / number of shares
outstanding.
* Share numbers have been adjusted in connection with the bonus issue in
January 2007
SALES AND EARNINGS
Net sales of the Group amounted to 8,559.2 million EEK (549.6 million EUR) in
the nine months of 2007/2008 financial year (September 01, 2007 - May 31, 2008)
compared to 8,351.3 million EEK (533.7 million EUR) in the nine months of
2006/2007 financial year (September 01, 2006 - May 31, 2007). The sales were
positively affected by the first ever winter period of fast ferry operation
between Tallinn and Helsinki by Tallink Shuttle service.
The Group's gross profit decreased 77.1 million EEK (4.9 million EUR) to
1,761.6 million EEK (112.6 million EUR), EBITDA increased by 1.7% to 1,206.0
million EEK (77.1 million EUR) and the net profit decreased by 184.3 million
EEK (11.8 million EUR) from 41.4 million EEK (2.6 million EUR) to -142.9
million EEK (-9.1 million EUR). Basic earnings per share and diluted earnings
per share were -0.21 EEK (-0.01 EUR) in the nine months of 2007/2008 financial
year compared to 0.06 EEK (0.00 EUR) in the corresponding period in 2006/2007
financial year.
The Group's earnings were negatively affected by the high fuel price. Compared
to the nine months of the previous financial year the Group's fuel costs have
increased by around 468 million EEK (30 million EUR). Around 40% of the
increase came from the Finland-Germany route. Group's management has already
taken action towards improving the route and has agreed to charter out one of
the Superfast vessels, Superfast IX, on a five year contract starting from
autumn 2008. The charter serves the objective of improving the return on the
capital of the Superfast vessels and maintaining the overall Group's return
ratios.
In order to reduce the impact from the increased fuel price the fuel
surcharges, previously included only in the cargo fares, were introduced also
to the passenger tickets effective from February 2008.
The Group's earnings were also affected by higher interest rates. During the
nine month period Group's interest expenses increased by 121.2 million EEK (7.7
million EUR).
CONSOLIDATED CONDENSED INCOME STATEMENT
(unaudited, in thousands of EEK)
01.03.2008- 01.03.2007- 01.09.2007- 01.09.2006-
31.05.2008 31.05.2007 31.05.2008 31.05.2007
Net sales 2,936,043 2,902,495 8,599,203 8,351,273
Cost of sales -2,322,753 -2,218,578 -6,837,587 -6,512,606
Gross profit 613,290 683,917 1,761,616 1,838,667
Marketing expenses -208,673 -241,528 -588,913 -645,216
Administrative and general -224,196 -274,926 -693,373 -754,165
expenses
Other operating items 19,157 19,221 36,674 27,471
Income from negative 0 0 0 689
goodwill
Financial income 17,622 56,121 48,234 147,166
Financial expenses -251,302 -210,728 -707,004 -578,277
Income from associates 0 6,493 0 6,493
Profit/-loss from normal -34,102 38,570 -142,766 42,828
operation before income tax
Income tax -62 205 -172 -1,448
Net profit/-loss for the -34,164 38,775 -142,938 41,380
period
Attributable to:
Equity holders of the -34,164 38,775 -142,938 41,380
parent
Earnings per share (in EEK
per share)
- basic -0.05 0.06 -0.21 0.06
- diluted -0.05 0.06 -0.21 0.06
CONSOLIDATED CONDENSED INCOME STATEMENT
(unaudited, in thousands of EUR)
01.03.2008- 01.03.2007- 01.09.2007- 01.09.2006-
31.05.2008 31.05.2007 31.05.2008 31.05.2007
Net sales 187,647 185,504 549,589 533,744
Cost of sales -148,451 -141,793 -437,001 -416,231
Gross profit 39,196 43,711 112,588 117,513
Marketing expenses -13,336 -15,437 -37,638 -41,237
Administrative and general -14,329 -17,571 -44,315 -48,200
expenses
Other operating items 1,224 1,229 2,344 1,756
Income from negative 0 0 0 44
goodwill
Financial income 1,127 3,587 3,083 9,406
Financial expenses -16,061 -13,468 -45,186 -36,959
Income from associates 0 415 0 415
Profit/-loss from normal -2,179 2,466 -9,124 2,738
operation before income tax
Income tax -4 13 -11 -93
Net profit/-loss for the -2,183 2,479 -9,135 2,645
period
Attributable to:
Equity holders of the -2,183 2,479 -9,135 2,645
parent
Earnings per share (in EUR
per share)
- basic 0.00 0.00 -0.01 0.00
- diluted 0.00 0.00 -0.01 0.00
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands of EEK)
ASSETS 31.05.2008 31.08.2007
Current assets
Cash and cash equivalents 444,962 1,303,609
Receivables 1,208,035 815,093
Prepayments 146,622 124,134
Derivatives 0 1,799
Inventories 325,643 272,352
Total current assets 2,125,262 2,516,987
Non-current assets
Investments in associates 5,282 3,242
Other financial assets and 7,621 9,279
prepayments
Deferred income tax assets 153,277 153,102
Investment property 4,694 4,694
Property, plant and equipment 23,901,464 22,600,001
Intangible assets 1,270,953 1,283,592
Total non-current assets 25,343,291 24,053,910
TOTAL ASSETS 27,468,553 26,570,897
LIABILITIES AND EQUITY
Current liabilities
Current portion of interest-bearing 2,202,334 2,247,390
liabilities
Payables 1,681,620 1,408,369
Deferred income 182,533 121,008
Derivatives 21,990 7,980
Total current liabilities 4,088,477 3,784,747
Non-current liabilities
Interest bearing loans and borrowings 13,384,477 12,584,261
Deferred income tax liability 63,447 63,463
Pension liability 3,192 3,489
Total non-current liabilities 13,451,116 12,651,213
TOTAL LIABILITIES 17,539,593 16,435,960
EQUITY
Equity attributable to equity holders
of the parent
Share capital 6,738,170 6,738,170
Share premium 9,999 9,999
Reserves 1,192,417 1,202,991
Retained earnings 1,988,374 2,183,777
Total equity attributable to equity 9,928,960 10,134,937
holders of the parent
TOTAL EQUITY 9,928,960 10,134,937
TOTAL LIABILITIES AND EQUITY 27,468,553 26,570,897
CONSOLIDATED CONDENSED BALANCE SHEET
(unaudited, in thousands of EUR)
ASSETS 31.05.2008 31.08.2007
Current assets
Cash and cash equivalents 28,438 83,315
Receivables 77,208 52,094
Prepayments 9,371 7,934
Derivatives 0 115
Inventories 20,812 17,407
Total current assets 135,829 160,865
Non-current assets
Investments in associates 338 207
Other financial assets and 487 594
prepayments
Deferred income tax assets 9,796 9,785
Investment property 300 300
Property, plant and equipment 1,527,582 1,444,403
Intangible assets 81,229 82,036
Total non-current assets 1,619,732 1,537,325
TOTAL ASSETS 1,755,561 1,698,190
LIABILITIES AND EQUITY
Current liabilities
Current portion of interest-bearing 140,755 143,634
liabilities
Payables 107,475 90,011
Deferred income 11,666 7,734
Derivatives 1,405 510
Total current liabilities 261,301 241,889
Non-current liabilities
Interest bearing loans and borrowings 855,424 804,281
Deferred income tax 4,055 4,056
Pension liability 204 223
Total non-current liabilities 859,683 808,560
TOTAL LIABILITIES 1,120,984 1,050,449
EQUITY
Equity attributable to equity holders
of the parent
Share capital 430,648 430,648
Share premium 639 639
Reserves 76,209 76,885
Retained earnings 127,081 139,569
Total equity attributable to equity 634,577 647,741
holders of the parent
TOTAL EQUITY 634,577 647,741
TOTAL LIABILITIES AND EQUITY 1,755,561 1,698,190
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands of EEK) 01.09.2007- 01.09.2006-
31.05.2008 31.05.2007
Cash flows from operating activities
Net profit/-loss for the period -142,938 41,380
Adjustments 1,339,130 1,129,215
Changes in assets related to -411,372 129,412
operating activities
Changes in inventories -52,273 -26,031
Changes in liabilities related to 279,939 -194,544
operating activities
Income tax repaid/-paid 288 -268
1,012,774 1,079,164
Cash flow used for investing activities
Purchase of property, plant, -2,142,902 -2,145,034
equipment and intangible assets
Proceeds from disposals of property, 200,536 243,222
plant, equipment
Proceeds from settlement of derivatives 53,367 68,328
Payments of settlement of derivatives -18,146 -42
Acquisition of subsidiary 1,885 0
Acquisition of associate -2,040 0
Acquisition of minority interests 0 -1,157
Interest received 8,501 17,415
-1,898,799 -1,817,268
Cash flow from (+)/ used for (-)
financing activities
Payment of transaction costs -65 -6,520
Repurchase of own shares -65,067 0
Proceeds from loans and bonds 1,401,617 1,357,847
Redemption of loans and bonds -1,192,822 -985,765
Change in overdraft 531,195 266,989
Repayment of finance lease -10,030 -30,562
liabilities
Interest paid -637,450 -565,290
27,378 36,699
TOTAL NET CASH FLOW -858,647 -701,405
Cash and cash equivalents:
- at the beginning of period 1,303,609 1,407,608
- increase (+) / decrease (-) -858,647 -701,405
Cash and cash equivalents at end of 444,962 706,203
period
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(unaudited, in thousands of EUR) 01.09.2007- 01.09.2006-
31.05.2008 31.05.2007
Cash flows from operating activities
Net profit/-loss for the period -9,135 2,645
Adjustments 85,586 72,170
Changes in assets related to -26,291 8,271
operating activities
Changes in inventories -3,341 -1,664
Changes in liabilities related to 17,891 -12,434
operating activities
Income tax repaid/-paid 18 -17
64,728 68,971
Cash flow used for investing activities
Purchase of property, plant, -136,956 -137,092
equipment and intangible assets
Proceeds from disposals of property, 12,817 15,545
plant, equipment
Proceeds from settlement of derivatives 3,411 4,367
Payments of settlement of derivatives -1,160 -3
Acquisition of subsidiary 120 0
Acquisition of associate -130 0
Acquisition of minority interests 0 -74
Interest received 543 1,113
-121,355 -116,144
Cash flow from (+)/ used for (-)
financing activities
Payment of transaction costs -4 -417
Repurchase of own shares -4,159 0
Proceeds from loans and bonds 89,580 86,782
Redemption of loans and bonds -76,235 -63,002
Change in overdraft 33,950 17,064
Repayment of finance lease -641 -1,954
liabilities
Interest paid -40,741 -36,128
1,750 2,345
TOTAL NET CASH FLOW -54,877 -44,828
Cash and cash equivalents:
- at the beginning of period 83,315 89,963
- increase (+) / decrease (-) -54,877 -44,828
Cash and cash equivalents at end of 28,438 45,135
period
Janek Stalmeister
Financial Director
AS Tallink Grupp
Tel. +372 6409 800
e-mail: janek.stalmeister@tallink.ee
