During the 2008/2009 financial year (01.09.2008-31.08.2009) the volume of
passengers transported by the Group vessels exceeded 8 million which is 14.9%
more than in the previous financial year. This has added noticeable fundamental
strength to the Group business and has created base for future improvement. The
revenues increased by 0.8% to 12,389 million EEK (791.9 million EUR).
The Group operations were affected by the global recession. As a consequence the
cargo volumes decreased significantly and also the revenues per passenger were
lower. However, thanks to the significantly increased passenger volumes the
revenues from passenger operations increased in overall and compensated the
decreasing factors.
The Group took a delivery of its last new cruise ferry - M/S Baltic Queen,
ending the 7-year fleet renewal program. Thus the investments during the
2008/2009 financial year amounted to 2,550 million EEK (163 million EUR). M/S
Baltic Queen started the service between Tallinn-Stockholm in the end of April
2009.
The Group was able to show cost effectiveness in the operations. The EBITDA
increased by 5.8% to 2,083 million EEK (133.1 million EUR). After revaluation of
financial derivatives and increased depreciation the net loss of the Group
amounted to 128 million EEK (8.2 million EUR).
The most significant events in the 2008/2009 financial year were the following:
- Reduction of capacity on Finland-Germany route by chartering out M/S
Superfast IX
- Delivery and successful launch of M/S Baltic Queen
- Re-routing of M/S Romantika to Riga-Stockholm route
- Cost savings activities
The Group has entered into a new phase. The significant investment program has
ended with the delivery of last cruise ferry MS Baltic Queen. The Group's focus
is now prioritized to realize results of the recent investments and repay the
loans. It is also high priority to find better utilisation and improve the
return on the vessels currently operating on the not so well performing
Finland-Germany route. The Management is actively working towards the chartering
or sale of the currently unemployed old vessels to improve the Group's cost
effectiveness.
The dynamics in the customer spending and the short visibility in booking
situation will continue to add uncertainties to the Group operations. The Group
has currently fixed about 10% of both the fuel price and EUR/SEK exposure for
the next year with the aim to increase the levels further. However, significant
price movements in raw materials or currency exchange rates may have indirect
impact to the customer behaviour or industry overall which cannot be estimated.
The Group's increased passenger levels have created strong fundamental base to
move forward targeting the improvement in results. The Group continues to be the
strong market leader in the region operating the most modern fleet. For the
2009/2010 financial year the Group is targeting net profit.
KEY FIGURES OF FINANCIAL YEAR 2008/2009
--------------------------------------------------------------------------------
| | 01.09.2008- | 01.09.2007- | change % |
| | 31.08.2009 | 31.08.2008(1) | |
--------------------------------------------------------------------------------
| | EEK | EUR | EEK | EUR | |
--------------------------------------------------------------------------------
| Net sales (million) | 12,390 | 791.9 | 12,296 | 785.9 | 0.8% |
--------------------------------------------------------------------------------
| Gross profit (million) | 2,578 | 164.8 | 2,567 | 164.0 | 0.4% |
--------------------------------------------------------------------------------
| EBITDA (million) | 2,084 | 133.2 | 1,969 | 125.8 | 5.9% |
--------------------------------------------------------------------------------
| Net profit for the | -128 | -8.2 | 304 | 19.4 | -142.1% |
| period (million) | | | | | |
--------------------------------------------------------------------------------
| Depreciation (million) | 1,094 | 69.9 | 964 | 61.6 | 13.5% |
--------------------------------------------------------------------------------
| Investments (million) | 2,550 | 163.0 | 4,240 | 271.0 | -39.9% |
--------------------------------------------------------------------------------
| Weighted average number | 669,882,040 | 671,245,086 | |
| of ordinary shares | | | |
| outstanding during 12 | | | |
| months* | | | |
--------------------------------------------------------------------------------
| Earnings per share | -0.19 | -0.01 | 0.45 | 0.03 | -142.2% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of passengers | 8,124,561 | 7,070,264 | 14.9% |
--------------------------------------------------------------------------------
| Number of cargo units | 252,026 | 331,149 | -23.9% |
--------------------------------------------------------------------------------
| Average number of | 6,853 | 6,564 | 4.4% |
| employees | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 31.08.2009 | 31.08.2008(1) | change% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets (million) | 30,468 | 1,947.2 | 29,702 | 1,898.3 | 2.6% |
--------------------------------------------------------------------------------
| Total liabilities | 20,412 | 1,304.5 | 19,513 | 1,247.1 | 4.6% |
| (million) | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 18,483 | 1,181.3 | 17,525 | 1,120.0 | 5.5% |
| liabilities (million) | | | | | |
--------------------------------------------------------------------------------
| Total equity (million) | 10,056 | 642.7 | 10,189 | 651.2 | -1.3% |
--------------------------------------------------------------------------------
| Equity ratio (%) | 33.0% | | 34.3% | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of ordinary | 669,882,040 | 669,882,040 | 0.0% |
| shares outstanding* | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 15.0 | 0.96 | 15.2 | 0.97 | -1.3% |
| per share | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross margin (%) | 20.8% | | 20.9% | | |
--------------------------------------------------------------------------------
| EBITDA margin (%) | 16.8% | | 16.0% | | |
--------------------------------------------------------------------------------
| Net profit margin (%) | -1.0% | | 2.5% | | |
--------------------------------------------------------------------------------
| Return on assets (ROA) | 3.3% | | 3.6% | | |
--------------------------------------------------------------------------------
| Return on equity (ROE) | -1.3% | | 3.0% | | |
--------------------------------------------------------------------------------
| Return on capital | 3.8% | | 4.2% | | |
| employed (ROCE) | | | | | |
--------------------------------------------------------------------------------
EBITDA - Earnings before net financial items, taxes, depreciation and
amortization;
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 of total assets;
ROE - Net profit/Average shareholders' equity;
ROCE - Earnings before net financial items, taxes / (Total assets - Current
liabilities (average for the period)).
* Share numbers have been adjusted in connection with the bonus issue in January
2007. Numbers exclude own shares.
(1) 2007/2008 statements are restated in relation to adoption of IFRIC 13
“Customer Loyalty Programmes”
SALES
Consolidated net sales amounted to 12,390.0 million EEK (791.9 million EUR) in
the 2008/2009 financial year (1 September 2008 - 31 August 2009) compared to
12,296.0 million EEK (785.9 million EUR) in the 2007/2008 financial year (1
September 2007 - 31 August 2008).
The largest sales growth of 33% was achieved in the Group's newest
Riga-Stockholm route where the sales reached total of 725.9 million EEK (46.4
million EUR). The sales increased also in the Finland-Estonia, Finland-Sweden,
mainland and other segment. Due to the weak cargo transportation and reduction
of the capacity the sales decreased in Finland-Germany route by more than 49% to
567.4 million EEK (36.3 million EUR).
In the operational segments, the largest increase by 601.3 million EEK (38.4
million EUR) or 10% during the 2008/2009 financial year was in the restaurant
and shop sales, as a result of the increased passenger volumes. Half of that
increase was delivered in the fourth quarter which is the peak season in
passenger operations. The ticket sales increased by 95.6 million EEK (6.1
million EUR). The Group's cargo sales decreased by 814.9 million EEK (52.1
million EUR) mostly as a consequence of the weak macroeconomics globally.
As a result of the different dynamics in the passenger related revenues compared
to the cargo revenues the revenues structure has changed. The most noticeable is
the drop of the Finland-Germany and cargo revenue proportion in the total Group
revenues.
From the external factors the Swedish Krona (SEK) and Euro exchange rate has
impacted the Group's sales. Onboard the ships the Group is selling the products
in the currencies of the both countries departure and destination. Hence, on the
ships operating to and from Sweden portion of the sales are in SEK. The SEK/EUR
and thereby also SEK/EEK exchange rate was highly volatile during the 2008/2009
financial year, being at the lowest point nearly 25% weaker compared to the
previous financial year. The estimated negative impact to the Group sales from
weak SEK/EUR exchange rate was nearly 313 million EEK (20 million EUR).
EARNINGS
During the 2008/2009 financial year the Group's gross profit increased by 11.0
million EEK (0.7 million EUR) to 2,577.9 million EEK (164.8 million EUR), EBITDA
increased by 114 million EEK to 2,083 million EEK (133.1 million EUR) and the
net profit decreased by 431.8 million EEK (27.6 million EUR) from 303.9 million
EEK (19.4 million EUR) to net loss of 127.9 million EEK (8.2 million EUR). Basic
earnings per share and diluted earnings per share were -0.19 EEK (-0.01 EUR) in
the 12 months of 2008/2009 financial year compared to 0.45 EEK (0.03 EUR) in the
2007/2008 financial year.
Related to the increased shops and restaurant sales the Group's largest cost
group, cost of goods, increased by 423.5 million EEK (27.1 million EUR) to
2,724.8 million EEK (174.1 million EUR).
The drop in the fuel price, compared to the previous financial year, resulted
fuel cost to decrease by 696.3 million EEK (44.5 million EUR). Portion of the
fuel purchases for 2009 year was fixed with the fuel derivatives. During the
2008/2009 financial year the expenses from the fuel derivatives were 64 million
EEK (4.1 million EUR) which resulted from the difference of the market price and
agreed price. Also for the 2010 calendar year the Group has hedged a portion of
the fuel price risk.
The Group personnel expenses increased by 0.1% to 2,566.7 million EEK (164.0
million EUR). The average number of employees for the 2008/2009 financial year
was 6,853 (6,564 in 2007/2008).
The Group's administrative, general and marketing expenses, decreased by 162.7
million EEK (10.4 million EUR) in the 2008/2009 financial year.
The depreciation and amortisation of the Group assets increased by 130 million
EEK (8.3 million EUR) mainly due to the new vessels MS Superstar, MS Baltic
Princess and MS Baltic Queen.
The net financial expenses increased by 350.3 million EEK (22.4 million EUR) in
the 2008/2009 financial year. Interest expenses decreased by 93.7 million EEK
(6.0 million EUR) whereas the net of derivative transactions (interest rate
swaps and fuel swaps) expenses increased by 408.6 million EEK (26.1 million
EUR). This includes negative mark to market revaluation of the derivatives in
amount of 219.9 million EEK (14.1 million EUR) which had no cash impact. The
respective net cash flows from all interest and fuel derivatives during the
2008/2009 financial year were negative by 62.5 million EEK (4.0 million EUR).
CONSOLIDATED INCOME STATEMENT
for the year ended 31 August
--------------------------------------------------------------------------------
| | in thousands of EEK | in thousands of EUR |
--------------------------------------------------------------------------------
| | 2009 | 2008 | 2009 | 2008 |
| | | (Restated) | | (Restated) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 12,389,960 | 12,295,967 | 791,863 | 785,855 |
--------------------------------------------------------------------------------
| Cost of sales | -9,812,048 | -9,729,085 | -627,104 | -621,802 |
--------------------------------------------------------------------------------
| Gross profit | 2,577,912 | 2,566,882 | 164,759 | 164,053 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Marketing expenses | -803,090 | -850,988 | -51,327 | -54,388 |
--------------------------------------------------------------------------------
| Administrative | -774,599 | -889,377 | -49,506 | -56,841 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other income | 5,579 | 199,467 | 356 | 12,748 |
--------------------------------------------------------------------------------
| Other expenses | -8,513 | -18,352 | -544 | -1,173 |
--------------------------------------------------------------------------------
| Results from operating | 997,289 | 1,007,632 | 63,738 | 64,399 |
| activities | | | | |
--------------------------------------------------------------------------------
| Financial income | 5,428 | 143,124 | 347 | 9,147 |
--------------------------------------------------------------------------------
| Financial expenses | -1,145,926 | -933,332 | -73,238 | -59,650 |
--------------------------------------------------------------------------------
| Share of loss of | -7,560 | -3,060 | -483 | -196 |
| associates | | | | |
--------------------------------------------------------------------------------
| Profit/-loss before | -150,769 | 214,364 | -9,636 | 13,700 |
| income tax | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax | 22,856 | 89,564 | 1,461 | 5,724 |
--------------------------------------------------------------------------------
| Net profit/-loss for | -127,913 | 303,928 | -8,175 | 19,424 |
| the financial year | | | | |
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | -127,913 | 303,928 | -8,175 | 19,424 |
| Parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic and diluted | -0.19 | 0.45 | -0.01 | 0.03 |
| earnings per share | | | | |
| (in EEK/EUR per | | | | |
| share) | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
| as of 31 August | in thousands of EEK | in thousands of EUR |
--------------------------------------------------------------------------------
| | 2009 | 2008 | 2009 | 2008 |
| | | (Restated) | | (Restated) |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 782,043 | 1,043,785 | 49,982 | 66,710 |
| equivalents | | | | |
--------------------------------------------------------------------------------
| Receivables | 797,762 | 1,177,342 | 50,986 | 75,246 |
--------------------------------------------------------------------------------
| Prepayments | 179,892 | 111,522 | 11,497 | 7,127 |
--------------------------------------------------------------------------------
| Derivatives | 6,493 | 51,884 | 415 | 3,316 |
--------------------------------------------------------------------------------
| Inventories | 297,527 | 358,480 | 19,015 | 22,911 |
--------------------------------------------------------------------------------
| | 2,063,717 | 2,743,013 | 131,895 | 175,310 |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Investments in | 0 | 2,222 | 0 | 142 |
| associates | | | | |
--------------------------------------------------------------------------------
| Other financial | 7,664 | 7,700 | 490 | 492 |
| assets and | | | | |
| prepayments | | | | |
--------------------------------------------------------------------------------
| Deferred income tax | 207,455 | 199,851 | 13,259 | 12,773 |
| assets | | | | |
--------------------------------------------------------------------------------
| Investment property | 4,694 | 4,694 | 300 | 300 |
--------------------------------------------------------------------------------
| Property, plant and | 27,049,393 | 25,518,298 | 1,728,771 | 1,630,917 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 1,134,738 | 1,226,023 | 72,523 | 78,357 |
--------------------------------------------------------------------------------
| | 28,403,944 | 26,958,788 | 1,815,343 | 1,722,981 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 30,467,661 | 29,701,801 | 1,947,238 | 1,898,291 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES AND | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 1,655,760 | 2,200,220 | 105,822 | 140,620 |
| loans and borrowings | | | | |
--------------------------------------------------------------------------------
| Payables | 1,415,762 | 1,621,711 | 90,484 | 103,646 |
--------------------------------------------------------------------------------
| Deferred income | 331,323 | 343,837 | 21,175 | 21,975 |
--------------------------------------------------------------------------------
| Derivatives | 179,842 | 5,351 | 11,494 | 342 |
--------------------------------------------------------------------------------
| | 3,582,687 | 4,171,119 | 228,975 | 266,583 |
--------------------------------------------------------------------------------
| Non-current | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 16,827,627 | 15,324,355 | 1,075,482 | 979,405 |
| loans and borrowings | | | | |
--------------------------------------------------------------------------------
| Deferred income tax | 0 | 16,147 | 0 | 1,032 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 1,330 | 1,643 | 85 | 105 |
--------------------------------------------------------------------------------
| | 16,828,957 | 15,342,145 | 1,075,567 | 980,542 |
--------------------------------------------------------------------------------
| Total liabilities | 20,411,644 | 19,513,264 | 1,304,542 | 1,247,125 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | | |
--------------------------------------------------------------------------------
| Equity attributable | | | | |
| to equity holders of | | | | |
| the Parent | | | | |
--------------------------------------------------------------------------------
| Share capital | 6,738,170 | 6,738,170 | 430,648 | 430,648 |
--------------------------------------------------------------------------------
| Share premium | 9,999 | 9,999 | 639 | 639 |
--------------------------------------------------------------------------------
| Reserves | 1,124,409 | 1,151,071 | 71,862 | 73,566 |
--------------------------------------------------------------------------------
| Retained earnings | 2,183,439 | 2,289,297 | 139,547 | 146,313 |
--------------------------------------------------------------------------------
| Total equity | 10,056,017 | 10,188,537 | 642,696 | 651,166 |
| attributable to | | | | |
| equity holders of the | | | | |
| Parent | | | | |
--------------------------------------------------------------------------------
| Total equity | 10,056,017 | 10,188,537 | 642,696 | 651,166 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND | 30,467,661 | 29,701,801 | 1,947,238 | 1,898,291 |
| EQUITY | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
| for the year ended 31 August | in thousands of EEK | in thousands of EUR |
--------------------------------------------------------------------------------
| | 2009 | 2008 | 2009 | 2008 |
--------------------------------------------------------------------------------
| Cash flows from operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Net profit/-loss for the | -127,913 | 303,928 | -8,175 | 19,424 |
| financial year | | | | |
--------------------------------------------------------------------------------
| Adjustments: | 2,190,985 | 1,661,987 | 140,029 | 106,221 |
--------------------------------------------------------------------------------
| Depreciation and | 1,094,311 | 964,266 | 69,939 | 61,628 |
| amortisation | | | | |
--------------------------------------------------------------------------------
| Net gain on disposals of | -1,203 | -19,344 | -77 | -1,236 |
| property, plant and | | | | |
| equipment | | | | |
--------------------------------------------------------------------------------
| Net interest expense | 815,809 | 903,715 | 52,140 | 57,758 |
--------------------------------------------------------------------------------
| Net expense from derivatives | 301,523 | -107,097 | 19,271 | -6,844 |
--------------------------------------------------------------------------------
| Loss from equity accounted | 7,560 | 3,060 | 483 | 195 |
| associates | | | | |
--------------------------------------------------------------------------------
| Net foreign exchange gain / | -4,159 | -184 | -266 | -12 |
| loss related to investing | | | | |
| and financing activities | | | | |
--------------------------------------------------------------------------------
| Income tax | -22,856 | -82,429 | -1,461 | -5,268 |
--------------------------------------------------------------------------------
| Changes in receivables and | 305,233 | -339,402 | 19,508 | -21,692 |
| prepayments related to | | | | |
| operating activities | | | | |
--------------------------------------------------------------------------------
| Changes in inventories | 60,953 | -85,110 | 3,896 | -5,439 |
--------------------------------------------------------------------------------
| Changes in liabilities | -149,508 | 172,427 | -9,555 | 11,020 |
| related to operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Income tax paid | -493 | -1,800 | -32 | -115 |
--------------------------------------------------------------------------------
| | 2,279,257 | 1,712,030 | 145,671 | 109,419 |
--------------------------------------------------------------------------------
| Cash flows used in investing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| Purchase of property, plant, | -2,549,838| -4,240,289 | -162,964 | -271,004 |
| equipment and intangible | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Proceeds from disposals of | 16,895 | 453,242 | 1,080 | 28,967 |
| property, plant, equipment | | | | |
--------------------------------------------------------------------------------
| Proceeds from disposals of | 782 | 0 | 50 | 0 |
| associates | | | | |
--------------------------------------------------------------------------------
| Proceeds/ payments from | -62,514 | 45,879 | -3,995 | 2,933 |
| settlement of derivatives | | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, | 0 | 1,885 | 0 | 120 |
| net of cash acquired | | | | |
--------------------------------------------------------------------------------
| Acquisition of associates | -6,120 | -2,040 | -391 | -130 |
--------------------------------------------------------------------------------
| Interest received | 5,804 | 11,511 | 371 | 736 |
--------------------------------------------------------------------------------
| | -2,594,991| -3,729,812 | -165,849 | -238,378 |
| | | | | |
--------------------------------------------------------------------------------
| Cash flows from /used in | | | | |
| financing activities | | | | |
--------------------------------------------------------------------------------
| Repurchase of treasury | 0 | -65,132 | 0 | -4,163 |
| shares | | | | |
--------------------------------------------------------------------------------
| Proceeds from loans | 2,427,151 | 3,756,212 | 155,123 | 240,066 |
--------------------------------------------------------------------------------
| Redemption of loans and | -1,699,49 | -1,518,433 | -108,618 | -97,045 |
| bonds | 3 | | | |
--------------------------------------------------------------------------------
| Change in overdraft | 204,199 | 443,199 | 13,051 | 28,325 |
--------------------------------------------------------------------------------
| Payment of finance lease | -6,619 | -14,855 | -423 | -949 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Interest paid | -871,246 | -843,033 | -55,683 | -53,880 |
--------------------------------------------------------------------------------
| | 53,992 | 1,757,958 | 3,450 | 112,354 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL NET CASH FLOW | -261,742 | -259,824 | -16,728 | -16,605 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents: | | | | |
--------------------------------------------------------------------------------
| - at the beginning of period | 1,043,785 | 1,303,609 | 66,710 | 83,315 |
--------------------------------------------------------------------------------
| - increase / decrease | -261,742 | -259,824 | -16,728 | -16,605 |
--------------------------------------------------------------------------------
| - at the end of period | 782,043 | 1,043,785 | 49,982 | 66,710 |
--------------------------------------------------------------------------------
2007/2008 statements are restated in relation to adoption of IFRIC 13 “Customer
Loyalty Programmes”
Janek Stalmeister
CFO
AS Tallink Grupp
Tel. +372 6409 800
e-mail: janek.stalmeister@tallink.ee
