Finnlines Plc Stock Exchange Release 28 October, 2008
INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2008 (unaudited)
The Finnlines Group recorded revenue totalling EUR 577.9 (505.4) million.
Operating profit was EUR 42.1 (57.2, including vessel sales gain of EUR 12,3
million) million. Profit before taxes was EUR 16.5 (35.9, incl. vessels sales
gain of 12,3 million) million. Return on equity (ROE) was 4.3 (8.8) % and return
on investment (ROI) was 4.5 (7.5) %.
Market development
During the year, the unitized sea transport via Finnish ports have been
continuously pacing down with imports growing constantly more than exports thus
increasing the imbalance in the traffic.
The restructuring of the Finnish forest industry has also had an impact on the
export volumes. In January-August, the paper exports transported by sea were
8,8% less than during the comparable period in 2007.
Similar pacing down has been apparent in trailer and lorry volumes between
Southern Sweden and Germany. The cumulative growth rate for January-September
was still 3%, but during July and September decrease was -2%.
The passenger traffic between Finland and Germany increased by 7,8% and
decreased by 1,7% between Finland and Sweden during January-August.
Bunker prices have increased substantially in 2008. The price for the Rotterdam
LS180 used as a reference reached its peak in mid-July, when the price was 100
per cent higher than the 2007 average prices (quoted in USD). Since July, the
bunker prices have come down but at the end of September were still 44 percent
above the 2007 average.
Group structure
Finnlines is one of the largest European shipping companies specialising in
liner cargo services. The Group's operations are centred on sea transports in
the Baltic Sea and North Sea areas and on providing port services mainly in
Finland. Through its subsidiaries and associated companies, the Group has
operations in eight northern European countries and in Russia. The Group's
services are also offered throughout Europe via an extensive network of agents.
There were no significant changes in the Group structure during the reporting
period.
Significant events during the reporting period
The Annual General Meeting
The Board of Directors of Finnlines Plc proposed to the AGM held on 15 April
2008 that no dividend be paid out for the fiscal year 2007 due to the sizeable
investment in the five vessels already in operation and the commitments of the
vessel renewal programme as well as to the investments in the Vuosaari harbour.
The minority shareholders (more than 10% of the shares) used their rights to
require the postponement of the handling of the closing of the books and the
discharge of the Board to a continued meeting. The meeting also decided to
postpone the Board of Directors' proposal for authorization to increase the
share capital to the same meeting.
The AGM decided that the company's Board of Directors has seven members. Mr.
Emanuele Grimaldi, Mr. Gianluca Grimaldi, Mr. Diego Pacella, Mr. Heikki Laine,
Mr. Antti Pankakoski, Mr. Olav K. Rakkenes and Mr. Jon-Aksel Torgersen were
unanimously re-elected. Finnlines' Board of Directors elected Mr. Jon-Aksel
Torgersen as Chairman and Mr. Diego Pacella as Vice Chairman of the Board. The
firm of authorised public accountants Deloitte & Touche Oy was appointed as the
company's auditors, with Mikael Leskinen, APA, as the principally responsible
auditor.
The Continued Annual General Meeting was held on 20 May, 2008. In his speech at
the Meeting, Christer Antson, President and CEO, explained that Group
contribution has been given, like in previous years, to Finnlines' 100% owned
ship-owning companies, which have invested in new vessels or converted older
vessels.
The Continued AGM approved, after voting, the financial statements and
discharged the company's officers from liability for the financial year 2007.
Ilmarinen Mutual Pension Insurance Company informed that it will apply for a
special audit in the company.
The Meeting decided, after voting, that the minimum dividend required by the
minority (more than 10% of shares) will be paid. The total amount of dividends
paid is EUR 180,216.40 ie. EUR 0.00443 per share. The dividend record date was
23 May 2008 and the dividend payment date was 30 May 2008.
The Board of Directors was, after voting, authorized to resolve on the issuance
of shares. The company may, on the basis of the authorization, issue new shares
in one or several instalments, so that the aggregate maximum number of new
shares will be 10,000,000 shares. The authorization includes the right for
direct issue of shares, in deviation from the shareholders' pre-emptive
subscription right on the terms and conditions prescribed by law. The
authorization is valid until the next Annual General Meeting.
Fleet
In April, Finnlines bought MS Finnmill and MS Finnpulp and two other vessels, MS
Finnkraft and MS Finnhawk, which all were under time charter in Finnlines
traffic, at the total amount of EUR 121 million. This deal settled the
litigation process relating to the purchase options of Finnpulp and Finnmill.
Finnkraft and Finnhawk are currently plying under the Finnish flag and Finnmill
and Finnpulp under the Swedish flag.
Traffic
The operations at the terminals of Lübecker Hafengesellschaft (LHG) in Lübeck
harbours suffered from actions of the stevedoring workers' union during the
first quarter of the year. The union protested against the planned privatisation
of LHG.
The cargo volumes transported during January-September totalled approximately
629,000 (584,000 in 2007) units (lorries, trailers), 92,000 (72,000) cars (not
including cars of the passengers) and, in addition, 2,247,000(1,941,000) tonnes
of freight not possible to measure by the unit. In addition, some 482,000
(337,000) passengers (including freight-related passengers) were transported in
2008.
Financial performance
The Finnlines Group recorded revenue totalling EUR 577.9 (505.4 in 2007)
million. Shipping and Sea Transport Services generated revenue amounting to EUR
503.6 (429.5) million and Port Operations EUR 96.6 (100.4) million. Other income
from operations amounted to EUR 1.8 (14.4) million. The main part (EUR 12
million) of the 2007 amount generated from the sales gain of the two vessels
sold during the third quarter of 2007. This was also the main reason for the
considerably lower third quarter result than to the third quarter result in
2007. The expenses were mostly affected by the fuel oil price increases.
Operating profit was EUR 42.1 (57.2, incl. sales gain of vessels) million. The
port operations in Oslo (Norsteve) were moved to a new location resulting in
losses of revenue and one-time expenses for the Port Operations segment.
Financial income was EUR 2.2 (3.3) million and financial expenses totalled EUR
-27.8 (-24.6) million. Profit before taxes was EUR 16.5 (35.9, incl. vessel
sales gain 12,3) million. Return on equity (ROE) was 4.3 (8.8) % and return on
investment (ROI) was 4.5 (7.5) %.
Investments and financing
The Group's investments were EUR 208.4 (368.3) million, consisting mainly of the
down-payments for the six roro/vessels ordered from Jinling shipyard, from the
purchased four roro vessels and of investments in the Vuosaari harbour.
Interest-bearing net debt amounted to EUR 896.3 (738.5) million. The next year's
payments for the Jingling newbuilding project, totalling approximately EUR 8
million, are due during the second half of 2009. At the end of September, 55% of
the loans were fixed rate and the rest were floating rate loans. The duration
(average interest rate period) of the debt portfolio was approximately. 56
months. On 30 September 2008, the granted but non-utilised credit facilities
totalled EUR 179 million. The equity ratio calculated from the balance sheet was
28.8 (31.0) %. Gearing was 199.4 (170.9) %.
Personnel
The Group employed an average of 2,461 (2,340) people during the period,
consisting of 1,496 (1,478) employees on shore and 965 (862) persons at sea.
The Finnlines share
The Company's registered share capital on 30 September 2008 was EUR 81,383,916
divided into 40,691,958 shares. A total of 7.1 (8.6) million Finnlines shares
were traded on the NASDAQ OMX Helsinki Ltd during the period. The market
capitalisation of the Company's stock at the end of September was EUR 477.3
(594.1) million. Earnings per share (EPS) during the period were EUR 0.34
(0.69). Shareholders' equity per share was EUR 11.01 (10.57).
Risks
In addition to the earlier published investment programme, Finnlines purchased
four roro vessels at the price of EUR 121 million in April. The deal was
financed with long-term debts.
The company has invested and will invest during 2003-2011 over one billion euros
in the renewal of the fleet and ports. Due to the investment programme the net
interest-bearing debt has increased and will continue to increase. This is also
reflected on the consolidated equity ratio. Otherwise there are no material
changes in the risks disclosed in the notes to the financial statements 2007.
Litigation
The arbitration proceedings commenced last year between the owners of MS
Finnmill and MS Finnpulp and Finnlines Plc were withdrawn in April when the
parties closed the deal on these vessels. The main dispute concerned the
validity and terms of the purchase options of the vessels.
On 26 June 2008, Finnlines Plc received a request for a statement of reply from
the County Administrative Board of South-Finland to the application made by
Mutual Pension Insurance Company Ilmarinen on executing a special audit of
accounts. The application letter of Ilmarinen, addressed to the County
Administrative Board was dated 19 June, 2008. In the application letter
Ilmarinen demands that the County Administrative Board orders a special audit to
be executed in Finnlines Plc's administration and accounting between 1.1. -
31.12.2007 as it is prescribed in The Companies Act (21.7.2006/624) 7:7 §.
Finnlines Plc submitted its reply by the given time limit of 15 September, 2008.
Mutual Pension Insurance Company Ilmarinen has initiated action against
Finnlines Plc in the City Court of Helsinki. Ilmarinen objects to the decision
of Finnlines' Annual General Meeting held on 20 May 2008 to distribute EUR
180,216.39 as a minimum dividend. Ilmarinen demands primarily that the minimum
dividend is to be altered to EUR 17,181,000. Secondarily Ilmarinen demands that
the resolution taken by the AGM on 20 May, 2008 is to be declared null and void.
Additionally, Ilmarinen demands Finnlines to pay its legal expenses.
Finnlines considers the action groundless. The company considers that the
measures taken have had commercial grounds and that it has in all respects acted
in the best interest of the company and its shareholders. The company prepared
a detailed response together with its legal adviser and submitted it to the City
Court of Helsinki within the given time limit of 30 days.
Mr. Tomas Lindholm, attorney at law from Roschier Attorneys Ltd., acts as legal
adviser to Finnlines.
Outlook for 2008
The new Vuosaari harbour will start operations as planned at the end November
2008. The project has tied up a lot of resources and expenses over the year and
additional non-recurring expenses will arise from the move and the start-up
phase of the new harbour.
The economic environment in Europe has worsened rapidly and creates uncertainty
for business development. It is expected that Finnlines' whole year operating
profit will fall behind the comparable figure in previous year. Due to the
investments in the new vessels, vessel conversions and the Vuosaari harbour,
there will be a substantial increase in the depreciation and interest expenses
compared to 2007.
The next report, financial statement bulletin for the year 2008, will
be published on 18 February 2009.
Finnlines Plc
The Board of Directors
ENCLOSURES Profit and loss account
Balance sheet
Changes in shareholders equity
Cash flow statement
Revenue and operating result by business segments
Property, plant and equipment
Financial indicators
Contingencies and commitments
Revenue and operating profit by quarter
DISTRIBUTION NASDAQ OMX Helsinki Ltd
Main media
All figures unaudited
--------------------------------------------------------------------------------
| CONSOLIDATED PROFIT AND LOSS | | | | |
| ACCOUNT | | | | |
--------------------------------------------------------------------------------
| 1,000 EUR | 7-9/08 | 7-9/07 | 1-9/08 | 1-9/07 | 1-12/07 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 193,849 | 176,525 | 577,898 | 505,410 | 685,464 |
--------------------------------------------------------------------------------
| Other income from | 668 | 13,479 | 1,808 | 14,388 | 15,320 |
| operations | | | | | |
--------------------------------------------------------------------------------
| Materials and services | -75,176 | -55,324 | -206,570 | -146,206 | -205,904 |
--------------------------------------------------------------------------------
| Personnel expenses | -31,031 | -29,276 | -91,073 | -87,359 | -116,648 |
--------------------------------------------------------------------------------
| Depreciation, | -15,243 | -14,035 | -44,059 | -39,046 | -53,081 |
| amortisation and | | | | | |
| other write-offs | | | | | |
--------------------------------------------------------------------------------
| Other operating | -62,507 | -64,641 | -195,913 | -190,003 | -256,334 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Total operating | -183,95 | -163,27 | -537,616 | -462,615 | -631,968 |
| expenses | 8 | 4 | | | |
--------------------------------------------------------------------------------
| Operating profit | 10,559 | 26,730 | 42,090 | 57,183 | 68,816 |
--------------------------------------------------------------------------------
| Financial income | -1,008 | 557 | 2,176 | 3,300 | 5,258 |
--------------------------------------------------------------------------------
| Financial expenses | -9,282 | -9,961 | -27,776 | -24,553 | -33,956 |
--------------------------------------------------------------------------------
| Profit before taxes | 270 | 17,325 | 16,489 | 35,930 | 40,118 |
--------------------------------------------------------------------------------
| Income taxes *) | 658 | -3,637 | -2,099 | -7,544 | -5,725 |
--------------------------------------------------------------------------------
| Profit for the | 928 | 13,688 | 14,390 | 28,386 | 34,393 |
| reporting period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution: | | | | | |
--------------------------------------------------------------------------------
| Parent company | 680 | 13,512 | 13,914 | 28,030 | 33,900 |
| shareholders | | | | | |
--------------------------------------------------------------------------------
| Minority interest | 248 | 176 | 476 | 356 | 493 |
--------------------------------------------------------------------------------
| | 928 | 13,688 | 14,390 | 28,386 | 34,393 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable to parent company shareholders | | |
--------------------------------------------------------------------------------
| calculated as earnings per share | | | |
| (EUR/share) | | | |
--------------------------------------------------------------------------------
| Undiluted earnings per | 0.02 | 0.33 | 0.34 | 0.69 | 0.83 |
| share | | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.02 | 0.33 | 0.34 | 0.69 | 0,83 |
| share | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*)Taxes have been estimated based on the profit for the reporting
period.
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET, IFRS | | | |
--------------------------------------------------------------------------------
| 1,000 EUR | 30/9/08 | 30/9/07 | 31/12/07 |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1,300,775 | 1,130,773 | 1,139,576 |
--------------------------------------------------------------------------------
| Goodwill | 108,660 | 108,660 | 108,660 |
--------------------------------------------------------------------------------
| Other intangible assets | 8,798 | 10,007 | 9,899 |
--------------------------------------------------------------------------------
| Investment properties | 1,581 | 1,585 | 1,584 |
--------------------------------------------------------------------------------
| Share of associated companies | 1,526 | 1,526 | 1,526 |
--------------------------------------------------------------------------------
| Other financial assets | 4,797 | 4,797 | 4,797 |
--------------------------------------------------------------------------------
| Receivables | 3,856 | 10,612 | 9,173 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1,941 | 1,862 | 2,051 |
--------------------------------------------------------------------------------
| | 1,431,934 | 1,269,822 | 1,277,265 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 8,325 | 6,121 | 6,908 |
--------------------------------------------------------------------------------
| Accounts receivable and other | 102,258 | 101,348 | 91,191 |
| receivables | | | |
--------------------------------------------------------------------------------
| Income tax receivables | 52 | 505 | 63 |
--------------------------------------------------------------------------------
| Bank and cash | 18,339 | 17,998 | 26,913 |
--------------------------------------------------------------------------------
| | 128,974 | 125,972 | 125,075 |
--------------------------------------------------------------------------------
| Total assets | 1,560,908 | 1,395,794 | 1,402,340 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDER'S EQUITY | | | |
--------------------------------------------------------------------------------
| Equity attributable to parent company shareholders |
--------------------------------------------------------------------------------
| Share capital | 81,384 | 81,384 | 81,384 |
--------------------------------------------------------------------------------
| Share premium account | 24,525 | 24,525 | 24,525 |
--------------------------------------------------------------------------------
| Fair value reserves | -4,625 | -2,838 | -4,544 |
--------------------------------------------------------------------------------
| Translation differences | 233 | 210 | 152 |
--------------------------------------------------------------------------------
| Retained earnings | 346,335 | 326,730 | 332,601 |
--------------------------------------------------------------------------------
| | 448,105 | 430,012 | 434,118 |
--------------------------------------------------------------------------------
| Minority interest | 1,543 | 1,995 | 1,534 |
--------------------------------------------------------------------------------
| Total shareholders' equity | 449,395 | 432,006 | 435,652 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Long-term liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 104,870 | 96,409 | 103,910 |
--------------------------------------------------------------------------------
| Interest free liabilities | 827 | 0 | 1,314 |
--------------------------------------------------------------------------------
| Pension liabilities | 2,736 | 2,454 | 2,358 |
--------------------------------------------------------------------------------
| Provisions | 2,281 | 3,656 | 2,284 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 762,813 | 610,841 | 593,817 |
--------------------------------------------------------------------------------
| | 873,527 | 713,360 | 703,682 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Accounts payable and other | 85,036 | 94,584 | 99,459 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Income tax liabilities | 331 | 9,123 | 491 |
--------------------------------------------------------------------------------
| Provisions | 1,901 | 435 | 672 |
--------------------------------------------------------------------------------
| Current interest-bearing | 150,718 | 146,284 | 162,384 |
| liabilities | | | |
--------------------------------------------------------------------------------
| | 237,986 | 250,428 | 263,006 |
--------------------------------------------------------------------------------
| Total liabilities | 1,111,513 | 963,787 | 966,688 |
--------------------------------------------------------------------------------
| Total shareholders' equity and | 1,560,908 | 1,395,794 | 1,402,340 |
| liabilities | | | |
--------------------------------------------------------------------------------
Changes in Consolidated Shareholders' Equity
--------------------------------------------------------------------------------
| 1,000 EUR | Share | Share issue | Fair value | Trans- |
| | capital | premium | reserves | lation |
| | | | | diffe- |
| | | | | rences |
--------------------------------------------------------------------------------
| Shareholders´ | 81,384 | 24,525 | 0 | 28 |
| equity 1.1.2007 | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | -2,838 | |
| hedges | | | | |
--------------------------------------------------------------------------------
| Translation | | | | 182 |
| differences | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | |
| reporting period | | | | |
--------------------------------------------------------------------------------
| Total recognised | | | -2,838 | 182 |
| income for the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | |
--------------------------------------------------------------------------------
| Shareholders´ | 81,384 | 24,525 | -2,838 | 210 |
| equity 30.9.2007 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1,000 EUR | Retained | Total | Minority | Total |
| | earnings | | interest | equity |
--------------------------------------------------------------------------------
| Shareholders´ | 315,791 | 421,728 | 2,028 | 423,757 |
| equity | | | | |
| 1.1.2007 | | | | |
--------------------------------------------------------------------------------
| Cash flow | | -2,838 | | -2,838 |
| hedges | | | | |
--------------------------------------------------------------------------------
| Translation | | 182 | 3 | 185 |
| differences | | | | |
--------------------------------------------------------------------------------
| Profit for | 28,030 | 25,374 | 356 | 28,386 |
| reporting period | | | | |
--------------------------------------------------------------------------------
| Total | 28,030 | 25,374 | 359 | 25,733 |
| recognised | | | | |
| income for | | | | |
| the period | | | | |
--------------------------------------------------------------------------------
| Dividend | -17,091 | -17,091 | -392 | -17,483 |
--------------------------------------------------------------------------------
| | -17,091 | -17,091 | -392 | -17,483 |
--------------------------------------------------------------------------------
| Shareholders´ | 326,730 | 430,012 | 1,995 | 432,007 |
| equity | | | | |
| 30.9.2007 | | | | |
--------------------------------------------------------------------------------
Changes in Consolidated Shareholders' Equity
--------------------------------------------------------------------------------
| 1,000 EUR | Share | Share issue | Fair value | Trans- |
| | capital | premium | reserves | lation |
| | | | | diffe- |
| | | | | rences |
--------------------------------------------------------------------------------
| Shareholders´ | 81,384 | 24,525 | -4,544 | 152 |
| equity 1.1.2008 | | | | |
--------------------------------------------------------------------------------
| Cash flow hedges | | | -81 | |
--------------------------------------------------------------------------------
| Translation | | | | 81 |
| differences | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | |
| reporting period | | | | |
--------------------------------------------------------------------------------
| Total recognised | | | -81 | 81 |
| income for the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders´ | 81,384 | 24,525 | -4,625 | 233 |
| equity 30.9.2008 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1,000 EUR | Retained | Total | Minority | Total |
| | earnings | | interest | equity |
--------------------------------------------------------------------------------
| Shareholders´ | 332,601 | 434,118 | 1,534 | 435,652 |
| equity | | | | |
| 1.1.2008 | | | | |
--------------------------------------------------------------------------------
| Cash flow hedges | | -81 | | -81 |
--------------------------------------------------------------------------------
| Translation | | 81 | | 81 |
| differences | | | | |
--------------------------------------------------------------------------------
| Profit for | 13,914 | 13,914 | 476 | 14,390 |
| reporting period | | | | |
--------------------------------------------------------------------------------
| Total | 13,914 | 14,167 | 476 | 14,390 |
| recognised | | | | |
| income for | | | | |
| the period | | | | |
--------------------------------------------------------------------------------
| Dividend | -180 | -180 | -467 | -647 |
--------------------------------------------------------------------------------
| | -180 | -180 | -467 | -647 |
--------------------------------------------------------------------------------
| Shareholders´ | 346,335 | 447,852 | 1,543 | 449,395 |
| equity | | | | |
| 30.9.2008 | | | | |
--------------------------------------------------------------------------------
Consolidated Cash Flow Statement
--------------------------------------------------------------------------------
| 1,000 EUR | 1-9/08 | 1-9/07 | 1-12/07 |
--------------------------------------------------------------------------------
| Cash flow from operations: | | | |
--------------------------------------------------------------------------------
| Profit for reporting period | 14,390 | 28,386 | 34,393 |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Non-cash transactions | 43,088 | 27,623 | 39,561 |
--------------------------------------------------------------------------------
| Interest expense and other | 25,708 | 19,978 | 28,937 |
| financial expenses | | | |
--------------------------------------------------------------------------------
| Taxes | 2,099 | 7,544 | 5,725 |
--------------------------------------------------------------------------------
| Changes in working capital: | | | |
--------------------------------------------------------------------------------
| Change in accounts | -10,500 | -11,406 | 66 |
| receivable and other | | | |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in current assets | -1,206 | -709 | -1,496 |
--------------------------------------------------------------------------------
| Change in accounts payable | -7,441 | 15,120 | 11,766 |
| and other liabilities | | | |
--------------------------------------------------------------------------------
| Change in provisions | 1,602 | 86 | 197 |
--------------------------------------------------------------------------------
| Interest paid | -28,579 | -19,968 | -20,988 |
--------------------------------------------------------------------------------
| Interest received | 1,026 | 1,020 | 1,397 |
--------------------------------------------------------------------------------
| Taxes | -1,256 | -1,152 | -1,087 |
--------------------------------------------------------------------------------
| Other financing items | -1,497 | -2,278 | -3,948 |
--------------------------------------------------------------------------------
| Net cash flow from operations | 37,434 | 64,244 | 94,524 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities: | | |
--------------------------------------------------------------------------------
| Investments in tangible and | -208,195 | -369,776 | -392,780 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Sale of tangible assets | 1,230 | 29,823 | 30,819 |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | -194 | 200 | 200 |
| Disposal of associated companies | | | |
--------------------------------------------------------------------------------
| Proceed sale of investment | | 243 | 243 |
--------------------------------------------------------------------------------
| Reduction in share capital, | | | -598 |
| minority interest | | | |
--------------------------------------------------------------------------------
| Dividends received | 6 | 3 | 16 |
--------------------------------------------------------------------------------
| Net cash flow from investing | -207,153 | -339,507 | -362,099 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities: | | |
--------------------------------------------------------------------------------
| Borrowing | 237,000 | 309,307 | 309,307 |
--------------------------------------------------------------------------------
| Net change in current | -14,840 | 64,277 | 79,907 |
| interest-bearing liabilities | | | |
--------------------------------------------------------------------------------
| Repayment of loans | -60,715 | -81,663 | -96,440 |
--------------------------------------------------------------------------------
| Increase / decrease of long-term | 352 | 383 | 770 |
| receivables | | | |
--------------------------------------------------------------------------------
| Dividends paid | -647 | -17,483 | -17,483 |
--------------------------------------------------------------------------------
| Net cash flow from financing | 161,150 | 274,821 | 276,062 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -8,569 | -442 | 8,487 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 26,913 | 18,436 | 18,436 |
| on 1 January | | | |
--------------------------------------------------------------------------------
| Effect of foreign exchange rate | -5 | 3 | 10 |
| changes | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents on | 18,339 | 17,998 | 26,913 |
| September 30 / December 31 | | | |
--------------------------------------------------------------------------------
REVENUE AND OPERATING RESULT BY BUSINESS SEGMENTS (PRIMARY SEGMENT)
--------------------------------------------------------------------------------
| 1,000 EUR | 1-9/08 | % | 1-9/07 | % | 1-12/07 | % |
--------------------------------------------------------------------------------
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Shipping and sea | 503,587 | 87,1 | 429,480 | 85.0 | 585,067 | 85.3 |
| transport | | | | | | |
--------------------------------------------------------------------------------
| Port operations | 96,557 | 16,7 | 100,396 | 19.9 | 133,155 | 19.4 |
--------------------------------------------------------------------------------
| Eliminations | -22,246 | -3,8 | -24,466 | -4.8 | -32,758 | -4.8 |
| (intragroup) | | | | | | |
--------------------------------------------------------------------------------
| External sales | 577,898 | 100.0 | 505,410 | 100.0 | 685,464 | 100.0 |
--------------------------------------------------------------------------------
| Operating profit | | | | | | |
--------------------------------------------------------------------------------
| Shipping and sea | 42,255 | | 50,453 | | 61,653 | |
| transport | | | | | | |
--------------------------------------------------------------------------------
| Port operations | -166 | | 6,730 | | 7,163 | |
--------------------------------------------------------------------------------
| Operating profit | 42,090 | | 57,183 | | 68,816 | |
| total | | | | | | |
--------------------------------------------------------------------------------
| Financial items | -25,601 | | -21,253 | | -28,698 | |
--------------------------------------------------------------------------------
| Profit | 16,489 | | 35,930 | | 40,118 | |
| before taxes | | | | | | |
--------------------------------------------------------------------------------
| Income taxes | -2,099 | | -7,544 | | -5,725 | |
--------------------------------------------------------------------------------
| Profit for | 14,390 | | 28,386 | | 34,393 | |
| reporting period | | | | | | |
| continuing | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
| 1,000 EUR | 30/9/08 | 30/9/07 | 31/12/07 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Historical cost at the | 1,410,479 | 1,084,491 | 1,084,491 |
| beginning of the period | | | |
--------------------------------------------------------------------------------
| Translation differences | -408 | 159 | -8 |
--------------------------------------------------------------------------------
| Additions | 204,206 | 367,004 | 389,559 |
--------------------------------------------------------------------------------
| Disposals | -4,914 | -60,732 | -63,598 |
--------------------------------------------------------------------------------
| Reclassifications | | | 19 |
--------------------------------------------------------------------------------
| Historical cost at the end of | 1,609,363 | 1,390,923 | 1,410,479 |
| the period | | | |
--------------------------------------------------------------------------------
| Accumulated depreciation at | -269,319 | -264,926 | -264,926 |
| the beginning of the period | | | |
--------------------------------------------------------------------------------
| Translation differences | 234 | -108 | 11 |
--------------------------------------------------------------------------------
| Cumulative depreciation on | 4,554 | 44,082 | 46,694 |
| reclassifications and | | | |
| disposals | | | |
--------------------------------------------------------------------------------
| Depreciations | -42,476 | -37,612 | -51,098 |
--------------------------------------------------------------------------------
| Accumulated depreciations at | -307,007 | -258,564 | -269,319 |
| the end of the period | | | |
--------------------------------------------------------------------------------
| Book value | 1,302,356 | 1,132,358 | 1,141,160 |
--------------------------------------------------------------------------------
FINANCIAL INDICATORS
--------------------------------------------------------------------------------
| | 1-9/08 | 1-9/07 | 1-12/07 |
--------------------------------------------------------------------------------
| Operating profit as % of | 7.3 | 11.3 | 10.0 |
| revenue | | | |
--------------------------------------------------------------------------------
| ROE, % | 4.3 | 8.8 | 8.0 |
--------------------------------------------------------------------------------
| ROI, % | 4.5 | 7.5 | 6.9 |
--------------------------------------------------------------------------------
| Gearing, % | 199.4 | 170.9 | 167.4 |
--------------------------------------------------------------------------------
| Gross capital | 204.2 | 368.3 | 391.3 |
| expenditure, MEUR | | | |
--------------------------------------------------------------------------------
| % of revenue | 35.3 | 72.9 | 57.1 |
--------------------------------------------------------------------------------
| Equity ratio, % | 28.8 | 31.0 | 31.1 |
--------------------------------------------------------------------------------
| Shareholders' equity/ | 11.01 | 10.57 | 10.67 |
| share, EUR | | | |
--------------------------------------------------------------------------------
| Number of shares during | 40,692 | 40,692 | 40,692 |
| period, average (1000) | | | |
--------------------------------------------------------------------------------
| Number of shares at | 40,692 | 40,692 | 40,692 |
| end of period (1000) | | | |
--------------------------------------------------------------------------------
| Market capitalisation, | 477.3 | 594.1 | 620.6 |
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average personnel | | | |
--------------------------------------------------------------------------------
| Shore-based personnel | 1,496 | 1,478 | 1,470 |
--------------------------------------------------------------------------------
| Sea-borne personnel | 965 | 862 | 865 |
--------------------------------------------------------------------------------
| Personnel total | 2,461 | 2,340 | 2,335 |
--------------------------------------------------------------------------------
Financial ratios have been calculated according to the same principles as in
financial statements 2007.
--------------------------------------------------------------------------------
| CONTINGENCIES AND COMMITMENTS | 30/9/08 | 30/9/07 | 31/12/07 |
--------------------------------------------------------------------------------
| 1,000 EUR | | | |
--------------------------------------------------------------------------------
| Vessel hires | | | |
--------------------------------------------------------------------------------
| Within 12 months | 68,459 | 89,821 | 89,899 |
--------------------------------------------------------------------------------
| Between one and five years | 98,745 | 67,105 | 51,614 |
--------------------------------------------------------------------------------
| After five years | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| | 167,204 | 156,926 | 141,513 |
--------------------------------------------------------------------------------
| Other leases | | | |
--------------------------------------------------------------------------------
| Within 12 months | 7,172 | 5,278 | 5,673 |
--------------------------------------------------------------------------------
| Between one and five years | 22,111 | 11,955 | 21,537 |
--------------------------------------------------------------------------------
| After five years | 38,925 | 8,462 | 42,689 |
--------------------------------------------------------------------------------
| | 68,208 | 25,695 | 69,899 |
--------------------------------------------------------------------------------
Collateral given:
Borrowings secured by given mortgages
--------------------------------------------------------------------------------
| Loans from financial | 670,181 | 540,681 | 531,461 |
| institutions | | | |
--------------------------------------------------------------------------------
| Vessel mortgages provided as | 843,500 | 723,500 | 723,500 |
| guarantees for the above loans | | | |
--------------------------------------------------------------------------------
Other guarantees given on behalf of the Group:
--------------------------------------------------------------------------------
| Collateral | 1,675 | 2,518 | 2,517 |
--------------------------------------------------------------------------------
| Mortgages | 606 | 606 | 606 |
--------------------------------------------------------------------------------
Other guarantees given on behalf of the others:
--------------------------------------------------------------------------------
| Collateral | 0 | 1,027 | 1,200 |
--------------------------------------------------------------------------------
| Mortgages | 0 | 431 | |
--------------------------------------------------------------------------------
Other commitments given by group on behalf of subsidiaries:
--------------------------------------------------------------------------------
| Commitments | 6,000 | 6,000 | 6,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Obligations for capital | 137,488 | 211,319 | 197,137 |
| expenditure | | | |
--------------------------------------------------------------------------------
| Other obligations | 84 | 107 | 101 |
--------------------------------------------------------------------------------
Open derivative instruments:
--------------------------------------------------------------------------------
| 1,000 EUR | 30/9/0 | 30/9/0 | 31/12/07 | 30/9/08 | 30/9/07 | 31/12/07 |
| | 8 | 7 | | | | |
--------------------------------------------------------------------------------
| | Fair value | Contract amount |
--------------------------------------------------------------------------------
| Currency | -270 | -2,495 | -3,845 | 20,555 | 86,325 | 64,126 |
| forwards | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 146 | -513 | -327 | 120,000 | 120,000 | 120,000 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
Contingent liabilities
Finnsteve's Leasehold Agreement:
When the new Vuosaari harbour is operational, Finnsteve Oy will transfer its
port operations from Helsinki's West Harbour and North Harbour to Vuosaari.
Finnsteve and the Port of Helsinki have made a leasehold agreement, which
obliges the leaseholder to dismantle and remove any buildings, plants and
equipment (including foundations) located in the area. The extent of the
liabilities arising from this depends on future town planning and is therefore
difficult to estimate. According to the managements present estimate, it is not
material, however.
REVENUE AND OPERATING RESULT BY QUARTER
--------------------------------------------------------------------------------
| MEUR | Q1/08 | Q1/07 | Q2/08 | Q2/07 | Q3/08 | Q3/07 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shipping and sea | 160.0 | 132.5 | 173.4 | 146.4 | 170.2 | 150.6 |
| transport | | | | | | |
--------------------------------------------------------------------------------
| Port operations | 32.4 | 33.3 | 33.5 | 33.5 | 30.7 | 33.5 |
--------------------------------------------------------------------------------
| Eliminations | -7.3 | -8.4 | -7.9 | -8.5 | -7.0 | -7.6 |
| (intragroup) | | | | | | |
--------------------------------------------------------------------------------
| External sales | 185.1 | 157.4 | 199.0 | 171.4 | 193.8 | 176.5 |
--------------------------------------------------------------------------------
| Operating profit | | | | | | |
--------------------------------------------------------------------------------
| Shipping and sea | 12.7 | 11.0 | 17.5 | 14.9 | 12.0 | 24.5 |
| transport | | | | | | |
--------------------------------------------------------------------------------
| Port operations | 1.3 | 2.5 | 0.0 | 2.0 | -1.4 | 2.2 |
--------------------------------------------------------------------------------
| Operating profit | 14.0 | 13.5 | 17.5 | 16.9 | 10.6 | 26.7 |
| total | | | | | | |
--------------------------------------------------------------------------------
| Financial items | -8.5 | -5.2 | -6.8 | -6.7 | -10.3 | -9.4 |
--------------------------------------------------------------------------------
| Profit | 5.5 | 8.3 | 10.7 | 10.2 | 0.3 | 17.3 |
| before taxes | | | | | | |
--------------------------------------------------------------------------------
| Income taxes | -1.0 | -1.7 | -1.8 | -2.2 | 0.7 | -3.6 |
--------------------------------------------------------------------------------
| Profit for the | 4.6 | 6.6 | 8.9 | 8.1 | 0.9 | 13.7 |
| reporting period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS (undiluted) | 0.11 | 0.16 | 0.22 | 0.20 | 0.02 | 0.33 |
--------------------------------------------------------------------------------
| EPS (diluted) | 0.11 | 0.16 | 0.22 | 0.20 | 0.02 | 0.33 |
--------------------------------------------------------------------------------
Related Party Transactions
There were no material related party transactions during the reporting period.
Reporting
The interim report includes a summary of the financial statements for the period
in accordance with the IAS 34. The accounting principles are the same as in the
financial statements of 2007. This interim report is unaudited.