Tallink Grupp
Audited Annual Report of the 2014 Financial Year
DGAP-News: Tallink Grupp 2015-04-30 / 08:50 --------------------------------------------------------------------- Tallinn, 2015-04-30 08:50 CEST (GLOBE NEWSWIRE) -- Audited Annual Report of the 2014 Financial Year In the 2014 financial year the Group's operations were affected by several actions and changes in the operations and market developments. Compared to the previous period an increased number of the Group's vessels were chartered out resulting in higher revenues from charters. The cruise ferries Silja Serenade and Silja Symphony received major upgrades that resulted temporarily in fewer trips. With the goal to optimize operations several re-routings were done. This resulted in lower fuel consumption but added one-off costs. At the same time increased capacity resulted in a changed competitive landscape. These various factors had an effect to the slight decline in the volumes resulting in a somewhat weaker annual result. The Group had a smooth transition switching to low sulphur fuel. One of the goals was to reduce fuel consumption by optimising current operations, therefore several re-routings were made: the cruise ferry Silja Europa was chartered out, the cruise ferry Baltic Queen changed to the Tallinn-Helsinki route and the cruise ferry Romantika changed to Tallinn-Stockholm route, leaving the Riga-Stockholm route with the cruise ferry Isabelle as the only vessel. During the 2014 financial year a total of 8.88 million passengers travelled on the Group's vessels. The Group's consolidated revenue for 2014 was EUR 921.5 million (EUR 942.0 million in 2013). Gross profit was EUR 181.7 million (EUR 190.2 million in 2013), EBITDA EUR 150.6 million (EUR 156.2 million in 2013). Net profit for 2014 was EUR 27.3 million (EUR 43.3 million in 2013), representing earnings per share of EUR 0.041 (EUR 0.065 in 2013). During the 2014 financial year the Group's increased focus continued to be on developing the on-board concept. It is our vision for the long term on-board development of new business concepts for bars, restaurants, shops, boutiques, servicing, technical innovations, customer communication etc, we call this 'Newboard'. In February 2014 the Group launched the refreshed vessel Silja Serenade on the Stockholm-Helsinki route and in October the refreshed Silja Symphony was launched on the same route. The vessels have a 50% expanded shopping area including a new Superstore, upgraded Grand Buffet concept and a new Italian restaurant. Several of the other public areas received a facelift including the refurbishment of Commodore Class cabins and a refreshed SPA & Sauna area. In 2014 the Group invested around EUR 30 million in upgrading the vessels. Active development of the on-line sales channels continued throughout the year. The volume and share of on-line bookings continue to increase. The European Commission has a strategy to reduce atmospheric emissions from seagoing ships. This approach brought the Baltic Sea area new rules. From the start of 2015 the allowed sulphur content was reduced from 1.0% to 0.1%. In order to be in compliance the Group switched to marine gasoil, a more expensive fuel that required minimal investment for the vessels. The Group continues actively to monitor the developments of the alternative solutions such as installing scrubbers on selected vessels, LNG technology and alternative fuels. The key highlights of the 2014 financial year were the following: -- Operations impacted by an overall weak economic environment in the region -- Increased competition -- Development of the online sales channels -- Development of 'Newboard' -- Upgrade of vessels -- Re-routings and additional charters -- Global drop in fuel prices In management's opinion, the Group's financial position allows the Group to pay dividends.Management will propose to the 2015 shareholders' general meeting a dividend distribution of EUR 0.02 per share, i.e. EUR 13,398,000 in aggregate. 2014 2013 Change -------------------------------------------------------------------------------- EUR EUR % -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Revenue (million) 921.5 942.0 -2.2% -------------------------------------------------------------------------------- Gross profit (million) 181.7 190.2 -4.5% -------------------------------------------------------------------------------- Net profit for the period (million) 27.3 43.3 -37.1% -------------------------------------------------------------------------------- EBITDA (million) 150.6 156.2 -3.6% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Depreciation and amortisation (million) 79.9 73.2 9.2% -------------------------------------------------------------------------------- Investments (million) 49.1 43.3 13.5% -------------------------------------------------------------------------------- Weighted average number of ordinary shares 669,882,040 669,882,040 0% outstanding -------------------------------------------------------------------------------- Earnings per share 0.041 0.065 -37.1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Number of passengers 8,881,732 9,114,812 -2.6% -------------------------------------------------------------------------------- Number of cargo units 310,492 301,660 2.9% -------------------------------------------------------------------------------- Average number of employees 6,952 6,948 0.1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 31.12.2014 31.12.2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total assets (million) 1,685.6 1,722.1 -2.1% -------------------------------------------------------------------------------- Total liabilities (million) 907.3 951.0 -4.6% -------------------------------------------------------------------------------- Interest-bearing liabilities (million) 743.4 794.3 -6.4% -------------------------------------------------------------------------------- Net debt (million) 678.1 722.3 -6.1% -------------------------------------------------------------------------------- Total equity (million) 778.3 771.1 0.9% -------------------------------------------------------------------------------- Equity ratio (%) 46.2% 44.8% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Number of ordinary shares outstanding1 669,882,040 669,882,040 0% -------------------------------------------------------------------------------- Shareholders' equity per share 1.16 1.15 1.1% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Ratios -------------------------------------------------------------------------------- Gross margin (%) 19.72% 20.19% -------------------------------------------------------------------------------- EBITDA margin (%) 16.3% 16.6% -------------------------------------------------------------------------------- Net profit margin (%) 3.0% 4.6% -------------------------------------------------------------------------------- Return on assets (ROA) 4.1% 4.8% -------------------------------------------------------------------------------- Return on equity (ROE) 3.6% 5.7% -------------------------------------------------------------------------------- Return on capital employed (ROCE) 5.0% 5.6% -------------------------------------------------------------------------------- Net debt to EBITDA 4.5 4.6 -2.6% -------------------------------------------------------------------------------- EBITDA: Earnings before net financial items, share of profit of equity accounted investees, taxes, depreciation and amortisation 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 total assets ROE: Net profit/Average shareholders' equity ROCE: Earnings before net financial items, taxes / (Total assets - Current liabilities (average for the period)) Net debt: Interest-bearing liabilities less cash and cash equivalents Net debt to EBITDA: Net debt / 12-months trailing EBITDA 1 Share numbers exclude own shares. SALES The Group's consolidated revenue amounted to EUR 921.5 million in 2014 (942.0 million in 2013). Restaurant and shop sales on-board and on mainland of EUR 487.6 million (507.3 million in 2013) contributed more than half of total revenue. Ticket sales amounted to EUR 230.5 million (249.2 million in 2013) and sales of cargo transport to EUR 103.1 million (105.6 million in 2013). The distribution of sales between operational segments remained more or less stable compared to the previous financial year. Geographically, 35.2% or EUR 324.0 million of revenue came from the Finland-Sweden route and 34.9% or EUR 321.7 million from the Estonia-Finland route. Revenue from the Sweden-Estonia route was EUR 102.4 million or 11.1% and from the Sweden-Latvia route EUR 60.0 million or 6.5%. The share of revenue generated by other geographical segments increased to 12.3% (EUR 113.3 million). EARNINGS Gross profit was EUR 181.7 million (EUR 190.2 million in 2013), EBITDA EUR 150.6 million (EUR 156.2 million in 2013). Net profit for 2014 was EUR 27.3 million (EUR 43.3 million in 2013). Basic and diluted earnings per share were EUR 0.041 (EUR 0.065 in 2013). The cost of goods related to sales at shops and restaurants, which is the largest operating cost item, amounted to EUR 211.2 million (EUR 220.2 million in 2013). Accordingly, the proportion of sales on the tax- paid routes (Finland-Estonia and Latvia-Sweden routes), where the margin is lower, increased, whereas the share of the Finland-Sweden tax-free routes decreased. Fuel costs for 2014 were EUR 114.0 million (EUR 129.8 million in 2013). Fuel costs were impacted by lower fuel price levels throughout the year. Measured in euros, in 2014 the average market price of the reference fuel (Fuel oil 1% sulphur content) was approximately 10% lower than in the 2013 calendar year. The Group's personnel expenses amounted to EUR 189.8 million (EUR 182.4 million in 2013). The average number of employees in the 2014 financial year was 6,952 (6,948 in 2013). Administrative expenses for 2014 amounted to EUR 49.2 million and marketing expenses to EUR 62.7 million (EUR 45.1 million and 63.3 million respectively in 2013). Depreciation and amortisation of the Group's assets was EUR 79.9 million (EUR 73.2 million in 2013).According to the operational efficiency review of the ships the Group Management changed at the beginning of the financial year 2014 estimated useful lives of the ships. There were no impairment losses related to the Group's property, plant, equipment and intangible assets. The Group's net finance costs for 2014 amounted to EUR 40.7 million (EUR 36.0 million in 2013). The Group's exposure to credit risk, liquidity risk and market risks, and its financial risk management activities are described in the notes to the financial statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME -------------------- In thousands of EUR 2014 2013 -------------------- -------------------- Revenue 921,466 941,983 Cost of sales -739,789 -751,827 -------------------- Gross profit 181,677 190,156 -------------------- -------------------- Marketing expenses -62,654 -63,292 Administrative expenses -49,211 -45,148 Other operating income 1,696 2,120 Other operating expenses -854 -805 -------------------- Result from operating activities 70,654 83,031 -------------------- -------------------- Finance income 11,760 21,547 Finance costs -52,443 -57,503 Share of profit of equity-accounted investees 24 17 -------------------- Profit before income tax 29,995 47,092 -------------------- -------------------- Income tax -2,734 -3,786 -------------------- -------------------- Net profit for the year 27,261 43,306 -------------------- -------------------- -------------------- Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translating foreign operations 286 114 -------------------- Other comprehensive income for the year 286 114 -------------------- Total comprehensive income for the year 27,547 43,420 -------------------- Basic and diluted earnings per share 0.041 0.065 (in EUR per share) -------------------- CONSOLIDATED STATEMENT OF FINANCIAL POSITION --------------------- In thousands of EUR As at 31 December 2014 2013 --------------------- --------------------- ASSETS Current assets Cash and cash equivalents 65,311 72,012 Trade and other receivables 38,210 40,544 Prepayments 5,448 3,185 Derivatives 0 679 Inventories 31,315 33,457 --------------------- 140,284 149,877 --------------------- --------------------- Non-current assets Investments in equity-accounted investees 286 262 Other financial assets 252 385 Deferred income tax assets 21,338 17,413 Investment property 300 300 Property, plant and equipment 1,467,964 1,495,895 Intangible assets 55,174 57,925 --------------------- 1,545,314 1,572,180 --------------------- TOTAL ASSETS 1,685,598 1,722,057 --------------------- --------------------- LIABILITIES AND EQUITY Current liabilities Interest-bearing loans and borrowings 149,850 106,014 Trade and other payables 91,236 97,387 Income tax liability 1,300 0 Deferred income 29,408 28,315 Derivatives 41,982 30,888 313,776 262,604 --------------------- --------------------- Non-current liabilities Interest-bearing loans and borrowings 593,532 688,327 Other liabilities 0 63 --------------------- 593,532 688,390 --------------------- Total liabilities 907,308 950,994 --------------------- --------------------- Equity Equity attributable to equity holders of the Parent Share capital 404,290 404,290 Share premium 639 639 Reserves 70,129 70,111 Retained earnings 303,232 296,023 --------------------- Total equity attributable to equity holders of the Parent 778,290 771,063 --------------------- Total equity 778,290 771,063 --------------------- TOTAL LIABILITIES AND EQUITY 1,685,598 1,722,057 --------------------- CONSOLIDATED STATEMENT OF CASH FLOWS ------------------- For the year ended 31 December In thousands of EUR 2014 2013 ------------------- ------------------- Cash flows from operating activities Net profit for the period 27,261 43,306 Adjustments: 125,629 118,619 Depreciation and amortisation 79,908 73,176 Net gain/loss on disposals of property, plant and equipment -76 1,300 Net interest expense 35,336 36,687 Net expense from derivatives 15,758 12,558 Profit from equity-accounted investees -24 -17 Net unrealised foreign exchange gain -7,783 -9,178 Share option programme reserve -224 307 Income tax 2,734 3,786 Changes in receivables and prepayments related to operating -2,291 4,229 activities Changes in inventories 2,142 -4,031 Changes in liabilities related to operating activities -2,103 6,649 Income tax paid 71 -378 ------------------- 150,709 168,394 ------------------- ------------------- Cash flows used in investing activities Purchase of property, plant, equipment and intangible assets -49,148 -43,291 Proceeds from disposals of property, plant, equipment 215 1,318 Interest received 140 114 -48,793 -41,859 ------------------- ------------------- Cash flows used in financing activities Proceeds from loans 0 24,000 Repayment of loans -89,842 -198,126 Change in overdraft 43,993 18,456 Proceeds from bonds 0 115,487 Payments for settlement of derivatives -3,985 -4,451 Payment of finance lease liabilities -75 -96 Interest paid -33,270 -32,439 Payment of transaction costs related to loans 0 -557 Dividends paid -20,096 -33,494 Income tax on dividends paid -5,342 -8,903 ------------------- -108,617 -120,123 ------------------- ------------------- TOTAL NET CASH FLOW -6,701 6,412 ------------------- ------------------- Cash and cash equivalents: - at the beginning of period 72,012 65,600 - increase / decrease -6,701 6,412 ------------------- - at the end of period 65,311 72,012 ------------------- Janek Stalmeister Chairman of the Management Board AS Tallink Grupp Tel +372 640 9800 E-mail janek.stalmeister@tallink.ee Harri Hanschmidt Head of the Finance Department AS Tallink Grupp Sadama 5/7. 10111 Tallinn Tel +372 640 8981 E-mail harri.hanschmidt@tallink.ee News Source: NASDAQ OMX --------------------------------------------------------------------- 2015-04-30 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Tallink Grupp Estonia ISIN: EE3100004466 End of News DGAP News-Service --------------------------------------------------------------------- 351259 2015-04-30
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