AS Tallink Grupp Audited Annual Report for the Financial Year 2023
Dear investors and business partners
After several years of writing this message to
you with mainly challenges and turbulence and uncertainties to
report in addition to a constant struggle to keep our company’s
nose above water, I am pleased to be able to write this year’s
message with a slightly more positive tone.
As a result of almost a herculean effort,
dedication, perseverance, commitment and many sacrifices, Tallink
Grupp has achieved the near-impossible in 2023 and has risen like a
phoenix from the ashes of the last four years of crises and
challenges. To get to a point of reporting significant profits from
nearly all operations being suspended for long periods almost four
years ago today, has required the management and all employees of
Tallink Grupp to put everything we have into the game – creativity,
flexibility, speed, knowledge, experience, courage, determination
and so much more.
The positive results we are reporting for 2023
speak volumes about the people who work in our company, our
business partners, our suppliers, our customers, our investors and
everyone who has had and continues to have faith in us.
The crisis years have forced us to re-think and
re-evaluate our strategies and operations more than once. Things
that once seemed like temporary solutions and business
opportunities have now developed into fullyfledged new strategic
business areas and are an important part of our company’s plans for
the foreseeable and possibly also long-term future, helping us
reduce risks for our core business.
For example, the chartering out of company
vessels, which has been part of our activities and operations for a
long time, but not to the extent of the last four years, is now
firmly a part of our strategy for the years ahead. Keeping the most
optimum number of our vessels in regular traffic on our core and
most profitable routes and chartering out other vessels in the
medium to long term has enabled us to turn our results around in
the last few years and will be part of our business strategy for
the years ahead. Tallink Grupp’s vessels are highly sought after
across the globe for a wide range of projects, and we have proven,
in recent years in particular, that both our vessels and crews are
able to meet the demands of any global project that we have the
opportunity to support.
Closer to home, our focus must be and will
continue to be on developing our products and services to ensure we
meet the changing customer needs, the demands of the fastchanging
world around us and regulatory requirements. To secure our place in
the future 20 to 30 years from now, we must put even more emphasis
on innovation and investment in sustainable development today. With
regulations on the one hand and ambitious goals for tackling
climate change on the other, we must pick up pace and get ahead in
this race for a carbon-neutral future, responsible value chains and
zero waste.
There is no denying that achieving all the goals
set for a sustainable future is extremely challenging, especially
for sectors like transport where solutions are still few and far
between, but we are focusing our efforts on ever stronger
cooperation with research institutions, tech start-ups, industry
peers, other industries and many others to find more and better
solutions to benefit us all. And find them urgently.
The targets that have been set cannot be
achieved if everyone works in isolation. Fighting climate change
should no longer be about competition, but all about collaboration.
In summary, we look back on 2023 with gratitude for our colleagues’
dedication and passion for our recovery, our investors’ and
partners’ continued faith in and support for us, and our customers’
loyalty towards us. On behalf of everyone at Tallink Grupp, I can
promise you that we will continue working with the same passion and
determination in 2024 and the years to come to deserve your trust
and loyalty also in the future. Our ambition is still to be the
best place to work for our people, the first
choice for our customers, and the most innovative and sustainable
service provider on and around the Baltic Sea. With your continued
faith and trust, I know we can be all that.
Yours sincerely
Paavo Nõgene
Chairman of the Management Board
AS Tallink
Grupp Audited Annual Report of the 2023 Financial Year
In the financial year 2023 (1 January – 31
December), AS Tallink Grupp and its subsidiaries (the Group)
carried 5.7 million passengers, which is 4.5% more than in the
financial year 2022. The number of cargo units transported
decreased by 20.9% compared to the previous financial year, while
the number of passenger cars transported exhibited a positive
year-on-year growth of 2.6%.
The Group’s audited consolidated revenue
amounted to EUR 835.3 million (EUR 771.4 million in the financial
year 2022), up by 8.3% year-on-year. Revenue from route operations
(core business) increased by EUR 16.9 million to EUR 645.8 million
compared to the financial year 2022. Audited EBITDA was EUR 214.5
million (EUR 135.8 million in the financial year 2022) and the
unaudited net profit for the period was EUR 78.9 million (EUR 13.9
million in the financial year 2022), up 58.0% and 466.0%,
respectively.
The following operational factors impacted the
Group’s revenue and operating results in 2023:
- Cargo and passenger transportation volumes were impacted by
fewer vessels in operation due to chartering and by fewer trips
compared to the previous year.
- Demand was also affected by low consumer and business
confidence levels, and the weak economic environment in all of the
Group’s core markets as well as global geopolitical
instability.
- At the end of the financial year, the Group operated 15
vessels, including 2 shuttle vessels, 2 cargo vessels and 5
operating cruise ferries, as well as 5 vessels chartered out (3
vessels on long-term and 2 vessels on short-term charter) and 1
vessel in lay-up.
- During the financial year, 2 charter agreements ended. The
charter agreement of the cruise vessel Romantika was terminated in
September 2023 prior to its expiry date. The short-term charter
agreement of the cruise ferry Victoria I expired in July 2023. In
addition, the Group extended the charter agreements of the cruise
vessels Galaxy I and Silja Europa until April 2024 and the end of
2024, respectively. The shuttle vessel Oscar Wilde (formerly Star)
was chartered out in May 2023 for 20 months with an option to
extend the charter period by 2+2 years and included a purchase
option.
- The planned maintenance works of the vessels totalled to 61
days.
- The Group operated 3 hotels in Tallinn and 1 in Riga.
- Declining global fuel prices, an optimal fleet size and strict
cost control had a positive impact on the Group’s cost base.
However, while the fuel prices have dropped, the fuel
transportation cost component has increased due to the change in
the country of origin of the fuel.
- The Group repaid loans in the amount of EUR 487.6 million,
which includes the refinancing of loans of EUR 298 million. The net
repayment of interest-bearing loans was EUR 189.6 million.
- The Group’s net debt to EBITDA ratio was 2.8 as at the end of
the financial year 2023, compared to 5.4 as at the end of the
financial year 2022.
- The Group continues to focus on cost efficiencies from
previously implemented measures and maintaining profitable
operations on its core routes.
- The Group regularly monitors the developments on its core
routes, including the capacity of each route, and continues to seek
new chartering options for vessels not used on the main routes, as
well as working to extend the existing charter agreements.
Key figures
|
2023 |
2022 |
2021 |
Revenue (EUR million) |
835.3 |
771.4 |
476.9 |
Gross profit/loss (EUR million) |
203.8 |
113.5 |
21.7 |
EBITDA¹ (EUR million) |
214.5 |
135.8 |
58.3 |
EBIT¹ (EUR million) |
113.3 |
37.7 |
-37.0 |
Net profit/loss for the period (EUR
million) |
78.9 |
13.9 |
-56.6 |
|
|
|
|
Depreciation and amortisation¹ (EUR
million) |
101.2 |
98.1 |
95.3 |
Capital expenditures¹ ²(EUR
million) |
28.2 |
203.3 |
20.2 |
Weighted average number of ordinary
shares outstanding |
743
569 064 |
743
569 064 |
694
444 381 |
Earnings/loss per share¹ (EUR) |
0.11 |
0.02 |
-0.08 |
|
|
|
|
Number of passengers¹ |
5 705
600 |
5 462
085 |
2 961
975 |
Number of cargo units¹ |
323
990 |
409
769 |
369
170 |
Average number of employees¹ |
4
879 |
5
023 |
4
360 |
|
|
|
|
As at 31 December |
2023 |
2022 |
2021 |
Total assets (EUR million) |
1
555.2 |
1
691.6 |
1
585.9 |
Total liabilities (EUR million) |
769.5 |
984.7 |
893.4 |
Interest-bearing liabilities¹ (EUR
million) |
649.3 |
853.5 |
779.9 |
Net debt¹ (EUR million) |
607.3 |
738.6 |
652.4 |
Net debt to EBITDA¹ |
2.8 |
5.4 |
11.2 |
Total equity (EUR million) |
785.8 |
706.9 |
692.5 |
Equity ratio¹ (%) |
50.5% |
41.8% |
43.7% |
|
|
|
|
Number of ordinary shares
outstanding |
743
569 064 |
743
569 064 |
743
569 064 |
Shareholders’ equity per share
(EUR) |
1.06 |
0.95 |
0.93 |
|
|
|
|
Ratios¹ |
2023 |
2022 |
2021 |
Gross margin (%) |
24.4% |
14.7% |
4.5% |
EBITDA margin (%) |
25.7% |
17.6% |
12.2% |
EBIT margin (%) |
13.6% |
4.9% |
-7.8% |
Net profit/loss margin (%) |
9.4% |
1.8% |
-11.9% |
|
|
|
|
ROA (%) |
7.0% |
2.4% |
-2.4% |
ROE (%) |
10.6% |
2.1% |
-8.2% |
ROCE (%) |
8.4% |
3.1% |
-2.8% |
Current ratio |
0.5 |
0.7 |
0.6 |
¹ Alternative performance measures based on ESMA guidelines are
disclosed in the “Alternative performance measures” section of the
report.
2 Does not include additions to right-of-use assets.
Sales and segments
In the financial year 2023, the Group’s total
revenue increased by EUR 63.9 million to EUR 835.3 million compared
to EUR 771.4 million in the financial year 2022.
Revenue from route operations (core business)
amounted to EUR 645.8 million, EUR 16.9 million more than in the
financial year 2022. The segment result from route operations (core
business) amounted to EUR 107.2 million compared to EUR 39.7
million in the financial year 2022.
In the financial year 2023, the Group’s vessels
carried a total of 3.5 million passengers on the Estonia-Finland
route, an increase of 10.8% year-on-year. The number of cargo units
transported decreased by 20.4%. Revenue from the Estonia-Finland
route increased by EUR 20.2 million to EUR 298.0 million and the
segment result improved by EUR 27.3 million to EUR 79.0 million. In
the financial year 2023, the segment reflects the operations of the
following vessels:
- 1 January – 1 May 2023: the shuttle vessels MyStar, Megastar
and Oscar Wilde (formerly Star). The latter stopped operating on
the route in May 2023 due to a charter agreement.
- 2 May – 11 October 2023: the shuttle vessels MyStar and
Megastar.
- 12 October – 31 December 2023: the shuttle vessels MyStar and
Megastar and the cruise ferry Victoria I, which was added to the
route in October 2023.
The cruise ferry Silja Europa stopped operating
on the Estonia-Finland route in August 2022 due to a charter
agreement.
In the financial year 2023, the Group carried a
total of 1.7 million passengers on Finland-Sweden routes, down by
9.9% year-on-year. The number of cargo units transported decreased
by 41.6%. The routes revenue decreased by EUR 17.2 million to EUR
257.1 million while the segment result improved by EUR 24.7 million
year-on-year to EUR 23.8 million. The decline in passenger numbers
and cargo volumes was mainly due to one less vessel in operation,
26% fewer trips compared to the financial year 2022 and the change
of route to Turku-Kapellskär. In the financial year 2023, the
segment reflects the operations of one cruise ferry on
Turku-Stockholm/Turku-Kapellskär routes and two cruise ferries on
the Helsinki-Stockholm route. The cruise ferry Galaxy I stopped
operating on the Turku-Stockholm route from September 2022 due to a
charter agreement.
On Estonia-Sweden routes the number of
passengers carried increased by 19.0% to 0.6 million in the
financial year 2023. The number of cargo units transported
increased by 3.0% year-on-year. Revenue of Estonia-Sweden routes
increased by EUR 13.9 million to EUR 90.8 million and the segment
result improved by EUR 15.5 million to EUR 4.5 million
year-on-year. Estonia-Sweden routes reflect the operation of two
cargo vessels on the Paldiski-Kapellskär route and one cruise ferry
on the Tallinn-Stockholm route.
Revenue from the segment Other increased by a total of EUR
48.6 million to EUR 196.0 million due to increase in the number of
chartered vessels. The segment result improved by EUR 19.5 million
year-on-year to EUR 54.5 million. At the end of the financial year
2023, the Group had 5 vessels on charter, of which 3 were on
long-term and 2 on short-term charter.
At the end of the 2023 financial year, long-term
charters were as follows:
- The vessel Atlantic Vision was chartered to Canada in November
2008. The current agreement runs until May 2024 with an option to
extend for another 12 months.
- The shuttle vessel Oscar Wilde (formerly Star) was chartered
out from 5 May 2023 for 20 months with an option to extend the
charter by 2+2 years and an option to purchase the vessel.
- The cruise ferry Isabelle has been chartered out on a long-term
basis since 1 July 2023 with a purchase option.
At the end of the 2023 financial year,
short-term charters were as follows:
- The cruise ferry Galaxy I was chartered out in September 2022.
In September 2023, the agreement was extended by six months until
April 2024.
- The cruise ferry Silja Europa was chartered out in August 2022.
In October 2023, the charter agreement was extended until the end
of 2024.
During the year, the charter agreements of 2
vessels ended. The charter agreement for the cruise ferry
Romantika, signed in March 2022, was terminated on 1 September
2023. The cruise ferry Victoria I, the charter of which expired in
July, started operating on the Tallinn-Helsinki route on 12 October
2023.
Restaurant and shop sales on board and on shore
totalled EUR 391.0 million (EUR 378.2 million in 2022) accounting
for almost half of total revenue. Ticket sales amounted to EUR
217.5 million (EUR 191.9 million in 2022) and sales of cargo
transport to EUR 91.0 million (EUR 103.2 million in 2022). Revenue
from the chartering of vessels amounted to EUR 101.2 million
compared to EUR 65.8 million in the financial year 2022.
Earnings
In the financial year 2023, the Group’s gross
profit increased by EUR 90.4 million to EUR 203.8 million compared
to EUR 113.5 million in the financial year 2022. EBITDA improved by
EUR 78.7 million to EUR 214.5 million.
The Group’s profitability was mainly influenced
by the following factors:
- strong pricing and chartering strategy;
- continued strong focus on cost efficiency through previously
implemented measures;
- lower global fuel prices and lower consumption due to
chartering of vessels.
The Group’s audited net profit for the financial
year 2023 was EUR 78.9 million or EUR 0.106 per share compared to a
net profit of EUR 13.9 million or EUR 0.019 per share in 2022
financial year.
The cost of goods sold at shops and restaurants
amounted to EUR 170.6 million (EUR 160.6 million in 2022).
Fuel costs for the financial year 2023 amounted
to EUR 97.2 million (EUR 144.1 million in 2022). The decline in
fuel cost was driven by an approximately 23% drop in global fuel
prices, but also by lower consumption and more vessels on charter
compared to the previous financial year. At the same time, the
share of the Group’s fuel transport cost component in the fuel
price increased year-on-year due to the increased distance of the
fuel sourcing.
The Group’s total personnel expenses amounted to
EUR 181.0 million (EUR 162.9 million in 2022). Personnel expenses
related to administrative staff and sales and marketing staff were
EUR 27.8 million and EUR 21.5 million, respectively (EUR 23.3
million and EUR 19.6 million, respectively, in 2022). The personnel
expenses related to servicing and technical personnel amounted to
EUR 131.7 million compared to EUR 120.0 million in 2022. The
average number of employees in the financial year 2023 was 4 879 (5
023 in 2022).
Marketing and administrative expenses for the
financial year 2023 amounted to EUR 83.0 million (EUR 74.3 million
in 2022). Excluding personnel, administrative expenses for the
period amounted to EUR 15.1 million and sales and marketing
expenses to EUR 18.7 million (EUR 14.1 million and EUR 17.3
million, respectively, in 2022).
The increase in the amortisation and
depreciation expense by EUR 3.1 million to EUR 101.2 million
compared to the financial year 2022 was mostly driven by the
delivery of the shuttle-vessel MyStar to the Tallinn-Helsinki route
in December 2022. There were no impairment losses related to the
Group’s property, plant and equipment and intangible assets.
As a result of higher interest rates and
increased financing obligations related to the delivery of the
shuttle-vessel MyStar, net finance costs increased by EUR 10.9
million year-on-year to EUR 35.5 million in the financial year
2023.
Liquidity and cash flow
The Group’s net operating cash flow for the
financial year 2023 was positive at EUR 203.4 million (EUR 144.3
million in 2022).
Net cash used in investing activities was EUR
26.2 million (EUR 200.3 million in 2022).
In the financial year 2023, the net repayment of
interest-bearing loans amounted to EUR 189.6 million. Interest
payments were EUR 32.8 million (EUR 23.5 million in 2022).
At 31 December 2023, the Group’s cash and cash
equivalents totalled EUR 41.9 million (EUR 114.9 million on 31
December 2022). In addition, available unused overdraft credit
lines amounted to EUR 75.0 million (EUR 135.0 million in 2022). The
total liquidity buffer (cash, cash equivalents and unused credit
facilities) amounted to EUR 116.9 million on 31 December 2023 (EUR
249.9 million on 31 December 2022).
In management’s opinion, the Group has
sufficient liquidity to support its operations.
Dividends
In 2018, the Group adopted a dividend policy
subject to which dividends of a minimum amount of EUR 0.05 per
share would be paid if the economic performance allows it.
Due to the ongoing global uncertainties the
Annual General Meeting of Shareholders held on 13 June 2023 decided
not to pay dividends for the financial year 2022.
In agreement with the Supervisory Board of the
Group, the Group’s Management Board has decided to prepare a
proposal to the General Meeting of Shareholders to pay a dividend
of EUR 0.06 per share in 2024 for the financial year of 2023.
Consolidated statement of profit or loss
and other comprehensive income
For the year ended 31 December, in thousands of
EUR |
2023 |
2022 |
Revenue |
835
325 |
771
387 |
Cost of sales |
-631 491 |
-657 917 |
Gross profit/loss |
203
834 |
113
470 |
|
|
|
Sales and marketing expenses |
-42
162 |
-38
796 |
Administrative expenses |
-52
401 |
-47
555 |
Impairment loss on receivables |
-71 |
-153 |
Other operating income |
4
275 |
10
871 |
Other operating expenses |
-171 |
-164 |
Result from operating activities |
113
304 |
37
673 |
|
|
|
Finance income |
1
332 |
215 |
Finance costs |
-36
864 |
-24
871 |
Share of profit/loss of equity-accounted investees |
-75 |
-90 |
Profit/loss before income tax |
77
697 |
12
927 |
|
|
|
Income tax |
1
175 |
1
008 |
|
|
|
Net profit/loss |
78
872 |
13
935 |
Net profit/loss attributable to equity holders of the Parent |
78
872 |
13
935 |
|
|
|
Other compherensive income |
|
|
Items that may be reclassified to profit or loss |
|
|
Exchange differences on translating foreign operations |
-172 |
480 |
Other comprehensive income |
-172 |
480 |
|
|
|
Total comprehensive income |
78
700 |
14
415 |
Total comprehensive income attributable to equity holders of the
Parent |
78
700 |
14
415 |
|
|
|
Basic
and diluted loss per share (in EUR) |
0.106 |
0.019 |
Consolidated statement of financial position
As at 31 December, in thousands of EUR |
2023 |
2022 |
ASSETS |
|
|
Cash and cash equivalents |
41
921 |
114
935 |
Trade and other receivables |
31
766 |
31
380 |
Prepayments |
7
661 |
9
379 |
Prepaid income tax |
193 |
37 |
Inventories |
41 411 |
39 965 |
Current assets |
122
952 |
195
696 |
|
|
|
Investments in equity-accounted investees |
0 |
75 |
Other financial assets and prepayments |
4
794 |
3
622 |
Deferred income tax assets |
21
840 |
21
840 |
Investment property |
300 |
300 |
Property, plant and equipment |
1 377
664 |
1 438
286 |
Intangible assets |
27 671 |
31 823 |
Non-current assets |
1 432
269 |
1 495
946 |
TOTAL ASSETS |
1 555
221 |
1 691
642 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Interest-bearing loans and borrowings |
104
097 |
165
049 |
Trade and other payables |
85
406 |
86
934 |
Payables to owners |
6 |
6 |
Income tax liability |
10 |
35 |
Deferred income |
34 788 |
44 222 |
Current liabilities |
224
307 |
296
246 |
|
|
|
Interest-bearing loans and borrowings |
545 160 |
688 465 |
Non-current liabilities |
545 160 |
688 465 |
Total liabilities |
769
467 |
984
711 |
|
|
|
Share capital |
349
477 |
349
477 |
Share Premium |
663 |
663 |
Reserves |
67
056 |
66
363 |
Retained earnings |
368 558 |
290 428 |
Equity attributable to equity holders of
the Parent |
785
754 |
706
931 |
Total
equity |
785 754 |
706 931 |
TOTAL LIABILITIES AND EQUITY |
1 555
221 |
1 691
642 |
Consolidated statement of cash flows
For the year ended 31 December, in thousands of
EUR |
2023 |
2022 |
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
Net profit/loss for the period |
78
872 |
13
935 |
Adjustments for: |
|
|
Depreciation and amortisation |
101
224 |
98
136 |
Net gain/loss on disposals of property, plant and equipment |
-15 |
-34 |
Net interest expense |
35
290 |
24
622 |
Loss from equity-accounted investees |
75 |
90 |
Net unrealised foreign exchange gain/loss |
-198 |
341 |
Loss from investments |
123 |
0 |
Income tax |
-1 175 |
-1 008 |
Adjustments |
135
324 |
122
147 |
Changes in: |
|
|
Receivables related to operating activities |
-378 |
-2
036 |
Prepayments related to operating activities |
1
718 |
-1
602 |
Inventories |
-1
446 |
-5
334 |
Liabilities related to operating activities |
-10 457 |
17 415 |
Changes in assets and liabilities |
-10
563 |
8
443 |
Cash generated from operating
activities |
203
633 |
144
525 |
Income tax paid |
-186 |
-227 |
NET CASH FROM/USED IN OPERATING
ACTIVITIES |
203
447 |
144
298 |
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
Purchase of property, plant and equipment and intangible
assets |
-28
131 |
-203
322 |
Proceeds from disposals of property, plant and equipment |
613 |
2
768 |
Interest received |
1 332 |
215 |
NET CASH USED IN INVESTING
ACTIVITIES |
-26
186 |
-200
339 |
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
Proceeds from loans received |
59
972 |
196
290 |
Repayment of loans received |
-251
431 |
-110
055 |
Change in overdraft |
-15 |
-165 |
Payment of lease liabilities |
-21
519 |
-17
157 |
Interest paid |
-32
827 |
-23
516 |
Payment of transaction costs related to loans |
-4
455 |
-1
977 |
NET CASH FROM FINANCING ACTIVITIES |
-250
275 |
43
420 |
|
|
|
TOTAL
NET CASH FLOW |
-73 014 |
-12 621 |
|
|
|
Cash and cash equivalents at the beginning of period |
114
935 |
127
556 |
Change in cash and cash equivalents |
-73 014 |
-12 621 |
Cash and cash equivalents at the end of
period |
41
921 |
114
935 |
Anneli Simm
Investor Relations Manager
AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail anneli.simm@tallink.ee
- 529900QRMWAKKR3L9W75-2023-12-31-en
- Tallink Grupp-AR-2023-ENG-copy
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