EIMSKIP: Results for Q1 2023
May 16 2023 - 11:06AM
EIMSKIP: Results for Q1 2023
HIGHLIGHTS OF QUARTER
ONE
- Overall good results, driven by strong performance of the
Container liner services, while results in International forwarding
decreased, as expected, with market conditions that have
significantly changed as the global shipping market has normalized.
- Sharp decline in global freight rates resulting in a decrease
in both revenue and cost YoY, mainly through purchase of
third-party services.
- Overall moderate growth in liner volumes compared to same
quarter last year or an increase of 5.3%.
- Import to Iceland remained on a strong level and export from
Iceland and Faroe Islands benefitted from strong pelagic seasons
while export of farmed salmon and industrial cargo from Iceland was
lower than expected.
- Trans-Atlantic volume grew by 9.6% and rates decreased from Q4
2022 levels and were on a similar level as in Q1 2022.
- International forwarding with marginal decrease in volume or
2.4% and solid financial results, despite decrease from previous
year.
- Revenue in the quarter amounted to EUR 214.6 million, a
decrease of EUR 25.1 million or 10.5% when compared with Q1 2022,
mainly caused by lower global freight rates.
- Expenses amounted to EUR 182.7 million, a decrease of EUR 26.6
million or 12.7% from last year, mainly driven by a significant
decrease in cost of 3rd party services.
- Salary expenses increased by EUR 2.7 million or 8.3% due to
e.g., increase in FTEs and general wage increases partly offset by
a positive currency effect of EUR 1.5 million.
- EBITDA in the quarter on a similar level as same time last year
and amounted to EUR 31.8 million, up by EUR 1.5 million or
4.8%.
- EBIT in the quarter amounted to EUR 15.8 million which is an
increase of EUR 0.7 million or 4.6%.
- Share of profit of affiliates amounted to EUR 1.9 million in
the quarter, an increase of EUR 1.1 million from last year.
- Net earnings amounted to EUR 12.5 million compared to Net
earnings of EUR 10.5 million for the same period in 2022.
- Good cash flow, with net cash from operating activities
amounting to EUR 34.3 million, an increase of EUR 5.5 million
compared with same quarter last year, mainly driven by changes in
net working capital.
- Strong liquidity at end of the period with a cash position of
EUR 86.8 million compared to EUR 51.2 million at end of same
quarter last year. At the end of the quarter, around EUR 22.7
million were allocated to dividend payment and EUR 12.7 million to
share capital reduction, both paid in April.
- Total maintenance CAPEX and new investments in line with plan
for the first three months and amounted to EUR 7.2 million compared
to EUR 4.4 million for the first three months last year.
VILHELM MÁR THORSTEINSSON,
CEO
“We are overall pleased with the financial
results in the first quarter. The container liner saw a moderate
growth in volume and the three pillars of the system; Iceland,
Faroe Islands and Trans-Atlantic services, all performed well in
the quarter. Import to Iceland remained strong and export from
Iceland and Faroe Islands benefitted from successful pelagic
seasons while farmed salmon and industrial exports from Iceland
were on a rather low level. Trans-Atlantic volume grew by 9.6%
while the freight rates decreased in the quarter as the global
shipping market normalized, however the rates were on similar level
as in Q1 2022. The changes in the global market landscape affected
our international forwarding operations where volume remained on a
similar level to the year before, while financial results decreased
as was expected.
Both revenue and expenses decreased in the
quarter, mainly driven by lower cost of third-party services.
Revenue in the quarter amounted to EUR 214.6 million and decreased
by EUR 25.1 million from last year and expenses amounted to EUR
182.7 million and decreased by EUR 26.6 million. EBITDA in the
quarter amounted to EUR 31.8 million and increased by EUR 1.5
million from same quarter last year and EBIT amounted to EUR 15.8
million, an increase of EUR 0.7 million. Net earnings amounted to
EUR 12.5 million compared to EUR 10.5 million last year.
The second quarter has been eventful so far with
the sale of the ferry Baldur, acquisition of the port agency and
forwarding activities of Royal Arctic Line in Greenland, strategic
changes to the sailing system and approval of new sustainability
targets which include reaching net-zero emissions in 2040 and
increasing share of women in the company’s management.
An agreement was signed in April for the sale of
the ferry Baldur, which is servicing in Breiðafjörður under the
brand Sæferðir. The ferry has for a long time been an important
connection for the West Fjords, and its importance has increased
even further with the growing activity in the area. Baldur will
remain in service until this October when it will be delivered to
its new owner. The Icelandic Road and Coastal Administration
(Vegagerðin) is expected to issue a tender announcement for the
ferry operations in Breiðafjörður soon and until the tender is
concluded, uncertainty remains regarding the future of Sæferði’s
ferry operation in the area.
In May, Eimskip acquired the port agency and
forwarding activities of Royal Arctic Line in Greenland. Greenland
is a growing, high-potential market area and the acquisition
increases Eimskip’s presence and strengthens its service portfolio
in the Greenlandic market.
We recently announced changes to our sailing
system which include connecting the reefer liner system in Norway
with the container liner system in Faroe Islands. This allows us to
reduce number of container vessels in operation by one, increase
utilization of the system and our terminal in the Faroes as well as
reduce bunker consumption and thus lower emissions. Subsequently we
announced weekly coastal services in Iceland which will transform
our domestic services. These changes strengthen our service
offering and create business opportunities by adding new
connections while resulting in lower operating cost.
The outlook for coming months is mixed. There is
general positivity surrounding our home market in the
North-Atlantic, while the swift changes in the global shipping
market will inevitably continue to affect our international
forwarding operations and the Trans-Atlantic rates in our container
liner. On the other hand, lower international freight rates and
bunker prices have decreased customers’ total transportation cost
which should positively affect demand in the longer term. We
experience general inflationary pressure on salaries and other
operating expenses, both in Iceland and internationally and stay
committed to manage our costs in a proactive way.”
INVESTOR MEETING 17 MAY
2023
The Board of Directors of Eimskipafélag Íslands
hf. approved the Company’s Condensed Consolidated Interim Financial
Statements for the period 1 January to 31 March 2023 at its
meeting on 16 May 2023. Investors and market participants are
invited to a meeting on Wednesday, 17 May 2023, at 8:30 a.m. at the
Company’s headquarters, Sundabakki 2, second floor. The meeting
will also be webcasted live in Icelandic at
www.eimskip.com/investors. Vilhelm Már Thorsteinsson, CEO and María
Björk Einarsdóttir, CFO, will present the Company’s financial
results for Q1 2023. Investor presentation and a recording of the
meeting will be available on the Company’s investor relations
website.
FURTHER INFORMATION
María Björk Einarsdóttir, CFO, tel: +354 774
0604, email: investors@eimskip.com
Guðbjörg Birna Björnsdóttir, Head of Treasury
and Investor Relations, tel: +354 844 4752, email:
investors@eimskip.com
FORWARD-LOOKING STATEMENTS
Statements contained in this financial press
release that refer to the Company’s estimated or anticipated future
results or future activities are forward-looking statements which
reflect the company’s current analysis of existing trends,
information and plans. These forward-looking statements are subject
to a number of risks and uncertainties that could cause actual
results to differ materially depending on factors such as the
availability of resources, the timing and effect of regulatory
actions and other factors. Eimskip undertakes no obligation and
does not intend to update these forward-looking statements to
reflect events or circumstances occurring after this press release.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in
their entirety by this cautionary statement.
- Eimskip - Condensed Consolidated Interim Financial Statements
Q1 2023
- Eimskip - Q1 2023 Financial Results - Investor
Presentation
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