Tallink Group reports €23.9 million Q3 2020 net losses

Tallink logo atop its hotel in Tallinn.
Tallink logo atop its hotel in Tallinn. Source: Siim Lõvi /ERR

Tallink Group has today announced its unaudited financial results for the third quarter and first nine months of 2020, which confirm the group does not expect to make a profit in the full financial year in 2020.

Shipping line and ferry operator Tallink Group says its net loss for the third quarter of 2020 (Q3 2020) stands at €23.9 million and that it will make a loss for 2020 as a whole.

The company's latest results cover the first nine months of the coronavirus-hit year as well as Q3, and are unaudited.

The Q3 2020 net loss of €23.9 million compares with a €54.6-million profit for the same quarter of 2019.

Q3 2020 earnings before interest, taxes, depreciation and amortization (EBITDA) is still in the black, however, Tallink says, thanks to significant activities and efforts on the part of the company to pursue a number of different new business lines and routes and stands at €5.7 million (Q3 2019: €83.2 million).

Unaudited revenue down 50 percent on year to Q3 2020

The Group's unaudited revenue for Q3 2020 decreased by a significant 50 percent on year to €143.7 million, compared with €287.8 million in Q3 2019.

The group's ticket revenue decreased by 58.6 percent, on board sales by 50.6 percent, cargo revenue by 21.5 percent and hotel accommodation revenue by 73.2 percent compared with the same period in 2019.

In contrast to Q2 2020 there was significantly less direct and indirect financial support available, the group says, after government coronavirus measures such as a wage support scheme petered out.

During the quarter the company's activities were oriented toward securing the long-term sustainability of the company including initiation of reorganization, withdrawing the first €40m instalment of the €100m working capital loan from state-owned credit body KredEx, and making prepayments towards the new shuttle vessel MyStar.

The Group's total investments in Q3 amounted to €53.8 million. 

In the first nine months of the year the group reported a €81.5 million unaudited net loss (€44.2 million net profit in the first 9 months of 2019).

The group's unaudited revenue for the nine months decreased by 49.7 percent compared with the same period in 2019 and stood at €363.6 million.

Unaudited EBITDA decreased significantly in the first 9 months of 2020 on year, to €6.9 million (it was €137.7 million in the first nine months of 2019).

Tallink Group CEO: Challenging year of ups and downs

Commenting on Q3 2020, Tallink Group's CEO Paavo Nõgene said:

"The third quarter of this challenging year has been one of ups and downs. We started the quarter with great optimism, initiating new routes, activities and plans, hoping for some kind of recovery, but ended it almost where we landed at the end of the first quarter of this year."

"With the new routes, special cruises and a great team effort, we managed to claw back at least some of the lost time and business from the second quarter and the fact that the number of trips we managed to make in the third quarter this year was only 7 percent less than in the same period last year, is great testament to this."

"However, with maximum capacity restrictions on all the departures we made to guarantee everyone's safety, it was impossible to achieve the same revenue levels as we have done during the high season in other years. And, as the advice against travelling and restrictions slowly started to re-emerge in mid-August, we have been forced to make some very difficult decisions in the organisation to secure the long-term sustainability of our company," he added.

"As external support dwindled in the third quarter, amounting to a mere €4.9 million mostly for salary compensation support in Sweden in Q3, and no further significant subsidies agreed in Q4, we have had no option but to start difficult collective redundancy processes and significant restructuring in our business across the markets to bring our costs and income in line with each other."

Nõgene noted that staffing had fallen to 5,000, from 7,200 at the start of the year, as a result of the pandemic. 

"That is over 2,000 real people with families, commitments and futures now sadly facing an uncertain time," he said.

Redundancies didn't get going until September, having been staved off by the state wage support scheme in April to June, Nõgene added, and said that the company would remain leaner and more streamlined into 2021, where it has plans for spring and summer.


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Editor: Andrew Whyte

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