Pandemic year comes with €108 million net loss to Tallink

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Snow in Tallinn on February 1, 2021. Source: Siim Lõvi /ERR

Shipping company Tallink Grupp's net loss for 2020 was reported at €108.3 million, while the year prior the company turned a nearly €50 million net profit. In addition, the company's turnover fell by 53 percent on the year to €443 million, the shipping line said on Thursday.

The group's unaudited consolidated revenue amounted to €442.9 million in 2020, which is a 53 percent drop compared to the previous year (€949.1 million in 2019) and the group's unaudited EBITDA for the financial year also declined in 2020, reaching €8.0 million (€171.1 million in 2019).

Considering the 62 percentage reduction in the company's passenger number for the year, the 5.2 percentage decrease in the number of cargo units carried and a significant 20 percentage reduction in the number of trips operated in 2020 compared to 2019, the results for the year, when the world was ravaged by a global health and financial crisis, are unsurprising, according to a press release sent by Tallink.

As a result of travel restrictions that were in place to varying degrees throughout the year, several of the company's normal daily operating routes have been suspended since March 2020 (Tallinn-Stockholm, Helsinki-Stockholm and Riga-Stockholm) and the company's hotels and restaurants were closed for shorter or longer periods during 2020.

The company attempted to boost its operations by setting up various temporary routes during summer and by operating a number of special cruises in areas where travel restrictions allowed operations, but these attempts were once again curbed in fall with travel restrictions gradually re-imposed across the region.

The majority of the company's €100 million investments were made to the company's fleet with the completion of the prepayment instalments of a new LNG-fuelled vessel MyStar making up the largest part of the capital expenditure.

A smaller proportion of the investments were made to enhance the existing fleet's energy efficiency and emissions reductions projects, vital for meeting the company's sustainable development goals, and into increasing the company's cargo capacity by acquiring an additional cargo vessel Sailor. When MyStar starts operating on the Tallinn-Helsinki route in early 2022, a "green bridge" between Estonia and Finland will be established, Tallink announced on Thursday morning.

To carry out the investment commitments and to ensure the sustainability of operations, a key area of activity for the company throughout the year was negotiations with financial institutions. As a result of successful developments in this area, the group ended the year with a total liquidity buffer of € 147.1 million.

Part of the efforts to ensure liquidity in 2020 also included omitting dividend distribution and the Management Board will propose not paying a dividend in 2021 as well.

Due to reduced operations and a critical need to bring the company's income and costs in line, the company was forced to undertake a number of personnel related processes throughout the year, including lay-offs, temporary reductions in working hours and pay, as well as collective redundancies. As a result of the various processes in all the company's home markets, employee numbers across the group reduced during the year from 7,240 at the end of 2019 to 4,237 at the end of 2020.

Tallink Grupp CEO Paavo Nõgene commented on the company's 2020: "A momentous effort has been made by every single employee in Tallink Grupp over the last 12 months to limit and reduce costs, create and find alternative revenue streams to substitute our suspended core operations, to secure liquidity and buffers to ensure we remain strong enough to restart our core activities as soon as the virus situation improves."

"We have paid a high price for the position we are in today and that price has been the loss of more than a third of our dedicated and loyal workforce. We continue to hope that some day we may be able to re-engage at least some of them in our future activities and welcome them back," the CEO continued.

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Editor: Kristjan Kallaste

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