Tallink back in profit in second quarter of 2023

Tallink ship in Tallinn.
Tallink ship in Tallinn. Source: Siim Lõvi/ERR

Despite a reduced number of trips, passengers as well as cargo units, Tallink recouped from a minor loss in the first quarter to bring in a net profit of €33.4 million in the second quarter of 2023 — up on year from a net loss of €700,000 as well, according to the financial results published by listed Estonian shipper AS Tallink Grupp on Thursday.

Between April 1 and June 30, Tallink's vessels carried a total of 1,541,081 passengers, down 0.7 percent on year, the company said in a press release. The company also carried just 85,359 cargo units last quarter, down 22 percent on year from 109,380. The company cited fewer vessels operating on its routes last quarter as the reason for this decline, noting that it operated 18 percent fewer trips across all routes, thus reducing its overall route capacity.

Nonetheless, the company's unaudited revenue for the quarter increased by 11.5 percent on year, from €206 million the same quarter last year to €229.7 million this year. Its unaudited earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 138.7 percent on year to €68.5 million, up from €28.7 million in the second quarter of 2022. Citing strong efforts and positive results, Tallinn reported a net profit of €33.4 million for the second quarter, up from a net loss of €700,000 on year.

As a result, Tallink delivered a profitable first half of year for the first time since 2015.

In the first half of 2023, the company's seven passenger vessels operating in regular traffic during this period — in addition to two cargo vessels — carried a total of 2,590,858 passengers, up 14 percent on year. The number of cargo units, meanwhile, declined by 18.6 percent on year, totaling 172,091.

Tallink noted that in addition to it having fewer vessels in regular traffic this year due to charters, it also sold the Sea Wind last spring, meaning one less cargo vessel operating on the company's routes in 2023.

In the first half of 2023, the group's unaudited revenue increased by 28.4 percent to €400.9 million, up from €312.2 million, while its unaudited EBITDA soared 439 percent on year from €17.7 million to €95.6 million. Its unaudited net profit as of the end of the half stood at €28 million, up from a €40.7 million net loss at the end of the first half of 2022.

"The results of the first half of 2023 are proof that the decisions we've made over the last few years to speed up our recovery following the [COVID-19] crisis with vessel charters were the right ones," said Tallink CEO Paavo Nõgene, commenting on the results. "The positive impact of the vessel charters is undeniable, especially at this time, when the increased cost of living is still putting pressure on people's travel choices."

Nõgene noted that the vessels Tallink is currently operating on its four core routes are performing well, with some room for growth should passenger numbers from beyond its home markets see some increases in the year or so ahead.

"The short-term plan is to continue operating with the same business model of the last few years — with a mix of regular traffic and charter contracts — until such time when demand on our current key routes or elsewhere increases and warrants additional capacity," he said.

The listed Estonian shipper is continuing with loan repayments and debt reduction, and the group's net debt has been reduced by €73.7 million compared with the end of 2022. It also continues to maintain strong liquidity as of the end of the second quarter of this year, with the group's cash and cash equivalents amounting to €57.6 million, and has €135 million in unused credit lines. Tallink's total liquidity buffer — including cash, cash equivalents and unused credit facilities — as of the end of the second quarter totaled €192.6 million, with its net debt to EBITDA 12-months trailing equaling 3.1.

As of the end of the first half of 2023, Tallink has a total of 39,149 company shareholders.


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Editor: Aili Vahtla

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