Nordica was required to submit its annual report for the last fiscal year to the Commercial Register by the end of June but has not yet done so. However, the company's unaudited financial report reveals that its revenue last year was €107.266 million, while the net loss amounted to €19.146 million. The previous year, Nordica had reported a profit of €1.514 million.

Revenue was over 18 percent higher compared to 2022, which Nordica attributed to increased customer activity. However, operating costs during the same period grew by nearly 45 percent. The company cited inflationary pressures, as well as one-time activities related to customer demand, pilot and crew shortages and prolonged aircraft maintenance downtime as reasons for the increase.

"Some of these challenges are not unique – like other airlines, Nordica is facing certain constraints in the current market related to workforce and equipment, which we are working hard to resolve," the company stated in its report.

Additionally, Nordica's financial performance was negatively impacted by several one-off events. For instance, the report highlighted an incident with the engine of an Airbus A320, which resulted in a repair cost of €2.5 million. Moreover, the company lost revenue from canceled flights while the aircraft was under repair.

The company noted that although revenue in 2023 was significantly lower than planned, they managed to stabilize liquidity, partly due to new cost-saving measures, aligning aircraft maintenance processes with standard practices and collaborating with strategic partners and suppliers.

Nordica explained the decrease in revenue was due to delays in aircraft leasing agreements and operational challenges. The company also affirmed in the report that they have taken decisive steps to stabilize their financial results and restructure operations.

Nordica representatives were unable to provide ERR with a timeline for when the audit of the annual report will be completed and submitted to the Commercial Register. The previously mentioned deadline to make the report public by the end of August has also passed.

"Indeed, 2023 was an especially challenging year for the company, as reflected in the preliminary financial report. We have agreed with our external auditor that additional efforts are necessary, which in turn takes time. This is also why the submission of the audited 2023 financial report has been delayed," the company stated. "We will share the audited report with the public as soon as it is ready."

Nordica's shares are owned by the Ministry of Climate, with Deputy Secretary General Sander Salmu saying that failing to submit the annual report by the deadline is certainly not good practice, and the ministry expects companies to submit their annual reports on time.

"At the same time, there has been considerable uncertainty in Nordica's business activities, including financial accounting, over the past year, as highlighted by a special audit commissioned by the ministry – hence, evaluating the figures has taken longer than usual," Salmu added.

Transpordi Varahaldus makes a profit in first half-year

Transpordi Varahaldus, which leases aircraft to Nordica, ended 2023 with a loss of €10.6 million. However, in the first half of the year, the company reported a net profit of €2.528 million, according to its preliminary unaudited report.

The company, which operates a fleet of seven Bombardier aircraft, saw its revenue decrease by 6 percent to €5.8 million. Its cash flow was negative, amounting to -€4.8 million, but Ergo Blumfeldt, a member of Transpordi Varahaldus' management board, still considers the half-year results to be positive.

"Our cash flow goes in two directions. We are repaying our bank loan, with annual payments totaling around €5 million, including interest, and then there are the regular maintenance activities. This is standard business practice," he said.

The 6 percent decrease in the company's operating income over the past half year was due to the fact that the rental fees they receive depend on flight hours. Compared to last year, Nordica has flown fewer hours this year, and therefore paid less to Transpordi Varahaldus.

Blumfeldt confirmed that the company is currently focused on completing all preparations necessary for privatization.

"We will definitely seek offers from the market for the aircraft, and then proceed with the privatization plan," he said.

As of the end of the second quarter, Transpordi Varahaldus had assets totaling €68.3 million, a decrease of €1.3 million over the past six months.

The company's liabilities stood at €31.1 million as of the end of June, with equity amounting to €37.2 million. The compensation for members of the governing bodies increased by 55 percent compared to the same period last year.

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