Shipping line Tallink Group doubled its revenue in the first quarter of 2021, though the company’s losses rose by nearly 15%.
Tallink Group announced its Q1 results to the stock exchange on April 28, revealing that the Omicron Covid wave and the beginning of the Ukraine war made their impact known on traveler numbers and confidence, and on prices.
The group’s unaudited consolidated revenue in Q1 stood at EUR 106.1 million, up by 97.5% YoY.
Despite increased passenger numbers and revenue, the company’s net loss in the first quarter of 2022 still amounted to EUR 40 million (compared with a net loss of EUR 34.4 million in Q1 2021).
The group’s unaudited earnings before interest, taxes, depreciation and amortization (EBITDA) in Q1 was -EUR 11 million compared with -EUR 6.3 million in Q1 2021.
Fuel costs rose by EUR 17.1 million.
Commenting on the results, Tallink Group CEO Paavo Nogene said: “The first quarter is historically our low season and the COVID years have not been an exception in this with the pandemic and restrictions dragging the results down even further over the last few years.”
“And if that wasn’t enough to impact the results, then this year we could add to the mix also the war in Ukraine and the resulting price increases and traveler confidence issues. It is clear that despite all our efforts over the last years to make our business as lean as possible and extremely tight cost control measures, the external factors we are facing have made it very difficult for us to achieve a desired result in this quarter,” Nogene continued, according to a company press release.
“Whatever strides ahead we managed to make with increased passenger numbers and revenues, were cancelled out by the huge fuel price hike,” he continued.
Nogene added that the company took steps in Q1 to cut its losses and also used down-time arising from the surge in Covid numbers accompanying the Omicron strain’s appearance to carry out maintenance and repair work on its vessels – this constituted the bulk of its EUR 8.9 million investments in the quarter (EUR 4.2 million in Q1 2021).
The company has also brought forward vessel dockings from autumn to reduce traffic interruptions in Q4.
As to positives in Q2, the company pointed to the lifting of Covid restrictions, which had been followed by maximum-capacity departures in the current month, and also an end in sight to the pandemic.
Tallink Group reported cash and cash equivalents of EUR 101 million at the end of the quarter (EUR 14.8 million as of March 31, 2021), along with EUR 123.4 million in unused credit lines (EUR 81.7 million) and a total liquidity buffer (cash, cash equivalents and unused credit facilities) of EUR 224.4 million (EUR 96.4 million).
The company has also repointed two of its vessels – the Romantika has commenced charter work already and the Isabelle is being used for refugee accommodation for at least four months of the year – and says that these and other activities will help to reduce risks and volatility in 2022, a year Tallink says it intends to end with a net profit. (ERR/Business World Magazine)