Charters help Tallink to return to profit

2023-07-29T10:47:33+00:00 July 29th, 2023|Finance|

In the second quarter of this year, the Tallink Group swung back into profit after showing a minor loss in the previous quarter.

Passenger numbers fell by 0.7% to 1,541,081 in 2Q23, compared to the previous quarter, while cargo units carried dropped by 22% to 85,359.

The fall was due to less vessels operating on the routes, thus reducing the overall route capacity.

Revenue increased by 11.5% to €229.7 mill in 2Q23, while EBITDA jumped by 138.7% to €68.5 mill and the net profit came in at €33.4 mill, compared with a net loss of €0.7 mill in 1Q23.

The strong 2Q23 results has meant that the Group has delivered the first profitable first half of the year results since 2015.

During 1H23, the passenger numbers increased by 14% to 2,590,858, but suffered a 18.8% drop in the number of cargo units carried at 172,091.

First half revenue increased by 28.4% to €400.9 mill, EBITDA shot up by 439% to €95.6 mill, while the net profit was €28 mill, compared to a loss of €40.7 mill at the end of 1H22.

Tallink’s CEO, Paavo Nogene (pictured), said: “The results for the first half of 2023 are proof that the decisions we have made over the last few years to speed up our recovery following the Covid crisis with vessel charters, were the right ones.

“The positive impact of the vessels’ charters is undeniable, especially at this time when the increased cost of living is still putting pressure on people’s travelling choices.

“Our current strategy to operate our regular routes with the most optimal number of vessels and charter out other vessels, is helping us on our road to recovery.

“Our focus now is on maintaining profitability into the next two quarters of 2023, while continuing to reduce to reduce our debts accumulated over the crisis periods.

“The vessels we currently have operating on our four core routes are performing well with some room for growth should passenger numbers from further afield that our home markets see some increases in the year or so ahead.

“The short term plan is to continue operating with the same business model as 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.