Fjord Line in drastic cost cutting measures

2020-09-24T19:59:05+00:00 September 24th, 2020|Finance|

Norwegian ferry operator Fjord Line has started to implement major cost cutting measures, including employee dismissals and layoffs, due to the effects of the pandemic.

“The year 2019 was a record for us in terms of both revenue and profit and we were very optimistic about 2020. Unfortunately, however, everything changed with the release of COVID-19.

“Bookings are now a mere fraction of that would normally be. So, we are now preparing for the fact that it may take a long time before we can return to normal operations,” explained Rickard Ternblom, Fjord Line CEO (pictured).

Measures taken before the summer, such as cash support, refinancing internal restructuring and equity, has resulted in an estimated positive cash flow of NOK700 mill for this year, which secures the company’s operations until the end of 2020.

The company added that this showed how much faith the owners, banks, lenders, other suppliers and partners, have in its business model and long term goals.

“Though we have secured our liquidity, we believe it will take time to return to normal operations. While the summer season went well, we are now entering the Autumn and winter seasons with even more limited traffic that what is normal for this time of year, due to governmental regulations to limit travel.

“Consequently, we must implement new cost cutting measures in order to maintain the vital route that goes to and from the Continent and is used for the transport of goods and passengers,“ Ternblom added.

“In the past few years, we have spent a considerable amount of resources on streamlining and automating all aspects of our business. We will now have an even greater focus on this task, as we expect it to result in significant savings.

“However, because of how difficult it is to predict how long this crisis will last, we must institute further measures. Even with the government plans for extended layoffs, compensation and loan guarantees, we cannot avoid the fact that employees will be affected.