Sweden’s island of Gotland is still popular as a travel destination, despite a slight decrease in the number of travellers, ferry operator Gotlandsbolaget said in its latest financial presentation.
The measures implemented to strengthen earnings, with efficiency improvements and adjusted ticket prices, have had a positive financial effect and, as a result, the ferry company has reported an improved adjusted operating profit for the first nine months of this year, despite a loss the year before.
During the third quarter, the Swedish Transport Administration distributed the procurement documentation for the Gotland service 2027/2035. In the event that the company does not win the concession, it plans to continue to operate traffic between the island of Gotland and the Swedish mainland.
Work is also continuing on the development of the new cruise line in co-operation with Viking Line, as well as investments in accommodation facilities on the island, plus Gotland’s biogas production and technology development to reduce the ferry traffic’s emissions.
Revenues for 3Q23 amounted to SEK968.5 mill. Costs amounted to SEK690.9 mill.
Revenues and expenses during the quarter were lower than last year, mainly due to the inclusion of items relating to Stockholms Reparationsvarv and Hansa Destinations, as well as for vessels sold during the second half of 2022 and the first half of 2023.
Adjusted operating profit amounted to SEK277.6 mill (SEK181.8 mill in 3Q22), corresponding to SEK111 (SEK72.7) per share.
The rise was due to the fact that earnings last year were affected by a negative result for Hansa Destinations, as well as adjusted prices in the Gotland service and also the price of fuel stabilised at lower levels.
Net capital gains on the sale of vessels amounted to SEK19.1 mill (SEK0.5 mill).
Profit after tax, including capital gains on sales, amounted to SEK247.2 mill (SEK162.9 mill), corresponding to SEK98.9 (SEK65.1) per share.
For the January/September period, revenues totalled SEK1,895.5 mill (SEK2,395.3 mill in 2022).
Adjusted operating profit was SEK222.9 mill (SEK32.6 mill), corresponding to SEK89.2 (SEK13) per share.
Net capital gains on the sale of vessels amounted to SEK280.3 mill (SEK0.4 mill).
Profit after tax, including capital gains on sales, amounted to SEK503.1 mill (SEK11.3 mill), corresponding to SEK201.2 (SEK4.5).
Håkan Johansson, Gotlandsbolaget CEO, said: “Continued economic recovery in the large parts of the Group’s operations are seasonal and the important summer is now behind us.
“Already during the first two quarters of 2023, we could see that the decisions not to operate Hansa Destination’s route to Rostock in 2023 and to adjust Destination Gotland’s ticket prices had an effect through a stronger result, compared to the loss year 2022.
“Now after the high season, we can confirm that the measures have had an impact and our adjusted operating profit for the period rose to SEK277.6 mill, compared to SEK181.8 mill in 2022.
“Thanks to lower fuel prices, Destination Gotland has been able to maintain lower average prices during the quarter than expected at the beginning of the year.
“In August, the Swedish Transport Administration published the documentation for the upcoming concession period (2027/2035) in Gotlandstrafiken. When Gotlandsbolaget was founded, it was to ensure good communications between Gotland and the mainland, and traffic is part of our origins and DNA.
“But today, the business is much broader, with hotels, real estate, travel bookings, technology development and an upcoming cruise venture. We are therefore not dependent on a deal or the agreement with the Swedish Transport Administration. In the 90s, when we did not have the procured traffic, we demonstrated our ability to change the business.
“That said, our main focus is to win the tender. We are humble in the face of potential competition, but we also know that we have extensive experience of traffic, well-established customer relationships and a well-adapted fleet of vessels. This knowledge means that, even if we do not win the contract with the Swedish Transport Administration, we plan to continue to operate traffic between Gotland and the mainland.
“For more long-term investments with a focus on Gotland, we are working in parallel with several strategic initiatives on and around Gotland. Perhaps our most important investment is in technology development for the ships of the future, with the goal of being able to offer a climate-neutral crossing to and from Gotland.
“We are also in an intensive phase together with Viking Line ahead of the launch of our joint cruise venture in the spring of 2024. With it, we will be able to welcome more visitors to Gotland.
“At the same time, we continue to invest in accommodation facilities on Gotland and we hope to be able to share more of our plans in early 2024,” he said.