Scandlines enjoys a rebound in traffic

2023-06-30T16:29:31+00:00 June 30th, 2023|Finance|

Baltic ferry operator, Scandlines generated higher annual revenue and results after car and shopping traffic rebounded in 2022.

Scandlines said that it continued to make headway in 2022, as the impact of COVID-19 eased and travel restrictions were lifted earlier in the year.

Volumes grew significantly driven by a rebound in leisure and shopping traffic, as well as continued strong traction in the freight business.

Against this backdrop, Scandlines increased revenue and earnings and continued to improve its competitive offering with long-term investments in fleet and facilities.

Last year experienced a difficult start impacted by travel restrictions and efforts to mitigate the spreading of COVID-19, but passengers returned to the ferries in large numbers, as soon as restrictions were lifted in Germany, Sweden and Denmark.

The volume growth from increased car traffic, record-high freight activity and shopping boosted revenue by 42% to €464 mill and the result before tax from €62 mill to €125 mill.

The two Germany/Denmark routes saw revenue growth, including on board retail and catering, by 40% to €363 mill in 2022, following solid volume growth driven by the eased effects of COVID-19 restrictions, entailing a rebound and 65% growth in the group’s car traffic volume with strong improvements on both the Puttgarden/Rødby and Rostock/Gedser routes.

The freight business recorded a traffic volume growth 5% in 2022 from a record level in 2021. The total number of passengers recovered by 68% in 2022 with even improvements on the two routes.

Activity levels also saw recovery in the group’s BorderShops in 2022, where revenue grew by 49% to €101 mill driven by higher passenger volume and lifted restrictions, even though shopping activity remained significantly lower than before the outbreak of COVID-19.

Factors such as increased fuel prices, general inflation pressure and a weak SEK played a role here.

“The solid rebound in 2022 resulted in record high freight volumes and a leisure summer peak season, which exceeded the pre-COVID-19 level realised in 2019, demonstrating the strength, reliability and competitiveness of our customer offerings.

“The geopolitical turmoil drove significant volatility and severe increases in energy and bunker fuel prices, as well as the disruption of supply chains across industries. Still, we maintained operations as a reliable provider of critical infrastructure connecting Continental Europe and Scandinavia day and night,” said CEO, Carsten Nørland.

Scandlines further progressed towards the zero direct emissions vision, continuing to invest in the existing fleet with the installation of a rotor sail on the ropax ‘Berlin’. Both ferries on the Rostock/Gedser route are now fitted with rotor sails.

In addition, ‘Prinsesse Benedikte’ was the last of the four double-ended ferries on the Puttgarden/Rødby route to be upgraded with new low noise thrusters.

Scandlines furthermore celebrated the keel-laying of the new zero direct emission freight ferry, which is being built for delivery in the second half of 2024 on the Puttgarden/Rødby route where terminals are being rebuilt to accommodate the new larger ferry including the fitting of the necessary shore power charging facilities.

This project will launch a new generation of ferries on the Puttgarden/Rødby route, which should be emission-free (scope 1 and 2) by 2030 in the effort to reach zero emissions for Scandlines’ entire business by 2040.

“I am proud of my colleagues and their tenacity and ability to stay the course throughout COVID19 and deliver strong results in the face of significant market volatility.

“We will continue on the current trajectory to recapture traffic and grow our business while investing in a greener and more competitive fleet and future ahead of the planned opening of the Fehmarn Belt fixed link.

“These efforts will be supplemented by targeted initiatives to drive growth through further improvement of the travel experience for our passengers and freight customers. We will remain focused on providing our customers with an excellent service, which they value and therefore continue to choose us as their preferred transport route between Scandinavia and Europe,” Nørland added.

Modest growth is expected in leisure and shopping traffic volumes, which are seen to be somewhat impacted by a general economic slowdown. Bus travel is expected to gradually return to previous levels, and the steadily growing freight traffic volume is expected to continue the positive trajectory – however at a modest level, the company said.

Management expected revenue and profits to increase moderately in 2023, subject to the level of economic slowdown.

For 2022, Scandlines reported revenue of €463 mill, compared to €328 mill for the previous year. EBITDA was €185 mill (€128 mill in 2021) and the result after tax was €124 mill (€61 mill in 2021.