Stabilising fuel prices boost Gotland ferry operator

2023-05-26T18:42:51+00:00 May 26th, 2023|Finance|

Swedish ferry and tanker operator, Gotlandsbolaget closed 2022 with a strong negative operating result, mainly due to extreme fuel prices.

One of the measures taken to stop an escalating loss, was that Destination Gotland adjusted its ticket pricing.

The operating profit for the first quarter of 2023 was, as expected, negative, due to the low season, but stabilised fuel prices and the effect of the decisions taken at the end of 2022 lead to an improvement, compared to the same period last year.

The fuel price situation has meant that Destination Gotland has been able to lower its ticket prices from April onwards.

For 1Q23, revenues amounted to SEK362.9 mill (SEK495.1 mill in 1Q22). Costs totalled SEK425.8 mill, compared to SEK593.6 mill in 1Q22.

Revenues and costs during the quarter were lower than the previous year mainly as a result of items relating to Stockholms Reparationsvarv and Hansa Destinations being included, as well as for four product tankers sold in autumn 2022.

Adjusted operating profit amounted to a negative SEK62.9 mill, compared to SEK98.5 mill loss in 1Q22. The improvement was due to the previous year’s result being dragged down by a negative result for Hansa Destinations, as well as adjusted prices in Gotlandstrafiken and the fact that the price of fuel had stabilised.

Net sales losses on the sale of the ‘Valentine’ and ‘HSC Gotlandia’ amounted to SEK30.5 mill.

The result after tax, including capital gains on sales, amounted to minus SEK70 mill, compared to minus SEK101.8 mill, corresponding to a negative SEK28 per share.

Significant events during the quarter included the delivery of the

‘Valentine’ ‘to KiwiRail, the sale of the ‘HSC Gotlandia II’,   and ‘HSC Gotlandia was delivered to her new owners.

At the same time, Gotlandsbolaget acquired ‘Birka Stockholm’ from Rederiaktiebolaget Eckerö for around €38 mill to start cruises between Stockholm, Mariehamn and Visby.

Following the quarter’s end, Gotlandsbolaget sold its shares in two tankers in which the group owned 50%. The vessels were sold for a total of $85 mill.

In addition, ‘HSC Gotlandia II’ was delivered to her new owners.

Gotlandsbolaget and Australian shipyard Austal signed a letter of intent (LoI) to enter into an agreement for the design of the planned high-speed catamaran ‘Gotland Horizon’.

CEO Håkan Johansson, said: “Reduced ticket prices thanks to a stabilised energy market at the end of 2022, two difficult, but important decisions were made to stop the escalating loss within Destination Gotland and Hansa Destinations.

“We decided that Hansa Destinations would not operate traffic between Nynäshamn and Rostock in 2023. In addition, Destination Gotland raised ticket prices to meet the explosive increases in fuel costs. We now see that these decisions had an effect and the adjusted operating profit shows a smaller loss than the same period last year.

“During the first quarter, fuel costs have stabilised at lower levels, which meant that Destination Gotland was able to lower ticket prices from April onwards. If fuel costs continue to fall, Destination Gotland will have the opportunity to lower ticket prices further. We can state that the booking situation for the high summer in Gotland traffic is on a par with the record year 2019, which gives positive signals to us and the Gotland tourism industry.

“The first quarter is low season for Gotland, which means lower volumes of travellers and accommodation at our facilities. It is a quarter that historically, and also this year, means a negative result.

“During the quarter, we acquired ‘Birka Stockholm’, which is a purely passenger ship, and we see great opportunities for her to offer attractive cruises and to complement the Gotland traffic. ‘Birka Stockholm’ will offer tax-free and operate Stockholm, Mariehamn and Visby with varying traffic patterns depending on the season.

“We plan for a launch in the spring of 2024. With ‘Birka Stockholm’, we are further strengthening Gotland as a travel destination and increasing accessibility with a new product, while further consolidating our position in passenger shipping in the Baltic Sea.

“The Swedish Transport Administration has announced that the procurement documentation for the next concession period in the procured Gotland traffic will be made public in the spring. As we have communicated before, our main focus is to gain continued confidence to operate in the region,” he said.