Tallink Grupp’s normally high season third quarter produced an unaudited net loss of €23.9 mill, compared with a €54.6 mill profit in 3Q19.
Third quarter EBITDA remained positive, due to significant activities and efforts from the company to pursue a number of different new business lines and routes. It amounted to €5.7 mill, compared to €83.2 mill in 3Q19.
The Group’s unaudited revenue for the third quarter decreased by 50%, compared to the same period last year and amounted to €143.7 mill, compared with €287.8 mill in the 2019 period.
During the quarter, the group’s ticket revenue decreased by 58.6%, on board sales by 50.6%, cargo revenue by 21.5% and hotel accommodation revenue by 73.2%, compared to the same period in 2019.
In contrast to 2Q20, there was significantly less direct and indirect financial support available.
During the quarter ,the company’s activities were aimed towards securing the long-term sustainability of the company, including a reorganisation, withdrawing the first €40 mill instalment of the $100 mill working capital loan from KredEx and making prepayments for the new shuttle ropax ‘MyStar’.
The Group’s total investments in 3Q20 amounted to $53.8 mill.
In the first nine months of this year, the group made a €81.5 mill unaudited net loss, compared with a net profit of €44.2 mill for the first nine months of 2019.
The group’s nine-month unaudited revenue decreased by 49.7%, compared to the same period in 2019 and was €363.6 mill. The unaudited EBITDA decreased significantly, compared to the same period last year amounting to €6.9 million, compared to €137.7 mill in same period of 2019.
Commenting on the third quarter financial result, Tallink Grupp’s CEO, Paavo Nõgene (pictured), said: “The third quarter of this challenging year has been one of ups and downs. We started the quarter with great optimism, initiating new routes, activities and plans, hoping for some kind of recovery, but ended it almost where we landed at the end of the first quarter of this year.
“With the new routes, special cruises and a great team effort, we managed to claw back at least some of the lost time and business from the second quarter and the fact that the number of trips we managed to make in the third quarter this year was only 7% less than in the same period last year, is great testament to it.
“However, with maximum capacity restrictions on all the departures we made to guarantee everyone’s safety, it was impossible to achieve the same revenue levels as we have done during the high season in other years. And, as the advice against travelling and restrictions slowly started to re-emerge in mid-August, we have been forced to make some very difficult decisions in the organisation to secure the long-term sustainability of our company.
“As external support dwindled in the third quarter, amounting to a mere €4.9 mill mostly for salary compensation support in Sweden in Q3, and no further significant subsidies agreed in Q4, we have had no option to start difficult collective redundancy processes and significant restructuring in our business across the markets to bring our costs and income in line with each other.
“Having started the year with over 7,200 dedicated employees in the group this year, we are faced with the reality of this number of good employees, dedicated and passionate tourism sector people in our company falling below the 5,000 mark by the end of this year.
“At the end of the third quarter alone, we have 19.9% less employees in our ranks than at the end of Q3 in 2019. We were unable to initiate any redundancy processes before September as the government salary support scheme that the company was able to use in April, May and June this year prohibited beneficiaries of the scheme from carrying out redundancies for a specific period of time.
“We will continue as a much leaner, focused, streamlined company, to sail through this storm and the uncertain months ahead. We will hold a steady course for the future and towards realising the plans we have made for the spring and summer of 2021, taking every opportunity during the last months of this year and the first months of next year to run operations and do business where it is possible.
“We have already proved during these challenging times that we can be extremely resourceful, agile and quick in taking new products and services to the market this year, maximising every opportunity to secure income for our company, but more importantly to secure jobs, livelihoods and the futures of our employees and their families,” he concluded.