Tallink suffers a year of contrasts

2019-03-16T14:14:52+00:00 March 16th, 2019|Finance|

In 2018, Estonian-based shipping company Tallink Grupp transported the highest number of passengers and cargo in its history but suffered a decrease in revenue and profit.

The total number of passengers increased to 9.8 mill last year, nearly 900 pax more than in 2017.

A more significant increase was recorded in the number of cargo units transported by the group, which rose by 5.7% to 385,000.

Tallink Grupp’s passenger numbers increased on nearly all the group’s routes and the number of cargo units transported increased on all of the routes, with record numbers of passengers and cargo being transported on the Estonia/Finland routes and Estonia/Sweden routes, and also the largest ever number of passengers transported on the Latvia/Sweden route last year.

Despite this, the group’s revenue and profit were impacted by higher fuel costs, lower charter revenue and a longer-than-planned docking of one of the group’s vessels in the spring of 2018.

The group’s unaudited consolidated revenue decreased by 1.8% to €949.7 mill from €967 mill in 2017. In addition, Tallink’s net profit for the financial year was €40 mill, compared to €46.5 mill reported in 2017.

However, the total revenue from the group’s operations increased last year by €0.7 mill to €883.7 mill.
“2018 was a year of some contrasts for Tallink Grupp. On the one hand we achieved a number of records in terms of passenger numbers, cargo units and numbers of trips completed by our vessels. I am particularly pleased that the Estonia/Finland routes, with significant competitive pressures and other challenges on the route, have seen passenger numbers increase and even produce all-time records,” Paavo Nõgene, Tallink Grupp’s CEO, commented.

“On the other hand, several factors negatively influenced our financial results, so our total outcome for the year was not record-breaking. One of the factors was the reduction of charter revenues by €10.8 mill, compared to 2017, as we had only one vessel chartered out instead of three in the previous year.

“However, it is clear that the biggest impact on our profits last year came from significantly increased fuel costs, which were €16.6 mill higher than in 2017. We are, of course, taking a number of steps to reduce the impact of the global price fluctuations on our business, but fuel costs will inevitably always form a significant part of our costs,” Nõgene added.

The group’s total investments in 2018 was €36.4 mill with several of Tallink’s ships receiving both technical upgrades and passenger areas and cabin refurbishment on board.
Tallink owns 14 vessels and operates under the brands Tallink and Silja Line on seven different routes.