Tallink Grupp’s low season first quarter results were strongly impacted by the Omicron pandemic and the start of the war in Ukraine in late February, the company said in its results roundup.
The latter resulted in a sharp increase in fuel, food and commodities prices, as well as a drop in traveller confidence in the second half of 1Q22.
Results were also impacted by the planned dockings of several vessels, including those brought forward from autumn 2022, to ensure there are fewer traffic interruptions in the fourth quarter of this year.
Unaudited consolidated 1Q22 revenue was €106.1 mill, up by 97.5% compared to 1Q21 (total revenue for 1Q21 was €53.7 mill).
Despite increased passenger numbers and revenue, compared to the same period in 2021, the company’s net loss for 1Q22 was €40 mill (net loss of €34.4 mill in 1Q21).
The group’s unaudited EBITDA was minus €11 mill (minus €6.3 mill in 1Q21). Compared to 1Q21, the fuel cost increased by €17.1 mill in the first quarter of this year.
With high expectations for the end of the COVID pandemic and in preparation of the 2022 summer high season, the company carried out technical maintenance on several vessels in the first quarter of this year.
As a result, the majority of the company’s €8.9 mill in investments in the quarter were dedicated to the maintenance and repairs of vessels – total 1Q21 investments came to €4.2 mill.
As at 31st March, 2022, the Group’s cash and cash equivalents amounted to €101 mill (€14.8 mill at 31st March, 2021) and the Group had €123.4 mill in unused credit lines (€81.7 mill at the same period of 2021).
The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to €224.4 mill (€96.4 mill at 31st March, 2021).
Tallink Grupp’s CEO Paavo Nõgene (pictured), commented: “The first quarter is historically our low season and the COVID years have not been an exception in this with the pandemic and restrictions dragging the results down even further over the last few years. And if that wasn’t enough to impact the results, then this year we can add to the mix also the war in Ukraine and the resulting price increases and traveller confidence issues.
“It is clear that despite all our efforts over the last years to make our business as lean as possible and extremely tight cost control measures, the external factors we are facing have made it very difficult for us to achieve a desired result in this quarter. Whatever strides ahead we managed to make with increased passenger numbers and revenues, were cancelled out by the huge fuel price hike.
“We took several steps in Q1 to minimise losses at a time when travel demand was once again dampened, due to the spread of the Omicron variant, temporarily suspending some of our vessels in January and February. We took advantage of the down-time to carry out the technical maintenance and repairs of several of our vessels, which means they are now shipshape for the summer season.
“All these steps in a normal year would have meant we were well prepared for the high season starting from late April, but in the Ukraine war and global security crisis context today, we know we need to continue working and work even harder to counter the effects of the new economic situation we have all found ourselves in.
“The positives we can hope for from the second quarter, however, based on what we saw in Q1 after the lifting of the COVID restrictions, are that traveller numbers will continue to bounce back and will bounce back faster than the original forecasts would have allowed us to hope. The fact that we have already seen departures in April where the vessels are at maximum passenger capacity, gives us hope that travelling on all our routes currently operated will increase rapidly in the coming quarters.
“Similarly to 2021, we will also continue to source alternative opportunities and work for our vessels with ‘Romantika’ commencing its charter already in March and ‘Isabelle’ securing a contract as a refugee accommodation vessel for at least four months this year. All such activities and contracts enable us to reduce risks and volatility for our business in these uncertain times. Our goal is to end the year 2022 with a net profit and the whole company continues to work towards this goal,” he concluded.