In its first quarter 2022 results roundup, Baltic ferry operator, Viking Line, said that it will not provide an outlook, mainly due to the current geopolitical situation.
It is still too soon to quantify the impact on operating income for 2022, which is the same conclusion at the time the previous earnings report was published, the company explained.
In 1Q22, consolidated sales increased 138.9 % to €58.8 mill (€24.6 mill in 1Q21). Operating income totalled minus €18.1 mill (minus €7.7 mill in 1Q21).
Passenger-related revenue increased 226.3 % to €47.2 mill, compared with €14.5 mill, while cargo revenue was €10.9 mill (€9.6 mill in 1Q21).
Initially, results for 1Q22 continued to be affected by the pandemic and related restrictions. Starting in mid-February, demand increased in the passenger segment, while demand for cargo transport was stable. In late February, Russia started a war with Ukraine and energy prices were severely affected as a result.
In January and February, the Group received aid for public service obligations from Traficom, the Finnish Transport and Communications Agency, for the Group’s vessels on the Turku/Mariehamn/Långnäs/Stockholm and Mariehamn/Kapellskär routes.
During the same period last year, aid was also received for the Helsinki/Tallinn route. The aid was recognised as State aid under other operating revenue.
In 1Q22, Viking Line provided passenger and cargo services using six vessels on the northern Baltic Sea and the Gulf of Finland routes.
‘Viking Glory’ was put in service on the Stockholm/Åland/Turku route on 1st March. ‘Amorella’ ceased operating on the same route on 28th February and was placed in service on the Helsinki/Mariehamn/Stockholm route on 1st April.
During the quarter, the ‘Viking XPRS’, ‘Rosella’, ‘Viking Cinderella’ and ‘Gabriella’ were drydocked. During the same period last year, no vessels were drydocked.
The total number of passengers on the Group’s vessels during the period was 521,537 (170,362 in 1Q21). The Group claimed a total market share on its routes of around 32% (28.1% in 1Q21).
Viking Line’s share of the cargo market was about 14.5% (17% in 1Q21), while the market share for passenger cars was around 25.2% (29.6% in 1Q21).
Market demand for travel was initially greatly limited due to restrictions related to the COVID-19 pandemic. In February and March, the Finnish and Swedish governments announced that the majority of restrictions would be lifted. That had a positive effect on demand in March and beyond.
On March 31, 2022, the Group’s long-term interest-bearing liabilities totalled €225.4 mill (€39.9 mill on the same date of 2021).
Viking’s cash and cash equivalents at the end of March totalled €80.7 mill (€24.9 mill for 1Q21). The company has agreed with its financiers on a waiver for the full-year 2022 of the covenant term concerning the maximum total net financial debt-to-EBITDA ratio.
The Group has undertaken not to pay a dividend or pay out any funds until its obligations related to the guarantees and loans have been repaid in full.
The management has made an assessment that there is currently no need for impairment, since the fair value of vessels is substantially higher than the book value.
