Viking Line enjoys increased sales and revenues

2023-04-28T18:59:03+00:00 April 28th, 2023|Finance|

Baltic ferry operator Viking Line has reported sales of €93.9 mill for the first quarter of this year, compared to €58.8 mill for 1Q22.

Income after taxes totalled minus €3.7 mil in 1Q23, compared to minus €16.2 mill at the same stage the previous year.

Provided that energy prices remain at current levels and taking into account that capital gains are expected to be lower than in 2022, it is Viking Line’s view that income before taxes will be somewhat lower than last year, which is the same conclusion as in our last report period, the company said.

“The first quarter of the year was good and gives cause for optimism about the full-year forecast, which remains unchanged at this stage. The deceleration in demand that could have been triggered by inflation and rising interest rates did so far not occur,” CEO Jan Hanses said.

“Passenger volumes and cargo volumes rose to planned levels, while planned price levels were also reached. Prices for bunkers gradually fell during the quarter but are still very high relative to the time before the COVID pandemic and Russia’s invasion of Ukraine.

“During the quarter, we sold and delivered ‘Rosella’ to its Greek buyers. The capital gain from the sale boosted quarterly income. We also reflagged ‘Viking XPRS’ under the Finnish flag.

“As a result, it was possible to reassign shipboard staff on ‘Rosella’ to the company’s other vessels, while co-operation negotiations were carried out to adapt the land-based organisation to the situation after the sale of the company’s vessels. Despite these measures, staff performance was excellent and contributed to quarterly income.

“Because of the sale of ‘Rosella’, our service on the short route between Mariehamn and Kapellskär was discontinued. As we assess alternatives for service on this short route, they must be adjusted in the long term to the stricter environmental standards that lie ahead.

“Starting in 2024, our operations will fall under the EU Emissions Trading System, which means we face a cost burden that we can only partly adapt our operations to in the medium term through continued work with energy efficiency.

“To summarise, I can say that the first quarter of 2023 was one of the strongest first quarters in the past 10 years, even excluding the income effect of the sale of ‘Rosella’,” he said.

During 1Q23, Viking Line Group provided passenger and cargo services using five vessels in the northern Baltic Sea and the Gulf of Finland.

‘Viking Grace’ was drydocked during the period 16th January to 12th February. During this time, she was replaced by ‘Viking Cinderella’ on the Turku-Mariehamn/Långnäs-Stockholm route. After that, ‘Viking Cinderella’ resumed her regular day cruise service between Stockholm and Mariehamn.

‘Rosella’ sailed between Mariehamn and Kapellskär until 8th January, when she was taken out of service.

‘Viking XPRS’ was out of service for three days. The vessel was de-listed from Estonia’s register of bareboat charterers on 6th March and then entered in the Åland Register of Ships and re-registered under the Finnish flag.

On 1st March, 2022, ‘Viking Glory’ was launched on the Turku-Mariehamn/Långnäs-Stockholm route, where she serves in tandem with ‘Viking Grace’. ‘Amorella’ ceased operating on the same route on 28th February, 2022.

The total number of passengers on the Group’s vessels during 1Q23 was 888,725 (521,537 in 1Q22). The Group had a total market share in its service area of around 35.4% (32% in 1Q22).

Market demand for travel at the beginning of this year was high, compared to the same period last year, which was affected by the pandemic restrictions that were still in force.

The Group’s total cargo volume was 33,736 units (29,033 in 1Q22). Viking’s share of the cargo market was about 17.5% (14.5% in 1Q22). Demand for cargo in the service area varied during the period, and the situation prevailing in Europe makes it especially sensitive.

The market share for passenger cars was around 26.8% (25.1% in 1Q22).

Passenger-related revenue increased 70.1% to €80.4 mill € 47.2 mill), while cargo sales were €12.7 mill (€10.9 mill) and other operating revenue was € 0.8 mill (€0.6 mill). The sales contribution was €71.3 mill (€45.3 mill).

As of 31st March, 2023, the Group’s long-term interest-bearing liabilities totalled €176.5 mill (€225.4 mill).

The debt/equity ratio was 47.7% compared to 40.7% in 2021.

The Group’s cash and cash equivalents at the end of March this year totalled €79.8 mill (€80.7 mill).

Most of the Group’s loan agreements include loan covenants according to market terms. The financial covenants in the loan agreements consist of minimum requirements for liquidity and solvency and a maximum net financial debt-to-EBITDA ratio.