Leading Finnish-based ferry operator Viking Line has posted an increase of sales for 2021 to €258.2 mill from €188.8 mill in the previous year.
Income after taxes amounted to €24.4 mill, compared with a negative €42.3 mill in 2020.
Uncertainty about regulatory requirements, aid, the effects of vaccination programmes and thus related limitations for passenger traffic and market demand will affect Viking Line’s 2022 operations, results and financial position, the company explained.
Last year, a number of fixed assets were sold, which led to a strengthening of the company’s liquidity and had a positive effect on income. Similar asset sales are not envisaged this year.
Taking into account the non-recurring nature of the items mentioned above, the uncertainty about the course of the pandemic – which so far has had a significant negative impact on the first quarter – and more stringent regulatory requirements and the current geopolitical situation, it is still too soon to quantify the impact on results so no earnings forecast for 2022 was provided, Viking Line stressed.
In the 4Q21, sales totalled €89.3 mill, compared to €34.6 mill for 4Q20. Operating income for the quarter was €1.6 mill, compared with a negative €14.1 mill for 4Q20.
In 4Q21, the company benefited from increased demand for its services between Åland, Finland and Sweden. However, traffic between Finland and Estonia remained limited, due to regulatory restrictions.
Towards the end of the quarter, a deceleration in travel was seen as a result of the increased spread of the virus and subsequent regulatory actions.
For 2021, passenger-related revenue increased 45.2% to €215.1 mi, while cargo revenue was €41.1 mill, up from €38.8 mill. The sales contribution was €195.6 mill, compared with €137.9mill. Operating costs increased 0.7% to €190.8 mill.
Results for 4Q21 were characterised by a steady increase in demand in the passenger segment and continued stable demand for cargo transport. In late December, the passenger sector was hampered by a resurgence in the spread of COVID and more stringent regulatory restrictions.
During the financial year, the Group received aid for public service obligations from Traficom, the Finnish Transport and Communications Agency, for the Group’s vessels on the Turku/Långnäs/Stockholm, Mariehamn/Kapellskär and Helsinki/Tallinn routes, most of which was received in the first and second quarters.
During the period 1st June to 31st December, no aid was received for the Helsinki/Tallinn route.
Furthermore, aid was received during the year from the Development and Management Centre of Finland’s Centres for Economic Development, Transport and the Environment (known as ELY centres) and from Finland’s Local Employment and Economic Development Offices, alongside aid for costs from the Finnish State Treasury.
At present, the Viking Line Group provides passenger and cargo services using six vessels on the northern Baltic Sea and in the Gulf of Finland.
During 2Q21, a bareboat hire/purchase agreement was entered into for ‘Mariella’. The Group’s remaining vessels served the same routes as in 2020, although those that normally sail between Helsinki and Stockholm and between Stockholm and Mariehamn were taken out of service to some extent, due to the COVID-19 pandemic.
On 12th June, ‘Gabriella’ resumed service on the Helsinki/Stockholm route and was also used for special cruises. During 4Q21, all of the vessels were in service.
The total number of passengers carried on Viking Line’s vessels during the year was 2,315,137, compared with 1,927,302 in 2020, giving the Group a market share in the area of around 34.1% (26.6% in 2020).
Due to ‘Viking Glory’s’ delivery in December, 2021, the Group’s non-current interest-bearing liabilities increased to €235.1 mill (€108.2 mill in 2020) on 31st December, 2021. The equity/assets ratio was 42%, compared to 46.4% a year earlier.
At the end of December, the Group’s cash and cash equivalents amounted to €114.6 mill (€29.7 mill in 2020).
Most of the Group’s loan agreements include loan covenants according to market terms. The covenant terms entail minimum requirements for liquidity and solvency and a maximum net financial debt-to-EBITDA ratio.
The Group has been granted a time-limited exemption from the covenant terms that were breached during the year for those loans already drawn. As of 31st December, 2021, all covenant terms were met.
Viking Line also signed an agreement 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.
In accordance with the terms in the State guarantees for liquidity loans drawn in the autumn of 2020, with the requirements in the waiver of covenant terms and loan payment deferrals granted by Finnvera, and in the financing taken on to fund the final payment for ‘Viking Glory’, Viking Line 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.