Viking Line reports strong results

2023-11-16T17:32:27+00:00 November 16th, 2023|Finance|

For the first nine months of this year, Baltic ferry company, Viking line reported a consolidated sales increase of 2.4% to €379.2 mill (€370.2 mill in 2022), while operating income totalled €52.4 mill (€18.9 mill).

During the period, ‘Rosella’ was sold, which had a positive income effect totalling €8.6 mill.

Passenger-related revenue increased 2.9% to €343.1 mill (€333.3 mill), while cargo sales were €33.8 mill (€34.9 mill) and other operating revenue was €2.4 mill (€2.1 mill). The sales contribution was €292.3 mill (€282.2 mill).

Operating expenses decreased 9.6% to €228.4 mill from €252.7 mill). The decrease was due to lower fuel costs, which fell 36.6% or €26.6 mill.

In January and February, 2022, 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. In June 2022, the Group received €2.1 mill in State aid for uncovered fixed costs.

For the third quarter of this year, consolidated sales decreased 10.3% to €152.9 mill (€170.4 mill in 3Q22). Using comparable vessels, sales increased 6.9%. Operating income totalled €35.3 mill (€26.9 mill).

Passenger-related revenue decreased 10.1% to €142.1 mill in 3Q23 (€158 mill), while cargo-related revenue was €10.1 mill (€11.7 mill) and other revenue was €0.7 mill (€0.7 mill). The passenger-related revenue decrease was due to lower capacity than last year.

The sales contribution was €119.9 mill (€130.5 mill), while operating expenses decreased 20.2% to €77.7 mill (€97.4 mill).

The outlook for the financial year 2023 is unchanged, which means that income before taxes is expected to be significantly better than last year provided that energy prices remain at current levels.

President and CEO Jan Hanses said: “Results for the third quarter exceeded expectations and provide grounds for a continued good full-year forecast. Passenger and cargo volumes continued to rise, despite the lower number of vessels, while the planned sales prices were reached. Bunker prices have gradually fallen but are still very high compared to before the pandemic and Russia’s war of aggression against Ukraine.

“On 9th August, we announced that Viking Line and Gotlandsbolaget were forming a joint venture entrusted with the task of developing and providing cruises using the former ‘Birka Stockholm’. At the same time, the two companies agreed that Viking Line would acquire 50% of the vessel for €19 mill.

“On 23rd August, the joint venture was approved by the Swedish Competition Authority, and intensive work began. The initial contract period runs for five years with an extension option.

“Starting in 2024, our traffic will be subject to the EU Emissions Trading System. This means that a cost will be imposed on us that we can only partly adjust to in the medium term through continued energy efficiency work. There are no fossil-free fuels available in a quantity and at prices that are economically viable.

“Implementation of a temporary island exemption for service between Finland and Åland is thus well justified since the transition to fossil-free fuel is determined not by the cost of emission rights but rather by the supply of alternative fossil-free fuels.

“We do not intend to lower our ambitions to reduce emissions from our service with the implementation of this island exemption. On the contrary, we will use the cost savings to continue our work to make the transition to fossil-free fuels and increase energy efficiency.

“During the summer months of June/August, nearly 1.8 mill passengers sailed with Viking Line’s vessels, and many departures during the holiday season were sold out well in advance.

“Reasons for the strong demand include local tourism, which is popular in both Finland and Sweden, and the recovery in international tourism for the Nordic region – and of course, the vessels, which many people want to experience.

“During the first nine months of the year, 3.8 mill passengers sailed on our vessels. Occupancy rates have been good on all the vessels. On the route between Turku, Åland and Stockholm, travel was intense on ‘Viking Grace’ and the new ‘Viking Glory’. Market share for the first nine months was over 73%.

“To summarise, I can note that the report period was very strong even excluding the income effect of the sale of ‘Rosella’,” he said.

In March, 2024, Viking Line will take the ‘Viking Cinderella’ out of the cruise service between Stockholm and Mariehamn to launch a service on the Helsinki/Mariehamn/Stockholm route. She will also be reflagged to Finland.

For ‘Viking Cinderella’s’ crew, the change will not give rise to any redundancies. As the staff will be offered continued employment on the vessel after her reflagging under Finnish collective agreement terms.

In the spring 2024, the joint venture between Viking Line and Gotlandsbolaget will be launched. This will enable staff to express interest in joining the vessel previously called ‘Birka Stockholm’.

This vessel will serve under a Swedish flag and be subject to Swedish collective agreement terms.

Based on the agreement between the two companies, Viking Rederi will manage catering staff and Destination Gotland will manage operational staff on the jointly-owned vessel.