Viking Line reports ‘very good year’

2024-03-01T18:17:33+00:00 March 1st, 2024|Finance|

Baltic ferry operator, Viking Line has reported sales of  €491.4 mill for 2023, compared with €494.7 mill for the previous year.

Income after taxes totalled €36.3 mill for 2023, compared to €22.7 mill in the previous 12 months. .

As a result, the Board proposed to pay a dividend of €1 per share, which corresponds to 48% of earnings.

As for the outlook, Viking Line said that there continued to be significant uncertainty, due to the geopolitical situation and the impact this has on energy prices, inflation, interest rates and currencies, as well as the effects these uncertainty factors may have on people’s propensity to travel, demand, consumption patterns and costs.

Provided energy prices remain at current levels and there is a sustained propensity to travel, the Board expects income before taxes in 2024 to be on a par with the figure for 2023, if the €8.6 mill capital gain from the sale of the ropax ‘Rosella’ in 2023 is not included.

For the fourth quarter of last year, sales totalled €112.2 mill, compared to €124.5 mill in 4Q22. Income after taxes totalled €1.7 mill, compared to € 13.2 mill in 4Q22.

President and CEO Jan Hanses (pictured), said:The financial year 2023 was a very good year, the best since the company was listed in 1995. Income before taxes totalled €45.4 mill.

“The fourth quarter of the year turned out as expected, which means that we could meet our full-year forecast with far better earnings than in 2022. Passenger and cargo volumes remained stable despite a smaller number of vessels, while planned sales prices were achieved.

“In late October and November, passenger demand weakened temporarily before recovering in December. This was a market trend that affected all operators in our service area.

“Bunker (vessel fuel) prices have gradually fallen, but are still very high relative to pre-pandemic levels and Russia’s war on Ukraine. Furthermore, the troubled state of the world, including the war in Ukraine, has had a small impact on our market.

“On 9th August, we announced that Viking Line and Gotlandsbolaget would form a joint venture entrusted with the task of developing and providing cruises with the former ‘Birka Stockholm’. Meanwhile, it was agreed with Gotlandsbolaget that Viking Line would acquire 50% of the ship for €19 mill.

“On 23rd August, the joint venture was approved by the Swedish Competition Authority and rigorous work got under way. The work has continued according to plan, and the vessel was rechristened ‘Birka Gotland’, with the joint venture taking the name Gotland Alandia Cruises. Services will launch on 20th March, 2024.

“At the same time, ‘Viking Cinderella’, which has undergone a major drydocking, will launch service on the Helsinki/Mariehamn/Stockholm route.

“The number of passengers who travelled with the company in 2023 totalled 4.9 mill, which is a very good result given our reduced capacity, with fewer vessels than the year before. During the summer, there were even periods where there was a lack of capacity. Nearly 1.8 mill passengers sailed during the period June/August, and many departures during the summer holiday season sold out well in advance.

“‘Viking Grace’ and ‘Viking Glory’ had the biggest passenger increase during the year, on the Turku/Åland/Stockholm route, with 2,123,647 passengers. Viking Line’s market share here was 72%.

‘Viking Glory’, which launched into service in 2022, still has the appeal of a novelty and is a well-loved vessel. The pairing of ‘Viking Glory’ and ‘Viking Grace’ makes for a strong combination on this route.

“Starting in 2024, our traffic will fall under the EU’s Emissions Trading System (ETS). This entails a cost burden that we can only partly offset in the medium term with continued energy efficiency work. Fossil-free fuel in a quantity and at a price that are economically viable does not exist.

“The implementation of a limited-term island exemption from the ETS for traffic between Finland and Åland is thus well justified, since the transition to fossil-free fuel is not driven by the cost of emission rights but by the supply of alternative fossil-free fuels.

“We do not intend to lower our ambitions to reduce emissions from our traffic when the island exemption is implemented – on the contrary, we will make use of cost savings to continue our work towards the transition to fossil-free fuel and increased energy efficiency. Viking Line has started to buy emission rights.

“To summarise, I can note that the past financial year has been very strong even excluding the income effect of €8.6 mill from the sale of ‘Rosella’. For 2024, our forecast is earnings on a par with 2023 (excluding ‘Rosella’s’ capital gain) even though the year will be affected by emission rights costs and start-up costs for traffic with ‘Birka Gotland’.

“Our good earnings and post-pandemic recovery in operations enable investments in new environmental technology and innovations.

“I would like to extend my warm thanks to our customers and partners for their faith in us and our good collaboration. A big thank you also goes to our engaged personnel, who contributed to our earnings with their fine work, “ he concluded.