Viking Line has reported a considerable drop in consolidated sales for 2020.
For example, sales for the year totalled €188.8 mill, compared to €496.4 mill for 2019.
Other operating revenue was €26.9 mill (€0.4 mill for 2019). Operating income totalled a negative €49.3 mill, compared to plus €17.4 mill in the previous year. Consolidated income before taxes amounted to minus €52.9 M (€13.6 plus for 2019). Income after taxes was minus €42.3 mill, compared to plus €10.8 mill for 2019.
Passenger-related revenue totalled €148.2 mill, compared to €448.4 mill for 2019, while cargo revenue amounted to €38.8 mill, compared to €45.6 mill for the previous 12 months. Net sales revenue was €137.9 mill, down from € 363.3 mill reported for 2019.
Consolidated operating expenses decreased by 41.1% to €189.4 mill, compared to € 321.7 mill for 2019.
As for the fourth quarter of last year, consolidated revenue totalled €34.6 mill, compared to €115.6 mill for 4Q19. Operating income was minus €14.1 mill, compared to minus €100,000 in 4Q19.
Passenger-related revenue during 4Q20 decreased by 75.9% to €25 mill, while cargo revenue amounted to €9.1 mill, compared with €11.3 mill for 4Q19. Net sales revenue was €23.1 mill, compared to €83.7 mill. Consolidated operating expenses decreased by 47.7% to €40.7 mill.
Viking Line said that it reacted quickly to the crisis, adapting operations to a changed market situation.
Salary and other employment benefit expenses decreased during the period. A large percentage of the Finnish staff was furloughed, while in Sweden and Estonia, short-term furloughs were introduced.
In October, co-operative negotiations were concluded over the Group’s land-based organisation and shipboard employees on ‘Viking Cinderella’. These negotiations resulted in a shift to part-time work, furloughs or redundancies, which affected some 120 land-based employees and some 80 shipboard employees.
During the financial year, the Group obtained both liquidity and cargo traffic aid for security of supply purposes and for its public service obligations, while the Swedish subsidiaries obtained restructuring aid. The aid is recognised as State aid under other operating revenue.
To secure Viking Line’s liquidity, the company was granted state guarantees for liquidity loans of up to €38.7 mill. In addition to the state guarantees, commercial banks have guaranteed €4.3 mill.
Uncertainty about regulatory requirements, state aid, the impact of vaccination programmes and related restrictions on passenger traffic, as well as market demand will affect Viking Line’s operations, earnings and financial position going forward, the company admitted.
As a result, no earnings forecast was provided for 2021.
President and CEO Jan Hanses, said; “Because of the global COVID-19 pandemic, the Group was forced to report a loss in 2020. Since the end of the first quarter, the operating environment has been extremely unfavourable to passenger shipping companies and as a result the economic consequences have been drastic.
“The challenge in 2020 was to run operations when demand evaporated due to various restrictions. Passenger volume collapsed in March, 2020, and at year-end we recorded a loss of 4 mill passengers. In a short period of time, we noted that essentially all sales revenue had disappeared while a large share of costs was still incurred. Of our four operating areas – cargo, passenger cars, cruise passengers and passengers in scheduled service – only cargo functioned normally.
”Consequently, our efforts during the year were focused on cutting costs to the greatest extent possible. Furlough measures were carried out in early April and had a quick impact in Finland since shorter periods for announcing and negotiating furloughs could be applied. In Sweden and Estonia, the impact was slower and more limited. Cost control generally also dominated our operations.
“State aid measures, primarily Finnish measures carried out through Finland’s National Emergency Supply Agency and the Finnish Transport and Communication Agency (Traficom), have helped to limit losses. State aid measures from Sweden, in the form of aid for short-term furloughs, and from Estonia in various forms have also provided support.
“Liquidity during the winter of 2020/2021 was secured through liquidity loans totalling €38.7 mill, which are backed by state guarantees. A deferral of loan repayments was also obtained from Finnvera and Finlands Exportkredit.
“In the autumn of 2020, the Group experienced two accidents, when ‘Amorella’ ran aground in the Åland archipelago in September and ‘Viking Grace’ ran aground close to Mariehamn in November. The groundings only caused damage to the vessels, mainly ‘Amorella’. While undergoing repair, the vessels were replaced by ‘Gabriella’, so the impact on earnings was limited. It was possible to carry out planned annual drydockings at the same time. The crew’s handling of the incidents was exemplary.
”During the year, the focus was on passenger safety issues. The safety of passengers and staff is Viking Line’s top priority, and that has also been the case during the ongoing pandemic. We have long worked at the company with infection prevention measures.
“During the spring, we decided to have the company assessed by a third party to quality-assure our infection prevention work. The accredited classification society DNV GL was contacted, and we became the first shipping company in the world to be verified in accordance with DNV GL’s My Care methodology,” he concluded.