Interim report January-June 2012
Finnlines Plc Stock Exchange Release 26 July 2012
INTERIM REPORT JANUARY – JUNE 2012 (unaudited)
April – June 2012
- Revenue EUR 164.6 million (EUR 160.2 million prev. year), increase 2.8%
- Result before interest, taxes, depreciation and amortisation (EBITDA) EUR 31.4 million (EUR 26.1 million), increase 20.1%
- Earnings per share were 0.12 (0.03) EUR/share
January – June 2012
- Revenue EUR 309.6 million (EUR 299.2 million prev. year), increase 3.5%
- Result before interest, taxes, depreciation and amortisation (EBITDA) EUR 47.3 million (EUR 41.2 million), increase 15.0%
- Earnings per share were 0.00 (-0.07) EUR/share
JANUARY – JUNE 2012 IN BRIEF
|MEUR||4-6 2012||4-6 2011||1-6 2012||1-6 2011||1-12 2011|
|Result before interest and taxes (EBIT)||14.7||9.9||14.5||9.7||21.0|
|% of revenue||8.9||6.2||4.7||3.3||3.5|
|Result before taxes (EBT)||8.4||2.7||1.3||-3.4||-5.4|
|Result for the reporting period||5.7||1.2||-0.1||-3.4||-2.5|
|Equity ratio, %||28.9||28.5||28.9||28.5||29.1|
|Shareholders’ equity/share, EUR||9.15||9.08||9.15||9.08||9.12|
Calculation of key ratios is presented under ’Calculation of ratios’.
Finnlines is one of the largest North-European liner shipping companies, providing sea transport services mainly in the Baltic and the North Sea. In addition to freight, the Company’s ro-pax vessels carry passengers between six countries and eleven ports. The Company also provides port services in Helsinki, Turku and Kotka. The company has subsidiaries or sales offices in Germany, Belgium, the UK, Sweden, Denmark, Luxembourg and Poland and a representative office in Russia. Finnlines is a Finnish listed company and part of the Italian Grimaldi Group.
GENERAL MARKET DEVELOPMENT
Based on the statistics by the Finnish Transport Agency for January-May, the Finnish seaborne imports carried in container, lorry and trailer units remained on the same level as in 2011, but exports increased by 3% (measured in tons). According to the statistics published by Shippax for January-May, trailer and lorry volumes transported by sea between Southern Sweden and Germany decreased by 4% compared to 2011. During the same period private and commercial passenger traffic between Finland and Sweden decreased by 2%. Between Finland and Germany the corresponding decrease was 13% (Finnish Transport Agency).
During the first quarter the third and the fourth out of six ro-ro newbuildings (MS Finnsky and MS Finnsun) entered the traffic flying the Finnish flag. During the second quarter Finnlines operated on average 24 vessels in its own traffic compared to 26 vessels in the same period in 2011.
During the spring, Finnlines started a new traffic between the Swedish port of Wallhamn and the Russian port of Ust-Luga by integrating the Grimaldi owned port of Wallhamn to benefit and ship factory new cars stemming from the Far East markets destined to the large Russian market.
The cargo volumes transported during January-June totalled approximately 324,000 (324,000 in the same period in 2011, corrected figure) cargo units, 30,000 (38,000) cars (not including passengers’ cars) and 1,073,000 (1,097,000) tons of freight not possible to measure in units. In addition, some 291,000 (292,000) private and commercial passengers were transported.
April – June 2012
The Finnlines Group recorded revenue totalling EUR 164.6 (160.2) million, an increase of 2.8% compared to the same period in 2011. Shipping and Sea Transport Services generated revenue amounting to EUR 155.8 (148.9) million and Port Operations EUR 15.2 (18.0) million. The internal revenue between the segments was EUR 6.4 (6.6) million.
Result before interest, taxes, depreciation and amortisation (EBITDA) was EUR 31.4 (26.1) million, an increase of 20.1%.
Result before interest and taxes (EBIT) was EUR 14.7 (9.9) million. Financial income was EUR 0.4 (0.2) million and financial expenses totalled EUR -6.7 (-7.3) million. Result before taxes (EBT) was EUR 8.4 (2.7) million and earnings per share (EPS) were EUR 0.12 (0.03).
January – June 2012
The Finnlines Group recorded revenue totalling EUR 309.6 (299.2) million, an increase of 3.5% compared to the same period in 2011. Shipping and Sea Transport Services generated revenue amounting to EUR 291.1 (275.3) million and Port Operations EUR 31.0 (36.6) million. The internal revenue between the segments was EUR 12.6 (12.7) million.
Result before interest, taxes, depreciation and amortisation (EBITDA) was EUR 47.3 (41.2) million, an increase of 15.0%.
Result before interest and taxes (EBIT) was EUR 14.5 (9.7) million. The result includes a non-recurring compensation of EUR 3.4 million from the Jinling shipyard relating to the first two newbuildings covering loss for reduced income. Financial income was EUR 0.5 (0.3) million and financial expenses totalled EUR -13.7 (-13.5) million. Result before taxes (EBT) was EUR 1.3 (-3.4) million and earnings per share (EPS) were EUR 0.00 (-0.07).
STATEMENT OF FINANCIAL POSITION, FINANCING AND CASH-FLOW
Interest-bearing net debt stayed approximately at the same level compared to the same period in 2011 and amounted to EUR 882.9 (882.3) million. The equity ratio calculated from the balance sheet was 28.9% (28.5) and gearing was 205.7% (207.1). Vessel lease commitments decreased by EUR 21.3 million from the end of June 2011 due to the redelivery of chartered tonnage.
At the end of the period, cash and deposits together with unused committed working capital credits and the undrawn part of committed credits for newbuildings amounted to EUR 70.9 million. The company has a commercial paper programme amounting to EUR 100 million of which the company has issued EUR 12.9 million at the end of June.
Gross capital expenditure in the review period totalled EUR 34.9 (48.2) million and consists mainly of payments for newbuildings, EUR 28.9 million. Total depreciation amounted to EUR 32.9 (31.4) million. Four of the six newbuildings ordered from the Jinling shipyard in China have been delivered, MS Finnbreeze and MS Finnsea in March 2011 and MS Finnsky and MS Finnsun in the beginning of 2012. The last two of the newbuildings are scheduled to be delivered during the last quarter of 2012.
The Group employed an average of 2,002 (2,066) persons during the period, consisting of 980 (1,099) persons on shore and 1,022 (967) persons at sea. The average number of sea personnel increased due to two newbuildings taken into use in the beginning of 2012. The number of shore personnel decreased mainly due to employee reductions carried out in the Port Operations. The employee co-operation negotiations with personnel in Kotka were completed in January 2012 resulting in termination of 23 employments in total.
DECISIONS TAKEN BY THE ANNUAL GENERAL MEETING
The Annual General Meeting of Finnlines Plc held on 17 April 2012 approved the Financial Statements and discharged the members of the Board of Directors and the President and CEO from liability for the financial year 2011.
The Annual General Meeting approved the Board of Directors’ proposal not to pay any dividend.
The Annual General Meeting decided that the Board of Directors shall have seven members. The current Board Members were re-elected to the Board: Mr Emanuele Grimaldi, Mr Gianluca Grimaldi, Mr Diego Pacella, Mr Olav Rakkenes and Mr Jon-Aksel Torgersen. In addition, Mr. Christer Backman and Ms. Tiina Bäckman were elected as new Members. The Board of Directors elected Mr Emanuele Grimaldi as Chairman and Mr Diego Pacella as Vice-Chairman.
The Authorised Public Audit Firm Deloitte & Touche Oy was appointed as the Company’s auditors for 2012.
The Annual General Meeting authorised the Board of Directors to resolve on the issuance of new shares in one or several tranches so that the total number of shares issued based on the authorization is 20 000 000 at maximum. The authorization is valid until the next Annual General Meeting. The authorization replaces the Annual General Meeting’s authorization to decide on a share issue of 19 April 2011.
The 2011 Financial statements, published in March 2012, contains a thorough description of Finnlines’ risks and risk management, and there are no essential changes to that report.
ESSENTIAL CHANGES IN LEGAL PROCEEDINGS
The 2011 Financial statements contains a thorough description of legal proceedings and the following is a description of the changes compared to what was reported in the financial statements:
During the second quarter, the parties reached an amicable settlement agreement in the dispute with Sponda Kiinteistöt Oy on the termination of the lease agreements. In this dispute the Helsinki District Court rendered its decision in February 2012 in favour of Sponda.
In January 2012, Mutual Pension Insurance Company Ilmarinen filed an application for a leave to appeal and a petition of appeal with the Supreme Court regarding the judgement of the Helsinki Court of Appeal of 29 November 2011 in which the Court of Appeal overruled the judgement rendered by the Helsinki District Court on 3 March 2010 and dismissed all claims presented against Finnlines Plc by Ilmarinen.
In the case of the sub-chartering of two vessels to Benfleet Shipping Limited, Cyprus (“SSI”) the District Court of Limassol, Cyprus, has rendered decision in favour of the Company for the enforcement of the decision of the sole arbitrator in Cyprus. The Company is proceeding to enforce the decision against SSI.
EVENTS AFTER THE REPORTING PERIOD
There are no essential events after the reporting period.
OUTLOOK AND OPERATING ENVIRONMENT
Finnlines has continued the re-structuring of its fleet and organisation in order to improve cost-efficiency of its vessels and its overall logistics systems. These measures will also enable the possible entering into the renewed Finnish tonnage taxation system, in force as from March 2012. The final decision to enter the tonnage taxation system is to be taken by the end of 2014 at the latest.
The Board expects 2012 still to be a volatile and challenging year. The Company is well prepared to face the market challenges.
The third interim report of 2012 for the period of 1 January – 30 September will be published on Tuesday, 6 November 2012.
The Board of Directors