You are here

CEO's review 2019

Finnlines is the forerunner of 2020 Green Change - Five Ultra Green Generation vessels ordered

In many ways, 2019 was again a remarkable year for Finnlines. While revenue was slightly below the previous year’s level – due to the slowdown in Finland’s exports and imports – profitability grew steadily from the previous year as a result of the Company’s past investments made in our fleet – as well as due to all our actions in improving efficiency, productivity and financial performance.

According to the Finnish Customs’ preliminary data, the value of Finnish goods exports increased by 1.9% in 2019, but imports decreased by 1.4% compared to 2018. Based on the volume statistics by Traficom for January–December 2019, the Finnish seaborne imports carried in container, lorry and trailer units (measured in tons) decreased by 3%. Finnish export volumes remained at the same level as the previous year. Our cargo volumes dropped from 754,000 units in 2018 to 738,000 units, but we shipped 166,000 cars, up from 163,000 in 2018, and carried 665,000 passengers; a substantial improvement on the previous year.

The Finnlines Group’s turnover was EUR 574.8 million (EUR 589.4 million) in January–December 2019. However, the Finnlines Group’s 2019 result increased to EUR 98.3 million. The 2019 result follows our successful track record over the past years and was Finnlines’ best ever result in our 72 years of operation.

In 2019, we continued to focus on fundamentals, i.e. dedication to smart use of technology, digitalised and optimised processes across our businesses, investments in energy efficiency to advance sustainable development and effective execution of our strategy by our highly productive, skilled and committed employees. One topic in our strategic discussion is digitalisation. In recent years, we have invested a lot in information technology. We have implemented two major ERP systems, one in the port and the other relating to vessel efficiency monitoring and measurement. We have also developed mobile services in port operations. This development in digitalisation and automation increases the efficiency and effectiveness of our processes just to name a few examples.

“We continued to focus on fundamentals, dedication to smart use of technology, digitalised and optimised processes across our businesses, investments in energy efficiency to advance sustainable development and effective execution of our strategy.”

Finnlines’ shipping services in the Baltic and North Sea areas provide a backbone to Finnish industries and commerce and to Finland as a whole. Finnlines’ ro-pax concept combines cargo and passenger traffic in an eco-efficient vessels enables our customers to carry their goods or travel in a sustainable and responsible way compared to other modes of transportation. In turn, as to our ro-ro services, we have steered large investments advancing sustainable development, i.e. environmental technology investments to further reduce the Finnlines fleet’s emissions, installation of modern propulsion systems and ship lengthenings to decrease energy consumption. Most recently, we have placed an order for two green ro-pax newbuildings to continue the transformation process of our eco-efficient fleet. All in all, we will continue to deploy larger and larger vessels in order to benefit from economies of scale. 

In 2020, we have entered a new era of international shipping. While shipping is already the most environmentally friendly mode of transport, particularly in transporting large amounts of cargo, it is clear that we need to have ambitious targets. Around 90% of world trade uses sea transport, but the world’s shipping sector accounts for only 2.2% of the CO2 emissions produced globally. Like many other sectors of the global economy, shipping is entering a new area of progress – there are some of the main challenges and trends shaping today’s maritime evolution and those are: decarbonisation, digitalisation and investment, concentration, intermodality – and the biggest challenge is
the environmental one.

The shipping sector is facing strict emission cuts. In April 2018, IMO, the International Maritime Organization under the UN, decided to reduce emissions from shipping transport. According to the ground-breaking agreement, CO2 emissions from international shipping will be reduced by a minimum of 40% by 2030, and by 50% by 2050 from the 2008 level. Considering the fact that simultaneously the world’s fleet capacity will have increased dramatically, it follows that we will have to reduce greenhouse emissions per ship by 80%. This means basically aiming for creation of a zero-emission ship and diffusion during the next two decades.

Finnlines welcomes the IMO’s GHG strategy and its goal to reduce carbon dioxide emissions. Finnlines is committed to long-term efforts for the environment. Environmental responsibility is part of our daily operations and includes everyday actions – like fleet changes and route optimisation, fuel monitoring or running at optimal speed, load and trim. Moreover – as a forerunner in sustainability – we have invested heavily during the past decade: in a new technologically advanced tonnage, in R&D that supports emission reduction equipment and operations, but also in the highly skilled personnel. Above all, we have ordered five Ultra Green Generation vessels, three green hybrid ro-ro vessels and two eco-efficient Superstar ro-pax vessels which represents a total investment worth EUR 0.5 billion. 

The construction work of the greenest ro-ro vessels has started. The vessels will be built with the latest technology to ensure the optimised energy efficiency and lowest emissions. They will be equipped with lithium-ion batteries that enable zero-emission operations in port. An innovative air lubrication system will reduce friction and hydrodynamic resistance and, consequently, reduce fuel consumption and emissions. Optimised energy efficiency is ensured with the hydrodynamic hull shape and an integrated propellerrudder system. The first ro-ro vessel is expected to start operation as early as 2021, and the other two in the first half of 2022.

Another newbuilding project is underway and two environmentally innovative Superstar ro-pax vessels were ordered in December 2019. They will be Finnlines’ flagships both in terms of size and technology. They will be equipped with the same energy efficiency and environmental technology as the ordered hybrid ro-ro vessels. The Superstar vessels are designed with the focus on fast and efficient cargo handling to guarantee Finnlines’ customers a short turnaround time. But at the same time, we aim to further develop passenger comfort, and the renewed concept combines the best of both cargo and passenger vessels. Travelling with Superstar will be comfortable and relaxing. There will be plenty of space to relax: areas where you can enjoy the voyage and take in sea views, or restaurant, café and shopping areas offering a wide range of products and services. 

We are confident that Finnlines has the correct and right strategy for our customers and for the Grimaldi Group as a whole. We will continue to deploy larger and larger vessels in both ro-pax and ro-ro segments, creating better economies of scale, and reducing CO2 emissions. We are ready for the future and we will have all the capabilities to improve our profitability further, thus continuing the splendid track record of the past years which peaked to our 72-year high in 2019.

I would like to thank all our customers and our stakeholders for your continued trust and support. Looking to 2020 and beyond, we will continue on our path, and make the right investments in line with our strategy in order to also ensure the joint success with our customers. We are geared for growth – with the sustainable investment decision to order five Ultra Green Generation vessels, along with our actions taken to increase the Company’s efficiency, productivity and financial performance – we trust that we will continue to perform well in the years to come. Finally, I thank our employees for their enthusiasm, commitment and hard work – again.

Emanuele Grimaldi