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  • Annual Report 2023, Finnlines

CEO’s review

Finnlines continues its green transition

Economic growth was modest in the EU area in 2023. The European Central Bank’s rapid increases in interest rates reduced private consumption, construction activity and corporate investments, and, as a consequence, hindered the economic activity in EU countries. Consumer and business confidence remained below long-term average. The geopolitical situation also continued to remain tense. In addition, the operational environment in Finnlines’ traffic areas, in the Baltic Sea, North Sea and Bay of Biscay, was highly competitive.

Financial performance

The Finnlines Group’s revenue in 2023 amounted to EUR 680.7 (736.1 in 2022) million, a decrease of 8 per cent compared to the corresponding period in 2022. The result for the reporting period was EUR 60.3 (133.3) million. The gross capital expenditure in the reporting period totaled EUR 191.8 (223.8) million and the Group’s return on capital employed (ROCE) was 5.8 (11.6) per cent.

The Net Debt/EBITDA (rolling 12 months) ratio amounted to 3.1 (1.7) and the equity ratio was 54.9 (60.3) per cent. Finnlines Group’s liquidity position is strong, cash and cash equivalents together with unused committed credit facilities amounted to EUR 147.6 (323.9) million. Cargo volumes declined slightly throughout 2023, but passenger travel increased over 17 per cent on our vessels.

The new vessels support customers in their transition towards sustainability.

Tom Pippingsköld, President and CEO

Green Newbuilding Programme completed

Globally, the whole shipping industry works on transition towards carbon neutral traffic. The EU decided to include the maritime sector in its Emissions Trading System from 2024 onwards. Due to this extra cost, energy efficiency must improve on both existing and new ships.

Finnlines has made substantial investments in sustainable and eco-friendly technologies, positioning itself competitively. Our investment programmes align with the Grimaldi Group’s strategy aimed at enhancing operational efficiency and reducing CO2 emissions.

The EUR 500-million Green Newbuilding Programme was completed at the end of the year when the second of the two Superstar ro-pax vessels, Finncanopus, was delivered at the shipyard in China. The sister vessel, Finnsirius, entered service on the Naantali–Långnäs–Kapellskär line on 15 September 2023.

The two vessels combine climate-friendly operations with a stylish interior design, a myriad of services and efficient cargo operations. With good reason Finnsirius was complimented by customers and other stakeholders and the Ferry Shipping Summit awarded Finnsirius as the Ro-Pax of the Year 2023. It was an honour to be rewarded for the intensive work on innovative and sustainable shipping, but at the same time it must be remembered that shipbuilding is a collaborative project, which involves a large number of professionals.

The programme also included three hybrid ro-ro vessels, which entered traffic in summer 2022, and have proven to be excellent carriers in terms of efficiency, capacity and low environmental impact.

The new vessels support customers in their transition towards sustainability and environmental responsibility. Therefore, Finnlines continues its green transition and thus makes its best efforts to enable our customers to grow in the most sustainable way.

Finnlines strives for cost-efficiency and growth

Finnlines is Finland’s biggest shipping company and therefore a significant operator, being responsible for the two most important maritime bridges (Finland–Germany and Finland–Sweden), providing important connections for the export industry and for imports internationally. Finnlines focuses now on adjusting its fleet, improve its cost-efficiency and find new growth. We are finally, closer than ever, to open a new ro-pax line between Sweden and Poland, from Malmö to Swinoujscie. We already have Zeebrügge–Rosslare line which has established itself well in the market even though we are a new operator on the Belgium–Ireland connection. We also have opened a new service from Vigo, Spain to Zeebrügge, Belgium at the beginning of this year.

Finnlines continues to focus on cargo, but on the Finland–Sweden line we will also address a wider passenger segment, such as foot passengers. The Grimaldi Group has traditionally operated in the Mediterranean, North and South America, and West Africa, but has expanded its routes globally to several locations in Asia and Australia. This also enables us to grow and provide our customers global transportation services.

Future outlook

In the euro area, GDP growth is expected to be very moderate. Finland’s GDP growth is also projected to rise to around 1.0 per cent 2024.

Sustainable shipping has been a key issue in the industry for several years, and therefore it is likely that Finnlines’ next newbuilding orders will have improved technical efficiency and include the use of alternative fuels. Also a higher degree of digital services and systems is a must and will improve operational and commercial efficiency for both cargo and passenger customers.

I warmly thank all Finnlines’ employees for your efforts to serve our customers and to develop our services and operations. We welcomed around 200 new seafarers to strengthen our services during 2023. I also thank our customers for your long-term partnership and numerous other stakeholders for your support. We will do our utmost to continue to provide safe and reliable shipping services with environmental friendly vessels.

Tom Pippingsköld, President and CEO