Financial review January-September 2021: Finnlines’ result on the upturn during the third quarter
Emanuele Grimaldi, President and CEO, in conjunction with the review
“The Finnlines Group’s revenue for January–September 2021 was EUR 425.9 million, an increase of 17% compared to the corresponding period in the previous year (EUR 363.1 in 2020). The result for the reporting period was EUR 69.0 million, an increase of 27% compared to EUR 54.2 million in January–September 2020. Earnings before interest, taxes, depreciation and amortisation, EBITDA, amounted to EUR 121.2 (107.2) million.
During the reporting period January–September 2021, Finnlines transported 583 (536 in 2020) thousand cargo units, shipped 124 (102) thousand cars, and carried 1,041 (811) thousand tons of freight not possible to measure in units, 439 (390) thousand private and commercial passengers travelled with us.
An upward trend continued during the third quarter when cargo volumes increased nearly on all routes. The automotive industry suffered from shortage of components and the summer stoppage was longer than anticipated. However, as the Finnlines fleet consists of vessels in different sizes, capacity could be moved from routes with temporarily declining demand to others where larger capacity was needed. When travel restrictions were gradually eased, recreational travel recovered although passenger numbers remained far below the normal level.
While the global shortage of containers has challenged importers and exporters and led to world-wide supply-chain disruptions, roll-on-roll-off vessels have proved to be efficient and competitive modes of transport. Finnlines has carried freight uninterruptedly throughout the Covid-19 pandemic, offering around 170 departures each week.
Finnlines has made substantial investments in environmental technology and in its fleet renewal during the past years, but new challenges lie ahead. Both globally and within the European Union, numerous proposals are being discussed. The European Commission intends to reduce greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Previously, IMO has set the minimum reduction target of 50%, compared to 2008.
The EU Commission has also proposed to include maritime transport in the emissions trading system, which has covered energy-intensive industries and flights within EU for nearly two decades. Furthermore, the planned FuelEU Maritime Initiative will set a maximum limit on the greenhouse gas content of energy used by ships. The EU Taxonomy Regulation directive aims to promote clean technologies and discourage the use of fossil fuels. The carbon levy, i.e. a tax, which the International Chamber of Shipping has put forward in September 2021, is intended to expedite the creation of a market that makes zero-emission shipping viable.
To reach the ambitious goal of becoming carbon neutral, it may be necessary to modify existing ships with new tanks and engines so that they can run on new types of fuel. However, at current rates of production, zero-carbon fuels are not commercially available at the scale needed for the global fleet. Today, Finnlines concentrates on new battery technology, hydrodynamic design in vessels, air lubrication systems and solar panels on its newbuilds. Several existing ships will be equipped to use onshore power where available. Moreover, gradual transition to carbon-free and renewable fuels is being investigated.
The construction of three hybrid ro-ro vessels and two state-of-the-art ro-pax vessels is proceeding. Although we have an ambitious EUR 0.5 billion Newbuilding Programme, in Finnlines, we have understood that it is of crucial importance to focus intensively on energy efficiency of the fleet because energy savings is the best way to reduce the emissions and reach immediate results.”
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Finnlines is a leading shipping operator of ro-ro and passenger services in the Baltic Sea, the North Sea and the Bay of Biscay. The Company is a part of the Grimaldi Group, one of the world’s largest operators of ro-ro vessels and the largest operator of the Motorways of the Sea in Europe for both passengers and freight. This affiliation enables Finnlines to offer liner services to and from any destination in the Mediterranean, West Africa as well as the Atlantic coast of both North and South America.