AS Tallink Grupp Unaudited Consolidated Interim Report Q3 2024

The Q3 2024 results of AS Tallink Grupp will be introduced at an Investor Webinar held today at 12:00 (EEST). To participate, please join via the following link; we kindly ask participants to provide their questions latest by 11:00 by email to: investor@tallink.ee. Further details are available in a previously published announcement.

In the third quarter (1 July – 30 September) of the 2024 financial year, AS Tallink Grupp and its subsidiaries (hereinafter referred to as "the Group”) carried 1 715 496 passengers, which is 3.4% less than in the third quarter of 2023. The number of cargo units transported decreased by 11.7% compared to the same period a year ago. The number of passenger vehicles was down by 8.3% year-on-year and amounted to 250 810. The Group’s unaudited consolidated revenue amounted to EUR 231.9 million (EUR 240.7 million in Q3 2023), down by 3.7%. Unaudited EBITDA was EUR 68.4 million (EUR 82.1 million in Q3 2023) and the unaudited net profit for the period was EUR 36.8 million (EUR 48.7 million in Q3 2023).

The following operational factors impacted the Group’s revenue and operating results in the third quarter of 2024:

• Demand continued to be affected by low consumer and business confidence levels, the economic challenges in the Group’s core markets as well as mounting global geopolitical tensions.
• As at the end of the quarter, the Group operated 14 vessels including 2 shuttle vessels, 2 cargo vessels, 5 operating cruise ferries as well as 3 vessels that were chartered out and 2 vessels that were in lay-up.
• During the quarter the Tallinn-Stockholm route was operated with two cruise ferries. The cruise ferry Victoria I returned to Tallinn-Helsinki route on 31 August 2024.
• The Group operated 3 hotels in Tallinn and 1 in Riga.
• The Group’s net debt was EUR 555.7 million as at the end of the quarter (EUR 548.9 million as at 30 June 2024) bringing the net debt to EBITDA ratio to 2.98 as at 30 September 2024.
• Payment of dividends in the amount of EUR 44.6 million and related income tax in the amount of EUR 4.9 million impacted the cash balance.
• As a result of the voluntary takeover bid, the shareholding of AS Infortar, the core shareholder of the Group, increased from 46.8% to 68.5% as at 9 August 2024. 
• The Group continues to focus on cost efficiencies from the previously implemented measures and maintaining profitable operations on its core routes.
• The Group regularly monitors the developments on its core routes including the capacity of each route and continues to look for new chartering options for vessels not used on the main routes and to work on extending the existing chartering agreements.

Sales and Segments

In the third quarter of 2024, the Group’s total revenue decreased by EUR 8.8 million to EUR 231.9 million compared to EUR 240.7 million in the third quarter of 2023. 

Revenue from route operations (the Group’s core business) decreased by EUR 2.0 million to EUR 193.6 million compared to the third quarter of 2023. The segment result from route operations (the Group’s core business) amounted to EUR 48.1 million, down by EUR 6.9 million compared to the third quarter of 2023.

The number of passengers carried on the Estonia-Finland route dropped by 1.7% in year-on-year comparison. The number of transported cargo units decreased by 13.0%. Revenue from the Estonia-Finland route increased by EUR 0.4 million compared to the same period a year ago and amounted to EUR 86.8 million. The segment result decreased by EUR 0.9 million amounting to EUR 31.4 million. The segment reflects the operations of two shuttle vessels until 31 August 2024 and two shuttle vessels and one cruise ferry from thereon. From 31 May 2024 until 31 August 2024, the cruise ferry Victoria I operated the Tallinn-Stockholm route.

In the third quarter of 2024, the year-on-year decrease in the number of passengers on Finland-Sweden routes was 18.1%. The number of transported cargo units increased by 9.9%. The routes’ revenue decreased by EUR 11.1 million to EUR 72.6 million and the segment result decreased by EUR 5.6 million to EUR 13.2 million, year-on-year. The segment reflects the operations of one cruise ferry on the Turku-Stockholm route and two cruise ferries on the Helsinki-Stockholm route.

On Estonia-Sweden routes the number of carried passengers increased by 34.2% while the number of transported cargo units decreased by 21.6% compared to the third quarter of 2023. Year-on-year, the revenue of Estonia-Sweden routes increased by EUR 8.6 million to EUR 34.2 million. The segment result declined by EUR 0.4 million compared to the third quarter of 2023 and amounted to EUR 3.5 million. Estonia-Sweden routes reflect the operation of two cargo vessels and two cruise ferries until 31 August 2024. The cruise ferry Victoria I returned to the Tallinn-Helsinki route on 31 August 2024 and the Tallinn-Stockholm route was from thereon operated by the cruise ferry Baltic Queen.

Revenue from the segment Other decreased by a total of EUR 7.2 million and amounted to EUR 40.2 million. The decrease was mainly driven by less vessels on charter. As at the end of the third quarter of 2024, the Group had 3 vessels on charter, of which one was on long-term and two on short-term charter (Q3 2023: 5 vessels including 3 on long-term and 2 on short-term).

At the end of the third quarter of 2024, the following vessels were chartered out:

• The shuttle vessel James Joyce (formerly Star) was chartered out from 5 May 2023 for 20 months with an option to extend the charter by 2+2 years and an option to purchase the vessel.
• The cruise ferry Galaxy I was chartered out in September 2022. In October 2024, the agreement was extended by 12 months until October 2025 with the option of extending the agreement at the end of the agreement period by 6+6 months.
• The cruise ferry Silja Europa was chartered out in August 2022. In October 2023, the charter agreement was extended until the end of 2024.

Earnings

In the third quarter of 2024, the Group’s gross profit declined by EUR 10.6 million to EUR 67.0 million compared to EUR 77.7 million in the third quarter of 2023. EBITDA declined by EUR 13.7 million and amounted to EUR 68.4 million.

Amortisation and depreciation expense decreased by EUR 0.9 million to EUR 24.4 million compared to the third quarter of the financial year 2023.

The Group’s unaudited net profit for the third quarter of 2024 was EUR 36.8 million or EUR 0.050 per share compared to EUR 48.7 million or EUR 0.065 per share in the third quarter of 2023.

Investments

The Group’s investments in the third quarter of 2024 amounted to EUR 5.6 million (EUR 6.1 million in Q3 2023). Main investments in vessels included maintenance and repair works i.e., technical works as well as interior upgrades. The Group also continued to invest in the improvement of its IT systems.

Financial Position

At the end of Q3 2024, the Group’s net debt amounted to EUR 555.7 million, up by EUR 6.8 million compared to the end of second quarter of 2024. The net debt to EBITDA ratio was 2.98 at the reporting date (2.7 as at 30 June 2024).

As at 30 September 2024, the Group’s cash and cash equivalents amounted to EUR 32.6 million (EUR 70.9 million as at 30 June 2024) and the Group had EUR 75.0 million in unused credit lines (EUR 75.0 million as at 30 June 2024). The total liquidity buffer (cash, cash equivalents and unused credit facilities) amounted to EUR 107.6 million (EUR 145.8 million as at 30 June 2024). The decline in cash and cash equivalents as well as in the liquidity buffer was driven by the payment of dividends and related income tax in the third quarter of 2024. In the third quarter of 2024, the Group repaid loans in the total amount of EUR 27.0 million (EUR 30.9 million in the third quarter of 2023).

Dividends

In 2018, the Group adopted a dividend policy subject to which dividends of a minimum amount of EUR 0.05 per share would be paid if the economic performance enables it.

The Annual General Meeting of Shareholders held on 7 May 2024 adopted a resolution to pay dividends of EUR 0.06 per share for the financial year of 2023. The dividends in the amount of EUR 44.6 million were paid out on 3 July 2024.

Results of the first 9 months of 2024

In the first 9 months (1 January – 30 September) of the 2024 financial year, the Group carried 4.3 million passengers which is down by 2.2% compared to the same period last year. The Group’s unaudited revenue for the period decreased by 6.1% and amounted to EUR 602.3 million. Unaudited EBITDA for the first 9 months was EUR 149.5 million (EUR 177.7 million in January-September 2023) and unaudited net profit was EUR 45.5 million (EUR 76.7 million in January-September 2023).

The financial result of the first 9 months of 2024 was impacted by the following factors:

• Low consumer and business confidence in the home markets as well as mounting geopolitical tensions.
• The number of vessels on charter dropped from 5 in the beginning of the year to 3 as at the end of the third quarter.
• Sale of the cruise vessel Isabelle in the first quarter of 2024.
• Two vessels in lay-up including the cruise vessel Romantika the charter agreement of which was prematurely terminated in September 2023 and MV Superfast IX (formerly Atlantic Vision) the charter agreement of which ended in May 2024.
• Payment of dividends in the amount of EUR 44.6 million in the third quarter of 2024.
• Income tax expense on dividends in the amount of EUR 9.2 million was recorded in the second quarter of 2024. In the third quarter of 2024, income tax on dividends was paid in the amount of EUR 4.9 million (EUR 4.3 million of the dividend tax expense was offset by prepaid income tax).
• Repayment of long-term loans in the amount of EUR 59.5 million.

Key Figures

For the period	Q3 2024	Q3 2023	Jan-Sep 2024	Jan-Sep 2023
Revenue (EUR million)	231.9	240.7	602.3	641.6
Gross profit/loss (EUR million)	67.0	77.7	127.6	168.9
EBITDA¹ (EUR million)	68.4	82.1	149.5	177.7
EBIT¹ (EUR million)	44.0	56.8	76.1	101.9
Net profit/loss for the period (EUR million)	36.8	48.7	45.5	76.7
Depreciation and amortisation (EUR million)	24.4	25.2	73.3	75.7
Capital expenditures¹ ²(EUR million)	5.6	6.1	16.5	22.3
Weighted average number of ordinary shares outstanding	743 569 064	743 569 064	743 569 064	743 569 064
Earnings/loss per share¹ (EUR)	0.050	0.065	0.061	0.103
Number of passengers	1 715 496	1 775 821	4 270 002	4 366 679
Number of cargo units	66 865	75 701	238 628	247 792
Average number of employees	5 063	4 756	5 004	4 878
As at	30.09.2024	30.06.2024	30.09.2023	30.06.2023
Total assets (EUR million)	1 498.9	1 567.0	1 597.4	1 613.6
Total liabilities (EUR million)	711.5	816.6	813.7	878.4
Interest-bearing liabilities (EUR million)	588.3	619.8	684.8	722.5
Net debt¹ (EUR million)	555.7	548.9	620.4	664.9
Net debt to EBITDA¹	3.0	2.7	2.7	3.1
Total equity (EUR million)	787.4	750.4	783.7	735.2
Equity ratio¹ (%)	53%	48%	49%	46%
Number of ordinary shares outstanding	743 569 064	743 569 064	743 569 064	743 569 064
Shareholders’ equity per share (EUR)	1.06	1.01	1.05	0.99
Ratios¹	Q3 2024	Q3 2023	Jan-Sep 2024	Jan-Sep 2023
Gross margin (%)	28.9%	32.3%	21.2%	26.3%
EBITDA margin (%)	29.5%	34.1%	24.8%	27.7%
EBIT margin (%)	19.0%	23.6%	12.6%	15.9%
Net profit/loss margin (%)	15.9%	20.2%	7.6%	12.0%
ROA (%)	5.6%	7.7%	5.6%	7.7%
ROE (%)	6.1%	12.9%	6.1%	12.9%
ROCE (%)	6.7%	9.6%	6.7%	9.6%

¹ Alternative performance measures based on ESMA guidelines are disclosed in the Alternative Performance Measures section of this Interim Report.

² Does not include additions to right-of-use assets.

EBITDA: result from operating activities before net financial items, share of profit of equity-accounted investees, taxes, depreciation and amortization
EBIT: result from operating activities
Earnings/loss per share: net profit or loss/ weighted average number of shares outstanding
Equity ratio: total equity / total assets
Shareholder’s equity per share: shareholder’s equity / number of shares outstanding
Gross profit/loss margin: gross profit / net sales
EBITDA margin: EBITDA / net sales
EBIT margin: EBIT / net sales
Net profit/loss margin: net profit or loss / net sales
Capital expenditure: additions to property, plant and equipment – additions to right-of-use assets + additions to intangible assets
ROA: earnings before net financial items, taxes 12-months trailing / average total assets
ROE: net profit 12-months trailing / average shareholders’ equity
ROCE: earnings before net financial items, taxes 12-months trailing / (total assets – current liabilities (average for the period))
Net debt: interest-bearing liabilities less cash and cash equivalents
Net debt to EBITDA: net debt / EBITDA 12-months trailing

Consolidated statement of profit or loss and other comprehensive income

Unaudited, in thousands of EUR	Q3 2024	Q3 2023	Jan-Sep 2024	Jan-Sep 2023
Revenue	231 868	240 668	602 317	641 588
Cost of sales	-164 849	-163 013	-474 695	-472 682
Gross profit/loss	67 019	77 655	127 622	168 906
Sales and marketing expenses	-10 684	-10 399	-32 347	-30 781
Administrative expenses	-12 770	-11 175	-39 009	-37 494
Other operating income	469	789	20 868	1 382
Other operating expenses	-42	-35	-1 001	-68
Result from operating activities	43 992	56 835	76 133	101 945
Finance income	144	133	633	804
Finance costs	-7 319	-8 507	-22 376	-26 803
Profit/loss before income tax	36 817	48 461	54 390	75 946
Income tax	-1	222	-8 896	762
Net profit/loss for the period	36 816	48 683	45 494	76 708
Net profit/loss for the period attributable to equity holders of the Parent	36 816	48 683	45 494	76 708
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations	-11	-244	358	29
Other comprehensive income for the period	-11	-244	358	29
Total comprehensive profit/loss for the period	36 805	48 439	45 852	76 737
Total comprehensive profit/loss for the period attributable to equity holders of the Parent	36 805	48 439	45 852	76 737
EPS (in EUR)	0.050	0.065	0.061	0.103
Diluted EPD (in EUR)	0.049	0.065	0.061	0.103

Consolidated statement of financial position

Unaudited, in thousands of EUR	30.09.2024	30.09.2023	31.12.2023
ASSETS
Cash and cash equivalents	32 609	64 433	41 921
Trade and other receivables	30 290	34 577	31 766
Prepayments	11 018	11 485	7 661
Prepaid income tax	13	1	193
Inventories	45 180	39 758	41 411
Short-term intangible assets	5 166	0	0
Current assets	124 276	150 254	122 952
Investments in equity-accounted investees	0	75	0
Other financial assets and prepayments	515	4 510	4 794
Deferred income tax assets	21 840	21 840	21 840
Investment property	300	300	300
Property, plant and equipment	1 327 413	1 391 682	1 377 664
Intangible assets	24 556	28 734	27 671
Non-current assets	1 374 624	1 447 141	1 432 269
TOTAL ASSETS	1 498 900	1 597 395	1 555 221
LIABILITIES AND EQUITY
Interest-bearing loans and borrowings	104 508	126 148	104 097
Trade and other payables	88 940	83 593	85 406
Payables to owners	0	0	0
Income tax liability	6	6	6
Deferred income	9	35	10
Current liabilities	34 261	45 237	34 788
	227 724	255 019	224 307
Interest-bearing loans and borrowings
Non-current liabilities	483 812	558 659	545 160
Total liabilities	711 536	813 678	769 467
Share capital	349 477	349 477	349 477
Share premium	663	663	663
Reserves	66 251	67 694	67 056
Retained earnings	370 973	365 883	368 558
Equity attributable to equity holders of the Parent	787 364	783 717	785 754
Total equity	787 364	783 717	785 754
TOTAL LIABILITIES AND EQUITY	1 498 900	1 597 395	1 555 221

Consolidated statement of cash flows

Unaudited, in thousands of EUR	Q3 2024	Q3 2023	Jan-Sept 2024	Jan-Sept 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit/loss for the period	36 816	48 683	45 494	76 708
Adjustments	31 858	33 283	86 268	100 721
Changes in:
Receivables and prepayments related to operating activities	5 341	2 480	-1 568	-5 282
Inventories	1 230	2 496	-8 935	207
Liabilities related to operating activities	-20 215	-27 274	5 970	-2 703
Changes in assets and liabilities	-13 644	-22 298	-4 533	-7 778
Cash generated from operating activities	55 030	59 668	127 229	169 651
Income tax repaid/paid	178	-20	153	-111
NET CASH FROM/USED OPERATING ACTIVITIES	55 208	59 648	127 382	169 540
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant, equipment and intangible assets	-5 575	-6 083	-16 337	-22 249
Proceeds from disposals of property, plant, equipment	26	164	24 516	244
Interest received	144	133	633	804
NET CASH USED IN INVESTING ACTIVITIES	-5 405	-5 786	8 812	-21 201
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans received	-27 040	-30 858	-59 492	-155 477
Change in overdraft	-26	-15	0	-15
Payment of lease liabilities	-4 751	-8 219	-13 887	-17 025
Interest paid	-6 722	-7 982	-22 159	-25 212
Payment of transaction costs related to loans	0	0	-450	-1 112
Dividends paid	-44 614	0	-44 614	0
Income tax on dividends paid	-4 904	0	-4 904	0
NET CASH FROM/USED IN FINANCING ACTIVITIES	-88 057	-47 074	-145 506	-198 841
TOTAL NET CASH FLOW	-38 254	6 788	-9 312	-50 502
Cash and cash equivalents at the beginning of period	70 863	57 645	41 921	114 935
Change in cash and cash equivalents	-38 254	6 788	-9 312	-50 502
Cash and cash equivalents at the end of period	32 609	64 433	32 609	64 433

Anneli Simm
Investor Relations Manager

AS Tallink Grupp
Sadama 5
10111 Tallinn, Estonia
E-mail anneli.simm@tallink.ee

Attachments

• Tallink Grupp 2024 Q3 ENG
• Tallink Grupp 2024 Q3 Financial Data
• AS Tallink Grupp Q3 2024 Presentation