Eimskipafélag Íslands hf. - Financial Statement Release

EIMSKIP: EBITDA growth 21.6% in second quarter 2016

Net earnings up by 58.7%


  -- Revenue EUR 126.1 million, down by EUR 0.5 million or 0.4% from Q2 2015
  -- Transported volume in the liner system up by 9.1% and liner revenue up by
     EUR 4.9 million
  -- Volume in forwarding services down by 1.2% and revenue down by EUR 5.4
     million, affected by lower international rates
  -- EBITDA EUR 16.2 million compared to EUR 13.3 million, up by 21.6% from Q2
     2015
  -- Net earnings EUR 8.8 million compared to EUR 5.5 million, up by 58.7% from
     Q2 2015
  -- Equity ratio 62.0% and net debt EUR 31.4 million at the end of June
  -- EBITDA forecast for the year 2016 unchanged, in the range of EUR 49 to 53
     million

GYLFI SIGFÚSSON, PRESIDENT AND CEO

“Eimskip’s EBITDA for the second quarter 2016 was EUR 16.2 million and was up
21.6% compared to the same period last year. Revenue for the quarter amounted
to EUR 126.1 million, down by 0.4%. Transported volume in the North Atlantic
liner services grew by 9.1% from the second quarter last year. The liner
segment revenue were up by EUR 4.9 million. There was good growth in transport
related to Iceland and Norway, but volume reduction in the Faroe Islands. The
forwarding revenue were down by EUR 5.4 million, affected by lower
international freight rates. There was a 1.2% reduction in the company’s
forwarding services volumes compared to the same period last year. The
reduction is mainly due to decreased reefer forwarding from China, but other
markets have been growing. 

Due to changes of the company’s sailing system, streamlining of operations,
increased cost control measures and lower cargo rates in international
forwarding, operating expenses including salaries were down by 3.0% in the
quarter which is a good performance despite materially increased cost related
to Icelandic wage agreements. 

Positive turnaround of currency exchange difference in the quarter was EUR 2.1
million and net earnings amounted to EUR 8.8 million, up by 58.7% from the
second quarter 2015. Cash flow from operating activities amounted to EUR 15.7
million compared to EUR 11.8 million in the same period last year and the cash
position at the end of June was EUR 47.5 million. This is the company’s best
second quarter in terms of EBITDA, EBIT, net earnings and net cash from
operating activities since 2009. 

The company’s revenue for the first six months amounted to EUR 239.4 million,
similar to last year. EBITDA for the period was EUR 25.8 million and grew by
EUR 6.7 million or 35.2% from the same period last year. Net earnings grew by
50.6% and amounted to EUR 10.6 million. Transported volume in the North
Atlantic liner services grew by 8.6% compared to the first six months last year
and the forwarding volumes grew by 2.2%. 

In May, Eimskip and Royal Arctic Line, the national carrier of Greenland,
signed a letter of intent to connect Greenland with Eimskip’s international
sailing system. Since then, the companies have been evaluating and formalizing
the potential cooperation regarding container vessel investments and connecting
sailing systems. The project is progressing as planned and we expect a final
decision shortly. 

Since presented in May, Eimskip has made significant progress on acquisitions
and aims to close several transactions in Europe in our existing core business
in the third and the fourth quarter. The company has engaged international
legal and audit firms to conclude due diligence. 

As I have said before, it remains our intent to grow both organically and
through strategic accretive acquisitions to increase shareholder value. We are
continuing to evaluate additional acquisition and vessel investments on an
ongoing basis. We will not be issuing new equity to conclude potential
investments. However we will be using our excess cash and issuing additional
debt, increasing the leverage of the company to more normal levels, still
maintaining a strong balance sheet. 

The outlook for the third quarter is in line with our expectations. The EBITDA
forecast for the year 2016 is unchanged from what was presented in May, or
EBITDA in the range of EUR 49 to 53 million." 

FURTHER INFORMATION

  -- Gylfi Sigfússon, President and CEO, tel.: +354 525 7202
  -- Hilmar Pétur Valgardsson, CFO,  tel.: +354 525 7202
  -- Erna Eiríksdóttir, Senior Manager of Investor Relations, tel.: +354 825
     7220, email: investors@eimskip.is

Viðhengi:

Eimskip - Financial Statements Q2 2016.pdf

Eimskip - Second Quarter 2016 Financial Results.pdf