2007-08-02 11:08:02 CEST
2007-08-02 11:08:02 CEST
REGULATED INFORMATION
Finnlines - Quarterly report
INTERIM REPORT 1 JANUARY - 30 JUNE 2007
Finnlines Plc Stock Exchange Release 2 August, 2007
INTERIM REPORT 1 JANUARY - 30 JUNE 2007
The Finnlines Group recorded revenue totalling EUR 328.9 (318.7)
meur (continuing operations). Operating profit was EUR 30.5
(27.7) million. Profit before taxes was EUR 18.6 (20.4) million.
Return on equity (ROE) was 7.0 (8.6) % and return on investment
(ROI) was 6.4 (8.1) %.
Significant events during the reporting period
Changes in the ownership
In January Grimaldi Group, the majority shareholder in Finnlines,
offered, by a public mandatory tender offer, to purchase all
shares in Finnlines Plc at a cash consideration of EUR 17.00 for
each share. The Board of Directors of Finnlines published its
evaluation of the offer on 26 January 2007.
The offer period in Grimaldi´s mandatory tender offer expired on
16 February 2007. Grimaldi was offered 264,368 shares
and Grimaldi Group's holding and share of votes in Finnlines
rose to 50.7 per cent.
Annual General Meeting
Finnlines Plc's Annual General Meeting, held on 16 March, 2007,
decided to pay a dividend of EUR 0.42 per share, i.e. a total of
EUR 17.1 million. The dividend payment day was 28 March, 2007.
The AGM decided that the company's Board of Directors has
seven members. The following were elected to the Board:
Emanuele Grimaldi, Mr. Gianluca Grimaldi, Mr. Diego Pacella (vice-
chairman), Mr. Heikki Laine, Mr. Antti Pankakoski, Mr. Olav K.
Rakkenes and Mr. Jon-Aksel Torgersen (chairman).
The firm of authorised public accountants Deloitte & Touche Oy
was appointed as the company's auditors.
Changes in management
Antti Lagerroos, President and CEO of Finnlines Plc resigned from
his duty in February and Mr. Olav K. Rakkenes, a member of the
Board of Directors, was appointed temporary President and CEO of
Finnlines Plc as from 24 April, 2007.
Mr. Christer Antson (MSc,Econ), was appointed President and CEO
of Finnlines Plc as from 4 July, 2007.
Mr. Antson was previously Executive Vice President and Chief
Controller of Finnlines Plc.
Mrs. Seija Turunen (MSc,Econ) was appointed Deputy CEO and CFO
being in charge of finance, accounting, communications,
personnel, administration and information technology as from 4
July, 2007.
Mrs. Turunen was previously Executive Vice President/Finance and
Communications of Finnlines Plc.
Vessels and traffic
The third newbuilding, MS Finnlady, started the traffic between
Helsinki, Finland and Travemünde, Germany in the middle of
February and the fourth vessel of the series, MS Europalink,
started plying between Malmö, Sweden and Travemünde, Germany in
March 2007. The last vessel of the five newbuildings, MS
Nordlink, was delivered early July and started the traffic
between Malmö/Sweden and Travemünde/Germany at the end of July.
The compensation dispute relating to the late delivery of the
newbuildings has been settled with the yard and the received EUR
15 million compensation will be booked to balance sheet as
deduction of the purchase prices of the vessels.
MS Finntrader started operating in NordöLink traffic in February
2007 after conversion. Her sister vessel MS Finnpartner was
docked for conversion in April 2007 and will start plying in
NordöLink traffic by the beginning of September. These so-called
Hansa vessels are converted into drive-through vessels with
increased passenger capacity.
MS Finnclipper has been back in FinnLink service since March
after conversion. The cargo capacity of the vessel was increased
by 500 lane meters to a total of 2,900 lane metres.
In April, Finnlines Group agreed on the sale of the ropax vessels
MS Malmö-Link and MS Lübeck-Link (built 1980) to
external non-related parties. The first of these NordöLink
vessels was replaced by the newbuilding Nordlink at the end of
July and the second will be replaced by MS Finnpartner
by the beginning of September.
The sales profit, approx. EUR 11 million, will be shown
in the Group's result during the third quarter.
The operations at the terminals of Lübecker Hafengesellschaft in
Lübeck harbours was suffering from actions of the dock workers'
union during the reporting period. The reason was the union's
protest against the planned privatisation of Lübecker
Hafengesellschaft. As a consequence of this protest, there was a
total strike for a day in June and all overtime work was stopped
until the end of June.
Financial performance
The Finnlines Group recorded revenue from the continuing
operations totalling EUR 328.9 (318.7 in 2006) million. Shipping
and Sea Transport Services generated revenue amounting to EUR
278.9 (271.4) million and Port Operations EUR 66.9 (61.9)
million. Other income from operations amounted to EUR 0.9 (1.0)
million. Operating profit was EUR 30.5 (27.7)million (continuing
operations). Financial income was EUR 2.7 (1.5) million and
financial expenses totalled EUR -14.6 (-8.7) million. Profit
before taxes was EUR 18.6 (20.4) million (continuing operations).
Return on equity (ROE) was 7.0 (8.6) % and return on investment
(ROI) was 6.4 (8.1) %.
Investments and financing
The Group's investments were EUR 209.9 (41.1) million.
The main part of this amount came from the delivery of two
newbuildings, MS Finnlady and MS Europalink. Interest-bearing net
debt amounted to EUR 622.5 (334.1) million. The equity ratio
calculated from the balance sheet was 33.4 ( 41.3) %. Gearing was
147.7 (86.9) %.
Personnel
The Group employed an average of 2,286 (2,120)people during the
period, consisting of 1,464 (1,387) employees on shore and 822
(733) persons at sea.
The Finnlines share
The Company's registered share capital on 30 June 2007 was EUR
81,383,916 divided into 40,691,958 shares.
A total of 6,7 million Finnlines shares were traded on the
Helsinki Exchanges during the period. The market capitalisation
of the Company's stock at the end of June was EUR 638.9
million. Earnings per share (EPS) during the period were EUR 0.36
(0.40). Shareholders' equity per share was EUR 10.30 (9.40).
Risks
The loan portfolio of the company has increased substantially
due to the five vessel investment program, which ended in July.
The vessels have been financed with long-term (12-15 years)
loans. Otherwise there are no material changes in the risks
disclosed in the notes to the financial statements 2006.
Outlook for 2007
During the first half of 2007 unitised cargo volumes have
developed positively on the main routes of Finnlines. This is due
to the good economic development in Finland and in its most
important trading countries and also due to Finnlines' faster
timetable between Finland and Germany.
Despite one-time expenses relating to the new vessels coming into
service, the rotation of the fleet and the vessels being out of
service due to conversion, the whole year operating profit for
2007 is expected to be better than in 2006. Compared to the
previous year, there is and will be an increase in the
depreciations and interest expenses due to the investments made
into five newbuildings and vessel conversions.
The next interim report for 1 January - 30 September, 2007 will
be published on 25 October, 2007.
Finnlines Plc
The Board of Directors
ENCLOSURES Profit and Loss Account
Balance Sheet
Changes in Shareholders Equity
Cash Flow Statement
Revenue by business division
Property, plant and equipment
Financial indicators
Contingencies and Commitments
Revenue and operating result by quarter
DISTRIBUTION Helsinki Exchanges
Main media
All figures unaudited
CONSOLIDATED PROFIT AND LOSS
ACCOUNT
1000 EUR 4-6/07 4-6/06 1-6/07 1-6/06 1-12/06
Continuing Operations
Revenue 171,442 165,798 328,885 318,655 632,666
Other income from 320 547 909 1,040 2,078
operations
Materials and services -48,267 -52,011 -90,883 -101,322 -196,042
Personnel expenses -29,328 -28,920 -58,083 -54,419 -111,266
Depreciation,
amortisation and other -13,395 -9,232 -25,012 -18,418 -39,875
write-offs
Other operating -63,824 -58,274 -125,363 -117,883 -229,337
expenses
Total operating expenses - - -299,340 -292,042 -576,521
154,813 148,437
Operating profit 16,948 17,908 30,453 27,653 58,223
Financial income 536 729 2,743 1,455 10,784
Financial expenses -7,207 -4,670 -14,592 -8,708 -21,557
Share of associated
companies' profits 0 0 0 0 274
Profit before taxes 10,277 13,968 18,605 20,400 47,725
Income taxes *) -2,158 -3,323 -3,907 -4,748 -9,989
Profit for the reporting
period, continuing 8,119 10,644 14,698 15,652 37,736
operations
Discontinuing operations
Profit for the reporting
period, discontinuing
operations N/A 990 N/A 712 18,742
Profit for the reporting
period 8,119 11,634 14,698 16,364 56,477
Distribution:
Parent company 7,960 11.510 14,518 16,261 56,053
shareholders
Minority interest 159 124 180 103 425
8,119 11,634 14,698 16,364 56,477
Profit attributable to parent company
shareholders
calculated as earnings per share
(EUR/share)
Undiluted earnings per 0.20 0.28 0.36 0.40 1.38
share
Diluted earnings per 0.20 0.28 0.36 0.40 1.38
share
Profit attributable to parent company
shareholders, continuing operations,
calculated as earnings per share
(EUR/share)
Undiluted earnings per 0.20 0.26 0.36 0.38 0.92
share
Diluted earnings per 0.20 0.26 0.36 0.38 0.92
share
Profit attributable to parent company
shareholders, discontinuing operations,
calculated as earnings per share
(EUR/share)
Undiluted earnings per N/A 0.02 N/A 0.02 0.46
share
Diluted earnings per N/A 0.02 N/A 0.02 0.46
share
*)Taxes have been estimated based on the profit for the reporting
period.
CONSOLIDATED BALANCE SHEET,
IFRS
1000 EUR 30/6/07 30/6/06 31/12/06
ASSETS
Non-current assets
Property, plant and equipment 1,002,61 640,580 817,977
4
Goodwill 108,660 112,971 108,660
Other intangible assets 10,248 12,167 10,136
Investment properties 1,586 1,590 1,588
Share of associated companies 1,526 2,074 2,349
Other financial assets 4,892 4,925 4,892
Receivables 7,938 7,471 5,839
Deferred tax assets 614 1,180 617
1,138,07 782,958 952,057
9
Current assets
Inventories 6,646 6,386 5,412
Accounts receivable and other
receivables 98,566 119,329 91,538
Income tax receivables 531 139 512
Bank and cash 17,543 21,201 18,436
123,286 147,055 115,898
Total assets 1,261,36 930,013 1,067,95
4 6
SHAREHOLDER'S EQUITY
Equity attributable to parent company shareholders
Share capital 81,384 81,384 81,384
Share issue 0 0 0
Share premium account 24,525 24,525 24,525
Translation differences 45 494 28
Retained earnings 313,218 275,999 315,791
419,172 382,402 421,728
Minority interest 2,211 2,105 2,028
Total shareholders' equity 421,383 384,507 423,757
LIABILITIES
Long-term liabilities
Deferred tax liabilities 98,745 90,114 98,352
Pension liabilities 2,497 4,577 2,565
Provisions 3,657 4,229 3,659
Interest-bearing liabilities 539,139 202,971 360,067
644,038 301,889 464,643
Current liabilities
Accounts payable and other
liabilities 91,366 87,336 79,155
Income tax liabilities 3,266 3,856 430
Provisions 411 91 230
Current interest-bearing
liabilities 100,900 152,333 99,739
195,943 243,616 179,555
Total liabilities 839,981 545,505 644,199
Total shareholders' equity
and liabilities 1,261,36 930,013 1,067,95
4 6
CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY
1000 EUR Share Share Share Trans-
capital issue issue lation
premium diffe-
rences
Shareholder
s´ equity
1.1.2006 81,314 6 24,301 -1,046
Translation
differences 1,539
Profit for
reporting
period
Total
recognised
income for
the period 1,539
Dividend
Share issue 70 -6 224
70 -6 224
Shareholder
s´ equity
30.6.2006 81,384 24,525 494
1000 EUR Retained Total Minority Total
earnings interest equity
Shareholder
s´ equity
1.1.2006 271,946 376,520 2,002 378,523
Translation
differences 1,539 1,539
Profit for
reporting
period 16,261 16,261 107 16,368
Total
recognised
income for
the period 16,261 17,801 107 17,908
Dividend -12,208 -12,208 -12,208
Share issue 289 289
Teamlines
sale -4 -4
-12,208 -11,919 -4 -11,923
Shareholder
s´ equity
30.6.2006 275,999 382,402 2,105 384,507
CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY
1000 EUR Share Share Share Trans-
capital issue issue lation
premium diffe-
rences
Shareholder
s´ equity
1.1.2007 81,384 24,525 28
Translation
differences 16
Profit for
reporting
period
Total
recognised
income for
the period 16
Dividend
Share issue
Shareholder
s´ equity
30.6.2007 81,384 24,525 45
1000 EUR Retained Total Minority Total
earnings interest equity
Shareholder
s´ equity
1.1.2007 315,791 421,728 2,028 423,757
Translation
differences 16 3 19
Profit for
reporting
period 14,518 14,518 180 14,698
Total
recognised
income for
the period 14,518 14,534 183 14,717
Dividend -17,091 -17,091 0 -17,091
Share issue
-17,091 -17,091 0 -17,091
Shareholder
s´ equity
30.6.2007 313,218 419,172 2,211 421,383
CONSOLIDATED CASH FLOW STATEMENT
1000 EUR 1-6/07 1-6/06 1-12/06
Cash flow from operations:
Profit for reporting 14,698 16,364 56,477
period
Adjustments:
Non-cash transactions 25,473 18,110 13,913
Interest expense and
other 11,704 5,384 11,762
financial expenses
Interest income -696 -485 -2,013
Dividend income -2 -34
Taxes 3,907 4,644 9,989
Realized currency
differences 843 2,785 1,028
Changes in working
capital:
Change in accounts
receivable and other
receivables -6,979 -16,137 4,525
Change in current assets -1,234 255 1,228
Change in accounts
payable 5,804 -2,211 -11,646
and other liabilities
Change in provisions 107 -356 -2,096
Interest paid -4,649 -4,314 -11,473
Interest received 695 380 2,008
Taxes -812 9,424 7,174
Other financing items -1,150 -940 1,475
Net cash flow from 47,708 32,903 82,318
operations
Cash flow from investing
activities:
Acquisition of N/A -1,727 -1,727
subsidiaries
Sale of subsidiaries 35,708
Investments in tangible - -38,214 -
assets 209,683 229,537
Investments in intangible
assets -982 -1,150 -2,207
Sale of tangible assets 325 999 1,625
Dividends received 2 1 34
Net cash flow from
investing activities - -40,091 -
210,338 196,104
Cash flow from financing
activities:
Proceeds from issue of 289 289
shares
Borrowing 229,920 2,935 202,881
Net increase in current
interest-bearing 22,658 25,439 -27,816
liabilities
Repayment of loans -74,128 -17,513 -59,394
Increase / decrease of
long-term receivables 372 707 2,190
Dividends paid -17,091 0 -12,600
Financing expenses 3 -2,063
Net cash flow from
financing activities 161,731 -348 103,487
Change in cash and cash
equivalents -899 -7,536 -10,299
Cash and cash equivalents
on 1 January 18,436 28,735 28,735
Effect of foreign exchange
rate changes 6 2 0
Cash and cash equivalents
on June 30 / December 31 17,543 21,201 18,436
REVENUE AND OPERATING RESULT BY BUSINESS SEGMENTS (PRIMARY
SEGMENT)
1-6/07 1-6/06 1-
12/06
Sales EUR % EUR % EUR %
(1000) (1000) (1000)
Shipping and sea
transport 278,89 84.8 271,37 85.2 538,99 85.2
7 5 6
Port operations 66,876 20.3 61,863 19.4 123,09 19.5
2
Eliminations
(intragroup) - -5.1 - -4.6 - -4.7
16,888 14,583 29,422
External sales 328,88 100. 318,65 100. 632,66 100.
5 0 5 0 6 0
Operating profit
Shipping and sea
transport 25,955 24,022 50,771
Port operations 4,497 3,631 7,452
Operating profit
total 30,453 27,653 58,223
Share of
associated 0 0 274
companies
Financial items - -7,253 -
11,848 10,773
Profit
before taxes 18,605 20,400 47,725
Income taxes -3,907 -4,748 -9,989
Profit for
reporting period
continuing 14,698 15,652 37,736
operations
PROPERTY, PLANT AND EQUIPMENT (INCL. INVESTMENT PROPERTIES)
30/6/07 30/6/0 31/12/
6 06
EUR EUR EUR
(1000) (1000) (1000)
Historical cost at
the beginning of the 1,084,49 849,02 849,02
period 1 9 9
Translation 96 5,442
differences 1,918
Additions 208,910 34,285 230,47
0
Acquisition of
subsidiaries 3,219 3,219
Disposals -856 -261 -2,615
Business disposals -825
Reclassifications -229 -229
Historical cost at 1,292,64 887,96 1,084,
the end of the period 1 1 491
Accumulated
depreciation at the
beginning of the -264,926 - -
period 227,71 227,71
0 0
Translation -66 -51 -990
differences
Disposals of 373
subsidiaries
Cumulative
depreciation on
reclassifications and 692 200 2,272
disposals
Cumulative
depreciation on -579 -579
business acquisition
Depreciations -24,142 - -
17,652 38,292
Accumulated
depreciations at the -288,442 245,79 -
end of the period 2 264,92
6
Book value 1,004,19 642,16 819,56
9 9 4
FINANCIAL INDICATORS
1-6/07 1-6/06 1-12/06
Operating profit as % of
revenue (continuing
operations) 9.3 8.7 9.2
ROE, % 7.0 8.6 14.1
ROI, % 6.4 8.1 9.9
Gearing, % 147.7 86.9 104.2
Gross capital
expenditure, MEUR *) 209.8 41.1 238.8
% of revenue 63.8 12.9 37.7
Equity ratio, % 33.4 41.3 39.7
Shareholders' equity/
share, EUR 10.30 9.40 10.36
Number of shares during
period, average (1000) 40,692 40,677 40,685
Number of shares at
end of period (1000) 40,692 40,692 40,692
Market capitalisation,
EUR million 638.9 616.5 699.9
Average personnel
(continuing operations)
Shore-based personnel 1,464 1,387 1,451
Sea-borne personnel 822 733 745
Personnel total 2,286 2,120 2,196
*) Includes continuing and discontinuing operations
Financial ratios have been calculated according to the same
principles as in financial statements 2006.
CONTINGENCIES AND 30/6/07 30/6/06 31/12/06
COMMITMENTS
1000 EUR
Vessel hires (continuing
operations):
Within 12 months 77,768 138,671 88,258
Between one and five 71,407 151,823 102,301
years
After five years 0 0 0
149,175 290,494 190,559
Other leases (continuing
operations):
Within 12 months 5,536 6,669 5,515
Between one and five 11,918 13,059 11,899
years
After five years 8,942 10,477 9,937
26,396 30,205 27,351
Collateral given:
Borrowings secured by given mortgages
Loans from financial
institutions 384,095 112,221 300,367
Vessel mortgages provided
as guarantees for the 536,000 231,000 461,000
above loans
Other guarantees given on behalf of the Group:
Collateral 2,518 2,769 2,485
Mortgages 606
Other guarantees given on behalf of the others:
Collateral 1,027 1,910 1,027
Mortgages 431 431 431
Other commitments given by group on behalf of subsidiaries:
Commitments 6,000 6,000
Obligations for capital
expenditure 137,431 399,642 239,768
Other obligations 112 115 115
Open derivative instruments:
1000 EUR 30/6/07 31/12/0 30/6/07 31/12/0
6 6
Net fair values Contract
amounts
Currency forwards 18 0 20,733 0
Interest rate swaps 0 0 0 0
Contingent liabilities
Finnsteve's Leasehold Agreement:
When the new Vuosaari harbour is operational Finnsteve Oy will
transfer its port operations from Helsinki's West Harbour and
North Harbour to Vuosaari. Finnsteve and the Port of Helsinki
have made a leasehold agreement, which obliges the leaseholder to
dismantle and remove any buildings, plants and equipment
(including foundations) located in the area. The extent of the
liabilities arising from this depends on future town planning and
is therefore difficult to estimate.
REVENUE AND OPERATING RESULT BY QUARTER
Q1/0 Q1/0 Q2/0 Q2/0
7 6 7 6
MEUR MEUR MEUR MEUR
Continuing
Operations
Shipping and
sea transport 132. 129. 146. 142.
5 1 4 2
Port 33.3 30.4 33.5 31.5
operations
Eliminations
(intragroup) -8.4 -6.6 -8.5 -7.9
External sales 157. 152. 171. 165.
4 9 4 8
Operating
profit
Shipping and
sea transport 11.0 7.9 14.9 16.1
Port 2.5 1.9 2.0 1.8
operations
Operating
profit total 13.5 9.7 16.9 17.9
Share of
associated
companies 0 0 0 0
Financial -5.2 -3.3 -6.7 -3.9
items
Profit
before taxes 8.3 6.4 10.2 14.0
Income taxes -1.7 -1.4 -2.2 -3.3
Profit for the
reporting 6.6 5.0 8.1 10.6
period,Continu
ing Operations
Discontinuing
Operations 0 -0.3 0 1.0
Profit for the
reporting 6.6 4.7 8.1 11.6
period
EPS 0.16 0.12 0.20 0.28
(undiluted)
EPS (diluted) 0.16 0.12 0.20 0.28
Related Party Transactions
There were no material related party transactions during the
reporting period.
Reporting
The interim report includes a summary of the financial statements
for the period in accordance with the IAS 34. The accounting
principles are the same as in the financial statements of 2006.
This interim report is unaudited.
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