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2015-11-12 14:30:16 CET 2015-11-12 14:31:18 CET REGULATED INFORMATION Finnlines - Interim report (Q1 and Q3)Finnlines Plc Interim Report January-September 2015 (unaudited)Helsinki, Finland, 2015-11-12 14:30 CET (GLOBE NEWSWIRE) -- FINNLINES PLC INTERIM REPORT JANUARY-SEPTEMBER 2015 (unaudited) Stock Exchange Release 12 November 2015 at 15:30 JANUARY-SEPTEMBER 2015: Result improved to EUR 41.1 million, an increase of 23.8 per cent - Revenue EUR 390.3 (413.8 prev. year) million, decrease 5.7 per cent, partly due to the reduction of cargo related bunker surcharge - Result before interest, taxes, depreciation and amortisation (EBITDA) EUR 94.7 (91.5) million, increase 3.5 per cent - Result for the reporting period EUR 41.1 (33.2) million, increase 23.8 per cent - Earnings per share were 0.80 (0.64) EUR/share - Interest-bearing debt decreased EUR 65.8 million and was EUR 561.4 (627.1) million at the end of the period JULY-SEPTEMBER 2015: Best quarterly result ever EUR 24.7 million, earnings per share up by 37 per cent - Revenue EUR 138.2 (143.7 prev. year) million, decrease 3.8 per cent, partly due to the reduction of cargo related bunker surcharge - Result before interest, taxes, depreciation and amortisation (EBITDA) EUR 43.2 (36.9) million, increase 17.1 per cent - Result for the reporting period EUR 24.7 (18.1) million, increase 36.0 per cent - Earnings per share were 0.48 (0.35) EUR/share KEY FIGURES MEUR 1-9 2015 1-9 2014 7-9 2015 7-9 2014 1-12 2014 Revenue 390.3 413.8 138.2 143.7 532.9 Result before interest, 94.7 91.5 43.2 36.9 115.4 taxes, depreciation and amortisation (EBITDA) Result before interest and 53.0 48.1 29.0 22.9 58.6 taxes (EBIT) % of revenue 13.6 11.6 21.0 15.9 11.0 Result for the reporting 41.1 33.2 24.7 18.1 41.7 period EPS, EUR 0.80 0.64 0.48 0.35 0.81 Shareholders' equity/share, 10.58 9.63 10.58 9.63 9.78 EUR Equity ratio, % 43.7 38.6 43.7 38.6 41.7 Interest bearing debt, MEUR 561.4 627.1 561.4 627.1 552.5 Gearing, % 106.0 130.0 106.0 130.0 113.0 EMANUELE GRIMALDI, PRESIDENT AND CEO, IN CONJUNCTION WITH THE REVIEW: January-September performance continued to be very strong and stems from prudent actions taken during the past years ”The third quarter result for the reporting period, EUR 24.7 million, is the best result ever. The January-September result for the reporting period EUR 41.1 million is a very strong achievement taken into account the slowdown of Finnish economy, the Russian sanctions and upgrade dockings on 17 vessels. Finnlines Group's continued strong performance stems from several past actions taken, some being more strategic decisions and some being more operational decisions. First of all, the Group has invested over EUR 1 billion on its fleet over the past ten years, and now has the youngest and most modern fleet in the Baltic Sea of all competitors. Secondly, this EUR 1 billion investment programme has been coupled with a strategic decision to own all vessels and to cease to charter a single vessel. This gives the required flexibility to manage the vessel capacity more optimally in this cyclical business. The Company is no longer dependent on a volatile charter market and can buy vessels which best meet its customer needs and are cost-efficient to operate. In turn, it can sell the vessels that are not cost-efficient or do not meet the Company's ROCE targets. Thirdly, the Group focused along the years to improve its financial position and strengthen its balance sheet by reserving all excess cash flow left after implementing a simultaneous and extensive EUR 1 billion capex programme to reduce its interest bearing debt and improve its equity ratio. Fourthly, we continue our EUR 100 million Environmental Technology Investment Programme by installing scrubbers to the remaining vessels, investing in propulsion and re-blading, and silicon-paint hull projects for better fuel economy and for the environment. Fifthly, the ongoing Turnaround Programme has resulted in a great improvement of our operational efficiency and cost efficiency, but we need to continue to focus on costs in every area also in the future. More importantly, Finnlines, belonging to Grimaldi Group, one of Europe's strongest shipping companies with a proven track record when measured against its global peers, is today a successful, profitable, cost-efficient, environmental-friendly, technically, operationally and financially sound company. Finnlines being ranked as one of the best performing listed shipping companies in 2014, has only been possible through the long-term prudent actions taken over the past years as described above. All the aforementioned has impacted our today's share price and has generated the best shareholder value to all of our shareholders - being small or large.” FINNLINES PLC, INTERIM REPORT JANUARY-SEPTEMBER 2015 (unaudited) FINNLINES' BUSINESS Finnlines is the largest shipping company in the Baltic Sea based on both ro-ro and ro-pax volumes (source: Baltic Transportation Journal). The Company's passenger-freight vessels offer services from Finland to Germany and via the Åland Islands to Sweden, as well as from Sweden to Germany. Finnlines' ro-ro vessels operate in the Baltic Sea and the North Sea. The Company has subsidiaries in Germany, Belgium, Great Britain, Sweden, Denmark and Poland, which all are also sales offices. In addition to sea transportation, the Company provides port services in Helsinki and Turku. GROUP STRUCTURE Finnlines Plc is a Finnish listed company. At the end of the reporting period, the Group consisted of the parent company and 21 subsidiaries. Finnlines is part of the Italian Grimaldi Group, which is a global logistics group specialising in maritime transport of cars, rolling cargo, containers and passengers. The Grimaldi Group comprises seven shipping companies, including Finnlines, Atlantic Container Line (ACL), Malta Motorways of the Sea (MMS) and Minoan Lines. With an owned fleet of about 110 vessels, the Group provides maritime transport services for rolling cargo and containers between North Europe, the Mediterranean, the Baltic Sea, West Africa, North and South America. It also offers passenger services within the Mediterranean and Baltic Sea. With 80.74 per cent (on 30 September 2015) of the shares, the Grimaldi Group is the biggest shareholder in Finnlines Plc. GENERAL MARKET DEVELOPMENT Based on the statistics by the Finnish Transport Agency for January-August, the Finnish seaborne imports carried in container, lorry and trailer units decreased by 4 per cent whereas exports increased by 3 per cent (measured in tons) compared to the same period in 2014. During the same period private and commercial passenger traffic between Finland and Sweden increased by 1 per cent. Between Finland and Germany the corresponding traffic decreased by 3 per cent (Finnish Transport Agency). FINNLINES' TRAFFIC During the third quarter Finnlines operated on average 23 (24) vessels in its own traffic. MS Finnmerchant, operating between Hanko and Rostock, was docked in September for the installation of exhaust gas cleaning system. During the docking MS Finneagle moved from Naantali-Kapellskär traffic to Hanko-Rostock line. The cargo volumes transported during January-September totalled approximately 472 (486 in 2014) thousand cargo units, 112 (61) thousand cars (not including passengers' cars) and 1,472 (1,803) thousand tons of freight not possible to measure in units. In addition, some 453 (450) thousand private and commercial passengers were transported. FINANCIAL RESULTS January-September 2015 The Finnlines Group recorded revenue totalling EUR 390.3 (413.8) million, a decrease of 5.7 per cent compared to the same period in 2014. Shipping and Sea Transport Services generated revenue amounting to EUR 376.5 (401.9) million and Port Operations EUR 27.0 (28.6) million. The internal revenue between the segments was EUR 13.1 (16.7) million, which means that the external revenue of Port Operations has increased during the reporting period. Result before interest, taxes, depreciation and amortisation (EBITDA) was EUR 94.7 (91.5) million, an increase of 3.5 per cent. Result before interest and taxes (EBIT) was EUR 53.0 (48.1) million. The increased efficiency of the operations in terms of bunker consumption, higher capacity utilisation of vessels and reduction of costs in many areas has continued to impact the financial performance of the Group. Despite the increased efficiency of the operations the result was burdened with several vessels being docked for the installations of scrubbers and new propulsion systems during the first quarter. Net financial expenses decreased and were EUR -13.4 (-16.8) million. Financial income was EUR 0.5 (0.3) million and financial expenses EUR -14.0 (-17.2) million. The result for January-September was EUR 41.1 (33.2) million and earnings per share (EPS) were EUR 0.80 (0.64). July-September 2015 The Finnlines Group recorded revenue totalling EUR 138.2 (143.7) million, a decrease of 3.8 per cent compared to the same period in 2014. Shipping and Sea Transport Services generated revenue amounting to EUR 133.4 (140.0) million. However, Port Operations revenue increased during the third quarter from EUR 8.5 million to EUR 8.9 million. The internal revenue between the segments was EUR 4.1 (4.8) million. Compared to the first two quarters the amount of passengers has increased due to the summer high season. Result before interest, taxes, depreciation and amortisation (EBITDA) was EUR 43.2 (36.9) million, an increase of 17.1 per cent. Result before interest and taxes (EBIT) was EUR 29.0 (22.9) million. The majority of Finnlines' fleet is using cheaper IFO fuel instead of MGO which has further decreased fuel costs. Net financial expenses were EUR -4.4 (-5.4) million. Financial income was EUR 0.1 (0.1) million and financial expenses totalled EUR -4.5 (-5.5) million. The result for July-September was EUR 24.7 (18.1) million, which is the best quarter ever. Earnings per share (EPS) rose to EUR 0.48 (0.35). STATEMENT OF FINANCIAL POSITION, FINANCING AND CASH-FLOW Interest-bearing debt decreased by EUR 65.8 million and amounted to EUR 561.4 (627.1) million. The equity ratio calculated from the balance sheet improved to 43.7 (38.6) per cent and gearing dropped to 106.0 (130.0) per cent. Vessel lease commitments decreased by EUR 11.5 million to EUR 2.7 million compared to the end of September 2014. At the end of the period, cash and deposits together with unused committed working capital credits amounted to EUR 92.4 (82.0) million. Net cash generated from operating activities improved markedly and was EUR 66.4 (55.5) million. CAPITAL EXPENDITURE Finnlines Group's gross capital expenditure in the reporting period totalled EUR 65.3 (20.5) million including tangible and intangible assets. Total depreciation and amortisation amounted to EUR 41.8 (43.4) million. The investments consist of the purchase of MS Finnmerchant, normal replacement expenditure of fixed assets, IT investments, scrubber, special coating, re-blading projects and dry-dockings of ships. In January, Finnlines signed a purchase agreement of two ro-ro vessels, and paid a part of the purchase price. The vessels will be delivered at the turn of the year 2015/2016. In 2014 Finnlines ordered exhaust gas cleaning systems (scrubbers) for ten of its ro-ro vessels and four of its ro-pax vessels plus propulsion upgrading to six of its vessels. These retrofits were finalised during winter/spring 2015. In March 2015, Finnlines launched the second phase of the Finnlines Group's EUR 100 million environmental investment programme by ordering one additional scrubber for MS Finnmerchant. The installation was finalised in September 2015. In July 2015, Finnlines placed additional orders for exhaust gas cleaning systems for two more of its ro-ro vessels and three more of its ro-pax vessels. Installations will start end of this year and are expected to be finalised in beginning of May 2016. In addition, Finnlines enlarged its propulsion upgrading programme in August 2015 by ordering new propeller blades for three of its ro-pax vessels. In August 2015, Finnlines also concluded agreements for applying special foul release coating (silicon paint) to two of its ro-pax vessels deployed on Sweden-Germany route. The hull treatment of the ro-pax vessels was finalised in beginning of October 2015. PERSONNEL The Group employed an average of 1,612 (1,729) persons during the period, consisting of 704 (778) persons on shore and 908 (951) persons at sea. The average number of shore personnel decreased mostly due to employee reductions in Port Operations. The number of sea personnel decreased due to employee reductions concerning MS Finnhansa and MS Finnsailor. The number of persons employed at the end of the period was 1,584 (1,628) in total, of which 712 (709) on shore and 872 (919) at sea. The personnel expenses (including social costs) for the reporting period were EUR -62.7 (-67.2) million. THE FINNLINES SHARE The Company's registered share capital on 30 September 2015 was EUR 103,006,282 divided into 51,503,141 shares. A total of 0.5 (4.0) million shares were traded on the NASDAQ OMX Helsinki during January-September. The market capitalisation of the Company's stock at the end of September was EUR 824.1 (772.5) million. Earnings per share (EPS) were EUR 0.80 (0.64). Shareholders' equity per share was EUR 10.58 (9.63). At the end of the reporting period, the Grimaldi Group's holding and share of votes in Finnlines was 80.74 per cent. RISKS AND RISK MANAGEMENT Finnlines is exposed to business risks that arise from the capacity of the fleet existing in the market, counterparties, prospects for export and import of goods, and changes in the operating environment. The risk of overcapacity is reduced when the aging vessels are scrapped, on the one hand, and as more stringent sulphur directive requirements have come into force, on the other. Finnlines operates mainly in the Emissions Control Areas where the emission regulations are stricter than globally. The sulphur content limit for heavy fuel oil was reduced to 0.1 per cent as from 1.1.2015 in accordance with the MARPOL Convention. This increases costs of sea transportation. However, with one of the youngest and largest fleets in Northern Europe and with investments targeted on engine systems and energy efficiency, Finnlines is in a strong position to greatly mitigate this risk. The effect of fluctuations in the foreign trade is reduced by the fact that the Company operates in several geographical areas. This means that slow growth in one country is compensated by faster recovery in another. Finnlines continuously monitors the solidity and payment schedules of its customers and suppliers. Currently, there are no indications of imminent risks related to counterparties but the Company continues to monitor the financial position of its counterparties. Finnlines holds adequate credit lines to maintain liquidity in the current business environment. LEGAL PROCEEDINGS The 2014 Financial statements, published on 24 February 2015, contain a description of ongoing legal proceedings. On 27 February 2015, the District Court of Helsinki rendered its decision on the dispute between Finnlines Plc and the State of Finland. According to Finnlines Plc the Finnish Act on Fairway Dues in force until 1 January 2006 has contained provisions which according to EU law were discriminatory. The Company has been charged excessive fairway dues during 2001-2004. In its decision, the District Court of Helsinki has ordered the State of Finland to refund to Finnlines Plc, as plaintiffs, the fairway dues, charged in excessive extent in the years 2001-2004 totalling about EUR 17.0 million including interest. The Finnish State has appealed to the Helsinki Court of Appeal. The case is pending. The Company's port operation subsidiaries have received summons from 18 former employees. All employees claim compensation based on groundless termination of their employment contracts and compensation according to Non-Discrimination Act. The total amount of the claims is EUR 2.2 million. The subsidiaries consider the basis of the claims groundless. The processes are under way. Finnlines Plc's port operation subsidiary Finnsteve Oy Ab ("Finnsteve") has initiated legal action against the Port of Helsinki Oy (the "Port of Helsinki"). The action has been initiated due to non-respect of the obligations from the part of the Port of Helsinki under the operative agreement in force between the parties concerning the rights of the subsidiary to use the operative area in the port of Vuosaari. The Port of Helsinki has filed for its own part after the review period of this interim report an application for a temporary court order against Finnsteve in the Helsinki District Court. With the application for an interim court order the Port of Helsinki is requesting a right to force Finnsteve to empty certain areas in the Vuosaari harbour which are essential to Finnsteve's business and operations and to oblige Finnsteve to provide crane services on request by the two cranes owned by Finnsteve to any third party designated by the Port of Helsinki. The Port of Helsinki has not given any information showing that there would be any third parties in need of additional areas or crane services in Vuosaari harbour. The temporary court order, if granted, would be in force until a final and legally binding judgement has been received in separate legal proceedings regarding the merits of the allegations made by the Port of Helsinki. Finnsteve considers the requests of the Port of Helsinki profoundly groundless and against the terms and conditions of the agreement in force since 2007 for 20 years between the Port of Helsinki and Finnsteve. The case is pending. CORPORATE GOVERNANCE Finnlines applies the Finnish Corporate Governance Code for listed companies. The Corporate Governance Statement can be reviewed on the corporate website: www.finnlines.com. EVENTS AFTER THE REPORTING PERIOD The Company has announced on 9 October 2015 that Grimaldi Group has made an agreement with Mutual Pension Insurance Company Ilmarinen ("Ilmarinen") on the purchase of Ilmarinen's Finnlines shares, through which Grimaldi Group's ownership rose to 91.32%. OUTLOOK AND OPERATING ENVIRONMENT Finnlines continues its EUR 100 million Environmental Technology Investment Programme, which is expected to be concluded in spring 2016, and which has enabled the Company to reduce fuel consumption and fuel costs. The ongoing Turnaround Programme has resulted in a great improvement of operational efficiency and cost efficiency. Finnlines Group's result before taxes is expected to be better in 2015 compared to the same period in the previous year. The Group Financial Statement bulletin for the period of 1 January-31 December 2015 will be published on Thursday, 25 February 2016. Finnlines Plc The Board of Directors Emanuele Grimaldi President and CEO ENCLOSURES - Reporting and accounting policies - Consolidated statement of comprehensive income, IFRS - Consolidated statement of financial position, IFRS - Consolidated statement of changes in equity, IFRS - Consolidated cash flow statement, IFRS - Revenue and result by business segments - Property, plant and equipment - Fair value hierarchy - Contingencies and commitments - Revenue and result by quarter - Shares, market capitalisation and trading information - Events after the reporting period - Calculation of ratios - Related party transactions DISTRIBUTION NASDAQ OMX Helsinki Ltd. Main media This interim report is unaudited. REPORTING AND ACCOUNTING POLICIES This interim report included herein is prepared in accordance with IAS 34 (Interim Financial Reporting) standard. The Company adopts new or revised IFRS standards and IFRIC interpretations from the beginning of the reporting period corresponding to those described in the 2014 Financial Statements with effect of 1 January 2015. They did not have any impact on the reported figures. Finnlines Plc entered into the tonnage taxation regime in January 2013. In tonnage taxation, shipping operations transferred from taxation of business income to tonnage-based taxation. All figures in the accounts have been rounded and, consequently, the sum of individual figures may deviate from the presented sum figure. The preparation of the interim financial statements in accordance with IFRS requires management to make estimates and assumptions and use its discretion in applying the accounting principles that affect the valuation of the reported assets and liabilities and other information such as contingent liabilities and the recognition of income and expenses in the income statement. Although the estimates are based on the management's best knowledge of current events and actions, actual results may differ from the estimates. The uncertainties related to the key assumptions were the same as those applied to the consolidated financial statements at the year-end 31 December 2014. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS EUR 1,000 7-9 2015 7-9 2014 1-9 2015 1-9 2014 1-12 2014 Revenue 138,234 143,673 390,273 413,813 532,889 Other income from 537 888 1,252 3,057 6,776 operations Materials and -40,463 -50,535 -126,461 -149,296 -191,445 services Personnel expenses -19,937 -19,933 -62,669 -67,150 -88,418 Depreciation, -14,212 -14,079 -41,755 -43,384 -56,843 amortisation and impairment losses Other operating -35,127 -37,159 -107,655 -108,927 -144,396 expenses Total operating -109,739 -121,706 -338,539 -368,757 -481,102 expenses Result before 29,032 22,855 52,986 48,113 58,563 interest and taxes (EBIT) Financial income 77 146 547 342 483 Financial expenses -4,451 -5,498 -13,965 -17,181 -22,412 Result before taxes 24,659 17,502 39,567 31,273 36,634 (EBT) Income taxes 25 645 1,529 1,910 5,079 Result for the 24,683 18,147 41,096 33,183 41,713 reporting period Other comprehensive income: Other comprehensive income to be reclassified to profit and loss in subsequent periods: Exchange differences -18 15 30 34 69 on translating foreign operations Tax effect, net -4 -6 Other comprehensive -18 11 30 28 69 income to be reclassified to profit and loss in subsequent periods, total Other comprehensive income not being reclassified to profit and loss in subsequent periods: Remeasurement of -844 defined benefit plans Tax effect, net * 0 212 353 Other comprehensive 0 212 -491 income not being reclassified to profit and loss in subsequent periods, total Total comprehensive 24,665 18,158 41,126 33,422 41,291 income for the reporting period Result for the reporting period attributable to: Parent company 24,672 18,132 41,112 33,193 41,726 shareholders Non-controlling 11 15 -16 -10 -13 interests 24,683 18,147 41,096 33,183 41,713 Total comprehensive income for the reporting period attributable to: Parent company 24,654 18,143 41,142 33,432 41,304 shareholders Non-controlling 11 15 -16 -10 -13 interests 24,665 18,158 41,126 33,422 41,291 Result for the reporting period attributable to parent company shareholders calculated as earnings per share (EUR/share): Undiluted / diluted 0.48 0.35 0.80 0.64 0.81 earnings per share Average number of shares: Undiluted / diluted 51,503,141 51,503,141 51,503,141 51,503,141 51,503,141 The majority of amounts included in Comprehensive income relates to tonnage tax scheme. * Tax asset has been posted from remeasurement because Finnlines Deutschland GmbH transferred from tonnage-based taxation to business taxation at the end of January 2014. The company entered into business taxation as from 1 February 2014. CONSOLIDATED STATEMENT OF FINANCIAL POSITION, IFRS EUR 1,000 30 Sep 2015 30 Sep 2014 31 Dec 2014 ASSETS Non-current assets Property, plant and equipment 1,012,706 986,021 983,183 Goodwill 105,644 105,644 105,644 Intangible assets 4,656 5,717 5,500 Other financial assets 4,576 4,580 4,576 Receivables 838 1,018 838 Deferred tax assets 6,050 1,599 5,353 1,134,469 1,104,579 1,105,092 Current assets Inventories 5,251 8,496 5,926 Accounts receivable and other 91,092 97,011 76,480 receivables Income tax receivables 475 185 1 Cash and cash equivalents 2,245 2,454 2,680 99,063 108,145 85,086 Non current assets held for sale 15,121 74,086 20,297 Total assets 1,248,653 1,286,810 1,210,475 EQUITY Equity attributable to parent company shareholders Share capital 103,006 103,006 103,006 Share premium account 24,525 24,525 24,525 Translation differences 207 136 178 Fund for invested unrestricted equity 40,016 40,016 40,016 Retained earnings 376,988 328,046 335,876 544,743 495,730 503,601 Non-controlling interests 289 308 306 Total equity 545,033 496,038 503,907 LIABILITIES Long-term liabilities Deferred tax liabilities 55,163 55,596 56,102 Other long-term liabilities 125 2,550 163 Pension liabilities 4,697 3,961 4,705 Provisions 1,783 1,889 1,844 Loans from financial institutions 392,406 485,988 420,722 454,175 549,983 483,536 Current liabilities Accounts payable and other liabilities 61,920 79,589 71,565 Current tax liabilities 0 16 72 Provisions 211 103 81 Loans from financial institutions 179,618 152,560 142,967 241,749 232,268 214,685 Total liabilities 695,923 782,251 698,220 Liabilities related to long-term 7,696 8,521 8,348 assets held for sale Total equity and liabilities 1,248,653 1,286,810 1,210,475 CONSOLIDATED statement of changes in equity 2014, IFRS EUR 1,000 Equity attributable to parent company shareholders Share Share Transl Unre- Re- Total Non-co Total capital issue a stric tained n equity pre- tion ted ear- trolli mium dif equity nings ng ferenc re- intere es serve sts Reported 103,006 24,525 109 40,016 294,641 462,297 360 462,658 equity 1 January 2014 Compre- hensive income for the repor- ting period: Result for 33,193 33,193 -10 33,183 the repor- ting period Exchange 34 34 34 dif- ferences on trans- lating foreign opera- tions Tax effect, -6 212 206 206 net Total 28 33,405 33,433 -10 33,422 compre- hensive income for the repor- ting period Dividend -42 -42 Equity 30 103,006 24,525 136 40,016 328,046 495,730 308 496,038 Septem- ber 2014 CONSOLIDATED statement of changes in equity 2015, IFRS EUR 1,000 Equity attributable to parent company shareholders Share Share Transl Unre- Re- Total Non-co Total capital issue a stric tained n equity pre- tion ted ear- trolli mium dif- equity nings ng ferenc re- inte es serve rests Reported 103,006 24,525 178 40,016 335,876 503,601 306 503,907 equity 1 January 2015 Compre- hensive income for the repor- ting period: Result for 41,112 41,112 -16 41,096 the repor- ting period Exchange 30 30 30 differences on trans- lating foreign opera- tions Tax effect, net Total 30 41,112 41,142 -16 41,126 compre- hensive income for the repor- ting period Dividend Equity 30 103,006 24,525 207 40,016 376,988 544,743 289 545,033 Septem- ber 2015 CONSOLIDATED CASH FLOW STATEMENT, IFRS EUR 1,000 1-9 2015 1-9 2014 1-12 2014 Cash flows from operating activities Result for the reporting period 41,096 33,183 41,713 Adjustments: Non-cash transactions 41,476 41,788 51,987 Unrealised foreign exchange -6 -45 -28 gains (-) / losses (+) Financial income and expenses 13,424 16,884 21,957 Taxes -1,529 -1,910 -5,079 Changes in working capital: Change in accounts receivable -15,023 -16,676 4,855 and other receivables Change in inventories 675 336 2,906 Change in accounts payable and 1,324 4,934 -9,435 other liabilities Change in provisions -119 -113 -207 Interest paid -12,283 -15,983 -18,742 Interest received 323 113 141 Taxes paid * -84 -3,885 -3,990 Other financing items -2,858 -3,080 -3,970 Net cash generated from operating activities 66,416 55,547 82,108 Cash flow from investing activities Investments in tangible and -71,161 -16,689 -29,575 intangible assets Proceeds from sale of tangible assets 195 7,801 69,590 Proceeds from sale of investments 1 Dividends received 12 13 13 Net cash used in investing activities 70,953 -8,875 40,029 Cash flows from financing activities Loan withdrawals 245,000 135,475 169,604 Net increase in current interest-bearing 30,867 17,556 7,953 liabilities (+) / net decrease (-) Repayment of loans -271,901 -199,166 -298,974 Loans granted -900 -900 Increase (-) / decrease (+) in 135 350 395 long-term receivables Dividends paid -42 -42 Net cash used in financing activities 4,101 -46,727 -121,964 Change in cash and cash equivalents -436 -55 173 Cash and cash equivalents 2,680 2,508 2,508 1 January Effect of foreign exchange rate changes 0 0 -1 Cash and cash equivalents at 2,245 2,454 2,680 the end of period * Taxes paid in 2014 include Finnlines Deutschland GmbH's payment of tax provision EUR 3.6 million. REVENUE AND RESULT BY BUSINESS SEGMENTS 7-9 2015 7-9 2014 1-9 2015 1-9 2014 1-12 2014 MEUR % MEUR % MEUR % MEUR % MEUR % Reve nue Ship 133.4 96.5 140.0 97.4 376.5 96.5 401.9 97.1 517.4 97.1 ping and sea transport ser vices Port 8.9 6.5 8.5 5.9 27.0 6.9 28.6 6.9 36.9 6.9 operation s In -4.1 -3.0 -4.8 -3.3 -13.1 -3.4 -16.8 -4.0 -21.3 -4.0 tra-group re venue External 138.2 100.0 143.7 100.0 390.3 100.0 413.8 100.0 532.9 100.0 sales Re- sult be fore interest and taxes Ship 29.0 22.1 54.1 49.8 61.6 ping and sea transport ser vices Port 0.1 0.7 -1.1 -1.7 -3.1 operations Re 29.0 22.8 53.0 48.1 58.6 sult be fore interest and taxes (EBIT) total Financial -4.4 -5.3 -13.4 -16.8 -21.9 items Result be 24.7 17.5 39.6 31.3 36.6 fore taxes (EBT) In 0 0.6 1.5 1.9 5.1 come taxes Re 24.7 18.1 41.1 33.2 41.7 sult for the reporting period PROPERTY, PLANT AND EQUIPMENT 2015 EUR 1,000 Land Buil- Vessels Machi- * Advance Total dings nery and payments equip- & ment acquisi- tions under construc- tion Acquisition 72 72,773 1,287,982 66,273 25,928 1,453,028 cost 1 January 2015 Exchange rate 29 29 differences Increases 45,282 241 19,194 64,718 Disposals -424 -429 -853 Reclassifi- 20,578 9 -20,586 0 cations Reclassifi- -4,369 -22,395 -26,763 cations to non-current assets held for sale Acquisition 72 68,404 1,353,417 43,728 24,537 1,490,158 cost 30 September 2015 Accumulated -17,341 -389,749 -42,459 -449,549 depreciation, amortisation and write-offs 1 January 2015 Exchange rate -27 -27 differences Cumulative 424 429 853 depreciation on reclassify- cations and disposals Depreciation -1,651 -37,871 -851 -40,373 for the reporting period Accumulated -18,991 -427,196 -42,907 -489,095 depreciation, amortisation and write-offs 30 September 2015 Reclassifi- 1,132 10,510 11,642 cation to non-current assets held for sale Book value 30 72 50,545 926,221 11,331 24,537 1,012,706 September 2015 A part of the Port Operations' assets, book value of 15.1 million euros, is continued to be classified as assets held for sale. * Includes mainly advance payments for the scrubber systems. PROPERTY, PLANT AND EQUIPMENT 2014 EUR 1,000 Land Buil- Vessels Machi- Advance Total dings nery and payments equip- & ment acquisi- tions under construc- tion Acquisition 72 75,271 1,372,769 73,122 398 1,521,632 cost 1 January 2014 Exchange rate 36 36 differences Increases 4,068 116 15,664 19,849 Disposals -2,062 -261 -6,698 -9,021 Reclassifi- -4,369 -94,603 -22,395 -121,367 cations to non-current assets held for sale Acquisition 72 68,840 1,281,974 44,181 16,062 1,411,128 cost 30 September 2014 Accumulated -16,316 -373,866 -47,060 -437,243 depreciation, amortisation and write-offs 1 January 2014 Exchange rate -33 -33 differences Cumulative 1,012 261 6,223 7,496 depreciation on reclassify- cations and disposals Depreciation -1,815 -39,060 -1,733 -42,609 for the reporting period Accumulated -17,119 -412,666 -42,603 -472,388 depreciation, amortisation and write-offs 30 September 2014 Reclassifi- 1,132 35,638 10,510 47,280 cation to non-current assets held for sale * Book value 30 72 52,853 904,946 12,088 16,062 986,021 September 2014 * In 2014, Finnlines Group's Port Operations were negotiating to sell port assets with book value of around EUR 15.4 million. No impairment losses have been recognized on the carrying amount of the assets of EUR 15.4 million. FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). The Group has loans from financial institutions and pension loans belonging to level 2. There is no material difference between carrying values and fair values of these instruments. Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs). There are no instruments in this category. During 2015 and the previous year there has been no transfers to or from the fair value hierarchy level 3. CONTINGENCIES AND COMMITMENTS EUR 1,000 30 Sep 2015 30 Sep 2014 31 Dec 2014 Minimum leases payable in relation to fixed-term leases: Vessel leases (Group as lessee): Within 12 months 2,683 11,492 11,409 1-5 years 0 2,683 2,683 14,175 11,409 Vessel leases (Group as lessor)*: Within 12 months 2,105 2,446 0 1-5 years 7,370 5,847 0 9,475 8,293 0 Other leases (Group as lessee): Within 12 months 6,182 6,307 6,366 1-5 years 14,465 17,619 17,128 After five years 8,202 10,117 9,274 28,849 34,043 32,768 Other leases (Group as lessor): Within 12 months 259 245 250 1-5 years 9 268 245 250 Collateral given Loans from financial institutions 453,539 520,024 477,054 Vessel mortgages provided as 973,000 1,035,000 1,035,000 guarantees for the above loans Other collateral given on own behalf Cash deposit 1,700 0 Corporate mortgages 0 606 0 1,700 606 0 Other obligations ** 35,425 43,782 35,453 VAT adjustment liability related 4,350 5,674 5,322 to real estate investments * A long-term bareboat agreement was terminated on 17.12.2014 due to the sale of the vessel, and another bareboat agreement was made during the first quarter of 2015. ** Includes scrubber system, re-blading obligations and vessel investments. REVENUE AND RESULT BY QUARTER MEUR Q1/15 Q1/14 Q2/15 Q2/14 Q3/15 Q3/14 Shipping and sea transport 112.9 122.8 130.2 139.1 133.4 140.0 services Port operations 8.3 10.0 9.7 10.2 8.9 8.5 Intra-group revenue -4.4 -6.0 -4.6 -5.9 -4.1 -4.8 External sales 116.8 126.8 135.2 143.3 138.2 143.7 Result before interest and taxes Shipping and sea transport 5.0 7.3 20.2 20.4 29.0 22.1 services Port operations -1.1 -1.8 -0.1 -0.6 0.1 0.7 Result before interest and 3.9 5.4 20.1 19.8 29.0 22.8 taxes (EBIT) total Financial items -4.3 -5.8 -4.8 -5.7 -4.4 -5.3 Result before taxes (EBT) -0.4 -0.4 15.3 14.1 24.7 17.5 Income taxes 1.0 0.7 0.5 0.6 0 0.6 Result for the reporting 0.6 0.3 15.8 14.7 24.7 18.1 period EPS (undiluted / diluted)* 0.01 0.01 0.31 0.29 0.48 0.35 * Key indicators per share have been adjusted with the share issue adjustment factor. SHARES, MARKET CAPITALISATION AND TRADING INFORMATION 30 Sep 2015 30 Sep 2014 Number of shares 51,503,141 51,503,141 Market capitalisation, EUR million 824.1 772.5 1-9 2015 1-9 2014 Number of shares traded, million 0.5 4.0 1-9 2015 High Low Average Close Share price 18.00 14.34 16.16 16.00 EVENTS AFTER THE REPORTING PERIOD The Company has announced on 9 October 2015 that Grimaldi Group has made an agreement with Mutual Pension Insurance Company Ilmarinen ("Ilmarinen") on the purchase of Ilmarinen's Finnlines shares, through which Grimaldi Group's ownership rose to 91.32%. CALCULATION OF RATIOS Earnings per share (EPS), EUR : Result attributable to parent company shareholders ------------------------------------------------------ Weighted average number of outstanding shares Shareholders' equity per share, EUR : Shareholders' equity attributable to parent company shareholders ------------------------------------------------------------------ Undiluted number of shares at the end of period Gearing, %: Interest-bearing liabilities - cash and bank equivalents ---------------------------------------------------------- X 100 Total equity Equity ratio, %: Total equity --------------------------------- X 100 Assets total - received advances Income tax expense is recognised based on the best estimate of the weighted-average annual income tax rate expected for the full financial year. In January 2013, the shipping operations of Finnlines Plc transferred to tonnage-based taxation. At the end of January 2014, Finnlines Deutschland GmbH transferred from tonnage-based taxation to business taxation. The company entered into business taxation as from 1 February 2014. RELATED PARTY TRANSACTIONS There were no material related party transactions during the reporting period. The business transactions were carried out using market-based pricing. |
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