2014-11-13 08:00:00 CET
2014-11-13 08:00:03 CET
REGULATED INFORMATION
Viking Line - Interim report (Q1 and Q3)
VIKING LINE'S INTERIM REPORT FOR THE PERIOD JANUARY - SEPTEMBER 2014
Mariehamn, 2014-11-13 08:00 CET (GLOBE NEWSWIRE) --
Viking Line Abp INTERIM REPORT 13.11.2014, 9.00 A.M.
VIKING LINE'S INTERIM REPORT FOR THE PERIOD JANUARY - SEPTEMBER 2014
Consolidated sales of the Viking Line Group during the period January 1 -
September 30, 2014 decreased by 4.4 per cent to 401.1 million euros compared to
the same period of 2013 (EUR 419.7 M). Operating income amounted to EUR 9.5 M
(32.7 including and 9.9 excluding the capital gain from the sale of the
Isabella). Net financial items totalled EUR -6.3 M (-5.1). Consolidated income
before taxes amounted to EUR 3.2 M (27.6) Income after taxes totalled EUR 2.5 M
(20.7 including and 3.5 excluding the capital gain from the sale of the
Isabella).
Competition in Viking Line's service area implies continued pressure on both
prices and volume. The economic downturn in Finland is another uncertainty
factor. In recent months, however, lower bunker prices have had a positive
effect on operations and the Board of Directors is still of the opinion that
operating income will improve in 2014 compared to operating income in 2013,
excluding the capital gain from the sale of the Isabella.
SALES AND EARNINGS
Consolidated sales of the Viking Line Group during the period January 1 -
September 30, 2014 decreased by 4.4 per cent to 401.1 million euros compared to
the same period of 2013 (EUR 419.7 M). Operating income amounted to EUR 9.5 M
(32.7 including and 9.9 excluding the capital gain from the sale of the
Isabella). Net financial items totalled EUR -6.3 M (-5.1). Consolidated income
before taxes amounted to EUR 3.2 M (27.6) Income after taxes totalled EUR 2.5 M
(20.7 including and 3.5 excluding the capital gain from the sale of the
Isabella).
Passenger-related revenue decreased by 5.4 per cent to EUR 368.5 M (389.5),
while cargo revenue increased by 8.9 per cent to EUR 29.6 M (27.1). Net sales
revenue decreased by 5.1 per cent to EUR 289.2 M (304.8). The Group's operating
expenses decreased by 4.6 per cent to EUR 255.6 M (267.9).
Consolidated sales during the third quarter, July 1 - September 30, 2014,
decreased by 2.6 per cent to EUR 160.1 M compared to the same quarter of 2013
(164.4). Operating income in the third quarter amounted to EUR 22.0 M (26.6)
and income after taxes totalled EUR 16.7 M (18.9).
The decrease in consolidated sales is primarily explained by the prevailing
pressure on prices in today's tough competitive situation, combined with
falling volume early in 2014 and an economic downturn in Finland that affects
the pattern of consumption. Overall, this has had a negative impact on net
sales revenue per passenger.
The Group's bunker (vessel fuel) expenses decreased during the period by EUR
2.5 M, equivalent to 5.4 per cent. The decrease is explained by lower average
bunker prices and the Group's continued efforts to optimize the bunker
consumption of its vessels.
The Board of Directors also believes that the Group's action programme aimed at
improving operational efficiency is continuing to have a positive impact on
operating expenses. Combined with ongoing measures to boost sales, this is
expected to improve earnings from day-to-day operations in the future.
SERVICES AND MARKET TRENDS
The Viking Line Group provides passenger and cargo carrier services using seven
vessels on the northern Baltic Sea. The Group's vessels served the same routes
as during 2013. During the period June 12 - September 2, 2014 the Gabriella and
the Mariella served the Helsinki (Finland)-Tallinn (Estonia) route, while
continuing to sail on their regular Helsinki-Mariehamn (Åland Islands,
Finland)-Stockholm (Sweden) route.
The number of passengers on Viking Line's vessels during the report period
increased by 91,003 to 5,089,760 (4,998,757). During the report period, Viking
Line reduced its market share on the Turku (Finland)-Mariehamn/Långnäs (Åland
Islands, Finland)-Stockholm route by 1.4 percentage points to 56.9 per cent. On
the Helsinki-Mariehamn-Stockholm route, market share increased by 0.8
percentage points to 46.1 per cent. In cruise services between Stockholm and
Mariehamn, market share decreased by 0.1 percentage points to 53.9 per cent. On
the Helsinki-Tallinn route, market share increased by 2.0 percentage points to
25.0 per cent. On the short route across the Sea of Åland between Mariehamn and
Kapellskär (Sweden), market share increased by 2.2 percentage points to 43.7
per cent. This gave the Group a total market share in its service area of 35.0
per cent (34.5).
Viking Line's cargo volume was 96,554 cargo units (88,819). Viking Line
achieved a cargo market share of 21.8 per cent (20.7).
INVESTMENTS AND FINANCING
The Group's investments amounted to EUR 6.3 M (169.5).
On September 30, 2014 the Group's non-current interest-bearing liabilities
amounted to EUR 201.8 M (225.5). The equity/assets ratio was 36.1 per cent,
compared to 33.8 per cent a year earlier.
At the end of September 2014, the Group's cash and cash equivalents amounted to
EUR 81.9 M (88.9). Net cash flow from operating activities amounted to EUR 12.3
M (19.9).
FINANCIAL REPORTING
This Interim Report was prepared in compliance with International Financial
Reporting Standards (IFRSs) and was drawn up as a summary of the financial
statements for the period in compliance with IAS 34. Estimates and judgments as
well as accounting principles and calculation methods are the same as in the
latest annual financial statements. Recognized income taxes are based on an
estimated average tax rate, which is expected to apply throughout the fiscal
year. This Interim Report is unaudited.
ORGANIZATION AND PERSONNEL
On January 16, 2014, the M/S Rosella was recorded in the Finnish ship register
and on January 22, 2014 the M/S Viking XPRS was recorded in the Estonian ship
register.
The average number of Group employees was 2,848 (3,151), of whom 2,114 (1,986)
worked for the parent company. Land-based personnel totalled 664 (708) and
shipboard personnel totalled 2,184 (2,443).
In addition to the Group's own employees, the Viking XPRS was staffed by an
average of 237 people employed by a staffing company. The expenses for them are
recognized among “Other operating expenses”.
RISK FACTORS
Since the Year-end Report was published, no changes have occurred that affect
the Group's short-term assessment of the risks in its business operations.
Special risks during the immediate future are primarily related to bunker
prices.
Viking Line is continuing its efforts to adapt to the European Union's sulphur
directive, which goes into effect on January 1, 2015, and is in the final stage
of negotiations with various bunker suppliers.
DE-MUTUALISATION AND MERGER WITHIN THE ALANDIA INSURANCE GROUP
Consent has been received from the Finnish Financial Supervisory Authority to
re-organize Redarnas Ömsesidiga Försäkringsbolag (Finnish business identity
code 0145065-2), “RÖF” − an Åland-based shipowners' mutual insurance company
and parent company of the Alandia Insurance Group − into a limited liability
insurance company and to merge RÖF with its wholly owned insurance subsidiary
Försäkringsaktiebolaget Alandia (0205048-2), “Alandia”, with RÖF as the
acquiring company and Alandia as the acquired company. The process will be
completed in such a way that both the change in the legal form of RÖF and the
merger are registered in the Finnish Trade Register as of December 31, 2014.
Distribution of shares will be carried out as of the same date.
According to preliminary calculations, Viking Line Abp's ownership share in the
merged company will amount to slightly more than 20 per cent. According to our
preliminary assessment, Viking Line Abp will not have significant influence on
the company. When the change in the legal form of the company is registered,
Viking Line Abp's shares in the merged company will be appraised at fair value.
Preliminary appraisals of the net asset value of the merged company that have
been conducted by outside appraisers give a total value of EUR 140 M based on
the financial statements as of December 31, 2013.
Nonrecurring income equivalent to Viking Line Abp's holding in the merged
company will be recognized as a financial income item in the consolidated
statement of comprehensive income, and the shares will be reported under
“Investments available for sale” in the consolidated balance sheet. The final
income item will depend on an appraisal as of December 31, 2014. During future
accounting periods, changes in the fair value of these shares will be reported
via the statement of total comprehensive income against the fair value reserve
under equity.
For further information on Alandia Insurance, please see www.alandia.com.
OUTLOOK FOR THE FULL FINANCIAL YEAR 2014
Competition in Viking Line's service area implies continued pressure on both
prices and volume. The economic downturn in Finland is another uncertainty
factor. In recent months, however, lower bunker prices have had a positive
effect on operations and the Board of Directors is still of the opinion that
operating income will improve in 2014 compared to operating income in 2013,
excluding the capital gain from the sale of the Isabella.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Jul 1, Jul 1, Jan 1, Jan 1, Jan 1,
2014- 2013- 2014- 2013- 2013-
EUR M Sep 30, Sep 30, Sep 30, Sep 30, Dec 31,
2014 2013 2014 2013 2013
SALES 160.1 164.4 401.1 419.7 549.4
Other operating revenue 0.1 0.2 0.5 23.2 23.5
Expenses
Goods and services 44.3 43.4 111.8 114.9 150.6
Salary and other employment 30.1 31.9 91.9 98.5 130.1
benefit expenses
Depreciation and impairment 8.0 8.8 24.6 27.4 35.7
losses
Other operating expenses 55.8 53.8 163.7 169.4 221.9
------------------------------------------------
138.1 137.9 392.0 410.2 538.2
OPERATING INCOME 22.0 26.6 9.5 32.7 34.7
Financial income 0.7 0.3 0.9 0.9 1.2
Financial expenses -2.0 -2.0 -7.2 -6.0 -8.3
INCOME BEFORE TAXES 20.7 25.0 3.2 27.6 27.7
Income taxes -4.0 -6.1 -0.7 -6.9 -0.2
INCOME FOR THE PERIOD 16.7 18.9 2.5 20.7 27.5
Other comprehensive income
Items that may be transferred
to the income statement
Translation differences 0.0 -0.1 -0.5 -0.3 -0.4
Investments available for sale - - - - 0.0
------------------------------------------------
0.0 -0.1 -0.5 -0.3 -0.4
TOTAL COMPREHENSIVE INCOME FOR 16.7 18.8 2.0 20.4 27.1
THE PERIOD
Income attributable to:
Parent company shareholders 16.7 18.9 2.5 20.7 27.5
Total comprehensive income
attributable to:
Parent company shareholders 16.7 18.8 2.0 20.4 27.1
Earnings per share before and 1.55 1.75 0.23 1.92 2.54
after dilution, EUR
CONSOLIDATED BALANCE SHEET
EUR M Sep 30, Sep 30, Dec 31,
2014 2013 2013
ASSETS
Non-current assets
Intangible assets 0.7 0.9 0.8
Land 1.1 1.1 1.1
Buildings and structures 11.1 11.8 11.7
Renovation costs for rented 0.6 0.5 0.7
properties
Vessels 346.9 370.5 365.2
Machinery and equipment 7.1 8.3 8.0
Investments available for sale 0.0 0.0 0.0
Receivables 0.5 0.7 0.5
Total non-current assets 368.0 393.6 388.1
Current assets
Inventories 16.3 15.3 15.0
Income tax assets 1.3 0.5 0.2
Trade and other receivables 47.2 40.7 31.0
Cash and cash equivalents 81.9 88.9 96.1
Total current assets 146.7 145.4 142.2
TOTAL ASSETS 514.7 539.0 530.3
EQUITY AND LIABILITIES
Equity
Share capital 1.8 1.8 1.8
Reserves 0.0 0.0 0.0
Translation differences -0.4 -0.2 -0.3
Retained earnings 184.2 180.8 187.5
------------------------------
Equity attributable to parent 185.6 182.4 189.0
company shareholders
Total equity 185.6 182.4 189.0
Non-current liabilities
Deferred tax liabilities 29.7 29.7 29.7
Non-current interest-bearing 201.8 225.5 221.2
liabilities
Total non-current liabilities 231.5 255.2 250.8
Current liabilities
Current interest-bearing 19.3 19.4 15.1
liabilities
Income tax liabilities 1.7 7.0 -
Trade and other payables 76.6 75.1 75.4
Total current liabilities 97.6 101.5 90.4
Total liabilities 329.1 356.6 341.3
TOTAL EQUITY AND LIABILITIES 514.7 539.0 530.3
CONSOLIDATED CASH FLOW STATEMENT
Jan 1, Jan 1, Jan 1,
2014- 2013- 2013-
EUR M Sep 30, Sep 30, Dec 31,
2014 2013 2013
OPERATING ACTIVITIES
Income for the period 2.5 20.7 27.5
Adjustments
Depreciation and impairment 24.6 27.4 35.7
losses
Capital gains from non-current -0.2 -22.8 -22.8
assets
Other items not included in 1.1 -0.3 -0.4
cash flow
Interest expenses and other 5.0 5.3 7.1
financial expenses
Interest income and other -0.1 -0.1 -0.1
financial income
Dividend income 0.0 0.0 0.0
Income taxes 0.7 6.9 0.2
Change in working capital
Change in trade and other -16.2 -11.6 -1.9
receivables
Change in inventories -1.3 -0.1 0.3
Change in trade and other 2.7 -3.0 -4.1
payables
Interest paid -5.9 -3.5 -3.7
Financial expenses paid -0.6 -0.6 -0.8
Interest received 0.0 0.0 0.1
Financial income received 0.0 0.0 0.1
Taxes paid -0.1 1.5 1.4
NET CASH FLOW FROM
OPERATING ACTIVITIES 12.3 19.9 38.4
INVESTING ACTIVITIES
Investments in vessels -5.4 -166.7 -168.6
Investments in other intangible -0.9 -2.8 -3.7
and tangible assets
Divestments of vessels - 29.9 29.9
Divestments of other intangible 0.3 0.2 0.2
and tangible assets
Payments received for - 0.0 0.2
non-current receivables
Dividends received 0.0 0.0 0.0
NET CASH FLOW FROM INVESTING -6.0 -139.3 -142.0
ACTIVITIES
FINANCING ACTIVITIES
Increase in non-current - 179.1 179.1
liabilities
Amortization of non-current -15.1 -16.0 -24.6
liabilities
Dividends paid -5.4 - -
NET CASH FLOW FROM FINANCING -20.5 163.1 154.4
ACTIVITIES
CHANGE IN CASH AND CASH -14.2 43.6 50.8
EQUIVALENTS
Cash and cash equivalents at 96.1 45.3 45.3
beginning of period
CASH AND CASH EQUIVALENTS AT 81.9 88.9 96.1
END OF PERIOD
STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
Equity attributable to parent
company shareholders
Share Translatio Retaine Total
n d
EUR M capita Reserve difference earning equity
l s s s
Equity, Jan 1, 2014 1.8 0.0 -0.3 187.5 189.0
Income for the period 2.5 2.5
Translation differences 0.0 -0.2 -0.3 -0.5
--------------------------------------------------------------------------------
Total comprehensive income for the - 0.0 -0.2 2.2 2.0
period
Dividend to shareholders -5.4 -5.4
--------------------------------------------------------------------------------
Equity, Sep 30, 2014 1.8 0.0 -0.4 184.2 185.6
Equity, Jan 1, 2013 1.8 0.0 0.1 160.0 162.0
Income for the period 20.7 20.7
Translation differences 0.0 -0.3 0.0 -0.3
--------------------------------------------------------------------------------
Total comprehensive income for the - 0.0 -0.3 20.7 20.4
period
--------------------------------------------------------------------------------
Equity, Sep 30, 2013 1.8 0.0 -0.2 180.8 182.4
QUARTERLY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2014 2014 2014 2013
EUR M Q3 Q2 Q1 Q4
SALES 160.1 137.5 103.4 129.7
Other operating revenue 0.1 0.3 0.1 0.3
Expenses
Goods and services 44.3 39.1 28.4 35.7
Salary and other employment benefit expenses 30.1 30.3 31.6 31.5
Depreciation and impairment losses 8.0 8.0 8.5 8.3
Other operating expenses 55.8 55.8 52.1 52.5
---------------------------
138.1 133.3 120.6 128.1
OPERATING INCOME 22.0 4.5 -17.1 2.0
Financial income 0.7 0.1 0.1 0.3
Financial expenses -2.0 -3.1 -2.2 -2.2
INCOME BEFORE TAXES 20.7 1.6 -19.1 0.1
Income taxes -4.0 -0.2 3.5 6.7
INCOME FOR THE PERIOD 16.7 1.4 -15.6 6.7
Other comprehensive income
Items that may be transferred to the income
statement
Translation differences 0.0 -0.4 -0.1 0.0
Investments available for sale - - - 0.0
---------------------------
0.0 -0.4 -0.1 0.0
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 16.7 1.0 -15.8 6.7
Income attributable to:
Parent company shareholders 16.7 1.4 -15.6 6.7
Total comprehensive income attributable to:
Parent company shareholders 16.7 1.0 -15.8 6.7
Earnings per share before and after dilution, EUR 1.55 0.13 -1.45 0.62
SEGMENT INFORMATION, VIKING LINE GROUP
Jan 1, 2014- Jan 1, 2013- Jan 1, 2013-
OPERATING SEGMENTS, EUR M Sep 30, 2014 Sep 30, 2013 Dec 31, 2013
Sales
Vessels 397.4 416.0 544.7
Unallocated 3.8 3.9 4.9
Total, operating segments 401.2 419.9 549.6
Eliminations -0.2 -0.2 -0.2
Total sales of the Group 401.1 419.7 549.4
Operating income
Vessels 43.5 66.3 81.2
Unallocated -34.0 -33.6 -46.4
Total operating income of the Group 9.5 32.7 34.7
PLEDGED ASSETS AND CONTINGENT LIABILITIES
EUR M Sep 30, Sep 30, Dec 31,
2014 2013 2013
Contingent liabilities 221.4 246.2 236.9
Assets pledged for own debt 315.7 316.2 315.7
FINANCIAL RATIOS AND STATISTICS
Jan 1, Jan 1, Jan 1,
2014- 2013- 2013- Sep 30, Sep 30, Dec 31,
2014 2013 2013
Equity per share, EUR 17.19 16.88 17.50
Equity/assets ratio 36.1 % 33.8 % 35.6 %
Investments, EUR M 6.3 169.5 172.3
- as % of sales 1.6 % 40.4 % 31.4 %
Passengers 5,089,760 4,998,757 6,533,650
Cargo units 96,554 88,819 119,704
Average number of employees, full time 2,848 3,151 3,104
equivalent
Earnings per share = (Income before taxes - income taxes +/- non-controlling
interests) / Average number of shares
Equity per share = Equity attributable to parent company shareholders / Number
of shares on balance sheet date
Equity/assets ratio, % = (Equity including non-controlling interests) / (Total
assets - advances received)
When rounding off items to the nearest EUR
1,000,000, rounding-off differences of EUR +/-
0.1 M may occur.
The Year-end Report for the financial year 2014 will be published on February
12, 2015.
Mariehamn, Åland, November 12, 2014
VIKING LINE ABP
The Board of Directors
Jan Hanses
President and CEO
CEO Jan Hanses, jan.hanses@vikingline.com, +358-(0)18-27000
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