Published: 2020-11-13 08:00:00 CET
Tallinna Sadam
Interim Management statement

AS Tallinna Sadam financial results for 2020 Q3 and 9 months

The impact of the COVID-19 pandemic continued in the third quarter, which resulted in a decrease in revenue, adjusted EBITDA and profit of AS Tallinna Sadam (hereafter: “the Group”). In Q3 2020, the revenue amounted to EUR 31.8 million decreasing by 18.9% compared to the same period previous year. The adjusted EBITDA was EUR 19.9 million decreasing by 16.2% and profit of Q3 amounted to EUR 13.6 million decreasing by 23.1%. At the same time, the adjusted EBITDA margin increased by 2.1 percentage points and the volume of investments by almost 50% to EUR 11.5 million.

The results of Q3 were mostly affected by the restrictions on passenger movement due to the COVID-19 pandemic, which were significantly milder in the summer period than in Q2. According to Valdo Kalm, Chairman of the Management Board of Tallinna Sadam, a diverse business model significantly mitigates the impact of the pandemic on the Group's financial results. Kalm noted that the cargo harbours segment continued to grow strongly, but due to competition, revenue per tonne decreased somewhat, especially for liquid bulk. Ferries and the icebreaker Botnica, or the shipping business, keeps a stable course.

"Passenger business is currently in decline, but we will continue to invest heavily in the Old City Harbour passenger port, because we believe that in the long run the impact of the pandemic will be temporary and passenger traffic will recover in the coming years," said Kalm.

The impact of the cost-cutting measures implemented in Q2 took effect predominantly from Q3. "Continuously strong positive EBITDA and secure cash flow will enable us to ensure the company's liquidity and profitability and meet the dividend policy, i.e. to pay at least 70% of the previous year's profit as dividends in 2021," Kalm confirmed.

The members of the Management Board of Tallinna Sadam, Valdo Kalm and Marko Raid, will present the Group's financial results at an investor webinar on the Microsoft Teams platform on 13 November at 11:00 EET, where you can participate via this link. The webinar will be held in English.

Key figures (in million EUR):

  Q3 Q3 +/- 9M 9M +/-
  2020 2019   2020 2019  
Revenue 31.8 39.2 -18.9% 82.1 100.5 -18.4%
Adjusted EBITDA 19.9 23.7 -16.2% 46.3 59.5 -22.1%
Adjusted EBITDA margin 62.7% 60.6% 2.1 56.4% 59.1% -2.7
Operating profit 14.2 17.9 -20.6% 29.3 42.6 -31.2%
Income tax 0 0 - -4.9 -5.8 -14.8%
Profit for the period 13.6 17.7 -23.1% 22.8 35.9 -36.6%
Investments 11.5 7.7 49.1% 28.9 18.8 53.8%


  30.09.2020 31.12.2019 +/-
Total assets 622.3 625.5 -0.5%
Interest bearing debt 193.4 172.7 12.0%
Other liabilities 369.7 377.0 -1.9%
Equity 263.0 263.0 0.0%
Number of shares 622.3 625.5 -0.5%

Major events in Q3:

  • The impact of the COVID-19 pandemic continued
  • Dividend payment in the amount of EUR 30.2 million
  • Completion of the reconstruction of passenger terminal D.
  • Connecting the first ship to onshore power supply
  • Hybrid ferry Tõll started servicing passengers on the Virtsu-Kuivastu route
  • Conclusion of the design contract for Rail Baltica Muuga freight terminal
  • Completion of the second stage of dry bulk operator PK Terminal development in Muuga
  • Extension of the term of office of the members of the Management Board Valdo Kalm and Marko Raid for a new 3-year period
  • Changes in the Management Board of OÜ TS Laevad

Revenue
Revenue for the nine months of 2020 decreased by EUR 18.5 million, i.e. 18%, year on year to EUR 82.1 million. The decrease was mainly influenced by the decline in vessel dues and passenger fees from international ferries and cruise ships due to restrictions on cross-border passenger movements imposed in connection with the COVID-19 pandemic. In terms of segments, the largest year-on-year change in nine-month revenue occurred in the Passenger harbours segment, followed by the Ferry segment and the Cargo harbours segment. The revenue of the segment Other did not change. In Q3, revenue increased year-on-year in the Cargo harbours segment and decreased in other segments.

The revenue of the Passenger harbours segment decreased by 41% in Q3 and by 43% in the first 9 months due to the decrease in the number of passenger and vessel calls due to the COVID-19 pandemic (starting from Q2).
The revenue of the Cargo harbours segment increased by 3% year on year. In the first 9 months, the revenue of Cargo harbours decreased by 2% due to the combined effect of various items of revenue, mostly affected by the brokered revenue from electricity and cargo charges. Cargo volume increased primarily due to liquid bulk, but the increase in the volume of liquid bulk with lower charge did not cover the effect of the decrease in the volume of other types of cargo in total cargo charge revenue.
The revenue of the Ferry segment decreased slightly because the state did not order an additional vessel for extra trips during the summer season. Instead, a smaller number of additional trips was made by the existing replacement ferry Regula. The decline was partly offset by a rise in fee rates, which are linked to the Estonian consumer and fuel price indices and wage inflation.
The revenue of the segment Other remained stable. The number of days for which the icebreaker Botnica was chartered out did not change. The number of days with lower charter rates was somewhat higher but the effect was offset by the indexation of the contractual fees to the Estonian and Canadian consumer price indices.

EBITDA
Adjusted EBITDA for Q3 decreased by EUR 3.8 million year-on-year mostly due to the Passenger harbours segment (EUR -5.5 million) but also the Cargo harbours segment (EUR +1.9 million). Adjusted EBITDA margin decreased from 59.1% to 56.4% whereas in Q3 the margin increased from 60.6% to 62.7%. In 9 months, adjusted EBITDA was EUR 46.3 million, decreasing by EUR 13.1 million compared to the same period last year. 

Profit
The profit of Q3 (EUR 13.6 million) fell short of the profit for the comparative period by EUR 4.1 million. Profit for the first 9 months was EUR 22.8 million, which was EUR 13.2 million less year-on-year. Profit decreased more than operating profit because the Group’s equity-accounted associate Green Marine incurred a loss.

Investments
In the first 9 months of 2020, the Group invested EUR 28.9 million, significantly more than in the same period last year (EUR 18.8 million). Investments were mostly related were mostly related to the construction of a cruise terminal, phase 2 of the reconstruction of passenger terminal D, the installation of automated mooring systems and the beginning of the construction of a multi-storey car park at the Old City Harbour. Investments made in the third quarter totalled EUR 11.5 million.

Interim condensed consolidated statement of financial position:

In thousands of euros 30.09.2020 31.12.2019
ASSETS   
   
Current assets   
Cash and cash equivalents 18,109 35,183
Trade and other receivables 13,554 10,614
Contract assets 1,072 0
Inventories 216 408
Non-current assets held for sale 98 142
Total current assets 33,049 46,347
   
Non-current assets   
Investments in associates 1,278 1,609
Other long-term receivables 243 294
Property, plant and equipment 585,696 575,267
Intangible assets 1,985 2,015
Total non-current assets 589,202 579,185
   
Total assets 622,251 625,532
   
LIABILITIES   
   
Current liabilities   
Loans and borrowings 16,766 16,266
Derivative financial instruments 139 243
Provisions 973 1,915
Government grants 1,845 193
Taxes payable 1,491 893
Trade and other payables 8,813 11,722
Contract liabilities 1,912 33
Total current liabilities 31,939 31,265
   
Non-current liabilities   
Loans and borrowings 194,697 191,580
Government grants 25,024 24,754
Other payables 16 2
Contract liabilities 903 913
Total non-current liabilities 220,640 217,249
   
Total liabilities 252,579 248,514
   
EQUITY   
Share capital at par value 263,000 263,000
Share premium 44,478 44,478
Statutory capital reserve 20,262 18,520
Hedge reserve -139 -243
Retained earnings (prior periods) 19,276 6,859
Profit for the period 22,795 44,404
Total equity 369,672 377,018
   
Total liabilities and equity 622,251 625,532

Interim condensed consolidated statement of profit or loss:

     
In thousands of euros  Q3 2020 Q3 2019 9M 2020 9M 2019
     
Revenue 31,767 39,181 82,055 100,531
Other income 823 209 2,793 789
Operating expenses -7,744 -10,741 -23,281 -27,457
Personnel expenses -4,581 -5,019 -14,065 -14,127
Depreciation, amortisation and impairment -5,983 -5,719 -17,895 -16,912
Other expenses -89 -44 -302 -226
Operating profit 14,193 17,867 29,305 42,598
     
Finance income and costs     
Finance income 5 2 29 29
Finance costs -482 -452 -1,295 -1,333
Finance costs - net -477 -450 -1,266 -1,304
     
Share of profit of an associate accounted for under the equity method -72 331 -331 417
Profit before income tax 13,644 17,748 27,708 41,711
     
Income tax 0 0 -4,913 -5,764
Profit/loss for the period 13,644 17,748 22,795 35,947
Attributable to owners of the Parent  13,644  17,748  22,795  35,947
         
Basic and diluted earnings per share (in euros) 0.05 0.07 0.09 0.14
Basic and diluted earnings per share - continuing operations (in euros) 0.05 0.07 0.09 0.14

Interim condensed consolidated statement of cash flows:

   
In thousands of euros 9M 2020 9M 2019
   
Cash receipts from sale of goods and services 86,160 105,558
Cash receipts related to other income 31 156
Payments to suppliers -33,746 -34,030
Payments to and on behalf of employees -11,758 -13,248
Payments for other expenses -327 -299
Income tax paid on dividends -4,913 -10,713
Cash from operating activities 35,447 47,424
   
Purchases of property, plant and equipment -28,134 -17,909
Purchases of intangible assets -348 -360
Proceeds from sale of property, plant and equipment 1,618 39
Government grants received 2,061 0
Interest received 15 27
Cash used in investing activities -24,788 -18,203
Loans received 10,000 0
Repayments of loans received -6,383 -6,383
Dividends paid -30,008 -34,970
Interest paid -1,331 -1,461
Other payments related to financing activities -11 -15
Cash from/used in financing activities -27,733 -42,829
NET CASH FLOW -17,074 -13,608
Cash and cash equivalents at beginning of the period 35,183 42,563
Change in cash and cash equivalents -17,074 -13,608
Cash and cash equivalents at end of the period 18,109 28,955

Tallinna Sadam is one of the largest cargo- and passenger port complexes in the Baltic Sea region, which in 2019 serviced 10.64 million passengers and 19.9 million tons of cargo. In addition to passenger and freight services, Tallinna Sadam group also operates in shipping business via its subsidiaries – OÜ TS Laevad provides ferry services between the Estonian mainland and the largest islands, and OÜ TS Shipping charters its multifunctional vessel Botnica for icebreaking and construction services in Estonia and offshore projects abroad. Tallinna Sadam group is also a shareholder of an associate AS Green Marine, which provides waste management services. According to audited financial results, Tallinna Sadam group’s sales in 2019 totaled EUR 130.5 million, adjusted EBITDA EUR 74.3 million and net profit EUR 44.4 million.

Additional information:

Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
Tel. +372 53 426 591
m.zirel@ts.ee

Attachments


Presentation Q3 2020 ENG.pdf
Tallinna Sadam Q3 2020 ENG.pdf