Viking Line: Interim Management Statement for the period January - March 2017
Viking Line Abp BUSINESS REVIEW 18.5.2017, 9.00 AM
INTERIM MANAGEMENT STATEMENT FOR THE PERIOD JANUARY–MARCH 2017
Consolidated sales of the Viking Line Group for the period January 1–March 31, 2017 were 102.1 million euros (EUR 106.9 M for January 1–March 31, 2016). Other operating revenue amounted to EUR 0.1 M (1.5). Operating income totalled EUR -17.7 M (-11.6). Net financial items totalled EUR -1.1 M (-1.5). Consolidated income before taxes amounted to EUR -18.8 M (-13.1). Income after taxes totalled EUR -15.1 M (-10.5).
Competition in Viking Line’s service area remains tough and implies continued pressure on prices and volumes. Volume and price developments during the remainder of the financial year will be crucial to the Group’s earnings. Bunker prices are expected to be higher than in 2016, which should have an adverse effect on consolidated income. However, there will be fewer planned dry-docking and servicing days, which is expected to have a positive effect on earnings, as is a revision in Finland’s restitution law for 2017. Operating income is expected to be higher overall in 2017 than in 2016.
SALES AND EARNINGS
Consolidated sales of the Viking Line Group for the period January 1–March 31, 2017 were 102.1 million euros (EUR 106.9 M for January 1–March 31, 2016). Other operating revenue amounted to EUR 0.1 M (1.5). Operating income totalled EUR -17.7 M (-11.6). Net financial items totalled EUR -1.1 M (-1.5). Consolidated income before taxes amounted to EUR -18.8 M (-13.1). Income after taxes totalled EUR -15.1 M (-10.5).
Passenger-related revenue decreased by 5.4 per cent to EUR 89.8 M (94.9), while cargo revenue increased by 3.7 per cent to EUR 11.7 M (11.2). Net sales revenue decreased by 3.5 per cent to EUR 72.5 M (75.2).
Sales for the period fell as a result of lower passenger volume combined with somewhat lower net sales revenue per passenger. Consolidated operating expenses increased by 2.0 per cent to EUR 83.2 M (81.6). Bunker expenses increased by 17.6 per cent to EUR 11.2 M (9.5) as a result of higher bunker prices.
The first quarter of the financial year usually shows a weak earnings performance, and 2017 was no exception. Consolidated earnings for the first three months of 2017 was as expected.
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 in 2016.
The number of passengers on Viking Line’s vessels during the report period amounted to 1,252,406 (1,314,700). The Group had a total market share in its service area of approximately 33.0 per cent (34.0).
Viking Line’s cargo volume was 32,237 cargo units (33,152). The Group had a cargo market share of approximately 19.9 per cent (22.2).
INVESTMENTS AND FINANCING
The Group’s investments amounted to EUR 6.7 M (5.1), which represents 6.5% of sales (4.7%).
On March 31, 2017, the Group’s non-current interest-bearing liabilities amounted to EUR 143.1 M (166.5). The equity/assets ratio was 42.6 per cent, compared to 42.8 per cent a year earlier.
At the end of March 2017, the Group’s cash and cash equivalents amounted to EUR 62.0 M (74.9). Net cash flow from operating activities amounted to EUR -18.7 M (-17.2). Net cash flow from investing activities was EUR -6.7 M (-2.6) and net cash flow from financing activities amounted to EUR -7.5 M (-16.0).
FINANCIAL REPORTING
This Interim Management Statement was prepared in accordance with the same accounting principles, estimates and judgements as in the latest annual financial statements. The Interim Management Statement is unaudited.
When rounding off items to the nearest EUR 1,000,000, rounding-off differences of EUR+/- 0.1 M may occur.
ORGANIZATION AND PERSONNEL
The average number of Group employees was 2,614 (2,573), of whom 1,954 (1,919) worked for the parent company. Land-based personnel totalled 625 (635) and shipboard personnel totalled 1,989 (1,938).
In addition to the Group’s own employees, the Viking XPRS was staffed by an average of 231 (240) people employed by a staffing company.
OUTLOOK FOR THE FULL FINANCIAL YEAR 2017
Competition in Viking Line’s service area remains tough and implies continued pressure on prices and volumes. Volume and price developments during the remainder of the financial year will be crucial to the Group’s earnings. Bunker prices are expected to be higher than in 2016, which should have an adverse effect on consolidated income. However, there will be fewer planned dry-docking and servicing days, which is expected to have a positive effect on earnings, as is a revision in Finland’s restitution law for 2017. Operating income is expected to be higher overall in 2017 than in 2016.
| CONSOLIDATED INCOME STATEMENT | |||
| Jan 1, 2017– | Jan 1, 2016– | Jan 1, 2016– | |
| EUR M | Mar 31, 2017 | Mar 31, 2016 | Dec 31, 2016 |
| SALES | 102.1 | 106.9 | 519.6 |
| Other operating revenue | 0.1 | 1.5 | 2.0 |
| Expenses | |||
| Goods and services | 29.6 | 31.7 | 151.7 |
| Salary and other employment benefit expenses | 29.3 | 30.5 | 122.3 |
| Depreciation and impairment losses | 7.1 | 6.7 | 28.0 |
| Other operating expenses | 53.9 | 51.1 | 206.0 |
| 119.9 | 120.0 | 507.9 | |
| OPERATING INCOME | -17.7 | -11.6 | 13.7 |
| Financial income | 0.5 | 0.5 | 5.4 |
| Financial expenses | -1.6 | -2.0 | -9.5 |
| INCOME BEFORE TAXES | -18.8 | -13.1 | 9.6 |
| Income taxes | 3.7 | 2.6 | -1.5 |
| INCOME FOR THE PERIOD | -15.1 | -10.5 | 8.0 |
| Income attributable to: | |||
| Parent company shareholders | -15.1 | -10.5 | 8.0 |
| Earnings per share before and after dilution, EUR | -1.40 | -0.97 | 0.74 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
| Jan 1, 2017– | Jan 1, 2016– | Jan 1, 2016– | |
| EUR M | Mar 31, 2017 | Mar 31, 2016 | Dec 31, 2016 |
| INCOME FOR THE PERIOD | -15.1 | -10.5 | 8.0 |
| Other comprehensive income | |||
| Items that may be transferred to the income statement | |||
| Translation differences | 0.1 | -0.1 | -0.8 |
| Investments available for sale | - | - | 0.3 |
| 0.1 | -0.1 | -0.5 | |
| COMPREHENSIVE INCOME FOR THE PERIOD | -15.1 | -10.6 | 7.5 |
| Comprehensive income attributable to: | |||
| Parent company shareholders | -15.1 | -10.6 | 7.5 |
| CONSOLIDATED BALANCE SHEET | |||
| EUR M | Mar 31, 2017 | Mar 31, 2016 | Dec 31, 2016 |
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 2.0 | 0.8 | 1.9 |
| Land | 0.6 | 0.6 | 0.6 |
| Buildings and structures | 9.0 | 9.5 | 9.2 |
| Renovation costs for rented properties | 2.8 | 1.5 | 2.3 |
| Vessels | 308.0 | 322.5 | 308.5 |
| Machinery and equipment | 5.3 | 5.3 | 5.6 |
| Investments available for sale | 27.1 | 26.8 | 27.1 |
| Receivables | - | 0.2 | - |
| Total non-current assets | 354.8 | 367.1 | 355.2 |
| Current assets | |||
| Inventories | 18.1 | 17.0 | 18.1 |
| Income tax assets | 4.7 | 3.3 | 1.7 |
| Trade and other receivables | 48.7 | 40.3 | 36.1 |
| Cash and cash equivalents | 62.0 | 74.9 | 94.9 |
| Total current assets | 133.5 | 135.5 | 150.8 |
| TOTAL ASSETS | 488.2 | 502.6 | 506.0 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 1.8 | 1.8 | 1.8 |
| Reserves | 1.0 | 0.7 | 1.0 |
| Translation differences | -1.1 | -0.6 | -1.3 |
| Retained earnings | 206.1 | 213.2 | 221.4 |
| Equity attributable to parent company shareholders | 207.9 | 215.1 | 222.9 |
| Total equity | 207.9 | 215.1 | 222.9 |
| Non-current liabilities | |||
| Deferred tax liabilities | 35.9 | 34.5 | 35.9 |
| Non-current interest-bearing liabilities | 143.1 | 166.5 | 150.6 |
| Total non-current liabilities | 179.0 | 201.0 | 186.5 |
| Current liabilities | |||
| Current interest-bearing liabilities | 23.5 | 15.0 | 23.6 |
| Income tax liabilities | 0.0 | 1.3 | 0.0 |
| Trade and other payables | 77.8 | 70.3 | 73.0 |
| Total current liabilities | 101.4 | 86.6 | 96.6 |
| Total liabilities | 280.4 | 287.5 | 283.0 |
| TOTAL EQUITY AND LIABILITIES | 488.2 | 502.6 | 506.0 |
| Equity per share, EUR | 19.25 | 19.91 | 20.64 |
The Group’s Half-Year Financial Report for the period January 1–June 30, 2017 will be published on August 17, 2017.
Mariehamn, Åland, May 18, 2017
VIKING LINE ABP
Jan Hanses
President and Chief Executive Officer
President and CEO Jan Hanses, jan.hanses@vikingline.com, +358-18-27000