Somewhat weaker first quarter demand
JANUARY-MARCH 2024
(compared to January-
- Sales amounted to
EUR 93.2 M (EUR 93.9 M). -
Other operating revenue was
EUR 0.4 M (EUR 8.8 M). -
Operating income totalled
EUR -10.4 M (EUR -0.9 M). -
Net financial items were
EUR -3.8 M (EUR -3.7 M). -
Income before taxes totalled
EUR -14.2 M (EUR -4.6 M, including theEUR 8.6 M capital gain from the sale of Rosella). -
Income after taxes was
EUR -14.3 M (EUR -3.9 M). -
Investments mainly in Viking Cinderella and
Birka Gotland totalledEUR 10.2 M (EUR 3.9 M).
Outlook for the financial year 2024
There continues to be significant uncertainty due to the geopolitical situation and its impact on energy prices, inflation, interest rates and currencies as well as the effects these uncertainty factors may have on people's propensity to travel, demand, consumption patterns and costs. In early 2023, Rosella was sold. Provided that energy prices remain at current levels and people's propensity to travel is sustained, the Board of Directors expects that income before tax in 2024 will be on a par with the figure for 2023 if the
COMMENTS FROM PRESIDENT AND CEO JAN HANSES Earnings for the first quarter of the year, excluding extraordinary items, were somewhat weaker than expected. After year-end, a downturn in demand was discernible in the market. Weak economic growth in Finland and Sweden has led to increased consumer cautiousness. This is mostly reflected in weaker onboard consumption compared to the same period last year. However, the good news is that we reached our targets for revenue generated from ticket prices in order to offset the cost of emission allowances introduced at the start of the year. Earnings for the quarter were affected by one-off costs in the joint venture Gotland Alandia Cruises for the launch of Birka Gotland . In addition, Viking Cinderella underwent an extensive dry-docking prior to being reflagged under the Finnish flag. Above all, the cabins on the vessel were upgraded, with nearly 300 cabins undergoing a total refurbishment. Various public spaces were also completely refurbished. On March 8 , Viking Cinderella was launched in service on the Helsinki-Mariehamn-Stockholm route, which once again is now served by two vessels. In February, Birka Gotland was dry-docked prior to cruise service between Stockholm and Mariehamn as well as to Visby on the Swedish island of Gotland. Service was launched on March 20, 2024 . This dry-docking was also extensive, with a number of refurbishments carried out on board.As a result of these major redeployments, it was possible to reassign shipboard staff on Viking Cinderella to new positions on Birka Gotland as well as the company's other vessels. Throughout these labour-intensive operational changes, staff performance has been excellent, and a high level of service has been maintained. It is gratifying in this context to note that, due to the redeployments and expansion in service to Helsinki , we have recruited new shipboard staff.Our operations are heavily impacted at present by increasingly stringent environmental standards. Starting in 2024, our operations are subject to the EU Emissions Trading System, which means that we are now obliged to shoulder the cost of emission allowances, which in the medium term we can only partly offset through our continued energy efficiency work. Finally, I would like to note that the first quarter of 2024 has entailed changes in our operations, with expanded service to Helsinki and the launch of Birka Gotland in partnership with Gotlandsbolaget.I would like to extend my warm thanks to our customers and partners for the faith they have shown in us and their good cooperation. I would also like to give a big thank you to our staff, who worked hard and with great patience during the first quarter.
Earnings for the quarter were affected by one-off costs in the joint venture Gotland Alandia Cruises for the launch of Birka Gotland . In addition, Viking Cinderella underwent an extensive dry-docking prior to being reflagged under the Finnish flag. Above all, the cabins on the vessel were upgraded, with nearly 300 cabins undergoing a total refurbishment. Various public spaces were also completely refurbished. On March 8 , Viking Cinderella was launched in service on the Helsinki-Mariehamn-Stockholm route, which once again is now served by two vessels. In February, Birka Gotland was dry-docked prior to cruise service between Stockholm and Mariehamn as well as to Visby on the Swedish island of Gotland. Service was launched on March 20, 2024 . This dry-docking was also extensive, with a number of refurbishments carried out on board.As a result of these major redeployments, it was possible to reassign shipboard staff on Viking Cinderella to new positions on Birka Gotland as well as the company's other vessels. Throughout these labour-intensive operational changes, staff performance has been excellent, and a high level of service has been maintained. It is gratifying in this context to note that, due to the redeployments and expansion in service to Helsinki , we have recruited new shipboard staff.Our operations are heavily impacted at present by increasingly stringent environmental standards. Starting in 2024, our operations are subject to the EU Emissions Trading System, which means that we are now obliged to shoulder the cost of emission allowances, which in the medium term we can only partly offset through our continued energy efficiency work. Finally, I would like to note that the first quarter of 2024 has entailed changes in our operations, with expanded service to Helsinki and the launch of Birka Gotland in partnership with Gotlandsbolaget.I would like to extend my warm thanks to our customers and partners for the faith they have shown in us and their good cooperation. I would also like to give a big thank you to our staff, who worked hard and with great patience during the first quarter.
Our operations are heavily impacted at present by increasingly stringent environmental standards. Starting in 2024, our operations are subject to the EU Emissions Trading System, which means that we are now obliged to shoulder the cost of emission allowances, which in the medium term we can only partly offset through our continued energy efficiency work. Finally, I would like to note that the first quarter of 2024 has entailed changes in our operations, with expanded service to Helsinki and the launch of Birka Gotland in partnership with Gotlandsbolaget.I would like to extend my warm thanks to our customers and partners for the faith they have shown in us and their good cooperation. I would also like to give a big thank you to our staff, who worked hard and with great patience during the first quarter.
I would like to extend my warm thanks to our customers and partners for the faith they have shown in us and their good cooperation. I would also like to give a big thank you to our staff, who worked hard and with great patience during the first quarter.
SUMMARY OF KEY FIGURES
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| |||
EUR M |
| |||
|
|
|
|
|
Sales |
| 93.2 | 93.9 | 491.4 |
Other operating revenue |
| 0.4 | 8.8 | 9.1 |
Operating income |
| -10.4 | -0.9 | 55.0 |
Income before taxes |
| -14.2 | -4.6 | 45.4 |
Income for the period |
| -14.3 | -3.9 | 36.3 |
SERVICE AND MARKET
During most of the report period, the
Viking Cinderella was dry-docked during the period
During the comparative period, Rosella served between Mariehamn and Kapellskär until
The total number of passengers on the Group's vessels during the report period was 871,828 (888,725). The Group had a total market share in its service area of approximately 34.6% (35.4%).
Market demand for travel in the company's service area as a whole weakened during the first quarter of the year. We noted some a softening in demand for service between
The period includes disruptions in service, in the form of vessel dry-dockings for both
The Group's total cargo volume was 32,993 cargo units (33,736). The Group's share of the cargo market was approximately 17.4% (17.5%). Due to uncertain economic conditions in our service area, total cargo volume transported was at the same level as in 2023. As a result, the number of cargo units transported by
The market share for passenger cars was approximately 29.9% (26.8%).
SALES AND EARNINGS FOR JANUARY - MARCH 2024
Consolidated sales decreased 0.7% to
Passenger-related revenue decreased 0.8% to
Operating expenses increased 1.1% to
INVESTMENTS AND FINANCING
The Group's investments for the period
The Group's long-term interest-bearing liabilities on
The debt/equity ratio was 50.5%, compared to 47.8% for the same period last year.
The Group's cash and cash equivalents at the end of March totalled
Net cash flow from operating activities was
Most of the Group's loan agreements include loan covenants according to market terms. The financial covenants in the loan agreements consist of minimum requirements for liquidity and solvency and a maximum net financial debt-to-EBITDA ratio.
The dividend restriction in one of the Group's loan agreements continues to apply in the event the Group's debt-to-EBITDA ratio exceeds 5.0. The Group's debt-to-EBITDA ratio is below 5.0, so the dividend restriction does not apply.
Future cash flows related to financial liabilities on
EUR M |
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|
|
| |
| Future cash flows related to | Lease | Trade | Interest- | Total |
| financial liabilities (incl. financial expenses) | liabilities | payables | bearing |
|
|
|
|
| liabilities |
|
| 1.4 | 26.1 | 23.4 | 50.9 | |
| 1.4 |
| 22.9 | 24.3 | |
| 2.2 |
| 29.6 | 31.8 | |
| 0.6 |
| 35.2 | 35.9 | |
| 0.4 |
| 25.1 | 25.5 | |
| 0.2 |
| 20.6 | 20.8 | |
| 0.2 |
| 63.1 | 63.2 | |
| Total | 6.5 | 26.1 | 219.8 | 252.4 |
IMPAIRMENT TESTING
Recognized values for intangible and tangible assets are tested regularly in order to identify any external or internal indications of an impairment loss. If such indications are observed for any asset item, the recoverable amount of the asset is recognized. One of the most important areas that entail judgements is valuation of the Group's vessels.
The management has also made the assessment that there is no need for impairment for the Group's other non-current assets.
ORGANIZATION AND PERSONNEL
The average number of full-time employees in the Group was 2,149 (1,993), 1,680 (1,487) of whom worked for the parent company. Land-based personnel totalled 454 (466) and shipboard personnel totalled 1,694 (1,527). On
During the comparative period, in addition to the Group's own employees, Viking XPRS was crewed by an average of 131 people employed by a staffing company. Since its reflagging under a Finnish flag on
RISK FACTORS
Fluctuations in bunker (vessel fuel) prices have an indirect impact on the Group's earnings. To partly offset the risk of higher bunker prices, on
Since
The company's interest-bearing liabilities amounted to
OUTLOOK FOR THE FINANCIAL YEAR 2024
There continues to be significant uncertainty due to the geopolitical situation and its impact on energy prices, inflation, interest rates and currencies as well as the effects these uncertainty factors may have on people's propensity to travel, demand, consumption patterns and costs. In early 2023, Rosella was sold. Provided that energy prices remain at current levels and people's propensity to travel is sustained, the Board of Directors expects that income before tax in 2024 will be on a par with the figure for 2023 if the
EVENTS AFTER THE BALANCE SHEET DATE
The Board of Directors knows of no events after the balance sheet date that could affect this Business review. The Finnish government has decided to increase the fairway fees from 2025. The decision has no effect on earnings for this financial year.
Mariehamn,
President and CEO
Financial information
The management's Business Review was prepared in accordance with IFRS accounting and valuation principles. The accounting and valuation principles applied are the same as for the year-end financial statements for 2023. The figures have not been audited.
Consolidated income statement | ||||
EUR M | ||||
SALES | 93.2 | 93.9 | 491.4 | |
Other operating revenue | 0.4 | 8.8 | 9.1 | |
Expenses | ||||
Goods and services | 21.5 | 22.6 | 113.7 | |
Salary and other employment benefit expenses | 28.0 | 24.5 | 108.5 | |
Depreciation, amortization and impairment losses | 7.5 | 6.7 | 27.5 | |
Other operating expenses | 47.1 | 49.8 | 195.9 | |
104.1 | 103.6 | 445.5 | ||
OPERATING INCOME | -10.4 | -0.9 | 55.0 | |
Financial income | 0.9 | 0.3 | 2.8 | |
Financial expenses | -3.4 | -2.8 | -11.8 | |
Share of after-tax income from joint ventures and | -1.2 | -1.2 | -0.6 | |
companies with a participating interest undertaking | ||||
accounted for using the equity method | ||||
INCOME BEFORE TAXES | -14.2 | -4.6 | 45.4 | |
Income taxes | -0.1 | 0.7 | -9.2 | |
INCOME FOR THE PERIOD | -14.3 | -3.9 | 36.3 | |
Income attributable to: | ||||
Parent company shareholders | -14.3 | -3.9 | 36.3 | |
Earnings per share before and after dilution, EUR | -0.82 | -0.23 | 2.10 | |
Consolidated statement of | ||||
comprehensive income | ||||
EUR M | ||||
INCOME FOR THE PERIOD | -14.3 | -3.9 | 36.3 | |
Items that may be reclassified to the income statement | ||||
Translation differences | -0.9 | -0.3 | 0.0 | |
Items that will not be reclassified to the income statement | ||||
Changes in the fair value of financial assets at fair value | ||||
through other comprehensive income | 0.0 | - | 1.5 | |
Other comprehensive income | -0.9 | -0.3 | 1.5 | |
COMPREHENSIVE INCOME FOR THE PERIOD | -15.1 | -4.2 | 37.8 | |
Comprehensive income attributable to: | ||||
Parent company shareholders | -15.1 | -4.2 | 37.8 |
CONSOLIDATED INCOME STATEMENT BY QUARTER
| 2024 | 2023 | 2023 | 2023 | 2023 |
EUR M | Q1 | Q4 | Q3 | Q2 | Q1 |
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|
SALES | 93.2 | 112.2 | 152.9 | 132.4 | 93.9 |
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Other operating revenue | 0.4 | 0.3 | 0.0 | 0.1 | 8.8 |
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Expenses |
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Goods and services | 21.5 | 26.7 | 33.1 | 31.3 | 22.6 |
Salary and other employment benefit expenses | 28.0 | 27.5 | 27.9 | 28.6 | 24.5 |
Depreciation, amortization and impairment losses | 7.5 | 7.1 | 6.9 | 6.8 | 6.7 |
Other operating expenses | 47.1 | 48.5 | 49.8 | 47.8 | 49.8 |
| 104.1 | 109.8 | 117.7 | 114.5 | 103.6 |
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|
OPERATING INCOME | -10.4 | 2.7 | 35.3 | 18.0 | -0.9 |
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|
Financial income | 0.9 | 1.3 | 0.6 | 0.6 | 0.3 |
Financial expenses | -3.4 | -3.3 | -2.3 | -3.4 | -2.8 |
Share of after-tax income from joint ventures and | -1.2 | 1.4 | 0.6 | -1.6 | -1.2 |
companies with a participating interest undertaking |
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|
accounted for using the equity method |
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INCOME BEFORE TAXES | -14.2 | 2.0 | 34.2 | 13.6 | -4.6 |
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Income taxes | -0.1 | -0.3 | -6.6 | -2.9 | 0.7 |
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INCOME FOR THE PERIOD | -14.3 | 1.7 | 27.6 | 10.6 | -3.9 |
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Income attributable to: |
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Parent company shareholders | -14.3 | 1.7 | 27.6 | 10.6 | -3.9 |
|
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Earnings per share before and after dilution, EUR | -0.82 | 0.10 | 1.60 | 0.61 | -0.23 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY QUARTER
| 2024 | 2023 | 2023 | 2023 | 2023 |
EUR M | Q1 | Q4 | Q3 | Q2 | Q1 |
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|
INCOME FOR THE PERIOD | -14.3 | 1.7 | 27.6 | 10.6 | -3.9 |
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Items that may be reclassified to the income statement |
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Translation differences | -0.9 | 1.0 | 0.7 | -1.3 | -0.3 |
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Items that will not be reclassified to the income statement |
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Changes in the fair value of financial assets at fair value |
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|
through other comprehensive income | 0.0 | 0.3 | 1.2 | - | - |
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|
Other comprehensive income | -0.9 | 1.3 | 1.9 | -1.3 | -0.3 |
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COMPREHENSIVE INCOME FOR THE PERIOD | -15.1 | 3.0 | 29.5 | 9.3 | -4.2 |
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Comprehensive income attributable to: |
|
|
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Parent company shareholders | -15.1 | 3.0 | 29.5 | 9.3 | -4.2 |
Consolidated balance sheet | ||||
EUR M | ||||
ASSETS | ||||
Non-current assets | ||||
Intangible assets | 6.1 | 3.1 | 5.4 | |
Land | 0.5 | 0.5 | 0.5 | |
Buildings and structures | 1.6 | 1.5 | 1.6 | |
Renovation costs for rented properties | 1.0 | 1.0 | 0.9 | |
Vessels | 436.9 | 426.9 | 435.3 | |
Machinery and equipment | 2.6 | 2.3 | 2.6 | |
Right-of-use assets | 4.3 | 4.0 | 4.7 | |
Financial assets at fair value through | ||||
other comprehensive income | 0.0 | 10.6 | 0.0 | |
Investments accounted for using the equity method | 48.6 | 35.2 | 49.8 | |
Receivables | 0.5 | - | 0.6 | |
Total non-current assets | 502.2 | 485.1 | 501.5 | |
Current assets | ||||
Inventories | 13.9 | 13.9 | 12.7 | |
Income tax assets | 0.1 | 0.1 | 0.1 | |
Trade and other receivables | 45.8 | 41.6 | 40.1 | |
Cash and cash equivalents | 65.7 | 79.8 | 85.3 | |
Total current assets | 125.4 | 135.5 | 138.3 | |
TOTAL ASSETS | 627.6 | 620.6 | 639.8 | |
EQUITY AND LIABILITIES | ||||
Equity | ||||
Share capital | 1.8 | 1.8 | 1.8 | |
Reserves | 49.7 | 49.7 | 49.7 | |
Translation differences | -3.6 | -3.4 | -3.2 | |
Retained earnings | 260.3 | 240.0 | 275.0 | |
Equity attributable to parent company shareholders | 308.1 | 288.1 | 323.2 | |
Total equity | 308.1 | 288.1 | 323.2 | |
Non-current liabilities | ||||
Deferred tax liabilities | 45.1 | 35.2 | 45.2 | |
Interest-bearing liabilities | 141.1 | 176.5 | 150.6 | |
Lease liabilities | 3.4 | 4.0 | 4.0 | |
Other payables | 2.0 | - | 2.3 | |
Total non-current liabilities | 191.6 | 215.7 | 202.1 | |
Current liabilities | ||||
Interest-bearing liabilities | 36.7 | 36.7 | 36.7 | |
Lease liabilities | 2.7 | 2.3 | 2.7 | |
Income tax liabilities | 0.0 | 0.0 | 0.0 | |
Trade and other payables | 88.4 | 77.7 | 75.1 | |
Total current liabilities | 127.8 | 116.8 | 114.5 | |
Total liabilities | 319.5 | 332.5 | 316.6 | |
TOTAL EQUITY AND LIABILITIES | 627.6 | 620.6 | 639.8 | |
Consolidated cash flow statement | ||||
EUR M | ||||
OPERATING ACTIVITIES | ||||
Income for the period | -14.3 | -3.9 | 36.3 | |
Adjustments | ||||
Depreciation, amortization and impairment losses | 7.5 | 6.7 | 27.5 | |
Capital gains/losses from non-current assets | - | -8.8 | -8.9 | |
Income from investments in associate companies | 1.2 | 1.2 | 0.6 | |
Other items not included in cash flow | -0.2 | -0.2 | -0.7 | |
Interest expenses and other financial expenses | 3.3 | 2.6 | 11.2 | |
Interest income and other financial income | -0.6 | -0.3 | -2.7 | |
Dividend income | - | - | 0.0 | |
Income taxes | 0.1 | -0.7 | 9.2 | |
Change in working capital | ||||
Change in trade and other receivables | -5.6 | -4.9 | -3.4 | |
Change in inventories | -1.1 | 0.1 | 1.3 | |
Change in trade and other payables | 11.5 | 5.0 | 4.3 | |
Interest paid | -1.0 | -2.4 | -10.0 | |
Financial expenses paid | -0.1 | -0.2 | -0.3 | |
Interest received | 0.4 | 0.2 | 2.7 | |
Financial income received | 0.2 | 0.1 | 0.0 | |
Taxes paid | 0.0 | -0.1 | 0.0 | |
NET CASH FLOW FROM OPERATING ACTIVITIES | 1.3 | -5.7 | 67.1 | |
INVESTING ACTIVITIES | ||||
Investments in vessels | -8.9 | -3.2 | -28.8 | |
Investments in other intangible assets, property, plant and equipment | -1.2 | -0.7 | -4.5 | |
Investments in financial assets recognized at fair value | ||||
through other comprehensive income | - | 0.0 | - | |
Investments accounted for using the equity method | 0.0 | - | -3.6 | |
Divestments of vessels | - | 11.1 | 11.1 | |
Divestments of other non-current assets | - | 0.1 | 0.2 | |
Change in non-current receivables | 0.1 | - | -0.6 | |
Dividends received from associate companies | - | - | 1.7 | |
Dividends received from others | - | - | 0.0 | |
NET CASH FLOW FROM INVESTING ACTIVITIES | -10.1 | 7.3 | -24.5 | |
FINANCING ACTIVITIES | ||||
Principal payments | -10.1 | -10.1 | -36.8 | |
Depreciation of lease liabilities | -0.7 | -0.7 | -2.6 | |
Dividends paid | - | - | -6.9 | |
NET CASH FLOW FROM FINANCING ACTIVITIES | -10.8 | -10.8 | -46.3 | |
CHANGE IN CASH AND CASH EQUIVALENTS | -19.7 | -9.2 | -3.7 | |
Cash and cash equivalents at the beginning of the period | 85.3 | 89.0 | 89.0 | |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 65.7 | 79.8 | 85.3 |
Statement of changes in consolidated equity | |||||
Equity attributable to parent company shareholders | |||||
Share | Translation | Retained | Total | ||
EUR M | capital | Reserves | differences | earnings | equity |
EQUITY, | 1.8 | 49.7 | -3.2 | 275.0 | 323.2 |
Income for the period | -14.3 | -14.3 | |||
Translation differences | 0.0 | -0.4 | -0.5 | -0.9 | |
Remeasurement of financial assets recognized at | |||||
fair value through other comprehensive income | 0.0 | 0.0 | 0.0 | ||
Comprehensive income for the period | - | 0.0 | -0.4 | -14.7 | -15.1 |
EQUITY, | 1.8 | 49.7 | -3.6 | 260.3 | 308.1 |
Equity attributable to parent company shareholders | |||||
Share | Translation | Retained | Total | ||
EUR M | capital | Reserves | differences | earnings | equity |
EQUITY, | 1.8 | 49.7 | -3.4 | 244.3 | 292.4 |
Income for the period | -3.9 | -3.9 | |||
Translation differences | 0.0 | 0.0 | -0.3 | -0.3 | |
Remeasurement of financial assets recognized at | |||||
fair value through other comprehensive income | - | ||||
Comprehensive income for the period | - | 0.0 | 0.0 | -4.2 | -4.2 |
EQUITY, | 1.8 | 49.7 | -3.4 | 240.0 | 288.1 |
KEY METRICS
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Equity per share, EUR | 17.83 | 16.67 | 18.71 |
Equity/assets ratio | 50.5 % | 47.8 % | 51.4 % |
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Investments, EUR M | 10.2 | 3.9 | 36.9 |
- as % of sales | 10.9 % | 4.1 % | 7.5 % |
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Passengers | 871,828 | 888,725 | 4,897,494 |
Cargo units | 32,993 | 33,736 | 125,269 |
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Average number of employees, full-time equivalent | 2,149 | 1,993 | 2,227 |
Equity per share = Equity attributable to parent company shareholders / Number of shares.
Equity/assets ratio, % = (Equity including minority interest) / (Total assets - advances received).
When rounding off items to the nearest
President and CEO
jan.hanses@vikingline.com
+358-(0)18-270 00
https://news.cision.com/viking-line-abp/r/viking-line-somewhat-weaker-first-quarter-demand,c3965022
https://mb.cision.com/Main/13658/3965022/2750850.pdf
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