AS Tallink Grupp, the listed Estonian cruise ferry company, has reported a fall in net profit in 2013 on weak local economic environment, but says this year should see a recovery in earnings.
The group reported a final quarter 2013 net profit of €7.5 million, an increase from €5.7 million in the same period a year earlier, while revenues rose to €224.0 million from €222.8 million. For the full year 2013, the profit narrowed to €47.0 million from €53.5 million in 2012 as revenues contracted to €941.8 million from €943.8 million in 2012.
The 2013 financial year result did not meet the management’s expectations. Due to adverse macroeconomic developments in the region and the increased competition on Finland-Sweden routes the results for this year did not reach the previous year’s level. With an aim to increase revenue generation improvements in product development are being made, emphasis is on retail sales and upgrades to the public areas on selected vessels," the company said in a statement.
"Cost reductions in some areas are processed in order to adapt with the changed economic environment. The management expects an improvement in the results for the 2014 financial year," the company continued.
The Group successfully continued the deleveraging strategy and the net debt decreased by €52million to a total of €722 million in the 2013 financial year. The company that has 18 ships carried 9.11 million passengers last year, a decline of 1.6% year on.
"The 2013 financial year ticket and cargo sales showed a 3.4% and 2.7% increase respectively. Due to the decline in the passenger numbers on the Finland-Sweden routes caused by increased competition and structural changes the shop and restaurant sales experienced a 2.0% decline. Although there was a slight decrease in shop and restaurant sales, spending per passenger stayed on last year’s level. As a result of upgrading the fleet growth continued on the Riga-Stockholm route in the 2013 financial year, showing an 8.4% increase in revenue and the result for the financial year was positive for the first time since the route was opened in 2006," Tallink concluded.
