Tallink Grupp, the listed Estonian cruise ferry company, has reduced its losses in the first quarter on an efficiency drive, but passenger volumes fell as well in the review period.
Group net loss narrowed to €13.3 million in the first three months of the year from €23.4 million in the corresponding 2014 period. Revenues rose a fraction, to €190.2 million from €188.2 million.
The group's ships carried nearly 1.8 million passengers which is 5.9% less compared to the same period last year, Tallink said in a statement.
The Group made various changes to the operations during the past year and these affected the first quarter with decreased passenger volumes but increased revenue and profitability. The reduction of operating costs from the measures taken has the highest effect to the first quarter profitability, which is also the low season," Tallink said.
In the first quarter the Estonia-Finland route showed positive developments with revenue increasing by 2.7% driven by a 21.3% growth in cargo units. The increase to the cargo volume was partly from Sea Wind switching from the Finland-Sweden routes to the Estonia-Finland route.
The Estonia-Sweden route, where capacity is lower than last year, experienced a 9.9% decrease in passengers and a 10.4% decrease in cargo volumes. The Latvia-Sweden route showed a decline with passenger’s numbers decreasing by 41.2%, cargo units transported decreased by 59.6%, passenger vehicles transported decreased by 33.0% and the sales decreased by 39.4%.
"The decline in passenger and cargo volumes on the Latvia-Sweden route is due to Isabelle operating as the only vessel on the route since the beginning of August 2014. Throughout the first quarter price pressure from competitors remained visible on all routes. The passenger volumes have been affected by the drop of Russian passengers since the second quarter last year and has continued to this date,." Tallink pointed out.
In the first quarter altogether 6 vessels were chartered out. Due to the increased number of chartered vessels the revenue from charters increased by €7.3 million or 85.9% to the total of €15.7 million. Two of the vessels Silja Festival and Regina Baltic are to be sold in the second quarter of the 2015 financial year.
The upgrades of the public areas and improvements to restaurant and shop concept throughout the fleet combined with the operational changes have resulted in a 3.5% increase in on-board revenue per passenger. Due to the changes in operations the segment result improved on all segments and was €14.9 million higher than in the same period last year, Tallink said.
