Two listed ferry companies in Northern Europe have reported an improvement in their third quarter interim results, a period that includes the key summer holiday season that plays a major role for their financial fortunes.
Tallink, the listed Estonian cruise ferry company that operates under the Tallink and Silja Line brands, increased net profit to €54.6 million from €46.1 million in the third quarter of last year. Operating income (EBIT) rose to €59.4 million from €51.3 million and revenues rose to €287.8 million from €283.6 million.
The company said common theme for the economic environment across all its home markets in the third quarter was slowing economic growth combined with a still robust labour market. The continued streak of weakening of Swedish Krona (SEK) continued to hurt our sales to the Swedish market.
“The developments in the economic environment reflected in the contraction of the cargo market while passenger operations, despite clearly lower demand from Swedish customers, remained more robust with the help of customers from outside home markets,” Tallink said.
“Given the economic environment and tight competition we consider the third quarter’s 1.5% revenue growth achieved on a mature market a good result. We are even happier about the fact that the improvement in the net result was not driven by lower fuel cost alone,” Tallink said.
Meanwhile, the Mariehamn based Viking Line also reported an improvement in its third quarter performance compared to the same period last year. Net icome rose to €19.9 million from €16.6 million, while operating income increased to €26.2 million from €21.3 million. Revenues, by contrast, only increased by a farction, to €152.8 million from €152.3 million.
During the third quarter passenger volumes were on the same level as for the same period last year, but thanks to better sales per passenger, the company achieved increased sales and higher net sales revenue. At the same time, operating expenses decreased, which resulted in higher operating income
Competition in Viking Line's service area entails continued pressure on prices and volumes, which will have an adverse effect on net sales revenue per passenger. “The currency trend for the Swedish krona affects the Group’s results. Fixed-price agreements related to a portion of the Group’s bunker consumption for 2019 mitigate the risk of higher bunker costs. Overall, operating income for 2019 is expected to be better than operating income for 2018,” Viking Line said. Its 2018 operating income was €9.3 million.
