Tallink earnings soar on volumes, charters, upgrades and efficiency drive

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Written by Kari Reinikainen Kari Reinikainen

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Published: 14 August 2015 14 August 2015

AS Tallink Grupp, the listed Estonian cruise ferry company that operates in the Baltic, has reported sa strong recovery in earnings for the second quarter and the first half of 2015, the company said in a statement.

Net profit in the second quarter rose to €28.5 million from €6.1 million in the same period last year, while revenues increased to €253.8 million from €246.9 million.

“The increase in the Group’s results is mainly attributed to the growth in passenger numbers, increased charter revenues and decreased costs related to operations. The increase in the pre-tax profit was affected by higher financial income mainly due to the increase in the fair value of derivative instruments (interest rate swaps) which resulted in €7.3 million lower net finance cost,” Tallink said.

For the first six months of the year, the group reported a net profit of €15.2 million compared to a loss of €17.2 million a year earlier. Revenues rose to €444.0 million from €43.6 million.

“The Group made various changes to the operations during the past year, these changes have continued to positively affect the operating result in the second quarter with increased revenue and profitability,” Tallink said

In the second quarter the Estonia-Finland route revenue increased by 6.2%, driven by 4.8% growth in passenger number and 19.9% increase in cargo units, the cargo growth is supported mainly by added capacity.

The Estonia-Sweden route, where capacity is lower than last year, experienced a 5.1% decrease in passengers and a 12.3% decrease in cargo volumes. The Latvia-Sweden route, operating with one vessel compared to two vessels last year, showed a decline with passenger numbers decreasing by 42.3%, cargo units transported decreased by 59.2%.

Throughout the second quarter price pressure from competition remained visible on all routes. The group was able to keep the total number of passengers on same level despite the total lower capacity from Latvia-Sweden route. The passenger number was supported by growth in Estonia-Finland and Finland-Sweden routes.

The upgrades of the public areas and improvements to restaurant and shop concept throughout the fleet in past year, combined with the operational changes, have resulted in a 2.0% increase in on-board revenue per passenger.

Due to the increased number of chartered vessels compared to the same period last year the revenue from charters increased by €4.8 million or 57.8% to the total of €13.2 million. “Main contribution to the charter revenue growth comes from the Silja Europa charter agreement from August 2014 onwards,” Tallink noted.

In February 2015 AS Tallink Grupp and Meyer Turku Oy signed a contract for the construction of the LNG powered fast ferry for Tallinn-Helsinki route shuttle operations. The ship will cost around €230 million, 20% of the total cost will be paid during the construction period and the rest 80% upon the delivery of the vessel in the beginning of 2017.

AS Tallink Grupp's subsidiary Tallink Line Ltd. and Nordea Bank Finland Plc have signed the loan agreement in June 2015 in amount of €184 million with maturity of twelve years from drawdown to finance the construction of the new fast ferry in Meyer Turku shipyard. Finnish Export Credit Agency “Finnvera” guarantees 95% of this post-delivery buyer credit and the loan bears OECD Commercial Interest Reference Rate (CIRR) based fixed interest rate.

Two of the vessels that were chartered out, Silja Festival and Regina Baltica were sold in the second quarter of the 2015 financial year. The sale of the two vessels generated a positive cash flow of €25 million which was used for the €11.5 million down payment of the new LNG vessel and repayment of loans. Altogether the Group successfully continued the deleveraging strategy and the net debt decreased by €62 million to a total of €614 million in the second quarter resulting in a solid net debt to EBITDA ratio of 3.4.

“In the first half year of 2015 the positive effect from chartering activities has been clearly visible as in the comparable period last year fewer ships were in charter. Looking forward to the second half of the 2015 financial year the chartering revenues will decrease compared to the previous year as Silja Europa charter becomes comparable with the last year and two ships previously in charter were sold in the second quarter of 2015,” Tallink said

Princess Cruises releases sixth annual Relaxation Report

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Written by Teijo Niemelä Teijo Niemelä

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Published: 12 August 2015 12 August 2015

Americans are hard workers, but when it comes to taking a break, they may need some advice.  According to results released today from Princess Cruises’ sixth annual Relaxation Report, over half (54%) of Americans spend their vacation days dealing with personal obligations such as family emergencies, doctor’s or dentist’s appointments and sick days for their children or loved ones rather than actually vacationing. And the mere thought of asking their boss for a few extra days off causes more stress than asking for a pay raise for nearly a quarter (22%) of American workers, according to the recent survey by Wakefield Research for Princess Cruises.

On this National Relaxation Day (Saturday, August 15,) the idea of stress and relaxation is an important discussion to be had with our 24/7 always-on American culture. Stress triggers are on the rise with nearly a one-third of people who get stressed at just the thought of relaxing, up from 28-percent in 2014. And 42-percent frequently feel guilty about relaxing, also up from 38-percent last year. For more than a third of Americans (36%), it’s even more difficult to find time to relax than to live within their budget!

"In the six years that Princess Cruises has commissioned this survey, we’ve continued to see stress levels rise year after year …” said Jan Swartz, Princess Cruises president. "We aren’t giving ourselves permission to truly let go and relax, and whether that’s because of the demands on our intense lives or our own guilt, this is an unsustainable trend that can have a genuinely adverse impact on our society as a whole.”

Even summertime brings no reprieve. Despite the sunshine, warm weather and break from school schedules, more than three quarters (77%) of parents are busier during the summer months compared to the rest of the year. That’s due in part to the stress that comes with planning – and taking – an actual vacation for half (50%) of Americans who find things like research and handling travel logistics stressful, and over half (55%) who return feeling the need for a vacation from their vacation.

On the optimistic side however, Americans still believe they can achieve the dream of finding relaxation, with two-thirds (66%) who agree that taking a cruise would be the best way to experience life and relaxation all in one vacation. Proudly, Princess Cruises offers an array of options for any traveler looking to “come back new” aboard its worldwide fleet of ships in exotic destinations.

Ovation of the Seas to make seven night cruise from Southampton in April

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Written by Kari Reinikainen Kari Reinikainen

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Published: 12 August 2015 12 August 2015

Ovation of the Seas, the third unit of Royal Caribbean International’s Anthem class, will make a seven night cruise from Southampton to France and Spain in April 2016, a cruise advertisement says.

Cruise118.com, a British online cruise retailer, advertises the cruise that is due to depart on 22 April and include calls at Gijon, Bilbao and St Peter Port.

Royal Caribbean International is the contemporary market unit of Royal Caribbean Cruises, Ltd (RCCL). Ovation of the Seas is under construction at the Meyer Werft shipyard in Germany.

Mitsubishi tells contractors to observe schedule despite AIDAprima delivery delay

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Written by Kari Reinikainen Kari Reinikainen

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Published: 11 August 2015 11 August 2015

Mitsubishi Heavy Industries (MHI), the Japanese shipbuilder that is constructing two 124,500 gross ton ships for Carnival Corp & plc’s German brand AIDA Cruises, has written to sub-contractors and suppliers to observe agreed delivery schedule despite a second six month delay in the completion of AIDAprima, the first ship.

“Regardless of the delay in ship delivery, MHI kindly asks all contractors and their sub-contractors to strictly observe and maintain the present delivery schedules and construction schedules except those which need to be adjusted to your own delay. We will appreciate your continuing utmost cooperation and effort to complete this project,” said Hideki Omori, VP General Manager of Procurement Department at MHI’s Commercial Aviation and Transportation Systems in a letter to contractors obtained by Cruise Business Online.

On 4 August, AIDA Cruises said the maiden voyage of AIDAprima would be postponed to April 2016 from October 2015. The postponement is due to the fact that the shipyard will not be able to complete ship as planned. This is the second time the delivery of the ship has been postponed - initially, it was due to enter service in June this year.