Weak performance of in particular the Finnish economy, its most important source of passengers, but also that of other economies in the North Eastern European region has hurt the third quarter interims of Tallink, the Estonian listed ferry company.
Group net profit fell to €44.0 million in the third quarter of the year from €49.6 million in the same period in 2012, while revenues fell to €278.4 million from €282.4 million. Tallink operates a fleet of 19 cruise and ropax ferries.
"The Group’s operations were affected by overall weak economic environment in the region. The countries which are the Group’s main markets are experiencing noticeable slowdown in their economies. The continuing decline of Finland economy is seen in the reported weak retail sales indicators and has also had impact to the Group’s passengers’ spending behaviour," Tallink said in a statement.
The Group carried a total of 2.7 million passengers in the third quarter which is 1.9% less compared to the same period last year. The number of cargo units transported amounted to 76.0 thousand, which is 10.5% more than in the same period last year due to some capacity and structural changes in the market when compared to the previous year.
Growth in the number of passengers on the Estonia-Finland route amounted to 2.3% and on the Latvia-Sweden route by 4.1%. The number of passengers decreased on the Finland-Sweden route by 9.6%, where the competition situation has changed and the Group has decreased its capacity.
Ticket sales continued to show increase, but passenger spending from restaurant and shop sales experienced some decline.
"The management is not pleased with the results in the 2013 financial year. Due to the dividend related tax expense, adverse economic developments and the increased competition on Finland-Sweden routes the Group’s management foresees that the results for this year will not reach the previous year’s level. Improvements in product development are being made to increase the revenue generation but also cost reductions in some areas are processed in order to adapt with the changed economic environment," Tallink said.
