Tallink revenue and profits slide in Q1; passenger traffic falls -96% in April

ESTONIA. Cruise ferry group and leading maritime travel retailer Tallink has reported a -13.4% fall in consolidated revenue year-on-year to €154.9 million in the three months to 31 March. Within this, shop and restaurant sales fell by -15.6% to €86.9 million. The company posted a net loss of €30.2 million (-19.6%) in the quarter.

Restaurant and shop sales accounted for 56% of Tallink Grupp revenue in Q1 2020 (click to enlarge)

Passenger traffic fell -15.6% year-on-year to 1.6 million in Q1. After rising by +12.4% and +8% respectively in January and February, passenger numbers fell by -59.3% in March and almost -96% in April. This was due to the state of emergency declared in Estonia, Latvia and Finland due to the COVID-19 pandemic in mid-March and the closure of borders to stop the spread of the virus.

Only five of the company’s 14 vessels are still operating on the Baltic Sea, mainly to ensure vital supplies and goods continue to be transported between the markets, and only one of the four Tallink-owned hotels are open with a near zero occupancy level.

The detailed revenue and profit picture for Q1 (click to enlarge)

The company said its focus is on strict cost control, cash flow management and liquidity support negotiations to secure the sustainability of the group.

Paavo Nõgene: “The restoration of our services will be a gradual process and will require different sectors and whole countries to work together to rebuild people’s trust and confidence in travelling”

Tallink Grupp CEO Paavo Nõgene said: “We are living in unprecedented times. Even two months ago we could not have foreseen that in mid-March we would find ourselves in a world where state borders are shut, airline and shipping fleets are suspended across the globe, people are not just unable to travel, but not even able to leave their own homes, millions of people are sick and hundreds of thousands no longer with us. But this is the harsh reality we are now faced with.

“In this context, our Q1 results are positive, but they are a false positive at this time of crisis. We almost need to look at these results already from the pre-coronavirus and post-coronavirus perspective, the results pre-state of emergency and post-state of emergency, as the two paint a very different picture of our operations and results.

“In the time before mid-March we were on the course for a stronger Q1 than we had had in 2019, but after mid-March we are now faced with challenges and uncertainties like we have never experienced before. Since there is currently still no clarity or certainty around when this global crisis will end and how will we be coming out of it, it is also difficult to predict what the months ahead will bring.

“The activities of tourism sector companies and our future results now depend directly on government decisions regarding permitting companies to provide their services again.

“Naturally we have been taking several steps to limit the damage and impact on our company over the last few months. We have introduced extremely tight cost control measures, have negotiated and made agreements with our key partners and suppliers regarding existing agreements and contracts. We have worked closely with our governments to secure support measures, have worked hard to identify and launch new revenue streams and have had to make some difficult decisions regarding our employees.

“All the steps we have taken so far and will continue to take in the months ahead, are all taken to secure the long-term sustainability and viability of our operations and in order to preserve as many jobs as possible.

“As we start to see the very tentative first signs of a possible end to the pandemic, we are now working on service recovery plans and making preparations for implementing enhanced safety measures onboard our vessels, in our hotels, restaurants, shops and offices.

“It is clear that the restoration of our services will be a gradual process and will require different sectors and our whole countries to work together to rebuild people’s trust and confidence in travelling, but it is also clear that our customers are ready to return to the seas and to their neighbouring countries, providing we are doing everything we can to provide our services with health and safety at the forefront.”

Food & Beverage The Magazine eZine