EBITDA for the first quarter 2011 EUR 13 million

Thursday, May 19, 2011

EBITDA for the first quarter 2011 EUR 13 million
Profit after taxes was EUR 5,8 million

Eimskip's gross turnover for 1Q 2011 was EUR 90,2 million, compared to EUR 79 million in 1Q 2010. The EBITDA was EUR 13 million, compared to EUR 7,7 million in 1Q 2010. The profit after taxes was EUR 5,8 million, compared to EUR 1,3 million in 1Q 2010. Eimskip's total assets at the end of March 2011 were EUR 283 million, with an equity ratio of 59%. Interest bearing debts were EUR 69 million. Eimskip's total liner transport volume in 1Q 2011 decreased by 3% from 1Q2010, while at the same time Eimskip's international reefer forwarding services increased by 7% between years.

The profits are above expectations due to better collections of an outstanding loan that had previously been fully written off, a total of EUR 6,4 million. The profit from regular operations was on the other hand below expectations, largely due to the cost from m/s Godafoss' grounding off the coast of Norway mid-February, as well as a 3% general recession in liner transport volume during the period. The Godafoss grounding is one of Eimskip's largest insurance claims in recent years, although the company is thoroughly insured to meet such setbacks. In spite of that, a direct cost of around EUR 0,5 million is on Eimskip's account for the 1Q 2011 due to the accident.

Gylfi Sigfússon, President/CEO: 

The profit from regular operations in the first quarter of the year is below our expectations, with the grounding of Godafoss playing a large role. Another cause for concern is that the total transport volume in the liner operations is still declining, which was not expected. The volume has declined both in Iceland and in the Faroe Islands, although Eimskip's international reefer forwarding business is growing steadily.

The outlook for 2011 does not give much cause for optimism, with no foreseeable increase in transport volume between years. Eimskip had the misfortune of m/s Reykjafoss suffering an impact in the port of Argentia, Newfoundland recently, and will have to undergo repairs. The accident will have a minimal effect on Eimskip's outcome in Q2 2011.

It appears that we are facing another recession period in transport volume in the North-Atlantic, since the economy continues to stall despite our hopes of the opposite. Eimskip's customers in Iceland are also facing decrease in income and adversity in financing their inventories. The recent salary agreements between Icelandic Workers Unions and the Employers Association will also affect the operational results of Icelandic companies and no large scale projects are due to start in Iceland.

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