News

21.03.2007

First quarter results in line with expectations

Magnús Þorsteinsson, Executive Chairman:

“In the first three months of the financial year 2007, the group’s financial performance was in line with management’s expectations.  The group’s EBITDA is EUR 32 million, which is almost a quarter of our estimates for the financial year of 2007.  This is an important milestone for the group since as a rule, the first quarter is generally the worst performing quarter.”

Operations continued to be characterised by a steady growth in revenues as well as acquisitions of foreign companies and integration.  The integration of newly acquired companies resulted in considerable expenses, especially regarding employee lay-offs abroad and other factors which will in time result in improved performance.  This applies to lay-offs of employees at Atlas Cold Storage and integration of Kursiu Linija and Containerships.

The group’s balance sheet has grown extensively due to acquisitions of other companies.  The group is now preparing to sell Atlas Cold Storage’s assets with the intention of lease-back.  By doing this, the company is able to reduce debts which will in return result in better performance.

As a rule the first quarter is generally the worst performing one and this applies to this financial year’s first quarter, just as management assumed in it’s estimates for 2007.  The management assumes the 80% of the group’s income will stem from operations outside of Iceland which will reduce seasonal fluctuations in the future.

At the beginning of the period Atlas Cold Storage entered the financial statements of the Group. Atlas Cold Storage is the second biggest provider of warehousing and distribution services to the refrigerated food industry, with total 53 cold stores facilities, in North America. Thereof Atlas owns 43 and 10 are leased.

In November, a shareholders meeting approved the proposal to change the name of Avion Group to Hf. Eimskipafélag Íslands. Two new members joined the Board of Directors, Sindri Sindrason and Thor Kristjansson replaced Arngrimur Johannesson and Eamonn Mullaney.

In December Eimskip opened up its third office in China.  The office is located in Shenzhen, on Shenzhen port which is the second largest containerport in China.  Operations will mainly inolve seafood logistics along with increasing and developing business oportunities with fruits and vegetables.  Eimskip signed an agreement with the port officials in Qingdao regarding the operation of the biggest cold store in Qingdao which is a very exciting project and supports Eimskip’s current operations in China.  The construction of the cold store is well under way and it is estimated to open for operation in the next few months.  This is an important aspect of Eimskip’s vision of becoming a key player in temperature-controlled cargo transporation on a global scale.  Eimskip has intentions of utilizing the cold store in terms of transportation between N-America and Asia.

In January Eimskip announced the acquisition of an additional 60% equity stake in the Dutch cold store company Daalimpex beheer B.V. in the Netherlands. Eimskip previously held 40% of Daalimpex’s equity interest. Daalimpex is one of the largest cold store companies in Europe and operates six cold stores in the Netherlands. This acquisition significantly strengthens Eimskip’s reefer logistics in Europe and is a good platform for further development of reefer service in Europe. This acquisition is part of Eimskip’s strategy to be a key international player in temperature-controlled cargo globally. Daalimpex is the biggest cold store company in the Netherlands and one of the biggest in Europe. With the acquisition of a majority stake in Innovate and Corby and now the acquisition of 100% share in Daalimpex, Eimskip has become a leading European cold store company and a leading cold store company globally with the acquisition of Atlas Cold Storage in Canada.

Containerships is rebranding the South Baltic services and agencies built up under the Kursiu Linija name. From February 1, 2007 all Kursiu Linija services will be operated under the Containerships name. Containerships is a door-to-door short sea carrier providing regular services linking key industrial and retail customers in Finland, Russia, Scandinavia, Eastern Europe, the Baltic States and Western Europe via ports in the Baltic, North Sea and UK areas. ”