Eimskip: Results for the year

Thursday, March 5, 2020

Highlights of the year 2019 results

  • Revenue amounted to EUR 679.6 million, a decrease of EUR 9.6 million or 1.4% when compared with the year 2018.
    • Revenues e.g. affected by lower volume in container liner, especially import to Iceland.
  • Expenses amounted to EUR 630.2 million (excluding IFRS 16), a decrease of EUR 9.7 million where salary expenses decreased by EUR 5.9 million or 4.3%.
  • EBITDA amounted to EUR 60.5 million or EUR 49.4 million (excluding IFRS 16) compared to EUR 49.2 million last year.
  • Net earnings amounted to EUR 1.0 million, compared to EUR 7.4 million for the year 2018.
    • A one-off tax expense in the amount of EUR 3.4 million and an impairment expense of EUR 2.6 million due to sale of vessels negatively affected the results. Normalized earnings therefore EUR 7.0 million in line with 2018.
  • Total CAPEX for the period amounted to EUR 38.9 million compared to EUR 47.4 million 2018. Planned investments in 2019 amounting to EUR 36 million delayed to 2020, mostly due to delay in delivery of the two new vessels.
  • Net cash from operating activities increased and amounted to EUR 51.3 million compared to EUR 29.0 million for the year 2018.
  • Total equity amounted to EUR 230.9 million, an equity ratio of 44.0%, affected by IFRS 16, compared to 49.1% at year-end 2018.
    • Dividend amounting EUR 4.7 million was paid in the year and a share buy-back programs were initiated. Shares amounting to EUR 5.0 million market value had been purchased at year-end.
  • Leverage ratio was 3.0 at the end of 2019, compared to 2.80 at the end of 2018. That is in the higher end of target leverage ratio.
  • The Board of Directors will propose to the Annual General Meeting that no dividend will be distributed for the year 2019.
  • The Board of Directors will also propose to the Annual General Meeting to reduce share capital equaling distribution to shareholders amounting to approximately EUR 12.5 million in payout.
  • EBITDA guidance for 2020 in the range of EUR 51-58 million.

Highlights of Q4 2019 results

  • Revenue amounted to EUR 175.5 million, a decrease of EUR 3.3 million or 1.8% when compared with the same quarter in 2018.
    • Transported volume in liner services decreased by 13.2% mainly affected by lower level of import to Iceland and lower exports due to less catch around Iceland in the quarter.
    • Volume in forwarding services decreased by 3.9% however profitability increased compared to last year due to improved margins and streamlining measures.
  • EBITDA amounted to EUR 11.2 million in the fourth quarter 2019 or EUR 7.9 million (excluding IFRS 16) compared to EUR 9.4 million in the same quarter last year.
  • Net loss in Q4 amounted to EUR 6.4 million, compared to 1.9 million in the same quarter last year, a decrease of EUR 4.5 million.
  • Net cash from operating activities amounted to EUR 16.9 million compared to EUR 8.4 million in the same quarter of 2018.

VILHELM MÁR THORSTEINSSON, CEO

“The year 2019 was characterized by lower import levels to Iceland which decreased by 10.7%, in line with Statistics Iceland total import numbers. Furthermore, no capelin season and lower catch around Iceland for the last quarter of the year had considerable impact on export volumes from Iceland. However, I am pleased to see that our efforts and commitment in various improvement and streamlining measures positively impacted results and will continue to realize in 2020.  This is in line with the current journey to streamline and focus on core operations.

Our operations in Norway improved throughout the year and the Trans-Atlantic service grew by double digit numbers. Results of the forwarding operation increased between years despite lower volumes.

Salary expenses decreased by EUR 5.9 million year on year, mostly due to decrease in FTE’s as a result of business integration.

Although our net earnings are low at EUR 1 million, main reasons being one-off impairment expenses related to sale of five vessels and one-off tax expense in Q1 2019, we are very pleased with significant increase in cashflow from operation between years.

We introduced a new container sailing system in October and managed to reduce number of container vessels by one. We were able to increase service and reliability in the system as well as lower fixed operating cost. At the end of the year Eimskip divested five vessels and took important steps in renewal of the container vessel fleet and alignment of the reefer vessel fleet to current operation. Eimskip publishes today its ESG report for the year 2019, now for the first time parallel to the publishing of the financial statements for the year. Eimskip’s carbon footprint, as measured by CO2 emission per ton of transported cargo, has decreased by 14.2% since 2015 exceeding our goal and I am sure that we are offering the most environmentally friendly solution in transport to and from Iceland.

Our new vessels that are being built in China, which are specially designed to reduce environmental impact, are now expected to be delivered in Q2 and Q3. We look forward to starting the co-operation with Royal Arctic Line which is now expected to commence after delivery of the first vessel in Q2.

In August we shared our intention to sell the subsidiary Sæferdir ehf. After initiating a sales process, there was an interest in the company however prolonged discussions did not lead to sale. We have now decided to discontinue the process and continue to run an excellent ferry service in Breidafjordur.

The EBITDA guidance for the year 2020 is in the range of EUR 51-58 million excluding IFRS 16 effect. This wide range is mainly explained by uncertainty regarding economic development in Iceland, global market condition and the development of the COVID-19 outbreak.

Finally, I would like to thank our dedicated employees for their hard work in the past year and our customers and business partners for valuable co-operation.”

FURTHER INFORMATION

  • Egill Örn Petersen, CFO, tel.: +354 525 7202
  • Edda Rut Björnsdóttir, Head of Marketing- & Communication, tel.: +354 825 3399, email: investors@eimskip.com

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