Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tallink Grupp AS (FRA:T5N, Financial) reported a solid EBITDA of EUR 175 million for the full year 2024, despite challenging economic conditions.
- The company successfully reduced its interest-bearing liabilities by EUR 92.9 million, indicating strong financial management and a focus on deleveraging.
- Tallink Grupp AS maintained a healthy EBITDA margin above 20% for 2024, demonstrating operational efficiency.
- The company proposed a dividend of EUR 0.06 per share, reflecting confidence in its financial stability and commitment to shareholder returns.
- Tallink Grupp AS has a strong balance sheet with an equity-to-asset ratio of 53%, showcasing financial resilience.
Negative Points
- Total revenue for 2024 was EUR 785.8 million, down EUR 10.2 million from the previous year, indicating a slight decline in overall business performance.
- The company faced a net loss of EUR 5.2 million in the fourth quarter, highlighting challenges in achieving profitability during the low season.
- Revenue from restaurant and shop sales decreased by EUR 3.8 million, reflecting lower consumer spending and demand.
- Charter revenues dropped by EUR 5.1 million due to fewer vessels being chartered compared to the previous year.
- The economic environment in the Nordic and Baltic regions remains weak, impacting consumer confidence and demand for Tallink Grupp AS's services.
Q & A Highlights
Q: Could you elaborate on your thinking regarding dividend payouts? Are you trying to keep it stable around the policy EUR0.05, or is it more dependent on individual year's results?
A: Paavo Nogene, CEO: The 6% dividend payment is possible due to our strong capitalization, rapid loan repayment, and the fact that we are not making large investment decisions in the coming years due to uncertainties about future ship technologies. Generally, we adhere to the dividend policy unless extraordinary events occur.
Q: Could you tell us more about your plans for the Estonia-Sweden routes? Will the Star be marketed differently than former Kapellskar vessels?
A: Paavo Nogene, CEO: Yes, the Star will carry more passengers by car or bus due to its design, which allows for greater cabin and passenger capacity compared to previous vessels.
Q: Are there any plans to change the number of ships on the Stockholm-Marianhamn-Tallinn routes?
A: Paavo Nogene, CEO: We will continue with one vessel on the Dain Marianhamn Stockholm route and do not plan to make changes this year.
Q: Is there any advantage to using tax-free options on your routes, and would you consider skipping Holland on this route?
A: Paavo Nogene, CEO: There are no plans to change this.
Q: Is the proposed dividend of EUR0.06 a reflection of your confidence in FY25 expected results, and what are your main targets for this year?
A: Paavo Nogene, CEO: The EUR0.06 dividend reflects our 2024 results and our rapid debt repayment. We are not planning large investments due to technological uncertainties. The decision is based on 2024 results and future investment plans.
Q: What is the source of optimism regarding the dividend proposal? Do you expect very good results in 2025 or more vessel sales?
A: Paavo Nogene, CEO: We are overcapitalized, and improving the dividend is a way to reduce it. We decided to enhance the dividend as a capital payment to shareholders.
Q: Could you give any insight into your plans for vessels and layup this year?
A: Paavo Nogene, CEO: We are actively negotiating, with 15 different negotiations in the pipeline. We are ready to sell cargo vessels depending on the offers we receive.
Q: Are there plans for the Southern Finland traffic, Turku-Stockholm route that would affect the operating ships or add or take out operations?
A: Paavo Nogene, CEO: No, we don't see any changes in the Turku-Stockholm route currently.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
