Release Date: April 24, 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) has seen growth in its Club One loyalty program, reaching 3.4 million members, which is a valuable asset for marketing and sales promotions.
- The company successfully sold the vessel Star to Irish Ferries, which will reduce costs associated with idle vessels and generate revenue.
- The renovation of the Baltic Princess was well-received, with positive feedback from customers and media, enhancing the vessel's appeal for the next decade.
- Despite a challenging quarter, Tallink Grupp AS (FRA:T5N) managed to maintain a strong equity ratio of 51%, indicating financial stability.
- The company is confident in its ability to pay out dividends as promised, reflecting a commitment to shareholder returns.
Negative Points
- Tallink Grupp AS (FRA:T5N) experienced a 12% decline in passenger numbers compared to the previous year, partly due to the economic slowdown and the timing of Easter.
- The company faced negative impacts from four idle vessels, which incurred substantial costs without generating revenue.
- Cargo volumes decreased, reflecting the broader economic slowdown, particularly affecting the Estonia-Finland segment.
- The first quarter ended with a net loss of €33 million, highlighting the financial challenges faced during this period.
- Tallink Grupp AS (FRA:T5N) reported a negative free cash flow of €22 million in Q1, influenced by high capital expenditures and the absence of asset disposal income.
Q & A Highlights
Q: Is Tallink not terminating a clearly unprofitable and unpromising hotel project because the hotels belong to importers? Is Tallink planning to burn more of the investors' money in this company?
A: Tallink has made hotel development decisions by looking at the customer journey as a whole, from purchasing a ferry ticket to staying at our hotels, and there are no plans to change this strategy at this time. - CEO
Q: Would it be possible to quantify the Easter effect on profits?
A: It's not possible to quantify it in the profits currently, but the Easter week had 50,000 more passengers compared to the week before, indicating a significant impact. - CEO
Q: Please give an update on the state of the market for selling ships.
A: The market is active. We recently sold a vessel to Iris Ferries and are working to find work or sell the remaining laid-up ships. The challenge is balancing the price offered for selling the ships. - CEO
Q: Please comment if there was a fuel price effect compared to Q1 last year. Also, if you hedged some fuel going into the high season quarters.
A: We haven't hedged fuel currently, and the price effect compared to last year was approximately plus or minus €1 million. - CEO
Q: Please analyze the decline of traffic volumes on the Estonia-Finland route regarding competition, market situation, and how you are positioned towards the Estonian and Finnish markets.
A: We feel strong with our premium product positioning. Despite a slight market share decrease, our pricing strategy balances it well. We focus on offering a premium experience compared to competitors. - CEO
Q: How are you reporting your carbon credits and the cost of them? Where do we find information about the cost for 2024 and Q1 2025?
A: We buy carbon credits monthly. The 2024 cost is available in our annual report, Note 12. We do not publish quarter-based costs due to competitive reasons. - CEO
Q: Could you tell me more about the effect so far on the updated Baltic Princess?
A: The Baltic Princess renovation was successful, with positive customer feedback and media coverage. The investment was significant and aimed at the next 10 years. - CEO
Q: Your market share is constantly decreasing in favor of competitors. What are your actions to cope with this trend? Is it a matter of pricing?
A: We are not worried about a slight decrease in market share. Our focus is on offering a premium product, and we have managed well through various crises over the last five years. - CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
