Market announcement

Title

AS Tallinna Sadam financial results for 2023 Q2 and 6 months

Message

In  the second quarter, Tallinna Sadam  earned 29 million euros in sales revenue
and 1.4 million euros in profit. The revenue for six months was 57 million euros
and  the profit reached  7 million euros. In  the second quarter,  the volume of
investments  increased to 4.6 million  euros, in the  first half of  the year we
invested a total of 6.1 million euros.

In  the  second  quarter,  both  sales revenue (-5%), adjusted EBITDA (-24%) and
profit  (-73%) decreased year-on-year. Semiannually, the revenue remained at the
previous year's level, but the adjusted EBITDA (-12%) and profit (-42%) fell due
to the pressure of cost growth.

The  financial results  of six  months were  significantly affected  by both the
increase  in the number of  passengers and the decrease  in cargo volumes. While
the  passenger business continued to recover steadily on regular lines and there
is  still  growth  potential  to  reach  the pre-COVID restrictions level, cargo
volumes  continue to decline due to sanctions  and the general decrease in cargo
volumes. In shipping, both ferries and the icebreaker Botnica showed growth, but
regular  dock  work  and  costs  related  to  the  new charter contract affected
Botnica's  profitability.  Rising  service  prices  and  wage pressure increased
operating costs, financial costs also increased.

Tallinna  Sadam management will present the financial  results of the Group at a
webinars  on 10 August, including  webinar in Estonian  starting at 10.00 (EEST)
(link       to      EST      webinar      (https://teams.microsoft.com/l/meetup-
join/19%3ameeting_ZDg5ZjkyYTEtNzk4MS00MjVhLWJmMDMtNzIzZGNlODk0MTQ4%40thread.v2/0
?context=%7B%22Tid%22%3A%223c572f71-c808-4685-aa00-
2ca59a11c7e2%22%2C%22Oid%22%3A%22f76c4208-aa18-403e-b244-
12d29bf7e0d0%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btyp
e=a&role=a))  and  webinar  in  English  starting  at  11.00 (EEST) (link to ENG
webinar                                   (https://teams.microsoft.com/l/meetup-
join/19%3ameeting_ZTEwZjhhNzMtYTJmYy00MjcyLThjN2QtYTdlZTQwOWJlYjRj%40thread.v2/0
?context=%7B%22Tid%22%3A%223c572f71-c808-4685-aa00-
2ca59a11c7e2%22%2C%22Oid%22%3A%22f76c4208-aa18-403e-b244-
12d29bf7e0d0%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btyp
e=a&role=a)).

Key figures (in million EUR):

                              Q2      Q2     +/-      6M      6M     +/-

                            2023    2022       %    2023    2022       %

  Revenue                   28.8    30.4    -5.2    57.2    57.1     0.1

  Adjusted EBITDA           11.7    15.4   -23.9    28.9    28.9    19.5

  Adjusted EBITDA margin   40.7%   50.7%   -10.0   50.5%   50.5%     1.5

  Operating profit           5.8     9.1   -36.8    12.6    16.3   -23.1

  Income tax                -3.0    -4.1   -27.4    -3.0    -4.1   -27.4

  Profit for the period      1.4     5.1   -73.1     7.1    12.3    42.3

  Investments                4.6     4.3     7.9     6.1     9.0   -31.4


                          30.06.2022   31.12.2022     +/-

  Total assets                 611.4        621.2   -1.6%

  Interest bearing debt        184.0        187.4   -2.0%

  Other liabilities             58.5         52.9   10.7%

  Equity                       368.8        381.0   -3.2%

  Number of shares             263.0        263.0    0.0%

Major events in Q2:

  * Additional trips by the ferry Regula in summer 2023
  * Icebreaker Botnica additional summer charter contract with Equinor
  * Agreement to build a new quay for construction of offshore windfarms in
    Paldiski South Harbour
  * Johann Peetre was recalled from the supervisory board of AS Tallinna Sadam's
    subsidiary OÜ TS Laevad
  * Establishing Hydrogen Valley of Estonia

Revenue
Revenue  for the first half of 2023 grew by EUR 54 thousand (+0.1%) year on year
to EUR 57.2 million. Revenue remained at the same level as a year earlier due to
growth  in revenue from ferry service between Estonia's mainland and two largest
islands, passenger fee revenue in the Passenger harbours segment and charter fee
revenue  in the segment Other, which offset  the decrease in revenue from vessel
dues,  cargo charges  and electricity  sales. In  terms of  revenue streams, the
biggest  change in the first half-year was in vessel dues revenue, which dropped
by EUR 2.2 million (-12.2%) to EUR 16.0 million. This was mainly attributable to
fewer calls by cargo ships and ro-pax vessels due to decreasing cargo volumes as
well  as a  decline in  the number  of cruise  ship calls (-35.3%). Cargo charge
revenue  decreased less than cargo throughput  (-30.6%), because the decline was
stronger  for cargo  with lower  charge rates.  In terms  of segments, six-month
revenue  grew  in  the  Passenger  harbours  segment,  the Ferry segment and the
segment Other (the icebreaker Botnica), which offset the revenue decrease in the
Cargo harbours segment.

The  six-month revenue  of the  Passenger harbours  segment grew by 7.6% year on
year, mainly through an increase passenger fee revenue (+EUR 1.0 million) due to
rapid growth in passenger numbers and higher lease income (+EUR 0.2 million). In
the  second quarter, revenue  decreased by 6.7% year  on year to EUR 9.3 million
(-EUR  0.7 million). This was  mainly due to  lower revenue from  vessel dues in
connection with fewer cruise ship calls.
The  six-month  revenue  of  the  Cargo  harbours segment decreased year on year
(-20.1%).  Vessel dues revenue  dropped significantly (-EUR  2.2 million) as the
number of vessel calls fell due to a drop in cargo volumes. Cargo charge revenue
decreased  (-EUR  0.5 million)  because  volumes  contracted for all cargo types
(particularly  liquid bulk and general cargo). The second-quarter revenue of the
Cargo  harbours  segment  decreased  by  EUR  2.2 million (-22.3%) year on year,
mainly  due to lower  vessel dues revenue,  cargo charge revenue and electricity
sales revenue.
The  six-month revenue of the Ferry segment  grew by EUR 1.5 million (+9.5%) due
to  growth in both ferry service revenue and lease income. Ferry service revenue
increased  through a rise in contractual fees due to an increase in the Estonian
fuel  cost, employment cost  and consumer price  indices. In the second quarter,
the revenue of the Ferry segment grew by EUR 0.6 million year on year (+6.3%).
The  six-month revenue  of the  segment Other  grew by EUR 1.1 million (+24.7%).
Revenue  grew due  to the  summer charter  of the  icebreaker Botnica and higher
charter  fee revenue for the  icebreaking season (under a  new contract with the
Transport  Administration), even  though the  summer charter  of Botnica was cut
short  due to technical changes made to the project (9 days instead of 40 days).
Revenue  for the  second quarter  grew by  EUR 0.8 million  (+80.5%) through the
summer  charter of  Botnica and  higher revenue  in the  icebreaking season that
ended on 20 April.

EBITDA
Adjusted EBITDA for the first half-year dropped by EUR 3.6 million (-12.4%) year
on  year  to  EUR  25.3 million.  Adjusted  EBITDA growth the Passenger harbours
segment  and  the  Ferry  segment  could  not  offset  the decrease in the Cargo
harbours segment and the segment Other. The adjusted EBITDA of the segment Other
decreased  due to higher  expenses incurred in  the second quarter in connection
with  the regular  dry dock  maintenance and  repairs of the icebreaker Botnica.
Adjusted EBITDA margin for the first half-year decreased from 50.5% to 44.2% and
adjusted EBITDA margin for the second quarter decreased from 50.7% to 40.7%.

Profit
Profit before tax for the first six months fell by EUR 6.3 million (-38.6%) year
on  year to EUR  10.1 million. Profit for  the first half-year  decreased by EUR
5.2 million (-38.6%) year on year. Second-quarter net profit was EUR 1.4 million
(-EUR 3.7 million).

Investments
In  the first six months  of 2023, the Group invested  EUR 6.1 million, EUR 2.8
million  less than a year earlier. The  largest investments were ma de scheduled
dry  docking works  and investments  for improving  ice class  on the icebreaker
Botnica, in building a new quay in Paldiski South Harbour, reconstructing a quay
and  completing the reconstruction of the outdoor  area around terminal D in Old
City  Harbour and, increasing the capacity of Muuga Harbour to serve ro-ro cargo
(secondII  floor  ramp)  and  information  technology. Investments of the second
quarter totalled EUR 4.6 million (Q2 2022: EUR 4.3 million).

Interim condensed consolidated statement of financial position:

  In thousands of euros               30 June 2023   31 December 2022
----------------------------------------------------------------------
  ASSETS



  Current assets

  Cash and cash equivalents                 37 836             44 387

  Trade and other receivables               11 005              7 477

  Contract assets                              407                  0

  Inventories                                  860                749

  Non-current assets held for sale              28                100
----------------------------------------------------------------------
  Total current assets                      50 136             52 713
----------------------------------------------------------------------


  Non-current assets

  Investments in associates                  1 879              2 099

  Other long-term receivables                  341                303

  Property, plant and equipment            557 130            564 379

  Intangible assets                          1 875              1 735

  Total non-current assets                 561 225            568 516
----------------------------------------------------------------------
  Total assets                             611 361            621 229
----------------------------------------------------------------------


  LIABILITIES



  Current liabilities

  Loans and borrowings                      15 916             15 916

  Provisions                                   760              2 013

  Government grants                          8 351              8 578

  Taxes payable                              1 146              1 060

  Trade and other payables                  11 310              9 770

  Contract liabilities                       2 759                 62

  Total current liabilities                 40 242             37 399
----------------------------------------------------------------------


  Non-current liabilities

  Loans and borrowings                     168 099            171 482

  Government grants                         32 871             30 156

  Other payables                               572                449

  Contract liabilities                         735                767

  Total non-current liabilities            202 277            202 854
----------------------------------------------------------------------
  Total liabilities                        242 519            240 253
----------------------------------------------------------------------
  EQUITY

  Share capital at par value               263 000            263 000

  Share premium                             44 478             44 478

  Statutory capital reserve                 22 858             22 115

  Retained earnings (prior periods)         31 441             25 791

  Profit for the period                      7 065             25 592
----------------------------------------------------------------------
  Total equity                             368 842            380 976
----------------------------------------------------------------------
  Total liabilities and equity             611 361            621 229
----------------------------------------------------------------------

Interim condensed consolidated statement of profit or loss:



 In thousands of euros                         Q2 2023  Q2 2022 6M 2023 6M 2022
-------------------------------------------------------------------------------


 Revenue                                        28 783   30 363  57 189  57 135

 Other income                                      520      434     861     728

 Operating expenses                            -10 922   -9 841 -20 067 -18 504

 Personnel expenses                             -6 355   -5 554 -11 976 -10 325

 Depreciation, amortisation and impairment      -6 189   -6 225 -13 227 -12 512

 Other expenses                                    -79      -66    -225    -194

 Operating profit                                5 758    9 111  12 555  16 328
-------------------------------------------------------------------------------


 Finance income and costs

 Finance income                                    329       34     587      63

 Finance costs                                  -1 837     -323  -3 230    -605

 Finance costs - net                            -1 508     -289  -2 643    -542
-------------------------------------------------------------------------------


 Share of profit of an associate accounted
 for under the equity method                        98      350     138     577

 Profit before income tax                        4 348    9 172  10 050  16 363
-------------------------------------------------------------------------------


 Income tax                                     -2 985   -4 111  -2 985  -4 111

 Profit for the period                           1 363    5 061   7 065  12 252
-------------------------------------------------------------------------------
 Attributable to owners of the Parent            1 363    5 061   7 065  12 252
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Basic and diluted earnings per share (in
 euros)                                           0.01     0.02    0.03    0.05

 Basic and diluted earnings per share
  - continuing operations (in euros)              0.01     0.02    0.03    0.05
-------------------------------------------------------------------------------

Interim condensed consolidated statement of cash flows:



  In thousands of euros                                  6M 2023   6M 2022
---------------------------------------------------------------------------


  Cash receipts from sale of goods and services           62 283    67 852

  Cash receipts related to other income                      181        71

  Payments to suppliers                                  -23 952   -23 580

  Payments to and on behalf of employees                 -12 569    -9 664

  Payments for other expenses                               -204      -238

  Income tax paid on dividends                            -3 264    -4 335

  Cash from operating activities                          22 475    30 106
---------------------------------------------------------------------------


  Purchases of property, plant and equipment              -4 664    -9 618

  Purchases of intangible assets                            -404      -261

  Proceeds from sale of property, plant and equipment         28        77

  Proceeds from government grants related to assets            0     4 954

  Dividends received                                         357       255

  Interest received                                          555         2

  Cash used in investing activities                       -4 128    -4 591
---------------------------------------------------------------------------
  Repayments of loans received

  Dividends paid                                          -3 383    -3 383

  Interest paid                                          -19 012   -25 287

  Other payments related to financing activities          -2 498      -570

  Cash from/used in financing activities                      -5        -5
---------------------------------------------------------------------------
  NET CASH FLOW                                          -24 898   -29 245
---------------------------------------------------------------------------
  Cash and cash equivalents at beginning of the period    -6 551    -3 730

  Change in cash and cash equivalents                     44 387    34 840

  Cash and cash equivalents at end of the period          -6 551    -3 730
---------------------------------------------------------------------------

Tallinna  Sadam is one of the largest cargo- and passenger port complexes in the
Baltic  Sea region, which  serves annually 10 million  passengers and 20 million
tons  of  cargo  in  average.  In  addition  to  passenger and freight services,
Tallinna  Sadam group also operates in  shipping business via its subsidiaries -
OÜ  TS  Laevad  provides  ferry  services  between the Estonian mainland and the
largest  islands, and OÜ TS Shipping charters its multifunctional vessel Botnica
for  icebreaking  and  construction  services  in  Estonia and offshore projects
abroad.  Tallinna Sadam  group is  also a  shareholder of  an associate AS Green
Marine, which provides waste management services.

Additional information:

Marju Zirel
Head of Investor Relations
Tel. +372 5342 6591

[email protected] (mailto:[email protected])