Market announcement

Title

AS Tallinna Sadam unaudited financial results for Q4 and 2023

Message

In  Q4  2023, both  adjusted  EBITDA  and  profit  increased  by  16% and  75%,
respectively,  and revenue  remained close  to the  previous year's level of 28
million  euros  (-0.8%). Profit  growth  was  mainly  driven  by lower operating
expenses,  longer charter  period of  the icebreaker  Botnica and  a decrease in
depreciation,  amortisation and impairment.  As a result  of austerity measures,
maintenance  and repair costs of  non-current assets decreased (-5%). The number
of  employees decreased (-4.5%) also, which  allowed personnel costs to maintain
the  previous year's  level (+0.4%).  At the  same time,  we invested 10 million
euros (+586%).

In 2023, Tallinna Sadam earned 117 million euros in revenue (-4%) and 16 million
euros   in  profit  (-38%). Adjusted  EBITDA  was  49 million  euros  (-12%) and
investments increased to 21 million euros (+50%).

Last  year's results were most  affected by the continuing  decline in the cargo
volumes  of Tallinna  Sadam (-29 %),  due to  the Russian-Ukrainian  war and the
general  economic  downturn.  The  number  of  passengers increased to 8 million
passengers (13%) and the growth was mainly on regular lines, while the number of
cruise ship visits fell (-45%) as the attractiveness of the region has decreased
due  to  geopolitical  risk  and  also  due  to the increase in costs related to
environmental  requirements.  The  rise  in  interest  rates  increased interest
expense  despite the reduction in  debt, so net profit  fell more than operating
profit and EBITDA.


Valdo  Kalm, chairman  of the  management board  of Tallinna  Sadam, states that
times  are difficult,  and we  have moved  from one  crisis to  another, but the
company continues to earn a decent profit. Different business areas balance each
other,  making  the  group  as  a  whole  resistant to the risks of the external
environment,  which is why we  are still ready to  pay dividends and at the same
time  continue with investments. "At the moment, there is a strong focus on cost
savings  while preparing and launching new growth projects such as offshore wind
farms quay and real estate development. As an infrastructure company, we must be
ready  to invest during the economic downturn, to be ready to offer the required
amount of service and grow during the new hightide," said Kalm.

Considering  the company's continued  strong cash flow  and dividend policy, the
management board proposes to pay a dividend to shareholders for 2023 in the same
amount as the previous year, i.e. 0.073 euros per share.

The  management  board  of  Tallinna  Sadam  will  present the group's financial
results  on February 28 in  webinars, including a  webinar in Estonian at 10:00
a.m.        (EET)        (link        to        Estonian-language        seminar
(https://teams.microsoft.com/l/meetup-
join/19%3ameeting_ZGE2MDc1Y2MtYjdjMi00Yjc3LTkzOWUtNDRiZTRkYjU0ZmI4%40thread.v2/0
?context=%7B%22Tid%22%3A%223c572f71-c808-4685-aa00-
2ca59a11c7e2%22%2C%22Oid%22%3A%22a6492212-75ef-498f-8735-75f88c5d463a%22%2C%22Is
BroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a))    and   a
seminar  in  English  at  11:00 a.m.  (EET)  (link  to  English-language seminar
(https://teams.microsoft.com/l/meetup-
join/19%3ameeting_YzdhMTBmNGEtNmFmNS00NGU5LWEyNTAtMzgzM2Q4MTFiMzg0%40thread.v2/0
?context=%7B%22Tid%22%3A%223c572f71-c808-4685-aa00-
2ca59a11c7e2%22%2C%22Oid%22%3A%22a6492212-75ef-498f-8735-75f88c5d463a%22%2C%22Is
BroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a)).

Main financial indicators (million EUR):

                              Q4      Q4      +/-    2023    2022     +/-

                            2023    2022        %                       %

  Revenue                   28.0    28.2     -0.8   116.6   121.7    -4.2

  Adjusted EBITDA           10.4     8,9     16.0    49.2    55.8   -11.9

  Adjusted EBITDA margin   37.0%   31.7%      5.3   42.2%   45.9%    -3.7

  Operating profit           4.6     2.6     76.9    24.6    30.8   -20.0

  Income tax                   0    -0.1   -100.0    -3.0    -4.2   -28.8

  Profit for the period      2.9     1.6     75.0    15.9    25.6   -37.9

  Investments                9.8     1.4    586.3    20.7    13.9    49.6


                          31.12.2023   31.12.2022     +/-

  Total assets                 606.2        621.2   -2.4%

  Interest bearing debt        171.5        187.4   -8.5%

  Other obligations             57.0         52.9    7.9%

  Equity                       377.7        381.0   -0.9%

  Number of shares             263.0        263.0    0.0%

Major events in Q4:

  * Amendment to construction contract for quay to serve offshore wind farms in
    Paldiski South Harbour (increase in price and extension of term date)
  * Agreement with Estonian Stockpiling Agency on operating LNG quay in
    Pakrineeme harbour
  * Bankruptcy proceedings against the client of Tallinna Sadam MPG
    AgroProduction OÜ and initiation of its reorganisation
  * Selecting the winner of the architectural design competition for passenger
    terminal A
  * Signing of memorandum of understanding on Green Corridor between Estonia and
    Finland
  * Tallinna Sadam Investor Day at the cruise terminal
  * Extension of contract of chairman of the management board until 28.02.2027
  * Extension of contract of CEO of the subsidiary TS Laevad until 04.01.2027.

Revenue
Tallinna  Sadam ended 2023 with  consolidated revenue of  EUR 116.6 million, EUR
5.1 million (-4.2%) less than a year earlier. The decline is mainly attributable
to lower revenue from vessel dues, electricity sales and cargo charges. In terms
of  revenue  streams,  the  strongest  rise  was in ferry service revenue (+5%),
charter  fees revenue (the icebreaker  Botnica; +13%) and passenger fees revenue
(+12%).  Vessel dues revenue decreased the most by EUR 5.8 million (-16%) to EUR
31.4 million  due to fewer calls by tankers  and cruise ships. In segment terms,
revenue  grew in 2023 in the Ferry segment and the segment Other, but the growth
could  not offset the  revenue decline in  the Passenger harbours  and the Cargo
harbours segments.
In  the fourth  quarter, revenue  decreased by  0.8%. The decline  in revenue is
primarily  attributable to lower  revenue from electricity  sales, cargo charges
and  vessel dues. Revenue from electricity sales  (-32%) declined due to a lower
electricity price and a decrease in consumption in the Cargo harbours segment.
The  revenue of the Passenger harbours segment decreased by 0.9% because revenue
from  vessel dues, other services, cargo charges and electricity sales declined.
Vessel  dues decreased due to fewer cruise  ship calls. This in combination with
the  leaving  of  the  vessel  which  accommodated Ukrainian war refugees in the
previous  summer reduced revenue from other services. Cargo charges declined due
to  the  overall  economic  slowdown.  Growth  in  passenger  numbers  increased
passenger  fees revenue.  In the  fourth quarter,  the revenue  of the Passenger
harbours segment grew by EUR 0.6 million (+8%) due to higher revenue from vessel
dues and passenger fees.
More  than a half of  the revenue decrease (-21%) in  the Cargo harbours segment
was  related to lower revenue from vessel  dues. There were fewer calls by cargo
vessels  and the  vessels that  called were  smaller on  average. Although total
vessel  calls decreased, on certain routes the number of vessel calls increased,
which  meant higher  discounts and  lower vessel  dues per  call. The decline in
cargo  throughput reduced cargo charges revenue. Cargo charges revenue decreased
less than cargo throughput, because the decline was sharper for cargo with lower
charge  rates and revenue from contractual  penalties increased. The decrease in
electricity  sales revenue  was attributable  to a  lower electricity  price and
smaller  consumption. The fourth-quarter  revenue of the  Cargo harbours segment
declined  by EUR 1.9 million (-19%), because  port dues revenue decreased by EUR
1.0 million,  electricity  sales  revenue  by  EUR 0.6 million and cargo charges
revenue by EUR 0.3 million.
The  revenue of the Ferry segment grew  due to the indexation of the contractual
fee  rates and  a higher  number of  trips made  (+0.6%). Revenue for the fourth
quarter grew by EUR 0.2 million (+2%).
The  revenue of the segment Other increased,  although the summer charter of the
icebreaker  Botnica was shorter than a year earlier. Charter fee revenue for the
icebreaking  season  grew  and  three  summer charter projects increased revenue
despite the drop in charter days. The fourth-quarter revenue of the segment grew
by EUR 0.9 million (+49%) as the number of charter days increased (+44%). In the
fourth  quarter, the revenue  from Botnica grew  due to the  increase in average
charter fee rate for the non-icebreaking season.

EBITDA
Adjusted EBITDA decreased by EUR 6.6 million (-12%) to EUR 49.2 million due to a
decrease  in the Cargo harbours segment (-EUR 5.6 million) and the segment Other
(the  icebreaker  Botnica).  The  adjusted  EBITDA margin declined from 45.9% to
42.2%. Adjusted  EBITDA  for  the  fourth  quarter  increased by EUR 1.4 million
(+16%),  with the largest contribution from  the Ferry segment through growth in
vessel calls and passenger numbers and from the segment Other, where Botnica had
more charter days in the project in Canada.

Profit
The  Group's net profit for 2023 amounted to EUR 15.9 million, which is EUR 9.7
million  (-38%) less  than a  year earlier.  Fourth-quarter profit  was EUR 2.9
million (+EUR 1.2 million, +75%).

Investments
In 2023, the Group invested EUR 20.7 million, EUR 6.9 million (+50%) more than a
year  earlier. Investments in harbour infrastructure assets, acquisition of non-
current  assets and improvements  to existing infrastructure  totalled EUR 16.6
million.  Investments in the icebreaker Botnica  amounted to EUR 3.0 million and
investments in the Ferry segment to EUR 1.1 million.
The  largest investment in 2023 was made in  launching the construction of a new
quay  to serve offshore wind farms in  Paldiski South Harbour. At Muuga Harbour,
the  largest  investments  were  related  to  improving  the conditions of ro-ro
traffic, the design and construction of a new workshop and the construction of a
sewerage system for the quays. In Old City Harbour, investments were made in the
marina  quay next to the new tramway  and ferry traffic improvement (the ramp of
berth  5). Major works  on the  icebreaker Botnica  included dry docking and ice
class upgrade. Significant investments in the Ferry segment were the replacement
of  the cooling systems of the vessels' main engines and acquisition of critical
equipment to ensure smooth operation of ferry traffic.
Investments  of the fourth quarter amounted  to EUR 9.8 million, EUR 8.4 million
more  than a year earlier. The high  volume of investments in the fourth quarter
was driven by the construction of the new quay in Paldiski.

Interim condensed consolidated statement of financial position:

                                                    Restated*    Restated*
  in thousands of euros               31.12.2023   31.12.2022   01.01.2022
---------------------------------------------------------------------------
  ASSETS

  Current assets

  Cash and cash equivalents               29,733       44,387       34,840

  Trade and other receivables             12,118        7,477       14,151

  Inventories                                550          749          399

  Non-current assets held for sale             0          100            0

  Total current assets                    42,401       52,713       49,390

  Non-current assets

  Investments in associate                 2,177        2,099        1,559

  Other long-term receivables                163          303          896

  Investment properties                   14,069       14,069       14,069

  Property, plant and equipment          545,271      550,310      561,494

  Intangible assets                        2,083        1,735        2,130

  Total non-current assets               563,763      568,516      580,148
---------------------------------------------------------------------------
  Total assets                           606,164      621,229      629,538
---------------------------------------------------------------------------
  LIABILITIES

  Current liabilities

  Loans and borrowings                    13,916       15,916       15,916

  Provisions                               1,311        2 013        1,572

  Government grants                        7,344        8,578        1,223

  Taxes payable                              876        1,060          890

  Trade and other payables                11,407        9,832       10,348

  Contract liabilities                    34,854       37,399       29,949
---------------------------------------------------------------------------
  Non-current liabilities

  Loans and borrowings                   157,566      171,482      187,398

  Government grants                       33,075       30,156       29,835

  Other payables                           3,010        1,216        1,461

  Contract liabilities                   193,651      202,854      218,694
---------------------------------------------------------------------------
  Total non-current liabilities          228,505      240,253      248,643
---------------------------------------------------------------------------
  EQUITY

  Share capital at par value             263,000      263,000      263,000

  Share premium                           44,478       44,478       44,478

  Statutory capital reserve               22,858       22,115       21,271

  Retained earnings (prior periods)       31,441       25,791       52,146

  Profit for the period                   15,882       25,592            0
---------------------------------------------------------------------------
  Total equity                           377,659      380,976      380,895
---------------------------------------------------------------------------
  Total liabilities and equity           606,164      621,229      629,538
---------------------------------------------------------------------------

*  Based on the results of an additional analysis carried out in 2023, the Group
concluded  that properties (land plots)  not is use, which  used to be accounted
for as items of property, plant and equipment, meet the definition of investment
property  and ought to  be classified as  such. Accordingly, the properties were
reclassified  to  investment  properties  in  2023 and the opening balances were
restated to ensure comparability.

Interim condensed consolidated income statement



 in thousands of euros                         Q4 2023 Q4 2022    2023    2022
------------------------------------------------------------------------------


 Revenue                                        28,030  28,243 116,646 121,703

 Other income                                      977     301   2,208   1,441

 Operating expenses                            -10,570 -12,152 -42,548 -43,418

 Personnel expenses                             -6,984  -6,955 -25,214 -23,165

 Depreciation, amortisation and impairment      -6,033  -6,609 -25,389 -25,312

 Other expenses                                   -793    -213  -1,073    -462

 Operating profit                                4,627   2,615  24,630  30,787
------------------------------------------------------------------------------


 Finance income and costs

 Finance income                                    320     119   1,237     216

 Finance costs                                  -2,132  -1,002  -7,435  -2,013

 Finance costs - net                            -1,812    -883  -6,198  -1,797
------------------------------------------------------------------------------


 Share of profit of an associate accounted
 for under the equity method                        39     -19     435     795

 Profit before income tax                        2,854   1,713  18,867  29,785
------------------------------------------------------------------------------


 Income tax expense                                  0     -82  -2,985  -4,193

 Profit for the period                           2,854   1,631  15,882  25,592
------------------------------------------------------------------------------
 Basic earnings and diluted earnings per share
 (in euros)                                       0.01    0.01    0.06    0.10
------------------------------------------------------------------------------

Condensed Consolidated Statement of Cash Flows:



  in thousands of euros                                         2023      2022
-------------------------------------------------------------------------------


  Cash receipts from sale of goods and services              124,344   130,099

  Cash receipts related to other income                          272       188

  Payments to suppliers                                      -52,911   -53,548

  Payments to and on behalf of employees                     -24,165   -19,899

  Payments for other expenses                                   -317      -368

  Income tax paid on dividends                                -3,264    -4,335

  Cash receipts from sale of goods and services               43,959    52,137
-------------------------------------------------------------------------------


  Purchases of property, plant and equipment                 -17,946   -15,189

  Purchases of intangible assets                                -799      -455

  Proceeds from sale of property, plant and equipment             28       191

  Proceeds from government grants related to assets                0    15,001

  Dividends received                                             357       255

  Interest received                                            1,179        83

  Cash used in investing activities                          -17,181      -114
-------------------------------------------------------------------------------


  Redemption of bonds                                         -7,650    -7,650

  Repayments of loans received                                -8,266    -8,266

  Dividends paid                                             -19,012   -25,287

  Interest paid                                               -6,494    -1,264

  Redemption of bonds                                            -10        -9

  In financing activity(s)
  Cash from/used in financing activities                     -41,432   -42,476
-------------------------------------------------------------------------------


  TOTAL CASH FLOW                                            14,654    9,547
-------------------------------------------------------------------------------


  Cash and cash equivalents at the beginning of the period    44,387    34,840

  Change in money and money equivalents                      -14,654   9,547

  Cash and cash equivalents at the end of the period          29,733    44,387
-------------------------------------------------------------------------------

Tallinna  Sadam is one of the largest cargo- and passenger port complexes in the
Baltic Sea region. 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  offshore services in  Estonia and 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 53 42 6591
E-mail: [email protected] (mailto:[email protected])