Market announcement

Title

On the impact of COVID-19 to the operations and results of Tallinna Sadam

Message

In  the context of the COVID-19 pandemic, various measures have been established
in  European countries to prevent the spread of the virus. Among others, Estonia
and  Finland have both proclaimed state of  emergency and closed the borders for
foreign  nationals' entrance. Passenger  traffic between Estonia  and Finland is
only  allowed for returning citizens  or in certain special  cases. There are no
national restrictions on freight transport. Due to the decline in demand related
to  the restrictions, passenger operators have made several adjustments to their
schedules.

The  following information is subject to change  at any time and is not intended
to be a long-term guidance.

Today,  there are daily trips on  the Tallinn-Helsinki route served by Tallink's
M/S  Megastar (three visits per day), Viking  Line's vessel M/S Viking XPRS (one
visit  per day) and Eckerö  Line's vessel M/S Finlandia  (three visits per day).
Compared to the pre-pandemic period, the route has an average of five ship calls
per  day less. Tallink's ships M/S Silja  Europa, which previously made one call
per  day and M/S Star, which previously made  three calls per day, are away from
the line. Viking Line's M/S Viking XPRS has reduced the number of calls from two
per  day to one. In  addition to the significant  decrease in the number of ship
calls,  the number of passengers on  the Tallinn-Helsinki route has decreased by
almost half in March.

Due  to the temporarily restored border control procedures, Tallink's vessel M/S
Sea  Wind serving the  Muuga-Vuosaari line departs  from Tallinn Old City Harbor
with the same frequency (two visits per day) but has temporarily stopped serving
passengers   and  carries  only  freight.  Eckerö  Line's  M/S  Finbo  Cargo  is
temporarily  away  from  the  line  due  to  maintenance work and is expected to
continue to carry freight on the line from 6 April 2020.

Tallinn-Stockholm  line  is  temporarily  closed  as  of  15 March,  which means
cancellation  of one ship call  per day. The freight  of the line is diverted to
Paldiski-Kapellskär line, which is served by Tallink's ship M/S Regal Star.

In  connection with the queues at the  Polish border and to ensure the operation
of  road transport, a  new line Paldiski-Sassnitz  (from Estonia to Germany) has
been  opened for freight  traffic and passengers  with vehicles from 19 March to
18 April  served  by  Tallink's  M/S  Star,  which previously sailed on Tallinn-
Helsinki  line. The  vessel is  scheduled to  visit Paldiski  South Harbor three
times a week.

The  ban on cruise ship calls until  1 May directly concerns the cancellation of
four  scheduled ship calls. As of today,  cruise companies have also informed us
of  cancellations of  few other  calls scheduled  for May  but given  the global
evolution  of  the  COVID-19 pandemic,  we  anticipate  that  there will be many
cancellations  this cruise season. The ban on  cruise ship calls also applies to
Moby  SPL M/S Princess Anastasia sailing on the St. Petersburg-Helsinki-Tallinn-
Stockholm-Helsinki-St.  Petersburg line,  which was  originally planned to start
traffic  in early  April and  make one  ship call  per week  to Tallinn Old City
Harbour.

There  are  no  significant  changes  in  the schedules of regular freight lines
vessels  (containers and ro-ro)  due to COVID-19 and  voyages continue as before
the  crisis. Also, there has been no  significant change in bulk cargo handling.
Therefore,  the COVID-19 pandemic has so far not had a significant impact on the
revenue of the Cargo Harbours segment of Tallinna Sadam.

As   freight   and  related  ship  calls  continue,  the  COVID-19 pandemic  and
restrictions  to prevent it have so far  mainly reduced the number of passengers
and  ship calls  of Tallinn  Old City  Harbour, a  Passenger Harbours segment of
Tallinna Sadam. In the Passenger Harbours segment, the decrease in the number of
passengers  will reduce the  revenue from passenger  charges and decrease in the
number of ship calls will reduce the revenue from vessel charges.

The  domestic  ferry  lines  of  Saaremaa  and  Hiiumaa operated by TS Laevad, a
subsidiary  of Tallinna Sadam, will continue to  operate on a sparse schedule in
order  to  ensure  the  island  residents'  return  home and continuity of cargo
traffic.   The   management  estimates  that  the  changes  resulting  from  the
restrictions  will not have a significant impact on Tallinna Sadam, as the fixed
fee,  which is irrespective  of the number  of voyages, stipulated  in the ferry
agreement  covers all fixed costs of the vessels and their operations (including
salaries of the crew) and ensures planned profitability.

The multifunctional icebreaker Botnica, operated by TS Shipping, a subsidiary of
the  Port of Tallinn, will continue providing the regular icebreaking service to
the  Estonian Maritime Administration until 20 April 2020. Baffinland Iron Mines
Corporation's contract for summer work in Northern Canada continues to be valid.
So  far, Botnica's operations and revenues have  not been affected by the COVID-
19 pandemic.

The  national measures  taken by  the states  to prevent COVID-19 are constantly
being  updated and  changed and  the situation  is changing  on daily basis. The
management  estimates that the impact of the COVID-19 pandemic on Tallinna Sadam
will  be  significant  due  to  passenger  traffic  disruptions  and the general
economic  downturn following  the disruption  of the  virus, but  the extent and
duration  of this impact cannot be objectively estimated at this point. In order
to  compensate for the decrease  in revenues, we will  critically review all the
Group's expenses in the changed circumstances, but due to the high proportion of
fixed  costs,  the  decline  in  the  profitability of the Group is unavoidable,
especially  in the Passenger Harbours  segment. To improve the  cash flow of the
company,  we review and,  if necessary, re-evaluate  all planned investments and
postpone them whenever possible. At the time being, the Group does not intend to
suspend investments already in progress.

Tallinna  Sadam shall take  the necessary measures  and cooperate fully with the
authorities  to achieve  a common  global goal  of preventing  the spread of the
virus and protecting human life and health. We have made several changes to work
processes  to ensure the continuity  of the service. Office  workers work in the
home  office during the spread  of the virus. The  work of operational staff has
been  reorganized to  minimize contact  with each  other and outsiders. Personal
protective equipment is provided to all frontline personnel.

Tallinna  Sadam is one of the largest cargo- and passenger port complexes in the
Baltic  Sea region,  which in  2019 serviced 10.64 million  passengers and 19.9
million  tons of cargo. 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.  According  to unaudited financial
results,  Tallinna  Sadam  group's  sales  in  2019 totaled  EUR  130.5 million,
adjusted EBITDA EUR 74.3 million and net profit EUR 44.4 million.


Valdo Kalm
Chairman of the Management Board

Additional information:

Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
[email protected] (mailto:[email protected])