Market announcement

Title

AS Tallinna Sadam financial results for 2020 Q3 and 9 months

Message

The  impact  of  the  COVID-19 pandemic  continued  in  the third quarter, which
resulted  in a decrease  in revenue, adjusted  EBITDA and profit  of AS Tallinna
Sadam  (hereafter: "the Group").  In Q3 2020, the  revenue amounted to EUR 31.8
million  decreasing  by  18.9% compared  to  the  same period previous year. The
adjusted  EBITDA  was  EUR  19.9 million  decreasing  by  16.2% and profit of Q3
amounted to EUR 13.6 million decreasing by 23.1%. At the same time, the adjusted
EBITDA  margin increased by 2.1 percentage points  and the volume of investments
by almost 50% to EUR 11.5 million.

The results of Q3 were mostly affected by the restrictions on passenger movement
due  to the  COVID-19 pandemic, which  were significantly  milder in  the summer
period  than in Q2. According to Valdo Kalm, Chairman of the Management Board of
Tallinna  Sadam, a diverse business model  significantly mitigates the impact of
the  pandemic  on  the  Group's  financial  results.  Kalm  noted that the cargo
harbours segment continued to grow strongly, but due to competition, revenue per
tonne decreased somewhat, especially for liquid bulk. Ferries and the icebreaker
Botnica, or the shipping business, keeps a stable course.

"Passenger  business is  currently in  decline, but  we will  continue to invest
heavily  in the Old City Harbour passenger  port, because we believe that in the
long run the impact of the pandemic will be temporary and passenger traffic will
recover in the coming years," said Kalm.

The   impact  of  the  cost-cutting  measures  implemented  in  Q2  took  effect
predominantly from Q3. "Continuously strong positive EBITDA and secure cash flow
will  enable us to ensure the company's liquidity and profitability and meet the
dividend  policy, i.e.  to pay  at least  70% of the  previous year's  profit as
dividends in 2021," Kalm confirmed.

The  members of  the Management  Board of  Tallinna Sadam,  Valdo Kalm and Marko
Raid,  will present the Group's financial results  at an investor webinar on the
Microsoft  Teams platform on 13 November at 11:00 EET, where you can participate
via           this          link          (https://teams.microsoft.com/l/meetup-
join/19%3ameeting_OGRmM2E0YzItZWI2OC00MTUyLWEwMmEtOTUzYWI5MTQxZTEx%40thread.v2/0
?context=%7b%22Tid%22%3a%223c572f71-c808-4685-aa00-
2ca59a11c7e2%22%2c%22Oid%22%3a%2205dd6daf-6c95-4d51-972d-92b046adff47%22%2c%22Is
BroadcastMeeting%22%3atrue%7d). The webinar will be held in English.

Key figures (in million EUR):

                              Q3      Q3      +/-      9M      9M      +/-

                            2020    2019             2020    2019

  Revenue                   31.8    39.2   -18.9%    82.1   100.5   -18.4%

  Adjusted EBITDA           19.9    23.7   -16.2%    46.3    59.5   -22.1%

  Adjusted EBITDA margin   62.7%   60.6%      2.1   56.4%   59.1%     -2.7

  Operating profit          14.2    17.9   -20.6%    29.3    42.6   -31.2%

  Income tax                   0       0        -    -4.9    -5.8   -14.8%

  Profit for the period     13.6    17.7   -23.1%    22.8    35.9   -36.6%

  Investments               11.5     7.7    49.1%    28.9    18.8    53.8%


                          30.09.2020   31.12.2019     +/-

  Total assets                 622.3        625.5   -0.5%

  Interest bearing debt        193.4        172.7   12.0%

  Other liabilities            369.7        377.0   -1.9%

  Equity                       263.0        263.0    0.0%

  Number of shares             622.3        625.5   -0.5%

Major events in Q3:

  * The impact of the COVID-19 pandemic continued
  * Dividend payment in the amount of EUR 30.2 million
  * Completion of the reconstruction of passenger terminal D.
  * Connecting the first ship to onshore power supply
  * Hybrid ferry Tõll started servicing passengers on the Virtsu-Kuivastu route
  * Conclusion of the design contract for Rail Baltica Muuga freight terminal
  * Completion of the second stage of dry bulk operator PK Terminal development
    in Muuga
  * Extension of the term of office of the members of the Management Board Valdo
    Kalm and Marko Raid for a new 3-year period
  * Changes in the Management Board of OÜ TS Laevad

Revenue
Revenue  for the nine  months of 2020 decreased  by EUR 18.5 million, i.e. 18%,
year  on year  to EUR  82.1 million. The  decrease was  mainly influenced by the
decline  in vessel dues and passenger fees from international ferries and cruise
ships  due  to  restrictions  on  cross-border  passenger  movements  imposed in
connection  with the COVID-19 pandemic. In terms  of segments, the largest year-
on-year change in nine-month revenue occurred in the Passenger harbours segment,
followed by the Ferry segment and the Cargo harbours segment. The revenue of the
segment Other did not change. In Q3, revenue increased year-on-year in the Cargo
harbours segment and decreased in other segments.

The revenue of the Passenger harbours segment decreased by 41% in Q3 and by 43%
in  the first 9 months due to the decrease in the number of passenger and vessel
calls due to the COVID-19 pandemic (starting from Q2).
The  revenue of the Cargo harbours segment  increased by 3% year on year. In the
first  9 months,  the  revenue  of  Cargo  harbours  decreased  by 2% due to the
combined  effect of  various items  of revenue,  mostly affected by the brokered
revenue from electricity and cargo charges. Cargo volume increased primarily due
to  liquid bulk, but the increase in the volume of liquid bulk with lower charge
did  not cover the effect of the decrease  in the volume of other types of cargo
in total cargo charge revenue.
The  revenue of the Ferry  segment decreased slightly because  the state did not
order  an additional vessel for extra trips during the summer season. Instead, a
smaller  number of additional  trips was made  by the existing replacement ferry
Regula.  The decline was partly offset by a  rise in fee rates, which are linked
to the Estonian consumer and fuel price indices and wage inflation.
The  revenue of the segment Other remained  stable. The number of days for which
the icebreaker Botnica was chartered out did not change. The number of days with
lower  charter  rates  was  somewhat  higher  but  the  effect was offset by the
indexation  of the contractual fees to  the Estonian and Canadian consumer price
indices.

EBITDA
Adjusted  EBITDA for Q3 decreased by  EUR 3.8 million year-on-year mostly due to
the  Passenger harbours segment  (EUR -5.5 million)  but also the Cargo harbours
segment  (EUR  +1.9 million).  Adjusted  EBITDA  margin  decreased from 59.1% to
56.4% whereas  in  Q3  the  margin  increased  from 60.6% to 62.7%. In 9 months,
adjusted EBITDA was EUR 46.3 million, decreasing by EUR 13.1 million compared to
the same period last year.

Profit
The profit of Q3 (EUR 13.6 million) fell short of the profit for the comparative
period  by EUR 4.1 million. Profit for  the first 9 months was EUR 22.8 million,
which  was  EUR  13.2 million  less  year-on-year.  Profit  decreased  more than
operating  profit because  the Group's  equity-accounted associate  Green Marine
incurred a loss.

Investments
In   the   first   9 months   of  2020, the  Group  invested  EUR  28.9 million,
significantly  more  than  in  the  same  period  last  year (EUR 18.8 million).
Investments  were mostly  related were  mostly related  to the construction of a
cruise  terminal, phase  2 of the  reconstruction of  passenger terminal  D, the
installation  of automated mooring systems and the beginning of the construction
of  a multi-storey  car park  at the  Old City  Harbour. Investments made in the
third quarter totalled EUR 11.5 million.

Interim condensed consolidated statement of financial position:

  In thousands of euros               30.09.2020   31.12.2019
--------------------------------------------------------------
  ASSETS



  Current assets

  Cash and cash equivalents               18,109       35,183

  Trade and other receivables             13,554       10,614

  Contract assets                          1,072            0

  Inventories                                216          408

  Non-current assets held for sale            98          142
--------------------------------------------------------------
  Total current assets                    33,049       46,347
--------------------------------------------------------------


  Non-current assets

  Investments in associates                1,278        1,609

  Other long-term receivables                243          294

  Property, plant and equipment          585,696      575,267

  Intangible assets                        1,985        2,015

  Total non-current assets               589,202      579,185
--------------------------------------------------------------


  Total assets                           622,251      625,532
--------------------------------------------------------------


  LIABILITIES



  Current liabilities

  Loans and borrowings                    16,766       16,266

  Derivative financial instruments           139          243

  Provisions                                 973        1,915

  Government grants                        1,845          193

  Taxes payable                            1,491          893

  Trade and other payables                 8,813       11,722

  Contract liabilities                     1,912           33
--------------------------------------------------------------
  Total current liabilities               31,939       31,265
--------------------------------------------------------------


  Non-current liabilities

  Loans and borrowings                   194,697      191,580

  Government grants                       25,024       24,754

  Other payables                              16            2

  Contract liabilities                       903          913

  Total non-current liabilities          220,640      217,249
--------------------------------------------------------------


  Total liabilities                      252,579      248,514
--------------------------------------------------------------


  EQUITY

  Share capital at par value             263,000      263,000

  Share premium                           44,478       44,478

  Statutory capital reserve               20,262       18,520

  Hedge reserve                             -139         -243

  Retained earnings (prior periods)       19,276        6,859

  Profit for the period                   22,795       44,404
--------------------------------------------------------------
  Total equity                           369,672      377,018
--------------------------------------------------------------


  Total liabilities and equity           622,251      625,532
--------------------------------------------------------------

Interim condensed consolidated statement of profit or loss:



 In thousands of euros                          Q3 2020 Q3 2019 9M 2020 9M 2019
-------------------------------------------------------------------------------


 Revenue                                         31,767  39,181  82,055 100,531

 Other income                                       823     209   2,793     789

 Operating expenses                              -7,744 -10,741 -23,281 -27,457

 Personnel expenses                              -4,581  -5,019 -14,065 -14,127

 Depreciation, amortisation and impairment       -5,983  -5,719 -17,895 -16,912

 Other expenses                                     -89     -44    -302    -226

 Operating profit                                14,193  17,867  29,305  42,598
-------------------------------------------------------------------------------


 Finance income and costs

 Finance income                                       5       2      29      29

 Finance costs                                     -482    -452  -1,295  -1,333

 Finance costs - net                               -477    -450  -1,266  -1,304
-------------------------------------------------------------------------------


 Share of profit of an associate accounted for
 under the equity method                            -72     331    -331     417

 Profit before income tax                        13,644  17,748  27,708  41,711
-------------------------------------------------------------------------------


 Income tax                                           0       0  -4,913  -5,764

 Profit/loss for the period                      13,644  17,748  22,795  35,947
-------------------------------------------------------------------------------
 Attributable to owners of the Parent            13,644  17,748  22,795  35,947
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
 Basic and diluted earnings per share (in
 euros)                                            0.05    0.07    0.09    0.14

 Basic and diluted earnings per share -
 continuing operations (in euros)                  0.05    0.07    0.09    0.14
-------------------------------------------------------------------------------

Interim condensed consolidated statement of cash flows:



  In thousands of euros                                  9M 2020   9M 2019
---------------------------------------------------------------------------


  Cash receipts from sale of goods and services           86,160   105,558

  Cash receipts related to other income                       31       156

  Payments to suppliers                                  -33,746   -34,030

  Payments to and on behalf of employees                 -11,758   -13,248

  Payments for other expenses                               -327      -299

  Income tax paid on dividends                            -4,913   -10,713

  Cash from operating activities                          35,447    47,424
---------------------------------------------------------------------------


  Purchases of property, plant and equipment             -28,134   -17,909

  Purchases of intangible assets                            -348      -360

  Proceeds from sale of property, plant and equipment      1,618        39

  Government grants received                               2,061         0

  Interest received                                           15        27

  Cash used in investing activities                      -24,788   -18,203
---------------------------------------------------------------------------
  Loans received                                          10,000         0

  Repayments of loans received                            -6,383    -6,383

  Dividends paid                                         -30,008   -34,970

  Interest paid                                           -1,331    -1,461

  Other payments related to financing activities             -11       -15

  Cash from/used in financing activities                 -27,733   -42,829
---------------------------------------------------------------------------
  NET CASH FLOW                                          -17,074   -13,608
---------------------------------------------------------------------------
  Cash and cash equivalents at beginning of the period    35,183    42,563

  Change in cash and cash equivalents                    -17,074   -13,608

  Cash and cash equivalents at end of the period          18,109    28,955
---------------------------------------------------------------------------

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  audited  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.

Additional information:

Marju Zirel
Head of Investor Relations
AS Tallinna Sadam
Tel. +372 53 426 591
[email protected] (mailto:[email protected])