TALLINN - Hansapank has estimated that the Finnish shipping concern Silja Line is worth 400-500 million euros based on a comparison with Tallink and the two companies' equity and profit figures for 2004.
That would make the Finnish company, which is rumored to be up for sale, worth less than the four brand-new ships Tallink intends to put into operation in the next few years.
"The best way to judge the value of Silja Line, like any other company, is on the basis of future cash flows, but it's difficult to do this by the relatively scant information available at present," analyst Sander Danil said.
In his words, the Finnish shipper was operating at a loss in the first nine months of 2005, but the firm's performance improved significantly in the fourth quarter.
"Understandably, Silja's results have, similar to those of other shipping companies operating in the Baltic Sea, been affected by the disappearance of tax-free trade on the Tallinn-Helsinki route, a drop in ticket prices due to competition and rising fuel prices," he said.
Tallink executives have expressed an interest in acquiring Silja Line should the latter go up for sale. Silja Line officials, however, have so far denied that any sale was planned.
Should the two shippers merge, that would leave Tallink/Silja and Viking Lines operating the lucrative routes between Tallinn, Helsinki and Stockholm.
Tallink will soon launch regular trips between Riga and Stockholm.
Silja Line has at present a fleet of 12 ships, or as many as Tallink, but the newest of them was built in 1993. In 2002, Tallink put into operation the Romantika.
Tallink has pledged to bring to the market four new passenger ships in 2005-2008, the first of which, the Galaxy, should be ready this spring.
The combined cost of the vessels is nearly 550 million euros.