TALLINN - Tallink, the Baltics' largest passenger shipper, posted a loss for the quarter ending Feb. 28, though the company managed a profit for the first six months of its financial year. Tallink registered a meager profit of 55.2 million kroons (3.5 million euros) for the six months ending Feb. 28 and a loss of 7.4 million kroons in the second quarter.
Sales were down from 1.8 billion kroons in the first half of the previous financial year to 1.78 billion this year.
Still, company executives put a positive spin on the financials.
"Tallink increased its net profit by 12 percent, which is a better result than had been forecast," CEO Enn Pant said. He noted significant events in the period, including the start of negotiations on the purchase of three Superfast ferries for German route operations and the Riga-Stockholm route.
Tallink estimates that three of its biggest projects 's the Riga and Germany routes and the launch of the brand new ferry Galaxy 's will add an additional increase to its consolidated sales by approximately 50 percent annually from the current base along with better profitability margins, according to Pant.
Analysts, meanwhile, have mixed emotions about the news.
"Tallink's revenues declined in the second quarter by 1.6 percent to 50.7 million euros, at the same time operating expenses increased significantly," Hansapank analyst Sander Danil told the Baltic News Service. "We believe that the increase in the price of fuel has a big role in it. Sales related expenses grew 5.2 percent, as a result of which gross profit declined to 6.6 million euros."
Danil said that, even though the company managed to significantly cut marketing costs in the second quarter, operating profit fell 63 percent to 1.1 million euros. "It looks like the managers are not satisfied with the sales results, because staff changes within the sales and marketing department have taken place lately," he said.
Arko Kurtmann of Suprema was satisfied with the results, since the second quarter is always toughest for the shipper. "The second quarter is the weakest for Tallink in the whole year and what matters is the second half-year, when the effect of the Riga-Stockholm route, the new Superfast ferries and the arrival of the Galaxy to the Finland-Estonia route will be there too," he said.
The ferry Superfast VII, one of Tallink's new acquisitions, started from the Finnish port of Hanko on April 12 and arrived in Rostock the following day after a stopover in the Estonian port of Paldiski.
"Superfast VII is already in operation and Superfast VIII will embark on the same route. Superfast IX is in the Port of Tallinn right now, but it, too, will start operating in the coming few days," spokesman Peter Roose said.
Before acquiring the ferries from the Greek Attica group, they sailed between Hanko and Rostock with Finnish crews without stopping in Paldiski. About 340 people are working on the ships in three shifts, all of them Estonian citizens, Roose said.
Tallink borrowed 280 million euros to finance the acquisitions. The three ships together cost 310 million euros.