Eimskip: Results for Q2 2023
15 Agosto 2023 - 10:42AM
Eimskip: Results for Q2 2023
HIGHLIGHTS OF QUARTER TWO
- Solid results with most business units performing well, despite
a significant change in international market conditions compared to
the previous year resulting in an anticipated decrease from the
strong results last year.
- Liner services continue to deliver sound results on back of
excellent service and strong business model.
- Continued strong import to Iceland and robust activity in the
Faroe Islands and Norway.
- Export Iceland on a lower level than last year due to external
factors such as significantly less salmon harvesting, less fishing
activity and reduced industrial output.
- Domestic Iceland results below same period last year, mainly
due to inflationary pressure and salary increases.
- Trans-Atlantic rates continued to decrease in the quarter and
volume was down by 18% YoY.
- Revenue in the quarter amounted to EUR 209.5 million, a
decrease of EUR 73.6 million or 26% when compared with Q2 2022,
mainly caused by lower global freight rates.
- Expenses amounted to EUR 175.2 million, a decrease of EUR 63.2
million or 26.5% from last year, mainly driven by a significant
decrease in cost of 3rd party services.
- Salary expenses increased by EUR 1.9 million or 5.3% due to
increase in FTEs and general wage increases, however partly offset
by a positive currency effect of EUR 2.0 million.
- EBITDA in the quarter amounted to EUR 34.3 million and was down
by EUR 10.4 million or 23.3%, compared to a record second quarter
last year.
- EBIT in the quarter amounted to EUR 19.4 million which is a
decrease of EUR 10.4 million or 34.9%.
- Share of profit of affiliates amounted to EUR 3.8 million in
the quarter, a marginal increase of EUR 0.2 million from last
year.
- Net earnings amounted to EUR 17 million compared to Net
earnings of EUR 24.9 million for the same period in 2022.
- Continued good cash flow, with net cash from operating
activities amounting to EUR 22.2 million, a decrease of EUR 9.1
million compared with same quarter last year, mainly driven by
change in EBITDA.
- Strong liquidity at the end of the period with a cash position
of EUR 46.3 million compared to EUR 36.9 million at end of same
quarter last year.
- A dividend of EUR 22.7 million and share capital reduction of
EUR 12.7 million were paid during the quarter.
- Total maintenance CAPEX and new investments on track and in
line with plan for the first six months and amounted to EUR 17.1
million compared to EUR 9.5 million for the first six months last
year.
HIGHLIGHTS OF 6M 2023
RESULTS
- Revenue amounted to EUR 424.1 million, a decrease of
EUR 98.7 million or 18.9% when compared with the same period
in 2022.
- Total expenses amounted to EUR 357.9 million, a
decrease of EUR 89.7 million compared to expenses for same
period last year.
- EBITDA amounted to EUR 66.2 million compared to
EBITDA of EUR 75.1 million in the same period last year, a decrease
of EUR 9 million. EBIT amounted to EUR 35.2 million
compared to EBIT of EUR 44.9 million for the same period last
year.
- Net earnings amounted to EUR 29.5 million, compared to Net
earnings of EUR 35.4 million in the same period of 2022.
VILHELM MÁR THORSTEINSSON,
CEO
“The results in the second quarter are solid,
despite an anticipated decrease from previous year, and confirm
that the changes that we have made in recent years have been
successful. EBITDA amounted to EUR 34.3 million, down from EUR 44.8
million in the same period last year which was a record second
quarter. The streamlining measures that were taken in 2019-2020,
followed by implementation of agile revenue management, improved
our business model and created a basis for sustaining healthy
profitability in our extensive operations internationally. On the
other hand, in the last twelve months we have experienced a swift
change in the global shipping market, where freight rates decreased
substantially before stabilizing at current level, after the
extraordinary rate increases driven by the supply chain disruptions
of the Covid period, mainly affecting our international forwarding
operations as well as the Trans-Atlantic liner services. This
change in global environment has reduced the overall cost of
transportation for our customers which is positive.
Our liner services delivered sound results in
the quarter, despite a slight decrease in volume. Import to Iceland
has remained strong on back of a robust economy while export volume
was on a lower level than last year, due to various external
factors such as lower salmon production, less fishing activity and
reduced industrial output. We are pleased with the outcome in Faroe
Islands where activity has been on a good level for the better part
of the year despite reduced output of farmed salmon. Our
Trans-Atlantic services were affected by the global market
conditions where we saw rates decline sharply and volume decrease
from previous year while the US economy cooled down and
international shipping lines shifted capacity from Asian trade
lanes over to the Trans-Atlantic routes. Eimskip’s international
forwarding services performed quite well in the quarter, despite an
anticipated decrease driven by the change in the global market
conditions and there was a slight decrease in volume while margins
were on a strong level.
The shipping industry will be included in the EU
Emissions Trading System (EU ETS) as of 2024. The purpose and goals
of the regulation play an important role when it comes to reducing
emissions from the industry. We have been preparing for this
regulation for some time now, in order to reduce emissions and
mitigate the impact it will inevitably have on cost of
transportation. In recent years we have taken various initiatives
to reduce emissions from our operations, such as investing in
larger and newer vessels which are more fuel-efficient than the
older vessels replaced, electrification of harbor cranes, the
construction of a shore connection for container vessels in
Sundahöfn and adjustments to our sailing system to optimize routes
and operations, to name a few. The mitigation measures that we are
already working on include further adjustments to the sailing
system with the aim of reducing sailed miles and bunker
consumption, further slow steaming where possible, increasing port
efficiency to shorten berth time and exploring alternative fuel
options. If we look further ahead, we aim to reduce emission even
further and meet our ambitious Sustainability goals, by invest in
new and more fuel-efficient vessels, hopefully running on
alternative green fuel.
We firmly believe that the foundation for
performance is based on employee satisfaction which is why we put
strong emphasis on employee wellness and development, both in our
strategy and daily operations. We conduct annual engagement surveys
to monitor our employees’ engagement, which is one of our most
important KPI’s. This year’s survey was conducted in May and we
were pleased with the results which show that our engagement level
is not only increasing from previous year, but also that we are
doing better on this measure that international companies in
similar sectors.
The outlook for coming quarters is generally
stable, where a lot of the uncertainty that has characterized the
past year has faded out as the global shipping market has
stabilized and the economic and geo-political turmoil following the
war in Ukraine has somewhat reduced. Our home market in the
North-Atlantic is quite robust, where we are experiencing a record
tourist season in Iceland, the outlook for the salmon farming
industry both in Iceland and Faroe Islands is promising, and we
expect our reefer liner services in Norway to pick up in the fall
after a traditional slow season during the summer months. The
Trans-Atlantic rates have continued to decrease in Q3 which will
inevitably affect our revenue in this trade lane, while the volume
outlook remains solid thanks to our unique position as the only
international carrier with direct services from Europe to
Newfoundland and Portland, Maine. There is generally neutral
outlook in our international forwarding operations in a market
showing signs of stabilization.”
INVESTOR MEETING 16 AUGUST
2023
The Board of Directors of Eimskipafélag Íslands
hf. approved the Company’s Condensed Consolidated Interim Financial
Statements for 1 January to 30 June 2023 at its meeting on 15
August 2023. Investors and market participants are invited to a
meeting on Wednesday 16 August 2023 at 8:30 a.m. at the Company’s
headquarters, Sundabakki 2, second floor. The meeting will also be
webcasted live in Icelandic at www.eimskip.com/investors. Vilhelm
Már Thorsteinsson, CEO and María Björk Einarsdóttir, CFO, will
present the Company’s financial results for Q2 2023. Investor
presentation and a recording of the meeting will be available on
the Company’s investor relations website.
FURTHER INFORMATION
María Björk Einarsdóttir, CFO, tel: +354 774
0604, email: investors@eimskip.com
Guðbjörg Birna Björnsdóttir, Head of Treasury
and Investor Relations, tel: +354 844 4752, email:
investors@eimskip.com
FORWARD-LOOKING STATEMENTS
Statements contained in this financial press release that refer
to the Company’s estimated or anticipated future results or future
activities are forward-looking statements which reflect the
company’s current analysis of existing trends, information and
plans. These forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results to differ
materially depending on factors such as the availability of
resources, the timing and effect of regulatory actions and other
factors. Eimskip undertakes no obligation and does not intend to
update these forward-looking statements to reflect events or
circumstances occurring after this press release. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
- Eimskip - Condensed Consolidated Interim Financial Statements
1H2023
- Eimskip - Q2 2023 Financial Results - Investor
Presentation
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