EIMSKIP: Results for Q3 2023
07 Noviembre 2023 - 11:13AM
EIMSKIP: Results for Q3 2023
HIGHLIGHTS OF THE QUARTER
- A good quarter with solid performance of most business units,
although marked by a sharp decline in Trans-Atlantic rates compared
to the previous year.
- Liner services with a fairly good quarter despite abnormal
level of operational incidents for a single quarter.
- Continued robust imports to Iceland on the back of high
economic activity.
- Export Iceland picked up as expected in the latter half of the
quarter with increased fisheries and salmon harvesting.
- Total transformation in Trans-Atlantic rates from previous
year, combined with traditional seasonality in Trans-Atlantic
volume, main driver behind drop in EBITDA YoY.
- Serious incidents with two container vessels temporarily
reduced the sailing system capacity and balance, adversely
affecting both revenue and cost.
- International forwarding with a solid quarter in challenging
global market, delivering a strong EBITDA margin on back of niche
focus on reefer logistics.
- Good quarter for Domestic Iceland with high activity in all
business units and improved balance in the trucking system compared
to recent quarters.
- Record cruise season concluded in Iceland and Greenland with
good financial contribution from port agency and marine logistics
activities.
- Revenue amounting to EUR 202.0m and operating expenses
amounting to EUR 167.5m, both decreasing by 31% from previous year.
Main drivers behind decrease in revenue and expenses are
significantly lower global freight rates and some decrease in liner
volume
- Salary expenses increased by EUR 1.7 million or 5.1% due to
general wage increases, however partly offset by a positive
currency effect of EUR 0.7 million.
- EBITDA amounting to EUR 34.5m, a decrease of EUR 15.1m from a
record quarter in the previous year, however EBITDA margin remains
on the same level.
- Share of profit of affiliates amounted to EUR 4.4 million in
the quarter, an increase of EUR 0.5 million from last year.
- Net earnings amounted to EUR 16.6 million compared to Net
earnings of EUR 28.1 million for the same period in 2022.
- Continued good cash flow, with net cash from operating
activities amounting to EUR 29.3 million, down by EUR 7.9 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 47.1 million compared to EUR 46.6 million at end of same
quarter last year.
- Total maintenance CAPEX and new investments on track and in
line with plan for the first nine months and amounted to EUR 34.0
million compared to EUR 20.6 million for the first nine months last
year.
HIGHLIGHTS OF 9M 2023
RESULTS
- Revenue amounted to EUR 626 million, a decrease of
EUR 189 million or 23% when compared with the same period in
2022.
- Total expenses amounted to EUR 525 million, a
decrease of EUR 165 million compared to expenses for same
period last year.
- EBITDA amounted to EUR 101 million compared to EBITDA
of EUR 125 million in the same period last year, a decrease
of EUR 24 million.
- Net earnings amounted to EUR 46.1 million, compared to Net
earnings of EUR 63.5 million in the same period of 2022.
VILHELM MÁR THORSTEINSSON,
CEO
“We delivered good results in the quarter, in a
global shipping market that has normalized after an extraordinary
period. The market changes from last year are reflected in a
substantial decrease in both revenue and operating expenses.
Despite this substantial change in global market conditions, we
have managed to maintain our margins by placing our focus on
excellent customer service, efficient cost control, active
procurement, and proactive sales. The result is an EBITDA of EUR
35.4 million, which is a material decrease from EUR 49.6 million in
the same quarter last year, but we were well aware that the
earnings level that we saw last year was not sustainable. However,
if we look further back and compare our results to pre-covid level,
it is evident that our financial performance has reached a new and
improved level.
It is challenging to operate a shipping line in
the harsh conditions of the North-Atlantic and various operational
incidents caused by weather conditions are unfortunately a part of
our daily operations. We have therefore not made a habit out of
informing the market about specific incidents. This quarter was,
however, marked by abnormal level of operational challenges when we
had serious malfunction in two key vessels at the same time as we
had two other vessels scheduled to dry-dock. This temporarily
reduced the capacity and balance of our sailing system, affected
the service level and caused some lost revenues as well as
increased cost associated with shuffling vessels and container
cost.
If we look past these operational hurdles, we
were generally content with the volume in our liner system, with
the exception of Trans-Atlantic volume, where we witnessed a
combination of contraction in the market along with less import to
the USA and a traditional slowdown for exports out of Europe during
the summer holiday season, which we did not see in the past two
years due to backlog of volume in covid. Import to Iceland remained
on a robust level in the quarter and exports out of Iceland picked
up in the quarter after a slow summer along with increased
fisheries and salmon harvesting. Volume in the Faroe Islands was
acceptable although the import market has reduced since last year
and an anticipated growth in salmon harvesting did not materialize.
In Norway we saw a prolonged slowdown in whitefish exports but we
have recently started to see volumes pick up in the fourth
quarter.
Our international forwarding business performed
well and delivered a strong margin despite significant changes in
market conditions, with global freight rates on a much lower level
than same time last year. Our domestic trucking and warehousing
services in Iceland delivered strong results in the quarter on back
of high economic activity and improved balance in the trucking
system alongside increased fisheries. We continue to develop port
agency and marine logistics services in our home market and
benefitted from a record cruise season both in Iceland and
Greenland this year.
Although we see rising uncertainty in the global
economy, with signs of stagnant growth and rising geopolitical
conflict, we are generally positive for the coming months. Under
such conditions, we as Eimskip are well positioned as a niche
player in the North-Atlantic, servicing our home market of wealthy
economies that are highly dependent on import and export. In
Iceland we anticipate strong export ahead with good fisheries,
steady salmon production and growing volume in exports of waste for
recycling in Scandinavia and Mainland Europe. Domestic services in
Iceland are also on a good track and our subsidiary Sæferðir
recently signed a new agreement regarding ferry operations in
Breiðafjörður until end of 2024. In Faroe Islands the outlook is
generally stable although we have some hopes for a good herring
season which could add to the volume in Q4. Trans-Atlantic volume
has picked somewhat up since end of third quarter and rates seem to
be leveling off after a sharp decline from the beginning of the
year. In our international forwarding business, we have a niche
status with our specialty in reefer logistics, which are generally
more complex, higher paid and more resilient against economic
cycles than dry cargo logistics.”
INVESTOR MEETING 8 NOVEMBER
2023
The Board of Directors of Eimskipafélag Íslands
hf. approved the Company’s Condensed Consolidated Interim Financial
Statements for 1 January to 30 September 2023 at its meeting on 7
November 2023. Investors and market participants are invited to a
meeting on Wednesday 8 November 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 Q3 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 Statement
Eimskip Q3 2023
- Eimskip - Q3 2023 Financial Results - Investor
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