FINANCIAL STATEMENTS 2010 - Finnlines
FINANCIAL STATEMENTS 2010 - Finnlines
FINANCIAL STATEMENTS 2010 - Finnlines
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BOARD OF DIRECTORS’ REPORT<br />
THE COMPANY<br />
<strong>Finnlines</strong> is one of the largest North-European liner shipping<br />
companies, providing sea transport services mainly in the Baltic<br />
and the North Sea. In addition to freight, the Company's ro-pax<br />
vessels carry passengers between five countries and eight ports.<br />
The Company also provides port services in Helsinki, Turku and<br />
Kotka. The company has subsidiaries or sales offices in Germa-<br />
ny, Belgium, the UK, Sweden, Denmark and Poland and a rep-<br />
resentative office in Russia. <strong>Finnlines</strong> is a Finnish listed company<br />
and part of the Italian Grimaldi Group.<br />
MARKET DEVELOPMENT<br />
During <strong>2010</strong>, the market volumes started to recover from the<br />
sharp drop experienced in 2009, but remained below 2008<br />
levels on an annual basis. Based on the statistics by the Finn-<br />
ish Maritime Administration (FMA), the Finnish seaborne imports<br />
carried in container, lorry and trailer units increased by 14 per<br />
cent and exports by 13 per cent during January-December <strong>2010</strong><br />
compared to the previous year (measured in tons). According<br />
to the statistics published by Shippax, trailer and lorry volumes<br />
transported by sea between Southern Sweden and Germany de-<br />
creased in January-December by 1 per cent compared to 2009.<br />
During the same period, private and commercial passenger traf-<br />
fic between Finland and Germany increased by 6 per cent and<br />
decreased between Finland and Sweden by 2 per cent (FMA).<br />
SIGNIFICANT EVENTS DURING THE REPORTING PERIOD<br />
TRAFFIC<br />
During the first quarter of the year, traffic was influenced by a<br />
number of external disturbances. Severe ice conditions in the<br />
northern parts of the Baltic Sea, stevedores' overtime ban in<br />
Finnish ports and the 16-day stevedoring strike in Finland all<br />
caused several temporary schedule changes, reroutings and<br />
stoppages. Especially the stevedores' strike had big impacts as<br />
practically all ro-ro traffic to and from Finnish ports halted during<br />
the strike. By the end of March, the situation normalised and the<br />
traffic returned to the normal pattern.<br />
During the second half of <strong>2010</strong>, <strong>Finnlines</strong> operated on aver-<br />
age 24 vessels in its own traffic, compared to 23 vessels in the<br />
same period in 2009. During the fourth quarter, the Company<br />
continued to expand its connections to St. Petersburg. Besides<br />
the Bilbao–Antwerp–Helsinki service to St. Petersburg, <strong>Finnlines</strong><br />
launched a new service between the United Kingdom and Rus-<br />
sia. In addition, the number of weekly departures between Ger-<br />
many and Russia increased to three in the TransRussiaExpress<br />
liner service.<br />
The cargo volumes transported during January-December to-<br />
talled approximately 629,000 (596,000 in 2009) units, 56,000<br />
(38,000) cars (not including passengers’ cars) and 2,039,000<br />
(2,001,000) tons of freight not possible to measure in units. In<br />
addition, some 648,000 private and commercial passengers<br />
were transported (around 533,000 in 2009), an increase of 22<br />
per cent. Compared to January-December of 2009, the number<br />
(figures in EUR thousand, if not stated otherwise)<br />
of private passengers (excluding lorry drivers) transported by the<br />
Company increased by 44 per cent.<br />
ANNUAL GENERAL MEETING<br />
The Annual General Meeting of <strong>Finnlines</strong> Plc held in April <strong>2010</strong><br />
approved the Financial Statements.<br />
The Meeting approved the Board of Directors’ proposal not to<br />
pay any dividend.<br />
The Annual General Meeting decided that the Board of Direc-<br />
tors shall have six members. The following were re-elected to the<br />
Board: Mr Emanuele Grimaldi, Mr Diego Pacella, Mr Gianluca<br />
Grimaldi, Mr Antti Pankakoski, Mr Olav Rakkenes and Mr Jon-<br />
Aksel Torgersen. The Board elected Mr Emanuele Grimaldi<br />
Chairman and Mr Diego Pacella Vice-Chairman.<br />
The Authorised Public Audit Firm Deloitte & Touche Oy was<br />
appointed as the Company’s auditors for <strong>2010</strong>.<br />
The Annual General Meeting authorised the Board of Direc-<br />
tors to decide on the issuance of new shares in one or several<br />
tranches so that the total number of shares issued based on the<br />
authorization is 20,000,000 at maximum. The authorization is val-<br />
id until the next Annual General Meeting. The Board of Directors<br />
does not have any authorisation to buy own shares.<br />
<strong>FINANCIAL</strong> PERFORMANCE<br />
The <strong>Finnlines</strong> Group recorded revenue totalling EUR 561.1 mil-<br />
lion (494.4), an increase of 13.5 per cent compared to the same<br />
period in 2009. Shipping and Sea Transport Services generated<br />
revenue amounting to EUR 513.7 million (444.9) and Port Opera-<br />
tions EUR 72.3 million (73.2). The internal revenue between the<br />
segments was EUR 24.9 million (23.7). The Port Operations seg-<br />
ment was affected by the stevedores’ two-week strike in spring.<br />
Result before interest, taxes, depreciation and amortisation<br />
(EBITDA) was EUR 85.9 million (37.4), an increase of 129.8 per<br />
cent. Vessel lease expenses decreased by EUR 27.3 million and<br />
amounted to 33.8 million (61.2). Other operating expenses to-<br />
talled EUR -165.9 million (-199.1) and included EUR 3.1 million<br />
(2.8) reimbursement of fairway dues and refund on harbour dues<br />
EUR 2.7 million (See Chapter ‘Legal Proceedings’).<br />
Result before interest and taxes (EBIT) was EUR 25.6 million<br />
(-23.6). Financial income was EUR 3.8 million (3.9) and financial<br />
expenses totalled EUR -25.7 million (-31.7). Result before taxes<br />
(EBT) was EUR 3.7 million (-51.4), an improvement of EUR 55.1<br />
million compared to the same period in 2009. Earnings per share<br />
(EPS) were EUR 0.05 (-0.96).<br />
The most important business and share related key indicators<br />
are presented in the Notes to the Consolidated Financial State-<br />
ments, under Five-Year Key Figures on page 50.<br />
INVESTMENTS AND FINANCING<br />
The Group's capital expenditure was EUR 82.2 (28.0) million,<br />
and consists mainly of prepayments for newbuildings (EUR 31.4<br />
million) and the purchase of Finnhansa vessel (EUR 40.0 million).<br />
Depreciation amounted to EUR 60.1 million (61.0). <strong>Finnlines</strong> sold<br />
the associated company Simonaukion Pysäköinti Oy in April and<br />
FINNLINES PLC Financial Statements <strong>2010</strong><br />
3