AS Tallink Grupp (TAL1T) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 8.5% year-over-year to €210 million, mainly due to lower passenger volumes and fewer chartered vessels.

• EBITDA dropped 31.9% to €46.6 million, and net profit fell to €6.1 million, impacted by lower charter income, fewer passengers, and dividend tax.

• Passenger numbers declined by 5.8% to 1.45 million, while cargo volumes increased by 1.7%.

• Profitability was affected by two vessels in lay-up and income tax on dividends.

• The company is focusing on core routes and is not planning to open new regular routes at this time.

Financial highlights

• Q2 2024 revenue: €210 million (Q2 2023: €229.7 million); EBITDA: €46.6 million (Q2 2023: €68.5 million); net profit: €6.1 million (Q2 2023: €33.4 million).

• EBITDA margin was 22.2% for the quarter; gross margin 22.3%; net profit margin 2.9%.

• Net debt at quarter-end: €548.9 million, down from €581.0 million at end of Q1; net debt/EBITDA ratio: 2.7.

• Positive free cash flow of €51 million generated in Q2; operating cash flow was €56 million.

• Dividend of €0.06 per share for 2023, totaling €44.6 million, paid in July 2024.

Outlook and guidance

• Most profit is typically generated in Q3; July performance so far is described as good, with passenger numbers expected to be close to last year.

• Management continues to focus on cost efficiencies, profitable core routes, and risk management for the low season.

• Dividend payments are intended to continue, with at least €0.05 per share if economically feasible.

• Uncertainties remain due to geopolitical tensions, economic environment, and fluctuating input prices.

• Cargo transportation revenues show an upward trend, but competition remains challenging.