Eimskipafélag Íslands (EIM) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was EUR 827.5m, EBITDA EUR 123.4m and net earnings EUR 54.5m, below 2022 record results as freight rates and Trans-Atlantic activity declined.

• Q4 revenue was EUR 201.5m and EBITDA EUR 22.7m; weaker Trans-Atlantic activity and holiday seasonality weighed on performance.

• Both segments remained profitable; North Atlantic home-market demand was described as good and stable at the start of 2024.

• Cash from operations was EUR 97.9m; year-end cash was EUR 32.5m, with EUR 36.6m of undrawn revolving facilities.

Financial highlights

• FY revenue was EUR 827.5m versus EUR 1,070.6m in 2022; operating expenses were EUR 704.2m versus EUR 907.5m.

• FY EBITDA declined 24.4% to EUR 123.4m; EBIT fell 39.9% to EUR 61.0m and net earnings fell 36.1% to EUR 54.5m.

• Q4 revenue was EUR 201.5m, EBITDA EUR 22.7m, EBIT EUR 6.9m and net earnings EUR 8.4m; Q4 2022 EBITDA was EUR 38.4m and net earnings EUR 21.8m.

• FY salary and related expenses rose 5.7% to EUR 143.8m, partly offset by a EUR 4.9m positive currency effect.

• Operating cash flow was EUR 97.9m versus EUR 148.5m; capex was EUR 44.5m, up EUR 12.9m, mainly for Faroe Islands and Sundahöfn terminals.

Outlook and guidance

• Sailing-system changes planned for Q1 2024 target higher reliability, lower costs and emissions; estimated annual savings are ~40,000 sailed miles, ~5,000 tonnes of bunker and ~15,000 tonnes of CO2.

• North Atlantic home-market demand was good and stable at the start of 2024; Trans-Atlantic demand was expected near or somewhat above H2 2023 levels in coming months.

• 2024 priorities include cost control, operational efficiency, digital transformation, reefer logistics and North Atlantic services; the proposed dividend is ISK 22.53 per share, totaling ~EUR 25m.