Despite passenger numbers rising to almost 9.8 million in 2018, several factors combined to lower revenues and profit.
The fluctuating price of oil is not just a headache for airlines. Record passenger numbers could not prevent falling revenues at Tallink Gruup in 2018, which was hit by a €16 million rise in fuel costs.
Tallink’s revenue and profits slid last year, despite passenger numbers increasingly slightly to reach 9,756,611, while cargo units transported also grew by 5.7%, DFNI reports.
Consolidated revenue for the financial year declined by 1.8% to €949.7 million, while net profit fell to €40 million, down from €46.5 million in 2017.
The company also blamed a reduction in the number of vessels the company chartered out.
“Several factors negatively influenced our financial results, so our total outcome for the year was not record-breaking,” concedes Paavo Nõgene, Tallink Grupp’s recently appointed chief executive.
“One of the factors was the reduction of charter revenues by €10.8 million compared to 2017, as we had only one vessel chartered out instead of three in the previous year.
“However, it is clear that the biggest impact on our profits last year came from significantly increased fuel costs, which were €16.6 million higher than in 2017.
“We are, of course, taking a number of steps to reduce the impact of the global price fluctuations on our business, but fuel costs will inevitably always form a significant part of our costs.”
The vitally important Estonia-Finland ferry line continues to be at the heart of Tallink’s operations. In total, the group operates 14 vessels on seven routes, plus four hotels in Tallinn and Riga.
While achieving a number of records in 2018 including passenger numbers and numbers of journeys, Tallink also invested €36.4 million in upgrading and updating its vessels. The group now enters its 30th year of operations.