Tallink makes record loss in the history of Estonian business

Tallink said that the results are hardly surprising as the global health and economic crisis cut its number of passengers by 62 percent compared to 2019. Photo: Kaupo Kalda/Tallink

The net loss of Tallink Group came to €108.3 million in 2020 following the coronavirus pandemic. The company made a net profit of €49.7 million in 2019.

The shipper’s financials were affected by travel restrictions, border closures and national states of emergency as a result of the COVID-19 pandemic, the company reported.

The group’s unaudited consolidated sales revenue shrank by 53 percent to €442.9 million and EBITDA by 95.3 percent to €8 million year-over-year. Postimees speculated that Tallink’s loss could break the all-time record last week. The previous record was held by Vopak E.O.S (now Liwathon) that made a loss of almost €100 million as a result of revaluation of assets in 2017.

Tallink said that the results are hardly surprising as the global health and economic crisis cut its number of passengers by 62 percent compared to 2019, cargo volumes by 5.2 percent and total number of trips by 20 percent.

Employment issues were the single greatest challenge for the company in 2020, with the shipper forced to resort to forced leave, temporary working time and salary cuts and collective layoffs.

The total number of people employed by Tallink in different countries dropped from 7,240 employees in late 2019 to 4,237 a year on of whom around 400 are currently on parental leave.

Cuts and layoffs affected the group’s bottom line. The one-off negative effect of layoffs amounted to €9 million, while support instruments from several countries netted the shipper €36.6 million.

Board decides against dividends

“We have paid a very high price for where we are now – we have lost a third of our dedicated and loyal staff. I hope that we will be able to rehire and welcome back at least some of them one day,” Tallink CEO Paavo Nõgene said.

He said that every Tallink employee has made efforts to cut the company’s costs and find alternative ways of generating revenue to compensate a notable drop in the principal activity and create buffers that would allow Tallink to return to its main business as soon as possible.

It is hardly surprising that the management board will decide against paying dividends in light of the situation.

Stockholm cut off for a year

Varying travel restrictions that have been in effect for almost a year have kept Tallink ferries departing from Tallinn, Helsinki and Riga from going to Stockholm since last March, while the group’s hotels and restaurants have also been closed at different times. Even though Tallink tried to restart activities in the summer and improve matters by opening several temporary maritime links, regional restrictions that returned in fall saw them be of modest use.

Despite a challenging business environment, Tallink Group invested roughly €100 million last year the lion’s share of which in its fleet. Investments mainly reflect prepayments for a new LNG shuttle MyStar in the total amount of €61.8 million and the purchase of the ro-pax vessel Sailor for €8.5 million.

MyStar will start catering to passengers on the company’s Tallinn-Helsinki line alongside Megastar from next year.