Financial Performance

KEY FIGURES
Amounts are in thousands of EUR

KEY RATIOS

Positive Operational Improvements Offset by Economic Cooldown

The EBITDA results of 2019, excluding the effect of the new accounting standard IFRS 16, were at a similar level as the previous year, amounting to EUR 49.4 million. Over the course of the year, various improvement measures were introduced, which had positive effects on the results; e.g. salary expenses were down 4.3%. Improvements were made in the Norway operation and freight forwarding services that positively affected the financial performance. However, the cooldown of the Icelandic economy resulted in a 10.7% decrease in import volume to Iceland, which offset the positive results of the improvement measures.

Transported Volume

Volume transported by the Company’s North Atlantic liner services from 2018 to 2019 reduced by 4.9%, mainly due the cooldown of the Icelandic economy and related effects on import volume. Export volume from Iceland was at similar level between years and transatlantic services grew by double digit numbers. Transported volume in the Company’s forwarding services reduced by 7.0% from the previous year, which can mainly be attributed to discontinued dry cargo transport in Asia. Despite less volume in forwarding services, financial results improved between years.

Operational Results

Revenue amounted to EUR 679.6 million, compared to EUR 689.2 million in 2018. The revenue decrease is mainly explained by less volume in the Company’s liner services. In 2019 64% of revenue came from the liner services and 36% from forwarding services.

Expenses for the year amounted to EUR 619.0 million. Excluding the effect of IFRS 16, expenses were EUR 630.2 million; a decrease of 1.5%. Salaries and related expenses amounted to EUR 131.6 million; a decrease of EUR 5.9 million or 4.3%.

The operating profit, or EBITDA, amounted to EUR 60.5 million. Excluding the effect of IFRS 16, the EBITDA amounted to EUR 49.4 million, or level with the 2018 EBITDA of EUR 49.2 million. Various operational improvements had a positive effect on the results; e.g. streamlining and integration measures, and improvements in the Norway operation and in the freight forwarding services. However, the improved results were offset by lower import levels to Iceland.

Eimskip’s net earnings amounted to EUR 1.0 million in 2019, compared to EUR 7.4 million in 2018. An extraordinary tax expense of EUR 3.4 million was realized in the first quarter of 2019 due to a tax ruling by the Internal Revenue Board of Iceland. In the fourth quarter of 2019, the Company announced the sale of five vessels to be delivered in the first quarter of 2020. Due to the sale, an amount of EUR 2.6 million was impaired through depreciation at end of year. Adjusting for the above-mentioned extraordinary items, the net earnings would have been EUR 7.0 million in 2019, in line with the previous year.

Financial Position and Capital Expenditure

Eimskip’s balance sheet at year-end 2019 remained solid, with assets amounting to EUR 524.5 million and a 44.0% equity ratio. Interest-bearing debt amounted to EUR 204.3 million at year-end; an increase of EUR 44.7 million, of which EUR 32.5 million were related to the adoption of the new IFRS 16 accounting standard as at 1 January 2019. Net debt was EUR 183.5 million, or an increase of EUR 45.9 million from the previous year. EUR 32.5 million thereof were due to the IFRS 16 accounting standard.

Net cash from operating activities amounted to EUR 51.3 million compared to EUR 29.0 million in 2018, or an increase of EUR 22.3 million from the previous year. Excluding the effect of IFRS 16, the net cash from operating activities amounted to EUR 41.1 million.  A dividend amounting EUR 4.7 million, or ISK 653.2 million, was paid to shareholders in April 2019. The Company purchased treasury shares amounting to EUR 5.0 million in 2019 as part of share buy-back programs. Cash and cash equivalents amounted to EUR 20.7 million at year-end.

The total capital expenditure, or CAPEX, amounted to EUR 36.8 million in 2019, of which maintenance CAPEX, including vessel dockings, was EUR 16.3 million. CAPEX in 2018 amounted to EUR 47.4 million. Right-of-use assets additions (IFRS 16) amounted to EUR 16.8 million during the year 2019.