Introduction
Eimskip’s operations are divided into two principal market segments: Liner services in the North Atlantic and international forwarding services.
LINER SERVICES
- The core of the Company’s operations
- Eimskip’s home market includes Newfoundland and Labrador, Greenland, Iceland, the Faroe Islands, and Norway
- 17 vessels in operation
- Terminal operations
- Chilled and cold storage facilities
- Warehousing
- Trucking and distribution
- Air freight services
- Agency services
FORWARDING SERVICES
- Main focus on reefer forwarding; dry cargo forwarding is growing
- Efficient system based on a network of 55 own offices in 20 countries
- Cooperation between Eimskip’s own offices, its worldwide network of associates, and international deep-sea lines
In 2020, 60.3% of Eimskip’s revenue came from liner services and 39.7% from forwarding services. The division of EBITDA in 2020 was as follows: 62.6% from liner services and 37.4% from forwarding services. The geographical division of revenue was showed a decreasing share of Iceland unchanged in 2018 where Iceland related business contributed 45.3% of total revenue.
REVENUE BY BUSINESS SEGMENT
EBITDA BY BUSINESS SEGMENT
DEVELOPMENT OF EBITDA BY BUSINESS SEGMENT
EUR million
* As at 1 January 2019, IFRS 16 was implemented.
GEOGRAPHICAL SPLIT OF REVENUE
LINER SERVICES
Eimskip’s liner services are the core of the Company’s operations. Eimskip operates a dynamic container sailing system in the North Atlantic, with 17 vessels currently in operation. The Company’s home market includes Newfoundland and Labrador, Greenland, Iceland, the Faroe Islands and Norway. Eimskip also offers short-sea services in Europe and North America, Trans-Atlantic services, and bulk transport. Liner services include terminal operations, chilled and cold storage facilities, warehousing, trucking and distribution, airfreight services, and agency services.
KEY STATISTICS
The revenue for liner services in 2020 amounted to EUR 402.8 million; a decrease of 6.9% from 2019 due to e.g. lower BAF, weaker ISK and USD and cargo mix. The EBITDA from the liner services amounted to EUR 38.6 million but despite lower EBIDTA from previous year, there was an increase in margin of EBIT. In 2020, liner services accounted for 60.3% of the Company’s revenue and 62.6% of its EBITDA.
Transported volume in Eimskip’s liner services in 2020 was in line with the previous year. Export volume from Iceland was strong during the year, up by 6.7% from last year. However export volume from the Faroe Islands was negatively affected by COVID-19 resulting in a decrease of 12.7%. Import to Iceland decreased by 4.2% between years with Q4 being strong with an increase of 10.1% QoQ. Despite capacity reduction in Norway, volume was in level with last year.
The graph below shows the volume development from 2016.
VOLUME DEVELOPMENT IN LINER SERVICES
Changes from previous year
LINER SERVICES VOLUME
Iceland, Faroe Islands, Norway and Trans-Atlantic
Home Market
Eimskip defines its home market as the North Atlantic, from the east coast of North America to the west and north coasts of Norway, including Newfoundland and Labrador, Greenland, Iceland, the Faroe Islands and Norway. These countries are all niche market areas, rich in natural resources and with small populations. Seafood represents a substantial part of the total cargo in the Company’s home market.
Sailing System
Eimskip is constantly re-evaluating its sailing system and vessel fleet with the aim of optimizing operational efficiency and customer service. In October 2020, Eimskip made changes to the Company’s container sailing system to increase service levels and bring two new container vessels, Dettifoss and Brúarfoss, into the sailing system. In doing so, Eimskip has now fully implemented the Vessel Sharing Agreement (VSA) with the national carrier of Greenland, Royal Arctic Line. The new sailing system replaces a temporary system that was introduced last spring due to COVID-19. It’s a more reliable system, supporting service on core sailing routes and designed to better meet customer needs. With Eimskip’s new larger and more powerful vessels, the service will not only be more reliable but also more environmentally friendly pr. transported unit.
Eimskip operates seven container vessels sailing between Iceland, the Faroe Islands, Greenland and ports in Scandinavia and Europe. Additionally, the Royal Arctic Line vessel Tukuma Arctica sails between Greenland and Scandinavia, also calling on ports in Iceland and the Faroe Islands. A further three container vessels ensure a weekly service between Iceland and North America.
CO-OPERATION BETWEEN EIMSKIP AND ROYAL ARCTIC LINE
In January 2017, Eimskip and Royal Arctic Line (RAL), the national carrier of Greenland, signed a co-operation agreement regarding potential sharing of capacity. The agreement was authorized by the Icelandic Competition Authority in 2019 and fully implemented by November 2020, when Brúarfoss, the second of Eimskip’s two new vessels, formally started service within the Company’s sailing system. The vessel sharing agreement with RAL connects their business to Eimskip’s global network, opening up great opportunities for the Greenlandic market. It also means the start of weekly services between Iceland and Greenland. These new vessels – Dettifoss, Brúarfoss and RAL’s Tukuma Arctica – now sail a three-week long route on Eimskip’s Red Line, connecting Greenland with Iceland, the Faroe Islands, Denmark and Sweden.
Eimskip opened an office in Nuuk, Greenland in September 2020, enabling us to offer local services to the Greenlandic market.
SAILING ROUTES
The Blue Line offers express services for both import and export between Reykjavík and Rotterdam. With fast sailing times, this route is ideal for fresh fish, fruits, vegetables and other perishable products. The vessels serving on the Blue Line are Vera D and Jonni Ritscher.
The Yellow Line offers express services, suited to fresh fish for example, from Iceland and the Faroe Islands to the UK and continental Europe, with a bi-weekly Iceland coastal service. The vessels serving on the Yellow Line are Selfoss and Skógafoss.
The Red Line hosts the co-operation with Royal Arctic Line (RAL) and offers weekly services with larger vessels and greater reliability. Sailings are to and from all major ports in Scandinavia, the Faroe Islands, Iceland and Greenland. The vessels serving in the Red Line are Dettifoss, Brúarfoss and RAL’s Tukuma Arctica.
The Green Line offers weekly services from Iceland to the east coast of the United States, Nova Scotia, Newfoundland, Labrador, and then back to Iceland. It connects to the other European Lines in Reykjavík, enabling transatlantic services. The vessels Lagarfoss, EF Ava and Pictor J serve on the Green Line.
The Purple Line offers weekly services between the Faroe Islands, Scotland and England. This Line plays an important role in serving the salmon industry in the Faroe Islands. The vessel serving on the Purple Line is Vantage.
The Orange Line offers weekly services from Murmansk in Russia, down the Norwegian coast, and onwards to the Netherlands, England and Scotland, before returning to Norway. The vessels serving on the Orange Line are Svartfoss, Polfoss and Holmfoss.
Four vessels serve other operations in the North Atlantic. Eimskip’s reefer transportation services are specifically focused on the transportation of frozen or chilled seafood and other perishable products in bulk, directly from port to port, in whole or partial loads according to need. These services are carried out by the specialized reefer vessel Silver Bird. The vessel Saxum is used for bulk transport. Finally, the ferries Baldur and Særún serve on the west coast of Iceland.
SAILING SYSTEM IN THE NORTH ATLANTIC
In 2020, Eimskip took delivery of two new vessels, Dettifoss and Brúarfoss. The two vessels are the largest container vessels in the history of the Icelandic fleet: 180 meters in overall length; 31 meters wide; and with a capacity of 2,150 TEU (twenty-foot equivalent unit). They are designed for exceptional maneuvering, with a TIER III, 17,000 kW main engine, which is especially built to lower Nitrogen Oxide (NOx) emissions into the atmosphere. Per TEU, the vessels are the most environmentally friendly of the whole Icelandic fleet. They consume less fuel per container unit compared to older vessels and have a built-in scrubber system to minimize emission of Sulphur Oxide (SOx). They are ice class vessels, well equipped to sail in the North Atlantic, and are designed in accordance with the Polar Code, a mandatory requirement for sailing in the ocean around Greenland.
Eimskip currently operates seventeen vessels, of which nine are owned vessels and eight are chartered. Thirteen of the vessels are used in scheduled liner services on six different sailing routes. Ten are container vessels and three are reefer vessels. In addition, one reefer vessel offers spot services, one is in bulk services, and two are ferries operated in Iceland.
All the vessels are highly competitive in terms of their size, cranes, reefer plugs, shallow draft, and maneuvering capabilities.
VESSEL FLEET
Jonni Ritsc.
Vera D
Dettifoss
Brúarfoss
Pictor J
EF Ava
Skogafoss
Selfoss
Lagarfoss
Vantage
Holmfoss
Polfoss
Svartfoss
Silver Bird
Saxum
Baldur
Saerun
OPERATIONS AND OPERATING ASSETS
The Company operates terminals at 15 locations in five countries: seven in Iceland, two in the Faroe Islands, three in Norway, two in Canada and one in the USA. Eimskip owns or operates 14 chilled and cold storage facilities in five countries: seven in Iceland, three in Norway and two each in the Faroe Islands, Newfoundland and Labrador. We also operate 28 warehouses for dry cargo in nine countries: 14 in Iceland, four in the USA, two in the Faroe Islands, two in the UK, two in Norway and one each in Sweden, Denmark, the Netherlands and Vietnam.
Eimskip’s container fleet currently consists of around 28,800 TEU. Trucking and distribution services are operated in Iceland, the Faroe Islands, Denmark, the Netherlands and the USA, and the Company owns around 161 trucks.
OPERATIONS AND OPERATING ASSETS
FORWARDING SERVICES
Eimskip is a niche player in forwarding services. The Company specialize in reefer forwarding – the transportation of temperature-controlled cargo, seafood products in particular.
Over the years, Eimskip has built valuable relationships and acquired extensive know-how in the reefer forwarding trade, both through our operations and the acquisition of specialist forwarding companies. Our success is based on a global network of deep-sea lines managed via numerous Eimskip offices and those of our associates. Eimskip also employ a range of logistics solutions to forward dry cargo worldwide.
KEY STATISTICS
Forwarding services delivered a solid performance, benefitting from previous streamlining measures. Performance was particularly strong given the COVID-19 situation, which affected global markets in many ways. Capacity reduction and price increases by global carriers contributed both to increased revenue and expenses. Revenue amounted to EUR 265.5 million, an increase of 7.5% from the previous year. The EBITDA from forwarding services was EUR 23.1 million, an increase of 10.6% from 2019. Forwarding services accounted for 39.7% of the Company’s revenue in 2020 and 37.4% of its EBITDA.
In 2020, transported volume in Eimskip’s forwarding services, including reefer and dry cargo forwarding, decreased by 4.4% from the previous year, which is acceptable in light of a challenging year. Dry cargo forwarding volume decreased by 12.5% year-on-year, partly due to discontinued business in Eimskip Belgium in 2019.
The graph below shows the volume development from 2016 to 2020.
VOLUME DEVELOPMENT IN FORWARDING SERVICES
Changes from previous year
FORWARDING SERVICES VOLUME
Reefer and dry cargo forwarding