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
- 15 vessels and 2 ferries 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 56 own offices in 20 countries
- Cooperation between Eimskip’s own offices, its worldwide network of associates and international deep-sea lines
In 2022, 61.1% of Eimskip's revenue came from liner services, while 38.9% came from forwarding services. The division of EBITDA in 2022 was 73.3% from liner services and 26.7% from forwarding services. The geographical division of revenue showed an increasing share of Iceland related business, contributing 42% 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. The effect of IFRS 16 was that the accounting treatment of leases was changed whereas the leases were recognized as an depreciable asset and a interest bearing liability and that shifted the expenses that were previously recognized as expenses among EBITDA to depreciation and finance expenses.
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, agency services and ferries.
KEY STATISTICS
The revenue for liner services in 2022 amounted to EUR 671.4 million; an increase of 32% from 2021 due to e.g., increased volume and active revenue management. The EBITDA from the liner services amounted to EUR 119.5 million and increase of EUR 45.1 million from previous year. EBIT from liner services in 2022 amounted to EUR 65.3 million compared to EUR 30.4 million in 2021. In 2022, liner services accounted for 61.1% of the Company’s revenue and 73.3% of its EBITDA.
Transported volume in Eimskip’s liner services in 2022 grew by 4.1% from the previous year. Most of this increase is attributable to strong growth in imports to Iceland, supported by the robustness of the Icelandic economy and high demand for Trans-Atlantic services. Export from the Faroe Islands increased between years, but imports declined with the last quarter especially demanding compared to the previous year. The Norwegian reefer liner services performed well financially, despite some contraction in volume caused by the discontinuance of calling Murmansk following the Russian invasion of Ukraine and due to the Company’s decision to redirect one vessel to another trade lane during the summer, resulting in a lower overall capacity.
The graph below shows the volume development from 2018 to 2022.
VOLUME DEVELOPMENT IN LINER SERVICES
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. Eimskip’s sailing system has proven to be a reliable system, supporting service on core sailing routes, and designed to meet customer needs. In 2021 some adjustments were made to the system to give transportation of fresh fish between Europe and America more focus and these changes proved to be very successful.
In 2022 the capacity to and from N-America was increased when a fourth vessel was added to the service.
Eimskip operates seven container vessels sailing between Iceland, the Faroe Islands, Greenland, and ports in Scandinavia, the UK, and mainland Europe. Additionally, the Royal Arctic Line vessel Tukuma Arctica sails between Greenland and Scandinavia, also calling ports in Iceland and the Faroe Islands. Four container vessels serve between Iceland and North America. Furthermore, four reefer vessels connect the Norwegian coast to the Netherlands, England and Scotland.
SAILING SYSTEM IN THE NORTH ATLANTIC
Sailing routes
The Blue Line offers express services in both directions between Reykjavík, Rotterdam and Bremerhaven. 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 and bi-weekly Fredrikstad. The vessels serving on the Yellow Line are EF Ava and Star Comet.
The Red Line hosts a vessel-sharing agreement with Royal Arctic Line (RAL) and offers weekly services with larger vessels and greater reliability. Sailings are to and from 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, and then back to Iceland with regular Iceland coastal service. It connects to the other European Lines in Reykjavík, enabling Trans-Atlantic services. The vessels Lagarfoss, Selfoss, Skogafoss and Vivienne Sheri D serve on the Green Line.
The Purple Line offers weekly services between the Faroe Islands and Scotland. 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 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, Holmfoss and Silver Star.
VESSEL FLEET
Eimskip currently operates seventeen vessels, of which nine are owned vessels and eight are chartered. Fourteen of the vessels are used in scheduled liner services on six different sailing routes. Eleven are container vessels and three are reefer vessels. In addition, one reefer vessel offers spot 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 Ritscher
Vera D
Dettifoss
Brúarfoss
Vivienne Sheri D
Lagarfoss
Skogafoss
Selfoss
EF Ava
Star Comet
Vantage
Holmfoss
Polfoss
Svartfoss
Silver Star
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 13 chilled and cold storage facilities in found countries: six in Iceland, three in Norway and two each in the Faroe Islands, Newfoundland and Labrador. Eimskip also operates 30 warehouses for dry cargo in nine countries: 15 in Iceland, five 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 33,000 TEU. Trucking and distribution services are operated in Iceland, the Faroe Islands, Denmark, the Netherlands and the USA, and the Company owns around 154 trucks.
GLOBAL OPERATIONS AND OPERATING ASSETS
FORWARDING SERVICES
Eimskip is a niche player in forwarding services. The Company specializes 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 operations and the acquisition of specialist forwarding companies. The success is based on a global network of deep-sea lines managed via numerous Eimskip offices and those of associates. Eimskip also offers a range of logistics solutions to forward dry cargo worldwide.
KEY STATISTICS
Despite a decline in forwarding volume in 2022 of 11.4% due to constraints in international shipping, elevated global freight rates during the first three quarters of the year helped maintain solid results in the company’s international freight forwarding business. From second half of the third quarter and especially in the fourth quarter, market conditions eased and freight rates in most major trade lanes decreased as a result of recessionary global economy. Revenue in 2022 amounted to EUR 447.8 million, an increase of 19% from the previous year. The EBITDA from forwarding services was EUR 43.6 million, an increase of EUR 3.7 million from 2021. Forwarding services accounted for 38.9% of the Company’s revenue in 2022 and 26.7% of its EBITDA.
The graph below shows the volume development from 2018 to 2022.
VOLUME DEVELOPMENT IN FORWARDING SERVICES
Changes from previous year
FORWARDING SERVICES VOLUME
Reefer and dry cargo forwarding