Eimskip release the financial results for the second quarter of 2020. Revenues amounted to EUR 160.6 million, a decrease of EUR 6.9 million or 4.1% when compared with the same quarter in 2019.
Revenues mainly affected by a 5.3% lower volume in liner services and EUR 4.0 million lower contribution of services in Iceland because of weakening of the ISK.
Forwarding volume was down by 5.3% however, revenues increased by 3.5% mainly due to higher share of reefer cargo.
Total expenses amounted to EUR 144.6 million, a decrease of EUR 7.1 million, compared with the same quarter in 2019, mainly driven by realization of streamlining measures.
Reduction in salary expenses by EUR 4.0 million or 11.9% whereof EUR 2.0 million related to devaluation of ISK. EUR 1.0 million redundancy cost included in salaries.
Savings in sailing system expenses, administrative expenses and lower fuel prices contributed to the decrease in expenses.
EBITDA adjusted for EUR 1.0 million redundancy cost in the quarter amounted to EUR 17.0 million in the second quarter of 2020 compared to EUR 15.8 million in the same quarter last year, an increase of 7.6%.
Net earnings for the period amounted to EUR 2.5 million, compared to EUR 2.8 million for the for the same quarter of 2019.
Net cash from operating activities increased by EUR 2.1 million and amounted to EUR 22.0 million compared to EUR 19.9 million for the same quarter 2019.
Cash balance is good and instalments amounting to EUR 14 million were made to a revolving credit facility in the quarter.
Vilhem Már Thorsteinsson, CEO of Eimskip, stated: “I am quite pleased with the second quarter results which is above management expectation at the beginning of the quarter especially given the situation regarding COVID-19 pandemic. Improved profitability can e.g. be seen in the adjusted EBITDA which increased by 7,6% between years. I am very proud and thankful for the relentless effort of our dedicated employees during this challenging period. Their contribution was the key to secure customer service and maintain an unbroken logistic chain.
We are really seeing operational improvements from our streamlining efforts in the last 6-12 months where we have e.g. reduced number of FTE’s by 10% from year-end 2019, adjusted our container and reefer sailing systems and integrated offices. This has been an important factor in offsetting a negative development in cargo volume and impact of COVID-19 and we are determined to make these improvements sustainable going forward.
We had a good performance in our International operation during the quarter, especially in the reefer forwarding services which is a focus area of our forwarding business and contributes higher margins than dry forwarding. Our Domestic operations also performed well during the quarter with a favorable volume mix in trucking and leveraging on a disciplined operation. However, profitability in our container liner system needs to improve and will continue to be a special focus area in coming months. In addition, I would like to mention that while COVID-19 affects tourism in Iceland it will negatively affect our cruise agency and ferry operation in Iceland.
It was a great milestone for Eimskip when Dettifoss, our new container vessel, came into service in July and we formally started the co-operation with Royal Arctic Line under the Vessel Sharing Agreement, a first for Eimskip. I would especially like to thank the crew of Dettifoss and employees within Eimskip’s operations for travelling to China under challenging circumstances due to COVID-19 and to secure a safe delivery of our new vessel. Greenland is now gaining access to international markets via Eimskip’s Trans-Atlantic sailing system. We see an increasing interest from Icelandic companies to export goods to Greenland and expect trade between the two countries to increase. We expect delivery of Brúarfoss, our second new build, in early Q4 and formally into scheduled service later that quarter.
In June we consolidated our headquarters under one roof creating a modern and more dynamic activity-based work environment. At the same time we decreased office space by 50% or 3200m2. This has been well received by our employees and I am happy to see the positive impact it has on our company culture already.”
For more information:
Egill Örn Petersen
Tel: +354 525 7202