FINANCIAL STATEMENTS 2010 - Finnlines

BOARD OF DIRECTORS’ REPORT
THE COMPANY
Finnlines is one of the largest North-European liner shipping
companies, providing sea transport services mainly in the Baltic
and the North Sea. In addition to freight, the Company's ro-pax
vessels carry passengers between five countries and eight ports.
The Company also provides port services in Helsinki, Turku and
Kotka. The company has subsidiaries or sales offices in Germa-
ny, Belgium, the UK, Sweden, Denmark and Poland and a rep-
resentative office in Russia. Finnlines is a Finnish listed company
and part of the Italian Grimaldi Group.
MARKET DEVELOPMENT
During 2010, the market volumes started to recover from the
sharp drop experienced in 2009, but remained below 2008
levels on an annual basis. Based on the statistics by the Finn-
ish Maritime Administration (FMA), the Finnish seaborne imports
carried in container, lorry and trailer units increased by 14 per
cent and exports by 13 per cent during January-December 2010
compared to the previous year (measured in tons). According
to the statistics published by Shippax, trailer and lorry volumes
transported by sea between Southern Sweden and Germany de-
creased in January-December by 1 per cent compared to 2009.
During the same period, private and commercial passenger traf-
fic between Finland and Germany increased by 6 per cent and
decreased between Finland and Sweden by 2 per cent (FMA).
SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
TRAFFIC
During the first quarter of the year, traffic was influenced by a
number of external disturbances. Severe ice conditions in the
northern parts of the Baltic Sea, stevedores' overtime ban in
Finnish ports and the 16-day stevedoring strike in Finland all
caused several temporary schedule changes, reroutings and
stoppages. Especially the stevedores' strike had big impacts as
practically all ro-ro traffic to and from Finnish ports halted during
the strike. By the end of March, the situation normalised and the
traffic returned to the normal pattern.
During the second half of 2010, Finnlines operated on aver-
age 24 vessels in its own traffic, compared to 23 vessels in the
same period in 2009. During the fourth quarter, the Company
continued to expand its connections to St. Petersburg. Besides
the Bilbao–Antwerp–Helsinki service to St. Petersburg, Finnlines
launched a new service between the United Kingdom and Rus-
sia. In addition, the number of weekly departures between Ger-
many and Russia increased to three in the TransRussiaExpress
liner service.
The cargo volumes transported during January-December to-
talled approximately 629,000 (596,000 in 2009) units, 56,000
(38,000) cars (not including passengers’ cars) and 2,039,000
(2,001,000) tons of freight not possible to measure in units. In
addition, some 648,000 private and commercial passengers
were transported (around 533,000 in 2009), an increase of 22
per cent. Compared to January-December of 2009, the number
(figures in EUR thousand, if not stated otherwise)
of private passengers (excluding lorry drivers) transported by the
Company increased by 44 per cent.
ANNUAL GENERAL MEETING
The Annual General Meeting of Finnlines Plc held in April 2010
approved the Financial Statements.
The Meeting approved the Board of Directors’ proposal not to
pay any dividend.
The Annual General Meeting decided that the Board of Direc-
tors shall have six members. The following were re-elected to the
Board: Mr Emanuele Grimaldi, Mr Diego Pacella, Mr Gianluca
Grimaldi, Mr Antti Pankakoski, Mr Olav Rakkenes and Mr Jon-
Aksel Torgersen. The Board elected Mr Emanuele Grimaldi
Chairman and Mr Diego Pacella Vice-Chairman.
The Authorised Public Audit Firm Deloitte & Touche Oy was
appointed as the Company’s auditors for 2010.
The Annual General Meeting authorised the Board of Direc-
tors to decide on the issuance of new shares in one or several
tranches so that the total number of shares issued based on the
authorization is 20,000,000 at maximum. The authorization is val-
id until the next Annual General Meeting. The Board of Directors
does not have any authorisation to buy own shares.
FINANCIAL PERFORMANCE
The Finnlines Group recorded revenue totalling EUR 561.1 mil-
lion (494.4), an increase of 13.5 per cent compared to the same
period in 2009. Shipping and Sea Transport Services generated
revenue amounting to EUR 513.7 million (444.9) and Port Opera-
tions EUR 72.3 million (73.2). The internal revenue between the
segments was EUR 24.9 million (23.7). The Port Operations seg-
ment was affected by the stevedores’ two-week strike in spring.
Result before interest, taxes, depreciation and amortisation
(EBITDA) was EUR 85.9 million (37.4), an increase of 129.8 per
cent. Vessel lease expenses decreased by EUR 27.3 million and
amounted to 33.8 million (61.2). Other operating expenses to-
talled EUR -165.9 million (-199.1) and included EUR 3.1 million
(2.8) reimbursement of fairway dues and refund on harbour dues
EUR 2.7 million (See Chapter ‘Legal Proceedings’).
Result before interest and taxes (EBIT) was EUR 25.6 million
(-23.6). Financial income was EUR 3.8 million (3.9) and financial
expenses totalled EUR -25.7 million (-31.7). Result before taxes
(EBT) was EUR 3.7 million (-51.4), an improvement of EUR 55.1
million compared to the same period in 2009. Earnings per share
(EPS) were EUR 0.05 (-0.96).
The most important business and share related key indicators
are presented in the Notes to the Consolidated Financial State-
ments, under Five-Year Key Figures on page 50.
INVESTMENTS AND FINANCING
The Group's capital expenditure was EUR 82.2 (28.0) million,
and consists mainly of prepayments for newbuildings (EUR 31.4
million) and the purchase of Finnhansa vessel (EUR 40.0 million).
Depreciation amounted to EUR 60.1 million (61.0). Finnlines sold
the associated company Simonaukion Pysäköinti Oy in April and
FINNLINES PLC Financial Statements 2010
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