PRESS RELEASE ON THE RESULTS FOR THE FISCAL YEAR NOV. 1, 2002 - OCT. 31, 2003

MARKET DEVELOPMENTS

The market for passenger ferry services between Sweden and Finland plus services between Finland and the Baltic states decreased by 0.9 per cent to 15,383,455 passengers. The number of passengers on Viking Line’s vessels decreased by 2.8 per cent to 5,038,680.

The total number of cargo units in the service area rose by 5.4 per cent to 371,473. On Viking Line’s vessels, the quantity of cargo rose by 0.6 per cent to 78,524 units.

Viking Line’s share of passengers in the entire service area amounted to 32.8 per cent (33.4). In terms of route segments, its market share was distributed as follows: Helsinki (Finland)-Stockholm (Sweden), 42.6 per cent (42.5); Turku (Finland)-Stockholm/Kapellskär (Sweden), 43.6 per cent (43.9); services to the Åland Islands (Finland), 41.8 per cent (40.6); and Helsinki-Baltic states, 17.7 per cent (20.4).

VESSELS AND ROUTES

The Group’s vessels served the same main routes as during fiscal 2001/2002. In addition, as in prior years Viking Line provided special cruises to various destinations in the Baltic Sea. During May and June, the Rosella provided seven cruises between Stockholm and Riga (Latvia). The Cinderella provided weekend cruises on the Helsinki-Riga route in June, July and August. The number of service days during the fiscal year 2002/2003 was larger than during 2001/2002, when among other things the Isabella was out of service for 61 days.

Starting on August 17, the Rosella was placed in scheduled service between Helsinki and Tallinn (Estonia), with four departures per day. Meanwhile the Cinderella was dry-docked for an extensive refurbishing. On September 1, the vessel was registered in the Swedish ship register under the name Viking Cinderella and was bare-boat-chartered starting on the same date by the subsidiary Viking Rederi AB. The vessel was time-chartered by the parent company and placed in cruise service between Stockholm and Mariehamn (Åland Islands) on September 4.

The Group’s seven vessels have a book value of 179.3 million euros, while their insurance value amounts to EUR 492.4 M. In addition, all vessels have protection and indemnity (P&I) insurance.

SALES AND EARNINGS

Consolidated sales of the Viking Line Group during fiscal 2002/2003 amounted to EUR 397.8 M (fiscal 2001/2002: EUR 402.4 M). Operating profit was EUR 22.9 M (28.7). Net financial items were EUR -0.3 M (0.6). Consolidated profit before taxes amounted to EUR 22.6 M (29.3). Net profit for the fiscal year was EUR 15.8 M (20.3).

Due to lower passenger volume, Group sales were somewhat lower than in the previous fiscal year. Net sales revenues per passenger were somewhat better. Vessel fuel (bunkering) costs were higher due to the difficult ice situation during the winter and a larger number of voyages. The transfer of the Rosella and Cinderella to new routes, combined with the Cinderella’s dry-docking, led to extra expenses and lost revenues. During the spring, Viking Line initiated an earnings improvement programme, which had a certain impact during the latter part of the fiscal year.

INVESTMENTS AND FINANCING

The Group’s investments totalled EUR 9.9 M (9.8).

On October 31, 2003, the equity/assets ratio stood at 53.5 per cent, compared to 51.0 per cent a year earlier. The Group’s long-term liabilities decreased during fiscal 2002/2003 to EUR 32.8 M (41.6).

At the close of fiscal 2002/2003, the Group’s liquid assets amounted to EUR 47.3 M (43.8). Net cash flow from business operations amounted to EUR 36.7 M (24.8).

PERSONNEL

The average number of Viking Line employees was 2,822 (2,792), of whom 2,069 (2,089) worked for the parent company. Land-based personnel totalled 693 (706) and shipboard personnel totalled 2,129 (2,086).

OPERATING CONDITIONS

The Finnish government has decided to enact an enlarged system of state restitution, in which taxes and social security fees on the income of shipboard employees will be refunded to the shipping company in accordance with European Union (EU) guidelines. This enlargement will go into effect only on January 1, 2005 and will lead to a reduction in personnel expenses for vessels that sail under the Finnish flag to a level comparable to that of Swedish-flagged vessels.

Starting on January 1, 2004, the current limitations on personal imports of taxed alcoholic beverages will be abolished on intra-EU passenger services, but not on services to and from the Åland Islands, which lie outside the EU tax union. Duty- and tax-free sales will continue on services to Åland, with the same personal import limitations as previously. Due to Estonia’s EU accession on May 1, 2004, it will become possible to personally import very large quantities of taxed alcoholic beverages from Estonia to Finland. For this reason, Finnish excise taxes on alcoholic beverages will be lowered sharply starting on March 1, 2004. Taken together, these changes will affect purchasing behaviour, pricing and the flow of passengers in Viking Line’s service area.

OUTLOOK FOR 2004

The above circumstances concerning duty- and tax-free sales, together with increasingly tough competition from vessels with lower manning expenses, will affect the company’s profitability. However, it is especially difficult to quantify their consequences for the Group’s earnings during the new fiscal year. For the time being, the Group estimates that its earnings during the 2003/2004 fiscal year will be somewhat lower than its 2002/2003 earnings.

THE BOARD'S PROPOSAL ON DISTRIBUTION OF EARNINGS

According to the balance sheet of the Viking Line Group on October 31, 2003, unrestricted equity amounted to EUR 44,962,770.83. The unrestricted equity of the parent company totalled EUR 54,045,395.78. The tax surplus from prior years amounted to EUR 8,669,045.11.

The Board of Directors proposes to the annual shareholders' meeting that the unrestricted equity be allocated as follows:

When rounding off items to the nearest EUR 1,000,000, rounding-off differences of EUR ± 0.01 M have occured.

¹⁾ (Profit before extraordinary items – direct taxes) / Average number of shares

²⁾ Shareholders’ equity / Number of shares on October 31

³⁾ (Profit before extraordinary items – direct taxes) / Shareholders’ equity (average for the year)

⁴⁾ (Profit before extraordinary items + interest and other financial expenses) / (Total assets – interest-free liabilities [average for the year])

⁵⁾ Shareholders’ equity / (Total assets – advances received)

The above figures from the financial statements have been audited.

Shareholders’ meeting

The annual meeting of shareholders in Viking Line Abp will be held at 12 noon on Wednesday, February 4, 2004 at the Hotel Arkipelag, Strandgatan 31 in Mariehamn, Åland, Finland.

The Annual Report for fiscal 2002/2003 will be published during the week of January 19 in Swedish and shortly thereafter in Finnish and English.

Financial information

During fiscal 2003/2004, Viking Line Abp will issue interim reports for the periods November 1, 2003 to January 31, 2004, November 1, 2003 to April 30, 2004 and November 1, 2003 to July 31, 2004. These interim reports will be published in March, June and September 2004, respectively.

Mariehamn, December 18, 2003

VIKING LINE ABP

THE BOARD OF DIRECTORS

Nils-Erik Eklund
Managing Director

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