PRESS RELEASE ON THE RESULTS FOR THE FISCAL YEAR NOV. 1, 2003 - OCT. 31, 2004

MARKET DEVELOPMENTS

The market for passenger ferry services between Sweden, Finland and the Baltic states increased by 3.6 per cent to 16.4 million passengers. The number of passengers on Viking Line’s vessels increased by 2.2 per cent to 5,150,996.

The total number of cargo units in the service area rose by 13.7 per cent to 422,000. On Viking Line’s vessels, the quantity of cargo rose by 6.6 per cent to 83,669 units.

During the period, Viking Line increased its passenger volume and market share in Sweden-Åland Islands (Finland)-Finnish mainland services. Placing the Viking Cinderella in cruise service from Stockholm led to a sharp rise in the number of passengers from Sweden. On the Helsinki (Finland)-Tallinn (Estonia) route, however, passenger volume declined while cargo volume rose.

Viking Line’s share of passengers in the entire service area amounted to 31.3 per cent (31.7). In terms of route segments, its market share was distributed as follows: Helsinki-Stockholm (Sweden), 42.1 per cent (42.6); Turku (Finland)-Stockholm 42.4 per cent (43.6); services to the Åland Islands, 49.4 per cent (41.9); and Helsinki-Baltic states, 13.2 per cent (17.7).

VESSELS AND ROUTES

The Group’s vessels served the same main routes as during 2002/2003. Starting in September 2003, the Viking Cinderella was placed in cruise service on the Stockholm-Mariehamn (Åland Islands) route. The vessel previously provided cruises between Helsinki and Tallinn. During the peak summer season, the Viking Cinderella made eight cruises between Stockholm and Riga (Latvia). In the summer of 2003, the vessel made nine cruises between Helsinki and Riga. Since mid-August 2003, the Rosella has operated in scheduled service between Helsinki and Tallinn. The vessel previously provided cruise service between Stockholm and Mariehamn.

The Group’s seven vessels have a book value of 163.2 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 2003/2004 amounted to EUR 385.2 M (fiscal 2002/2003: EUR 397.8 M). Operating profit was EUR 13.2 M (22.9). Net financial items were EUR -0.2 M (-0.3). Consolidated profit before taxes amounted to EUR 13.0 M (22.6). Net profit for the fiscal year was EUR 13.0 M (15.8).

Due to lower net sales revenues per passenger, the Group’s sales fell and operating profit was lower than in the same period of fiscal 2002/2003. Net sales revenues per passenger declined due to the adjustment of shipboard prices for those goods on which the price level was affected by the lowering of the tax level in Finland and by Estonia’s accession to the European Union (EU).

Cargo revenues rose due to the increased number of sailings between Helsinki and Tallinn.

The Finnish Parliament’s decision to lower the corporate income tax level from 29 per cent to 26 per cent beginning on January 1, 2005 has been taken into account when calculating deferred tax liability. The total change in deferred tax liability increases the Group’s earnings by an amount that exceeds the tax for the report period.

When making comparisons with fiscal 2002/2003, it should be taken into account that the principles for expensing vessel repair and maintenance costs have been revised in such a way that a smaller proportion of these expenditures has been capitalized. This has a certain negative impact on earnings.

INVESTMENTS AND FINANCING

The Group’s investments totalled EUR 4.5 M (9.9).

On October 31, 2004, the equity/assets ratio stood at 53.7 per cent, compared to 53.5 per cent a year earlier. The Group’s long-term liabilities decreased during fiscal 2003/2004 to EUR 24.3 M (32.8).

At the close of fiscal 2003/2004, the Group’s liquid assets amounted to EUR 46.1 M (47.3). Net cash flow from business operations amounted to EUR 33.6 M (36.7).

On May 18, 2004, Viking Line acquired a majority of the shares in Sundqvist Buss Ab, which provides scheduled service and organises bus trips using twelve buses based in Åland. The company has been included in the consolidated financial statements beginning with May 2004.

ORGANISATION AND PERSONNEL

On May 17, 2004, the Board of Directors decided to draft a plan for a merger of the wholly-owned subsidiary Viking Line Marketing Ab Oy with the parent company, Viking Line Abp. The merger is expected to enter into force on November 1, 2005.

The average number of Viking Line employees was 2,828 (2,822), of whom 1,733 (2,069) worked for the parent company. Land-based personnel totalled 704 (693) and shipboard personnel totalled 2,124 (2,129).

OUTLOOK FOR 2005

The Finnish government has decided to implement an expansion of its maritime restitution system. In addition to withholding taxes on the income of shipboard personnel, social security payments will also be refunded to ferry shipping companies in keeping with European Union guidelines. This expansion takes effect beginning on January 1, 2005 and will lead to a reduction in manning costs for vessels sailing under the Finnish flag, to a level comparable with Swedish costs.

The travel and cargo shipping market is expected to remain stable, while competition in Viking Line’s service area will become increasingly stiff. This applies especially to services between Helsinki and Tallinn, where most vessels under non-Finnish flags are manned by personnel from the Baltic states. In March 2004, Viking Line adjusted the shipboard prices of goods whose price level was affected by the tax cut in Finland. This led to lower net sales revenues per passenger during eight months, which had a negative impact on fiscal 2003/2004 earnings. During the 2004/2005 fiscal year, the price adjustment will affect net revenues per passenger during all twelve months. In addition, lower margins because the sale of goods on the Helsinki-Tallinn service became subject to taxation will also apply throughout the fiscal year.

During fiscal 2004/2005, a number of major dry-dockings and discontinuations in service have been planned, and the number of service days will consequently be less than in fiscal 2003/2004.

On the basis of the above, Viking Line estimates that its earnings during the 2004/2005 fiscal year will be lower than its 2003/2004 earnings.

THE BOARD'S PROPOSAL ON DISTRIBUTION OF EARNINGS

According to the balance sheet of the Viking Line Group on October 31, 2004, unrestricted equity amounted to EUR 37,694,205.29. The unrestricted equity of the parent company totalled EUR 47,139,524.22.

The Board of Directors proposes the following:

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 + minority share (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 + minority share) / (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 Tuesday, December 21, 2004 at the Hotel Arkipelag, Strandgatan 31 in Mariehamn, Åland, Finland.

The Annual Report for fiscal 2003/2004 will be published on Tuesday, December 14, 2004  in Swedish and shortly thereafter in Finnish and English.

Financial information

During fiscal 2004/2005, Viking Line Abp will issue interim reports for the periods November 1, 2004 to January 31, 2005, November 1, 2004 to April 30, 2005 and November 1, 2004 to July 31, 2005. These interim reports will be published in March, June and September 2005, respectively.

Mariehamn, December 11, 2004

VIKING LINE ABP

THE BOARD OF DIRECTORS

Nils-Erik Eklund
Managing Director

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