INTERIM REPORT, NOVEMBER 1, 2004 - JANUARY 31, 2005

SALES AND EARNINGS

During the period November 1, 2004 − January 31, 2005, the consolidated sales of the Viking Line Group totalled 84.58 million euro (year-earlier period: 83.92 million euro). Operating profit was EUR -7.05 M (-1.70). Consolidated profit before taxes totalled EUR -7.12 M (-1.82). Profit after taxes was EUR -7.12 M (-1.82).

The number of passengers rose by 15.5 per cent and the Group’s sales were 0.8 per cent higher than in the same period of fiscal 2003/2004. 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). Furthermore, stiff competition led to lower ticket revenues per passenger.

Operating expenses rose due to the higher passenger volume. In addition, bunker (vessel fuel) costs were higher than in the same period of fiscal 2003/2004. Repair and maintenance costs were also higher, mainly due to measures related to the Viking Cinderella’s eleven day out-of-service period in January 2005.
 

TRAFFIC AND MARKET CONDITIONS

The Group’s vessels served the same main routes as during 2003/2004.

During the first three months of fiscal 2004/2005, the number of passengers on the Group’s vessels totalled 1,171,328. This was 15.5 per cent higher than in the year-earlier period. Total passenger volume in Viking Line’s service area rose by 6.7 per cent compared to the year-earlier period. Viking Line’s cargo volume rose by 9.8 per cent to 22,159 cargo units.

Viking Line’s share of passenger traffic in its entire service area totalled 34.6 per cent (31.9). Its market share on each route was as follows: Helsinki (Finland)-Stockholm (Sweden), 42.2 per cent (40.2); Turku (Finland)-Stockholm/Kapellskär (Sweden), 42.5 per cent (42.6); services to the Åland Islands (Finland), 53.7 per cent (49.8); and Helsinki-Baltic countries, 19.1 per cent (12.4). Viking Line’s share of the cargo market on its routes totalled 21.9 per cent (22.2).
 

INVESTMENTS AND FINANCING

The Group’s investments during the period totalled EUR 1.16 M (0.91). On January 31, 2005, the equity/assets ratio was 51.2 per cent, compared to 54.1 per cent on the same date in 2004.

On January 31, 2005, the Group’s liquid assets amounted to EUR 26.95 M (45.83). Net cash flow from business operations amounted to EUR -7.43 M (-0.58). The dividend for the fiscal year 2003/2004, EUR 10.8 M (EUR 21.60 M), was disbursed in December 2004 (February 2004).
 

ORGANISATION AND PERSONNEL

The Board of Directors has drafted 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 October 31, 2005.

The average number of Group employees was 2,784 (2,701). Of these, 1,690 (1,687) worked for the parent company. Land-based personnel totalled 701 (661) and shipboard personnel 2,083 (2,040).
 

OUTLOOK FOR THE FULL 2004/2005 FISCAL YEAR

The Group’s earnings are not generated evenly throughout the year. These earnings are highly dependent on volume and price developments during the remainder of the fiscal year.

In March 2004, Viking Line adjusted shipboard prices for those goods on which the price level was affected by the lowering of the tax level in Finland. In May 2004, sales of goods on the Helsinki-Tallinn route became subject to taxation. The above-mentioned circumstances resulted in substantially lower margins during the first four months of fiscal 2004/2005 compared to the same period of 2003/2004.

The expansion of the Finnish government’s restitution system for vessels sailing under the Finnish flag took effect on January 1, 2005 and will lead to a reduction in manning costs compared to 2003/2004.

Developments to date do not justify any change in the outlook published in the latest financial statements, i.e. that earnings during this fiscal year will be lower than earnings in 2003/2004.

This Interim Report is unaudited.

The next Interim Report (November 1, 2004 − April 30, 2005) will be published on June 7, 2005.
 

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

Mariehamn, Åland, March 15, 2005
 

VIKING LINE ABP
The Board of Directors

Back