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

SALES AND EARNINGS

During the period November 1, 2004 − July 31, 2005, the consolidated sales of the Viking Line Group totalled 283.38 million euro (year-earlier period: 285.34 million euro). Operating profit was EUR -1.46 M (12.17). Consolidated profit before taxes totalled EUR -2.01 M (11.73). Profit after taxes was EUR -2.01 M (12.20).

The number of passengers rose by 5.9 per cent, but the Group’s sales were 0.7 per cent lower 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 revenue per passenger.

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

TRAFFIC AND VOLUME

The Group’s vessels served the same main routes as during 2003/2004. During the period June-August 2005 the Viking Cinderella made a total of nine (year-earlier period: eight) cruises between Stockholm (Sweden) and Riga (Latvia).

During the first nine months of fiscal 2004/2005, the number of passengers on the Group’s vessels totalled 3,994,509. This was 5.9 per cent higher than in the year-earlier period. Viking Line’s cargo volume rose by 4.0 per cent to 64,014 cargo units.

INVESTMENTS AND FINANCING

The Group’s investments during the period totalled EUR 2.26 M (5.16). On July 31, 2005, the equity/assets ratio was 52.0 per cent, compared to 52.5 per cent on the same date in 2004.

On July 31, 2005, the Group’s liquid assets amounted to EUR 32.96 M (36.52). Net cash flow from business operations amounted to EUR 6.19 M (22.59).

ORGANISATION AND PERSONNEL

The merger of the wholly-owned subsidiary Viking Line Marketing Ab Oy with the parent company, Viking Line Abp, is expected to enter into force on November 1, 2005.

The average number of Group employees was 2,881 (2,806). Of these, 1,730 (1,734) worked for the parent company. Land-based personnel totalled 730 (694) and shipboard personnel 2,151 (2,112).

OUTLOOK FOR THE FULL 2004/2005 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. Due to the above-mentioned circumstances, margins shrank substantially 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.

Competition in the market area will be increasingly stiff, due to increased vessel capacity. It is thus not possible to offset lower margins on shipboard sales with higher ticket prices. High world market prices for crude oil are leading to increased bunker costs. The Group foresees bunker costs in 2004/2005 more than EUR 6 million higher than in fiscal 2003/2004. Given the above circumstances, the Group expects earnings during 2004/2005 to be in the same range as earnings for the first nine months of the fiscal year.

This Interim Report is unaudited.

The Group’s press release on results for fiscal 2004/2005 will be published on December 20, 2005.

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

Mariehamn, Åland, September 6, 2005
 

VIKING LINE ABP
The Board of Directors

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