INTERIM REPORT, NOVEMBER 1, 2005 - JULY 31, 2006

SALES AND EARNINGS

During the period November 1, 2005 − July 31, 2006, consolidated sales of the Viking Line Group totalled 299.91 million euro (year-earlier period: 283.38 million euro). Operating profit was EUR 7.21 M (0.53). Consolidated profit before taxes totalled EUR 7.61 M (-0.02). Profit after taxes was EUR 5.31 M (-0.56), equivalent to 1.8 per cent of sales.

Consolidated sales rose by 5.8 per cent, which shows the market’s confidence in Viking Line, but is also a consequence of more service days. Net sales revenue per passenger was at the same level as during the first nine months of fiscal 2004/2005. Repair and maintenance costs were lower during the report period, while bunker (vessel fuel) costs were substantially higher than in the year-earlier period.
 

TRAFFIC AND VOLUME

The Group’s vessels served the same main routes as during 2004/2005.

During the first nine months of fiscal 2005/2006, the number of passengers on the Group’s vessels totalled 4,180,213. This was 4.6 per cent higher than in the year-earlier period. Viking Line’s cargo volume rose by 4.0 per cent to 66,573 cargo units.
 

INVESTMENTS AND FINANCING

The Group’s investments totalled EUR 9.76 M (2.26). On July 31, 2006, the equity/assets ratio was 55.5 per cent, compared to 52.3 per cent on the same date in 2005.

At the end of July 2006, the Group’s liquid assets amounted to EUR 41.70 M (32.96). Net cash flow from business operations amounted to EUR 19.03 M (6.19).
 

ORGANISATION AND PERSONNEL

The average number of Group employees was 2,892 (2,881). Of these, 2,063 (1,730) worked for the parent company. Land-based personnel totalled 720 (730) and shipboard personnel 2,172 (2,151).
 

CHANGES IN ACCOUNTING PRINCIPLES

Viking Line will issue its first report in compliance with International Financial Reporting Standards (IFRS) starting with the financial statements for the 2005/2006 fiscal year, with comparative figures for 2004/2005 based on a transition date of November 1, 2004. When reporting in compliance with IFRS, it is customary in Viking Line’s industry to recognize a residual value when drafting depreciation plans for vessels. Viking Line will also introduce estimated residual values for the Group’s vessels when establishing depreciation plans in compliance with IFRS.

When reporting in compliance with Finnish Accounting Standards (FAS), the depreciation plans for vessels have been changed to reflect the same principle that will be applied when reporting in compliance with IFRS. The planned carrying amount (book value) on November 1, 2004 is unchanged, while an estimated residual value at the end of the useful life of vessels has been taken into account when calculating depreciation. For this reason, planned depreciation for the remaining estimated useful life of the vessels has been recalculated. The estimated useful life of the vessels has not been changed. Figures for the comparative year have been recalculated in compliance with the new principles, leading to a reduction of EUR 2.00 M in planned depreciation for the comparative period. Tax expenses in the comparative year attributable to profit for the period have been adjusted by EUR 0.55 M due to the changes in accounting principles.

An account of the consequences of the transition to IFRS will be published in conjunction with the Group’s press release on results for fiscal 2005/2006.
 

OUTLOOK FOR THE FULL 2005/2006 FISCAL YEAR

The earnings improvement achieved during the first nine months of fiscal 2005/2006 is expected to affect full fiscal year earnings in such a way that they will be better than fiscal 2004/2005 earnings.

The Interim Report is unaudited.

The Group’s press release on results for fiscal 2005/2006 will be published on December 21, 2006.

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

Mariehamn, Åland, September 14, 2006
 

VIKING LINE ABP
The Board of Directors

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