Good afternoon, all of you who have joined us today. Welcome to Tallink Group Investor Webinar introducing the financial results of the first quarter of 2025. My name is Anneli Simm, I'm the Investor Relations Manager at Tallink, and today we have here a member of the Management Board, Mr. Margus Schults, who will walk you through the presentation on the operations of Tallink, first quarter financial results, as well as the key takeaways. After the presentation, Mr. Paavo Nõgene, the CEO of Tallink Group, will take your questions. We have already received your questions, but I encourage you to ask your questions also through the Q&A function of this webinar. It would be nice if you would also identify yourself when asking the questions. Enough said, I will now hand the microphone over to Margus.
Thank you, and good afternoon also from my side. Q1 results are published now on stock exchange, and as we already wrote there, Q1 was quite a difficult quarter for us as well as for the whole economy. The result of Tallink impacted by maybe four major effects. First of all, of course, economic slowdown in all our home markets. We can see that the wallet of spent on free time is lower for households, and therefore the number of passengers is affected. Also, the economic slowdown means that there is less cargo between countries. Secondly, for us, of course, four idle vessels have impacted our results negatively because idle vessels do not produce any revenue but have quite substantial costs. Thirdly, Easter. Last year, the Easter was at the end of March.
This year, Easter is in April or was in April, and obviously, Q1 results are affected by this moving holiday because we know that during Easter, there is always more people traveling. Last but not least, also the results are affected by quite long dockings. We had two Finnish-Swedish vessels, Silja Serenade and Baltic Princess, in a dock quite a long time, made improvement on technical side and as well as passenger side. These docks are also affecting our Q1 result when you compare to 2024. Our key facts are very much the same. We have 14 vessels at the end of Q1. I will come back to the events which have happened during April on the next slide. Out of these 14 vessels at the end of Q1, two vessels were chartered to Holland as accommodation vessels.
Where we are very happy is that our Club One, our loyalty program members, continue to grow. We have reached already 3.4 million Club One members, and this is obviously our assets when we make marketing and sales promotions. Also, we have a small adjustment in our minor businesses. We have one standalone restaurant now less and one Burger King restaurant less. Our fleet as of end of Q1 2025 is presented here. Just a reminder that we have on Tallinn-Helsinki route three vessels, two shuttle vessels, and one cruise vessel. On Helsinki-Stockholm, we have daily departures with two cruise vessels. On Tallinn-Stockholm and Turku-Stockholm, we have one cruise vessel operating. We have also Paldiski-Kapellskär operated by Star by the end of March, and two vessels in charter.
As mentioned, at the end of the quarter, we had four layup vessels, which affected our result in a negative way. During April, we had two major changes. First, we sold our vessel Star to Irish Ferries, and as a result of that, the Superfast ferry, which was laid up, started to operate on Paldiski-Kapellskär and obviously started to generate revenue. Today, we have one vessel less in our fleet and one vessel less also in layup. The numbers in summary are here. Basically, we had in Q1 a little bit less than one million passengers, which is about 12% lower numbers than a year ago. As mentioned already, one reason to compare this minus is the movement of Easter to April. Second is the docking of Silja Serenade and Baltic Princess.
Where we are very happy is that our international passengers, i.e., passengers coming outside of home markets, are continuing to grow. This is a positive trend, but obviously, this absolute amount of these passengers is lower than from home markets. Totally, the number is a little bit more than 100,000 lower than in 2024. Cargo units are also down, reflecting the economic slowdown. The total revenue for Q1 ended up with EUR 137 million. EBITDA was slightly negative, minus EUR 4 million, and net profit was EUR 33 million. Where I also would like to highlight is that our capital expenditure was quite high, EUR 13 million, and out of that, the biggest investment was done in Baltic Princess, where we had quite a big renovation both on the technical side, but also we renovated all our shops and restaurants.
It is quite a big improvement during the dock. We can see that the passengers have basically very well perceived this, and we see positive trends during now springtime. Also, I would like to highlight that in Q1 2024, we had sales of our Isabelle vessel, and of course, both in terms of the result and EBITDA, the Q1 2024 includes extraordinary profit. If we go by segments, then you can see that all the geographical segments had negative impact. The biggest negative impact came from Estonia-Finland segment, mostly due to the impact of cargo. Also, like already mentioned several times, the docking impacted negatively the sales on Finland-Sweden segment. In segment other, we reflect other like hotels, but also the charter vessels. Since we had less charter vessels, the segment was also negative.
If you look at segment results, you can see also that the biggest impact was almost EUR 8 million came from chartering of the vessels, but also between Estonia and Finland, the segment result was negative by EUR 7 million. Finland-Sweden result was, in relative terms, had lower negative impact because during the docking period, our costs were obviously lower. If we go to the operational segments, basically all operational segments, onboard sales, ticket sales, are reflecting lower volumes, which are coming from a lower number of passengers. The economic slowdown also reflects the sales of cargo negatively by EUR 4 million. The proportions between different segments are still very much the same. About half of revenues is coming from onboard sales, about one quarter is coming from ticket sales, and the remaining is divided basically between cargo and charter revenues.
This is a long-term trend the last six years. The number of passengers, cargo units, revenues, and EBITDA, and the blocks in each year reflects quarters. Obviously, our first quarter is the most slow business, and this year we served 1 million passengers and transported 58,000 cargo units, earned EUR 138 million in revenues, and made EBITDA minus EUR 4 million. If you look at the long-term trend comparing 2019, you can see that approximately the number of passengers have been in recent periods after COVID about - 40% lower comparing pre-COVID time, but the revenue is - 20%. We have been able to get better revenue per passenger, and EBITDA, if you look at the long-term trend, has been so far quite comparable to pre-COVID times. On net profit, these are the numbers on net profit level.
Basically, first quarter this year ended up with minus EUR 33 million. If you compare to 2019, we cut off to fit everything on screen, we cut off two COVID years from this slide. If you compare to 2019 and adjust this minus EUR 33 million with a negative result of four idle vessels, then basically we made a little bit better result than in 2019. We can see that the results are in 2019 and 2025 quite comparable adjusted to the idle vessels. On income statement, already most of the numbers have gone through. Sales number, sales EUR 137 million. The other operating items in 2024 included sales of one vessel. Basically, from operating activities, the result was minus EUR 27 million, and the EBITDA and net profit already announced minus EUR 4 million and minus EUR 33 million respectively.
On cash flow, more or less the same comments what we had previously. We had quite a high capital expenditure because of the docking of two of our vessels quite a long period. We are missing this first quarter the income from disposal of asset, i.e., sales of Isabelle. Therefore, our free cash flow is also negative minus EUR 22 million in Q1. Yeah, basically, change of cash is quite neutral considering all these changes. Our balance sheet has not been changed. Our assets are still the vessels. Basically, now the value of vessel in our balance sheet is EUR 1.35 billion. On loan side, we are paying back every quarter our loans. Basically, now the net debt is now EUR 569 million.
Some of our loans are scheduled in the way that second half of year the principal payment are higher than in first half of year. Therefore, the down payment schedule is not even during the year. Equity ratio is very strong still, even in spite of the first quarter negative result, 51%. Our loan portfolio, we have long-term loans in the amount of EUR 454 million as end of March. Three loan agreements, nothing changed. Two of those are related to our newest vessels, MyStar and Megastar, and one syndicated loan for general corporate purposes. Maturity dependent on loan are 4-10 years, and all our loans are euro-denominated, but some of those have a fixed interest rate, and some of those have a Euribor-related interest rate.
Last but not least, in the beginning of the week, we announced also the annual general meeting timetable and also the proposal for general meeting decisions. This meeting will take place on 20th of May, and all the decisions are public now. You can see that the agenda is quite ordinary as it has been in the previous years. I thank you for your attention. Thank you, Margus. Before we start with the Q&A session, I'll give the microphone over to Mr. Paavo Nõgene for a few words. Yes, good afternoon also from my side. As Margus already told, the quarter was quite difficult. We need to understand where we live. There are war in Europe. There are a difficult economical situation in our core markets. I mean, in Finland and Sweden, mainly Sweden. Swedish economy is starting to increase slowly.
In Finland, the government made yesterday important decisions to lower the income tax for the citizens and enterprises. These will have the positive impact for the future. All in all, as also Margus said, if we take off from the negative result, the four layup vessels result, then we ended the quarter in similar result as the 2019. Also, between 2019 and 2025, a lot of changed. If you take the number of passengers, example that the same result was achieved with a much lower number of passengers, etc., etc. The Tallink, as the company is still the slim fit, this helps us in these difficult situations. Definitely, when the economy is starting to grow and geopolitical situation getting better, there are also the positive outlook for the Tallink future. Let's start with the questions. Thank you.
As usually, we will follow the approach that I will be reading out the questions, and Paavo will be addressing those. I will start with the questions we have received prior to this meeting. Two questions about our hotel operations. Is Tallink not terminating a clearly unprofitable and unpromising project because the hotels belong to Infortar? The second one goes, is Tallink planning to burn more of the investors' money in this company?
Thank you for this question. Tallink has made hotel development decisions by looking at the customer journey as a whole, from purchasing a ferry ticket to staying at our hotels. There are no plans to change this strategy at this time.
Thank you. Would it be possible to quantify the Easter effect on profits?
It's not possible to quantify it in the profits currently, but what I can say is that the Easter week had 50,000-500,000 passengers more compared to the week before. The Easter impact is significant anyway.
Please give an update on the state of the market for selling ships.
As we just signed and delivered the Star to the new owner, Irish Ferries, the market is active. Yes, we have three layup ships today. We're working to find the work or to sell them. Market is active, but always the question is what is the price we offered? We are trying to find a good balance between layup the ship or sell the ship or charter her out.
Thank you. Please comment if there was a fuel price effect compared to Q1 last year, also if you hedged some fuel going into the high season quarters.
We have not hedged the fuel currently and not also the LNG. The question about the price effect compared to last year, it was plus minus EUR 1 million.
Thank you. Next question, please analyze the decline of traffic volumes on the Estonia-Finland route regarding competition, market situation, and how you are positioned towards the Estonian and Finnish markets.
We feel strong. We definitely have a different product compared to our good competitors here. We allocate our product as the premium product. If you take a look also at the pricing, what we can get, if you read the report and find out the ticket prices, then you can see that it is different from competitors. This is our strategy currently, and we do not see any big problems if someone's market share is maybe getting 1% or 2% better from us because the ticket price difference is just balancing it well.
Thank you. How are you reporting your carbon credits and the cost of them? Where do we find information about the cost for 2024 and Q1 2025? Are you buying them on the go or not?
We are buying them monthly, and you can find the 2024 cost from our annual report note 12. There are the cost for full year. We are not going to publish the quarter-based cost due also to the reason of the competition.
Thank you. Could you tell me more about the effect so far on the updated Baltic Princess?
Baltic Princess is doing well. The renovation went really well. It has had a lot of good. Yeah, it is successful. Customers are happy. We are happy. We got a lot of good PR also in the media, so everyone is very welcome on board.
She looks amazing, and definitely this investment was for the next 10 years. She hasn't had such a big investment since launching the Baltic Princess 16 years ago, so definitely it was needed, and we are happy that we were able to do it before coming up high season.
Thank you. I will continue now with the questions in our Q&A section of this webinar. Does Infortar have the lockup period as no activity on the market since buyout was finished?
No, they don't have a lockup period.
Don't you think dividend proposal is too aggressive looking at current cash flows?
We promised we will pay out this year EUR 0.06. We do it in two parts. First part, beginning of July. Second part in November, and we are confident we can do it as promised.
What are your plans regarding remaining free ships in layup?
What will be the effect on P&L of sale of Star?
About Star, you can read from the second quarter report as it happened in April. Free ships layup, we are trying to find work or sell. Let's see. Hopefully, there will be some news already in coming weeks about some of these vessels.
Thank you. This seems to be the last question now. Your market share is constantly decreasing in favor of Viking Line. What are your action points to cope with this trend? Is it a matter of the pricing?
I think I already answered this question before, that we are not worried about 1% or 2% or 3% decreasing market share. One thing I don't know which route you are talking about, because if you take the Helsinki-Stockholm, our market share is better than Viking Line.
We need to go route by route and take a look also at what is the effect of the ticket price, what is the onboard spending, and look at everything together. Definitely, to sell the premium product during the crisis period is more difficult, but we have done it quite well. In the last five years, we have been in different crises, and we are confident that we will do it well also in coming months and years.
Thank you. Since no more questions, we thank everybody for attending this webinar and for your questions, definitely. We wish you all a very good rest of the day and hope to see you back on a webinar for reporting our second quarter results in July 2025. Thank you and goodbye.