Good day to all the participants of today's webinar. Today, we are going to give an overview of the developments and results of the Q2 of 2021. And from Dalink Group's side, the presenters on today's webinar are Chairman of the Board, Paul Nukhane Member of the Management Board, Hari Hansmidt and Financial Director, Njona Joost. As always, it is possible to submit your questions during the webinar using the question box on the right side of your screens. The questions will be addressed after the presentation part of the webinar.
And now, over to Harry Hahn Schmidt.
Thank you, Jonas. Thank you for tuning in to the Q2 webinar of 2021 for Talend Group. We will go over the latest results of 2nd quarter and developments and then the state of the Well, Talink is 3d European provider of leisure and business travel and sea transportation services in the Baltic Sea region. This is right now 2nd year of quite unusual operations for us because of the global COVID pandemic. We own a fleet of 15 vessels, and we operate typically 7 ferro routes.
Part of time, 3 of the ferry routes have been suspended now. And we will get We will talk about this a little bit on the next slide. We also operate for hotels. Our tailings for Torrega This has been closed during the crisis. Last year, we had a revenue of EUR 443,000,000 We typically hear the revenues have been over €99,000,000 and we transport the 3,700,000 passengers.
Before the crisis, this number was close to 10,000,000 passengers. We transported So last year, 36,000 cargo units and our asset base is EUR 1,500,000,000. This is mainly than ships. We also have about 4,300 employees, and Our Club 1 Loyalty program consists of 2,800,000 loyal customers. Regarding the crisis, there are various restrictions from different governments.
For us, it's mostly affects us are the restrictions from Estonia, Sweden and Finland. And because of these restrictions, The following ships were able to continue operations throughout 2021. It's Megastar Star Galaxy, Wild Princess Sea Wind, Regastar, Sailors and Atlantic Vision. And The ships on the right, we're not able to operate in the Q1, but and Q2 mostly as well, but will be mostly operational when now the Environment allows it and the restrictions allow it. Sile Europa will Wazen, short term charter in UK, Siraj Serenade and Siraj Sinfonia Have been in operation now from July and will be in operation in August doing Swedish domestic cruises and connections between Tallinn Helsinki and Helsinki Mareham.
Badi Quinn is operating between Stockholm and Tallinn and Victoria Romantica are in short term charter for 3 months. So The developments and key facts for 2021 Q2, well, obviously, there is Still a quite extensive impact from the COVID suspension of the cruise ferries and the restriction On the overall passenger capacity of the vessels and also especially between Tallinn and Helsinki, it's restricted who are able to travel and these restrictions are set by the government. And we have to follow this. And the situation has become a little bit better because the vaccinations are progressing. Also, the Numbers have been a bit lower, but many restrictions exist on these routes.
Different activities and events. Well, we enforce continuous cost control to ensure efficiency and savings from the previously implemented measures. There has been change in the management board, Marco Schulz, who is a long time employee of Talend Group since 2008 and is a long time CEO of our Finnish operations and has been appointed as Some changes in the loan agreements. We have deferred the loans and also are exempt from loan related covenants. There have been short term agreements for Resilia Europe, Victoria and Romantica for various charters.
We are opening the 3rd Burger King restaurant in Latvia, and this will be the 10th Restaurants overall, and we plan another 6 restaurants, I believe, to open This year, this will be in Latvia, Lithuania. We also finished Renovation of Tallinn City Hotel on 30th June, and the hotel is open right now and It looks really good. Regarding the results of the Q2. The impact of the restrictions was there. Now we are on a more like for like period, but obviously, the restrictions have this year been more Heavily impacting the Finnish operations and then connections between Estonia and Finland last year, Sweden was more affected by the restrictions.
So we managed to generate EUR 21,000,000 more revenue. This is still 2.5%, but obviously, the base is low and this is far from regular year. The impact on cargo operations was more limited, and we saw 18% more departures compared to the Q2 last year. Regarding costs and support, Cost of sales also increased because of various Factors and wider operations, higher fuel bill, etcetera, Costs related to the employment of the vessel were also cause for the increase and administrative and marketing costs. Also in Q2 last year, we saw reduced The enumerations and this was not the case in this year.
The total impact of our support measures has The client, we still were able to get EUR 10,600,000 effect in Various support measures, but this is down EUR 17,000,000 from the support last year when the first crisis impact happened. There were More support measures available. The positive is that the LTE level is So slightly on the positive side, but we still generate a net loss of €24,300,000 The quarterly seasonality breakdown is more useful than the regular years. As we can see right now, it is not regular here. So the only thing we can see is cargo operations Are quite typical to our usual year.
All the other numbers are down because of the restrictions. And on the dynamics of the high seasonality and profit level, we can see that Yes, Strahd. The first and second quarter have been pretty much similar to the last year. The Q1 is slightly More negative, but the second quarter a little bit more positive. I will give an award To Jonas Sjost, we will continue with the presentations.
Thank you.
Thank you, Harri. So yes, looking a bit more detailed into the development of the revenues compared to the last year's Q2. So as Hari explained, yes, there were somewhat less restrictions this Time around, but still not back to normal. But nonetheless, the revenues improved, therefore, almost So across all the operating segments, the largest increase was in the segment of restaurant and shop sales onboard and onshore. And this was due to various activities, including also addition of the Burger King Restaurants, but this increase came largely It comes down to the higher volume of the purchases and consumption of our passengers.
Ticket sales increased by about €500,000 compared to last year. And here, I would comment that the increase was largely affected by the ad hoc services offered last year, but not this year. So this elevated the comparison base. Change in the cargo sales, €1,300,000 or 6% is in line with the changes in the number of transported cargo units. And this time around, the charter revenues were €3,200,000 higher than last year, And this change was mainly affected from the fact that Zillow Europa was charted out in June this year.
The only negative segment in year over year sales comparison was the accommodation sales, And this was due to the fact that only effectively one hotel was operated in the Q2 of this year. And when looking at the revenue structure pie chart on the bottom right of the slide, Then in the Q2, the split resembles slightly more our normal operation compared to the Q1 this year, and the Share of the restaurant and shop sales has increased to 46 Percent from the Q1 this year and consequently, the share of cargo sales has reduced somewhat. In terms of geographical segments, the Estonia Finland increased most. And this route this quarter represents also the most services offered. So we had operational I'll have the shuttle service, cargo vessel and also in June, the cruise service.
At the same time, the Estonia Sweden operation was reflecting only Cargo Service. But in this year, 2 vessel operations. Last year, it was only 1 vessel in Q2. The latter Sweden route had some activity last year, but it was effectively dormant this year. Therefore, the decline in the sales of the Lattice Sweden segment and the Finland Sweden Segment represents only Torpor Stockholm route with mainly cargo concept, But still also on this route, there was increase in the revenue compared to last year in the amount of €2,600,000 And the largest increase came this time around from the segment Other, which was boosted by the charter revenue and also various retail activities, as mentioned, including also the higher number of Burger King restaurants this year.
Somewhat reiterate what Hari Explained a few minutes earlier, so in this quarter, due to somewhat better operating environment compared to last year, Sales increased to €86,000,000 In line with increase of the sales and operational volumes, There was also some increase in cost of sales and also, as Harry explained, the higher fuel costs, Preparation cost of operations of vessels for Q3 and various other Factors resulted in the cost of sales being slightly higher than last year and the marketing and administrative expenses remaining comparable to last year's results. And here, you can see the direct government assistance received This year, this amounted to €6,000,000 Last year, it was €16,000,000 So almost a €10,000,000 difference in the direct support received, but The difference in the total impact from various support measures compared to last year's Q2 was €17,000,000 Overall, net result negative, unfortunately, also this quarter still. The positive EBITDA, Start of more operations and opening the sales and bookings for new routes for July and longer periods and also the charter agreements and also negotiations with the suppliers to extend The payment terms resulted in positive working capital developments in the second quarter. So therefore, the operating cash flow was relatively healthy at €30,000,000 which is Quite an improvement over the EUR 4,000,000 recorded in the Q2 of 2020.
Just for context, the in 2019 Q2, the operating cash flow was €60,000,000 So there's still some ways to go to the previous levels. And as the investments We're kept low during the quarter and the loan principal payments were deferred, then majority of the operating cash flows Remains on our balance and the change in cash was €23,000,000 Just to remind, last year in the capital expenditure row, it included also the purchase of the vessel Saylor for €8,500,000 And looking at the financial position at the end of the June, the assets remained above €1,500,000,000 And I explained the positive developments in the working capital and the cash contributed The assets increasing compared to the beginning of the quarter. The interest bearing liabilities reached EUR740,000,000 by the end of the quarter, while the equity decreased to EUR 656,000,000 or to €0.98 per share. Most importantly, the liquidity remained strong with the cash And unused overdrafts combined at €116,700,000 And in addition to that figure, €90,000,000 of the working capital loan from Nordic Investment Bank was still undrawn at the end of the quarter. And as you can see from the graph on the right side hand side, The overall interest bearing debt level has remained still on fairly comparable level to the past years.
The interest bearing debt amounted to 573,000,000 euros at the end of the quarter, with the net debt being €535,000,000 And in addition to the €90,000,000 undrawn amount of the Nordic Investment Bank working capital loan, Just as a reminder, we also have €198,000,000 loan signed by Nordea Tron, which is related to the delivery of MyStar next year. As Hari mentioned, During the quarter, we concluded the negotiations over for the loans and deferral of the principal payments of the loans. So overall, the impact for this year It's €67,400,000 deferral. And as the deferral was agreed To include also the Q1 of the next year, the total amount is €82,100,000 And looking slightly forward, In August, there is the christening ceremony of the LNG powered shuttle vessel, MYSTAR, With the President of Republic of Estonia, Kersti Kallulain, being the godmother of the vessel, We continue preparations for operating new Burger King restaurants. As Harry mentioned, 6 new restaurants are planned to be opened in Latvia and Lithuania in the second half of the year.
And unfortunately, the outlook still remains Quite unstable and mostly dependent on external factors, being that the progress of nations or the development of the viral situation and also the decisions of the states regarding implementing various restrictions and measures in the society. Overall, The management is still in the opinion that once the situation with the vaccinations improves sufficiently and The restrictions are lifted, then we would see fairly rapid recovery in the traveling between our home markets and especially in Estonia and Finland. This concludes now the presentation part of the webinar, and we are Going to proceed to the questions and answers. And as customary, we are going to start with the questions that was sent to us in writing prior to the webinar. So the first question is, Please give an update on the latest travel restrictions to Finland and Sweden and how they work in practice.
Eiji, is there a long way to get into Finland? And Paolo will take this question.
Yes. Hello. My name is Pernig, and firstly, I'm happy that we are in a stable situation and the Q2 was tough. But due to the different actions All over our company, the efficiency of the company is better, and we are stronger to continue our operations and go through this pandemic situation, which still is ongoing. Answering the question, actually, Finland and Sweden are following now both countries, The European Union agreement where traveling is allowed between the countries and possible If traveler are fully vaccinated or have one dose of vaccine and Negative COVID test or traveling with negative COVID test or have had the COVID in last 6 months.
So generally, most easiest way is right now to travel between the Estonia and Sweden and of course, our Swedish domestic routes secondly, Estonia, Finland. And as we are going to reopen this Sunday also Helsinki Stockholm, then we don't see right now Big problems why people can't use the ferry for traveling between Estonia and Finland. Swedish situation is the best. Right now, if you take a look at the infection rates and Estonian and Finland situation are quite similar already today. So traveling is possible.
Of course, we need to Understand that we need to live together with this virus sometime, most probably some years. But the vaccination in Finland and Sweden going rather well and Estonia Trying to speed up as well the vaccination. So Yes. That's actually shortly. Traveling is possible.
You just need to have the medical documents with you.
Thank you, Baba. Next question. Following the postponement of principal loan payments, the line repayments of loans received And your cash flow statement will be 0 until the end of Q1 2022, right. When will the major loss payments be for the deferrals?
Yes, the movement will be 0 aside of fluctuations from the use of overdraft. The payments are deferred To the last payments of each respective loan agreement and the different loans have different duration and they range from 1 to 8
Yes. Thank you. Next question. What investments do you foresee for the remainder of the year? Can it continue to be at around €3,000,000 or €4,000,000
It depends a lot how many ships are in operations. The more ships in operations, the more maintenance investments are needed. We, of course, are still keeping a strict control over the investments, but we may not be able to keep it Quite at €3,000,000 or €4,000,000 per quarter in the second half of the year if we continue with the traffic Planned right now, but as the situation changing not only monthly but weekly, Then as we are monitoring carefully all the passenger numbers on different routes, then if we Decide to suspend some vessel again for some period then investments or the CapEx is lower. But if you continue like this, it should be a bit higher than this €3,000,000 or €4,000,000
Thank you. The next question, is there any way to get the guidance on the estimated number of the employees at the end of the year. Is there employee statistics in your report also including personnel hired from staffing agencies?
Employee statistic includes personnel with whom we have the employment contracts, which is the main form of employment. The number of employees At the end of the year is mainly dependent on the number of vessels in operations and the hotels, Factoring in the nature of seasonality and addition of Burger King Restaurants in the second half of the year, the number can be estimated to be somewhere Around 4,000 and the current level is 4,350. But to clarify this 4,000 doesn't mean that To be pay the salary for €4,000 because as We see decrease in the passenger numbers on some routes, then also some people are going back to lay off As it has been throughout this pandemic, for example, in Finland. So One is the number who are in the payroll and the secondly is what workload we can offer for these people. This is a bit too early to say how it ends up by the end of the year.
Thank you. The next question, how are the booking rates for Q3 and Q4 developing Better or worse compared to last year in the same period?
It is very hard to compare with the last year. So What we can see right now is that they're coming in the last moment bookings. Example, yesterday, just In one day, for the same day, we sold more than 800 tickets for different routes. Also, we see in Tallinn in Hotels that people coming to the hotel and just walk in and taking the room and they are not the students, they're coming From abroad. So when last year, we were saying that people making the bookings In very last moment then this year, we can say that they're making the bookings even the same day of the traveling.
So it's not It's good idea right now to take a look booking numbers in October, November, December because it's changing all the time.
Next question, can you quantify your fixed Cost savings in the Q2 of 'twenty one compared to last year's Q2. How much of these are permanent and how much volume dependent?
It depends also again, are we going to bring back some vessels and routes because a lot of Costs are connected directly with the employees, cost of operations and so on. But generally, yes, tailing Kegrupp is absolutely more efficient. We have made changes in our all our land organizations where we have made Changes in the employees numbers, we did bring some operations from some countries to Estonia Because of the cost efficiency and all other reasons. So definitely, we are more efficient when the Travel Link comes back to the previous year's numbers. But As I said, it's difficult to say exact number because if you open the new route, then the marketing cost goes up.
If we decide to start operations with some vessels, we need to hire back the people. What has been changed during this crisis that The example, we hire back the people also for shorter periods with the short term contracts. So also this summer, we're using the short term contracts in Estonia, example, and also In Sweden, so we really take a look into every cost we need to do and then trying to optimize as much as possible.
Thank you. Next question. Understandably the short term focus is on managing costs and cash flows, But do you see any need for changing your strategy due to the pandemic? How will Telenk become a better company after the pandemic?
We're discussing different versions. And as you have seen also now in last months, we have actually I succeeded to charter out some vessels even during the period when the hundreds of vessels are staying somewhere at the ports around the world. We were successful with SilaRope, but to U. K, we right now are operating with 2 vessels for government of Morocco and so on. So definitely, we're Trying to find ways how to kind of like charter out some vessels For the future, if we don't have ourselves confidence that open some route can be profitable, We're going to open the roads only when we see that they are profitable.
And otherwise, we let stay vessels I'll report some time and wait when the better times are coming because then the operating costs Definitely lower and we don't generate negative result with operations.
Thank you. The next question also concerns the mentioned charter agreements. The question is What profits the company expects from short term charter agreements for the vessels Victoria and Romantica with Moroccan state owned company, Tanger Med
Right now the agreement is for the both vessels for 100 days, so a bit more than 3 months. The agreement is profitable. I can't comment the rates, but definitely we are not Chartering out any vessel with negative results, so vessels earning money. And Yes. Can the agreements will be extended?
We'll see. We don't have Information about that right now. Before we made the agreement, there was a possibility that maybe the need is longer. But Right now, vessels both vessels are rolling back in end of September, beginning of October.
Thank you. Next question. Is there any plan from the company to buy or lease any other cargo vessels? I mean to focus more to trucks, transportation and less to crews, even to add some new routes.
We
Calculating and monitoring the situation in different markets very closely. Right now, there are No, the reasons made for that, if we make something like this, we will let all the shareholders know about it Via the press releases or stock exchange releases.
Thank you. Next question regarding Stockholm Helsinki routes, what is the future schedule for Sinfranik? Will Serenade continue its operations?
We hope that both vessels continue operations. It depends
How
it depends how the bookings coming in and what is the Readiness of traveling. Right now, taking a look in the August bookings, we are confident that Vessels operating. As I said, right now, the situations can change not only monthly, but weekly. We really hope that we can operate throughout the year, but we can't say it for sure. And of course, If you see that passengers numbers decreasing lower than our breakeven level compared Standing with the vessels at ports, then definitely we need to change the traffic.
But Right now, all traffic which is planned is still valid.
Thank you. Next question is, what are the company's plans for the older ships? For example, Seabin is almost 50 years old. Do the old ships of the company have scrubbers? The operating costs is good with high fuel prices as we have today.
We don't use the scrubbers. We use the 0.1 For fuel, so we don't need to use the scrubbers. What is planned for Cwind? Cwind Waiting for 50 UBL and we're planning to have a big party.
Thank you. Are the new cruising routes like Bispi, South Sweden and the Swedish Heinecaus now a regular yearly route.
Hard to say. Right now, this year, we are happy about the results we have seen for Silas Rinfoni during the domestic routes. But definitely, as mentioned also before, we need to Take a look how the market changing during this pandemic, what are the market situation in Baltic Sea and so on. But definitely, we're working to Keep the customers we have found now during these days when we're operating also Swedish domestic routes and offering For them, something as well. So we'll see.
As I said, we are happy with these Cruises and what are our plans for the future. We will let everyone know when we are ready.
Thank you. It seems that we have exhausted all the questions. So I would like to thank everyone for participating in today's webinar and Until next webinar in 3 months. Thank you.
Thank you.