Despite constantly increasing its number of passengers, the shipping company Tallink Group had to accept a surprisingly large loss of 270 million kroons in the third quarter of its financial year 2007/2008, writes Äripäev.ee/LETA.

Tallink’s third-quarter turnover amounted to 2.75 billion kroons while in 2008, during the same period of time, the turnover reached 2.94 billion kroons. In the third quarter of its financial year of 2007/08, the group earned a loss of 34.2 million kroons.

While a few months ago, Tallink’s executives hoped that the enterprise would be able to end the financial year with a profit, it is now doubtful, although the fourth quarter of the financial year is the time when Tallink earns most of its income. In nine months, Tallink has had to face a total loss of 623.8 million kroons.

While in the first three quarters of the financial year, the increase in passenger transport brought extra revenue of approximately 266 million kroons in comparison to last year, the decline in freight transport decreased the company’s sales by 579 million kroons.

The enterprise explained the loss mostly with the decline in cargo transport, the weakening of the Swedish krona and changes in consumer behaviour. The lower average revenue per passenger continues to affect the Tallink Group’s sales revenue and profits.

Tallink announced that it is looking for different options for cutting costs. One of the proposed solutions is to lower the wages of members of the management board by a fifth.

The management board will also propose to the supervisory board to lower the pay of top-level and mid-level executives by 15%.

The management board of the enterprise is also analyzing different scenarios for restructurising, including different changes on the routes, selling or renting out old vessels.

Source

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