Eimskip in Growth Mode

Icelandic transportation company Eimskip ended 2017 with record volumes, revenue and EBITDA.

EBITDA for 2017 rose by 7% year-over-year to EUR 57.2 million (USD 70.3 million).

In addition, revenue increased by 29.2% to EUR 664 million in 2017. The increase came from the new acquisitions, volume growth and increased international freight rates, according to Eimskip.

However, the company recorded a net income of EUR 16.8 million, down from EUR 21.9 million seen a year earlier. As informed, the company’s net earnings reflect adverse currency exchange fluctuations year-on-year of EUR 5.8 million.

“The year 2017 can be described as “the year of growth” for Eimskip, where volume, revenue and EBITDA were record high. The year was great for the forwarding segment, with new companies added to the group and solid organic growth. The company faced some operational challenges in the liner segment, like the fishermen strike at the beginning of the year and the volume imbalance between imports and exports in Iceland that reached an all-time high, negatively affecting the EBITDA margin,” Gylfi Sigfússon, President and CEO, commented.

The volume in the North Atlantic liner system grew by 3.6% and in the forwarding services by 41.2%.

Sigfússon stressed that the acquisitions of Extraco, Mareco and SHIP-LOG have created accretive value for the group, adding that the forwarding business is becoming more important to Eimskip which wants to continue to grow the business both organically and through further acquisitions.

The company said it has reached its long-term goal of weekly service on all routes. The largest investment was in the weekly service on the North America and Europe route and the coastal route in Iceland.

As from the end of November 2017, Eimskip strengthened its Trans-Atlantic services by offering new weekly services between Northern Europe and North America. This is part of the company’s growth strategy and was achieved by adding the third 700 TEU vessel to the Green Line. Eimskip’s Trans-Atlantic volumes have been growing substantially in recent years and were up 30.9% in 2017.

Over the last three years, Eimskip added three ships to its container liner system, increasing capacity by 35%. The company said it reached its goal to offer weekly services on all of its North Atlantic routes.

“The outlook for 2018 is positive for the liner and forwarding business. Good growth is in import and export volumes in Iceland in the first six weeks of this year and the outlook for the Faroe Islands and Norway are stable. Trans-Atlantic transport volume is expected to increase with the weekly services. Competition remains strong in the North Atlantic liner operation. The EBITDA forecast for the year 2018 is EUR 60 to 65 million,” Sigfússon further said.

The cooperation regarding the vessel sharing agreement with Royal Arctic Line is estimated to begin in mid-2019, as explained by Eimskip. Eimskip has ordered two 2,150 TEU vessels for USD 32 million in China.

The company has been working on lowering its carbon footprint in the recent years. The accumulated reduction of the company’s carbon footprint in 2016 and 2017 was 12.3% compared to the base year 2015, calculated per ton of transported units. Eimskip’s aim is a 40% accumulated reduction in 2030.

Currently, Eimskip operates 22 vessels of which thirteen are owned and nine are chartered.