Accelerating EU vaccination rollout together with the implementation of the EU Green Passport is set to restore travel significantly from midsummer. The upcoming quarter is challenging, but costs and cash flow are under control, and the valuation is low based on normalized profits.

The layoffs done in the second half of 2020 means Tallink is prepared for the worst scenario in 2021. We see positive cash flow this year, but if we are wrong, the government loans protect the downside. The short-term outlook is challenging, but the valuation is low based on normalized profits.

Finska staten garanterar EUR 90m av ett nyligen signerat EUR 100m lån från NIB. Detta följer estniska statens lån på EUR 100m. Budskapet är tydligt, Estland och Finland kommer hjälpa rederierna genom krisen. Vi bedömer nu att Tallink har fullgod likviditet tills sommarens högsäsong.

Following Estonia’s EUR 100m government loan, Finland steps up and guarantees EUR 90m of the recently signed EUR 100m loan from the NIB. We now believe Tallink has more than enough liquidity until the summer high season.

In the near-term, Tallink’s fortune depends on the development and political responses to covid, as this will determine passenger demand. If the number of covid cases* per 100K inhabitants (cases) converge around twenty in the Baltic Sea region, travel restrictions become more a question of politics than covid prevention.

The Q1 report was “ok” but focus is on the summer high season. If the summer is decent (our Base case), we believe the company may not need to use the full government loan amount. If the summer is weak, then the government loan should be sufficient but additional financing need cannot be excluded.

Tallink’s Q4/19 profit was the best in 5 years. However, focus is on Corona. The negative pax effect is expected to be substantial, but there is also a positive oil price effect. We lower our estimates due to Corona, but still see net profit and dividends.

Strong restaurant and shop sales combined with favorable fuel costs led to a record quarter. We raise our profit estimates and lower our sales estimates.

Tallink är den ledande kryssningsoperatören i norra Östersjön. Bolaget går mot ett starkt år med en förväntat direktavkastning på 5%. Vi ser möjlighet till ökad utdelning framöver drivet av ökad försäljning ombord samt expansion av landbaserad verksamhet.

Tallink is the leading cruise operator on the Baltic Sea. It has been profitable every year except 2010 since listing in 2005 and paid dividends every year since 2013. The outlook for increased dividends is good as the onboard spending trend is positive and the onshore business is developed.