Based on management accounts for January and February 2024 and a forecast for March 2024, now available, Eimskip estimates that EBITDA in the first quarter of 2024 will vary materially from the analyst consensus of EUR 21 million which was published today, April 5th 2024. The Company estimates that EBITDA in the first quarter of 2024 will be in the range of EUR 13 - 15 million and EBIT in the quarter is estimated in the range of EUR -2.5 to -0.5 million.
As was presented in Eimskip's most recent investor presentation, the results for the fourth quarter of 2023 were marked by a sharp decrease in Trans-Atlantic freight rates compared to the first half of the year 2023. In the first quarter of 2024, the Trans-Atlantic rates remained on a low level, while adverse changes in the market environment in Iceland have put even greater pressure on the financial results. Import of new cars and vehicles to Iceland has dropped significantly since the start of the year which greatly affects market dynamics alongside slowdown in import of general cargo. At the same time, lack of capelin quota affects exports out of Iceland while other, lower value export categories such as recycling materials have increased. Faroe Islands also experienced a slow start of the year with less liner volume than in the fourth quarter last year.
Following first indications of a slowdown in the Icelandic market and a prolonged slowdown in the Faroe Islands, both negatively affecting the financial results of Eimskip's liner services, the management initiated cost-savings measures. These include reduction of FTEs in the international part of the operation, resulting in a redundancy cost of approx. EUR 0.6 million expensed in the quarter. At the end of February, Eimskip implemented changes to its container liner sailing system with the aim of reducing bunker consumption, saving cost and reducing carbon emissions. The benefits of the sailing system changes started to materialize in March, however, the savings in the first quarter were offset by cost related to the implementation. Going forward, the aforementioned measures will yield positively, alongside expectations of seasonal growth in volume and activity in the coming months.
Eimskip is still preparing financial results for Q1 2024 and the results are subject to change during that process and until the work on financial closing is completed.
The Company will publish its Q1 2024 results after market closing on Tuesday 7 May 2024.
For further information please contact Guðbjörg Birna Björnsdóttir, Head of Investor Relations via phone (+354) 844 4752 or investors@eimskip.is.
