NEL Lines: Full Year Results - 28.03.2008

2007 financial year results according to IFRS:

The Group’s turnover increased significantly to € 45.090.000 versus € 26.979.000 from the previous fiscal year, thus presenting an increase of 67%, even though there was extreme competition in the routes of operation and especially in the prime route of Chios-Mytilene. This increase is mostly due to the redeployment of the two highspeed vessels “AEOLOS KENTERIS I” and “AEOLOS KENTERIS II” into new routes and the addition of turnover from the subsidiary company, C-Link Ferries, whose vessels are mostly active in subsidized routes.

In addition, the Group considerably limited operating losses to € 805.000 from € 7.851.000 in 2006. The main reasons beneficially influencing the operating results of the Group during fiscal year 2007 in comparison to 2006 were as follows:

a) the increase of income by 3% per mile, due to the increase in fare prices and
b) the decrease of the total operating costs per mile by 19%. Specifically, in regards to the operating costs, the cost of fuel decreased by 14% per mile, the cost of crew fees decreased by 7% per mile, the cost of vessel insurance decreased by 25% per mile, while the cost of maintenance and upgrading of vessels (11% of the total operating costs) increased by 48% per mile due to a significant maintenance program that increased the operational abilities of the fleet. The decrease in operating costs are due to the sale and decommissioning of the vessels “AEOLOS KENTERIS” and “PANAGIA PAROU”, the redeployment of the highspeed vessels “AEOLOS KENTERIS I” and “AEOLOS KENTERIS II”, the effective management of resources and the efficiency of all human resources.

The Group’s Administrative expenses (excluding travel agent commissions) increased by 14% compared to the previous year, due in part to the exclusion of the subsidiary company, C-Link Ferries, in the previous year’s results.

Earnings before tax, interest, financial expenses and depreciation (EBIDTA) amounted to € 2.120.000 from € 43.772.000 in 2006 and “Profits/losses after tax” amounted to losses of € 9.830.000 versus profits of € 32.077.000 in fiscal year 2006. It should be noted that last year’s results included profits amounting to € 55.180.000 from the renegotiation of loans due to the malfunctions of the highspeed vessels. The substantial increase in the price of oil (the price of brent has more than doubled from the beginning of 2007 until today) has decisively affected this fiscal year’s results and significantly decreased the profit margin, negatively altering Management’s plans.

The Group’s net asset value amounted to € 54.520.000 versus € 58.736.000 in 2006. The Group’s loan obligations decreased significantly and amounted to € 70.667.000 in 2007 versus € 117.362.000 in 2006. This decrease resulted in a better loan leverage ratio for the Group by 54% in comparison to 2006.

In 2007 the Group’s traffic results amounted to 934.177 passengers, 125.662 vehicles and 27.897 trucks in comparison to 2006 traffic results that amounted to 603.548 passengers, 77.990 vehicles and 23.003 trucks. This increase in traffic transported is due to both, the redeployment of the highspeed vessels not commissioned in fiscal 2006 and the inclusion of traffic results from the subsidiary company, C-Link Ferries, which were included for the first time in fiscal 2007.

Management’s intention is to develop the basis and a business environment in which competitive services will be offered, as well as the operational development of the Group companies. Management has placed priority on increasing market share in active routes, gaining market share in new routes, capable of positively contributing to the gross operating profit margin, as well as the development of the Group’s fleet.

NEL Lines press release