OREANDA-NEWS. January 20, 2010. The Group's passenger volume development was positive by 1.2% compared to the first quarter of the previous financial year. While cargo volumes for the first quarter still show a decrease by 10.5% on year on year comparison the latest months have already brought slight increase in cargo volumes on some routes.

The unaudited revenues in the first quarter of the 2009/2010 financial year were EUR 181 million (EEK 2 837 million) which is 6.4% decrease compared to the first quarter of the previous financial year. The revenue decrease was mainly influenced from the drop in cargo volumes and lower spending per passenger compared to the first quarter of 2008/2009 financial year.

The overall situation in the passenger spending pattern has however improved on quarter to quarter basis during the past two quarters which is giving a positive signal for the future outlook. The Group is actively managing the selection of products, special offers and pricing also onboard the vessels in order to follow the customers' changed spending behaviour and to meet their expectations.

The Group's EBITDA in the first quarter of 2009/2010 financial year was EUR 27 million (EEK 422 million), 10.7% lower than year ago which resulted mainly from the lower revenues. After the increased depreciation and lower interest expenses the unaudited net loss for the first quarter of 2009/2010 financial year improved by EUR 0.8 million (EEK 12 million) and amounted to EUR 1.2 million (EEK 18.6 million).

As an effect of the cost reduction activities the Group's administrative and general expenses continued to decrease in the first quarter, being 16.7% or EUR 1.9 million (EEK 29.4 million) lower compared to the first quarter of the previous financial year.

The Management continues to focus on the cost efficiency and on the improvement of the Group results. The sales or charters of older and non performing vessels have high priority. In October 2009 one of the older vessels' Tallink Autoexpress 2 was sold. There are currently several negotiations open to either charter or sell some of the older and non performing vessels.

The Group's fleet renewal program has been completed and thus the Group's investments are now relatively small going ahead. This helps to concentrate on the core operations. As there are no capital commitments then more free cash can be used to reduce the Group's net debt.

During the first quarter the Group's cash flow from operations was EUR 31.6 million (EEK 495 million), which is EUR 11.5 million (EEK 180 million) increase compared to the first quarter of the previous financial year. The increase in the operating cash flow results from the improved working capital dynamics.
Taking into account the reduction in investments, sale of one vessel and lower interest payments the total net cash flow for the first quarter increased by EUR 28.9 million (EEK 452 million) compared to the first quarter of the 2008/2009 financial year. In the end of the first quarter the Group's cash and cash equivalents amounted to EUR 41 million (EEK 642 million).