OREANDA-NEWS. April 11, 2011. In the second quarter (01.12.2010-28.02.2011) the Group (AS Tallink Grupp and its subsidiaries') continued to show positive developments in the operations. The Group's sales campaigns and various offers were well received by the customers throughout the quarter. The passenger number increased to nearly 2
million in the second quarter of the 2010/2011 financial year which is 23% higher when compared to the second quarter of the previous financial year.

Cargo volumes were 19% higher in same comparison. As an effect of the strong volume growth and steady revenue per passenger on a year on year comparison the Group's unaudited consolidated revenue was EUR 188.8 million which is 19% or EUR 30.8 million higher than in the second quarter of the last financial year.

While the cost inflation is visible in all areas the costs overall did not exceed the Group's revenue growth and the Group was able to increase earnings. The most impacting cost item in the second quarter was the fuel cost with a 23% or EUR 5.8 million increase from the same time in the last year. As the Group continued to keep the focus on the sales and marketing activities the marketing expenses continued to increase according to expectations. The Group's EBITDA in the second quarter of the 2010/2011 financial year was EUR 18.1 million which is EUR 7.7 million or a 74% increase in the year on year comparison. EBITDA margin improved from 7% to 10%. In the second quarter, which is the low season, the Group's unaudited consolidated net loss was 9.4 million compared to the netloss of 16.3 million year ago.

All the Group's main operations and segments showed a positive development. Volume and revenue growth was highest on Estonia-Sweden and Latvia-Sweden routes. Similarly to the last year the Group's weakest route Finland-Germany was not operated in the low season(January and February). The vessels were in maintenance during that time. The Group will operate Finland-Germany route in the summer high season until mid August 2011 when the vessels M/S Superfast VII and M/S Superfast VIII will be chartered to Stena Line Ltd for at least three years.

In the Annual General Meeting held in February 2011 the Group's financial year was changed. The new financial year will be the calendar year, from 1st of January to 31st of December. Due to the change the current 2010/2011 financial year which started on 1st of September 2010 will be 16 months long, ending in31 December 2011. The Group will provide comparable operational and financial information to make the transition smooth.

The management has introduced a new point in the Group's strategy - to reach a optimal debt level which would allow sustainable dividends in the future. While the other strategic points of the Group are profitability targeted the new path will contribute more to the shareholders' value and return. In the management opinion the comfortable level of the Group's net debt to EBITDA should be 5 times or less and the equity ratio to total assets around 40%.

The Group's second quarter result meets the management expectations. In the management opinion the Group's development in the 2010/2011 financial year has performed well and the Group is on the track to improve the results in the current financial year.