SIX-MONTH REPORT, NOVEMBER 1, 2005 - APRIL 30, 2006

SALES AND EARNINGS

During the period November 1, 2005 − April 30, 2006, consolidated sales of the Viking Line Group totalled 182.16 million euro (year-earlier period: 172.17 million euro). Operating profit was EUR -7.07 M (-12.20). Consolidated profit before taxes totalled EUR -6.83 M (-12.45). Profit after taxes was EUR -5.43 M (-9.90).

Consolidated sales rose by 5.8 per cent due to more service days and higher passenger volume. Net sales revenue per passenger was at the same level as during the first six months of fiscal 2004/2005. Repair and maintenance costs were lower during the report period, since there were no lengthy out-of service periods and dry-dockings. The Viking Cinderella was out of service in January 2005 and the Gabriella was dry-docked in April 2005. Bunker (vessel fuel) costs were substantially higher than in the year-earlier period.
 

TRAFFIC AND VOLUME

The Group’s vessels served the same main routes as during 2004/2005.

During the first six months of fiscal 2005/2006, the number of passengers on the Group’s vessels totalled 2,579,340. This was 5.2 per cent higher than in the year-earlier period. Viking Line’s cargo volume rose by 3.7 per cent to 45,989 cargo units.
 

INVESTMENTS AND FINANCING

The Group’s investments totalled EUR 7.89 M (1.70). On April 30, 2006, the equity/assets ratio was 54.3 per cent, compared to 51.8 per cent on the same date in 2005.

At the end of April 2006, the Group’s liquid assets amounted to EUR 26.69 M (19.70). Net cash flow from business operations amounted to EUR 2.18 M (-7.50).

At a regular Board meeting, the Board of Directors adopted the following dividend policy for the Viking Line Group: “At least 40 per cent of the Group’s profit that is generated through its regular business operations shall be distributed as a dividend. The dividend distribution shall take into account the need for financing, the Company’s economic position as well as any capital gains.”

The vessel construction contract with Aker Finnyards for the Viking XPRS high-speed passenger ferry included options for two additional vessels. After having evaluated the existing alternatives, the Board has decided not to exercise the option for the first of these two vessels.
 

ORGANISATION AND PERSONNEL

The average number of Group employees was 2,801 (2,790). Of these, 2,010 (1,694) worked for the parent company. Land-based personnel totalled 698 (705) and shipboard personnel 2,103 (2,085).
 

CHANGE IN ACCOUNTING PRINCIPLES

Viking Line will issue its first report in compliance with International Financial Reporting Standards (IFRS) starting with the financial statements for the 2005/2006 fiscal year, with comparative figures for 2004/2005 based on a transition date of November 1, 2004. When reporting in compliance with IFRS, it is customary in Viking Line’s industry to recognize a residual value when drafting depreciation plans for vessels. Viking Line will also introduce estimated residual values for the Group’s vessels when establishing depreciation plans in compliance with IFRS.

When reporting in compliance with Finnish Accounting Standards (FAS), the depreciation plans for vessels have been changed to reflect the same principle that will be applied when reporting in compliance with IFRS. The planned carrying amount (book value) on November 1, 2004 is unchanged, while an estimated residual value at the end of the useful life of vessels has been taken into account when calculating depreciation. For this reason, planned depreciation for the remaining estimated useful life of the vessels has been recalculated. Figures for the comparative year have been recalculated in compliance with the new principles. The estimated useful life of the vessels has not been changed. Planned depreciation during the report period declined by EUR 1.24 M (1.33) due to the changes in accounting principles.

An account of the consequences of the transition to IFRS will be published in conjunction with the Group’s press release on results for fiscal 2005/2006.

A deferred tax asset attributable to the results for the report period was recognized as a reduction in deferred tax liabilities. This deferred tax asset was recognized in the income statement for the period. Figures for the comparative year were adjusted accordingly.
 

OUTLOOK FOR THE FULL 2005/2006 FISCAL YEAR

The Group’s earnings are not generated evenly throughout the year. These earnings are highly dependent on volume and price developments during the remainder of the fiscal year. Developments to date and continued high bunker prices do not justify a change in the outlook published in the latest full fiscal year financial statements and the preceding Interim Report, i.e. that the Group’s earnings for fiscal 2005/2006 are expected to be at about the same level as its earnings in fiscal 2004/2005.

This Interim Report is unaudited.

The next Interim Report (for November 1, 2005 − July 31, 2006) will be published on September 14, 2006.

When rounding off items to the nearest EUR 1,000,000, rounding-off differences of EUR ± 0.01 M have occurred.
 

Mariehamn, Åland, June 14, 2006
 

VIKING LINE ABP
The Board of Directors

Back