Fjord1 has completed its massive newbuilding program of 25 electric ferries, moving forward with the plan to reduce greenhouse gas emissions from its fleet.
In its interim report, the Oslo-listed ferry operator confirmed it took delivery of the final ship earlier this month, having welcomed five ships in the first quarter and one in the second quarter.
But Fjord1 conceded that travel restrictions for technical personnel from Germany and Italy during the coronavirus pandemic have delayed electrification work on some services.
This will push back the start-up of fully electric ferry routes and postpone the release of public infrastructure payments and government-funded NOx compensation for the new vessels, the company said. Expected fuel cost savings from the battery-powered ships will also be delayed.
Fjord1, which has over 70 vessels, expects electricity to account for 40% of its fuel mix by the end of this year once the construction of infrastructure for the new ships is finished.
The environmental efforts will pave the way for Fjord1 to adapt to future regulatory changes, with the Norwegian government planning to ban ferry emissions in the Geiranger and Naeroy fjords by 2026.
“This year we have successfully started up several new contracts, taken delivery of [new] vessels and made further progress with the electrification of ferry services despite the additional challenges posed by Covid-19,” ceo Dagfinn Neteland said.
The company’s revenue reached NOK 1.5bn ($170m) between January and June, up 13% from the same period of last year. Ebitda increased by 15% to NOK 439m.
Fjord1 said the number of passengers decreased by 37% to 2.9m in the second quarter due to the Covid-19 crisis, but the company’s revenue was cushioned because the majority of its ferry contracts were based on capacity and sailing frequency rather than traffic volumes.
"A very clean quarter from Fjord1 with limited surprises/one-offs in what has been a challenging market environment," Fearnley Securities noted.
The company's net profit fell to NOK 8m from NOK 118m in the first half of this year, however, with higher deprecation and financing costs related to the newbuilding programme and the pandemic hitting its catering and tourism businesses.
Fjord1’s net interest-bearing debt stood at NOK 5.8bn as of 30 June and is set to decrease in the second half of the year, according to the interim report.
The company has predicted its revenue will grow by 10% to 15% this year due to new ferry services. It also expects its Ebitda margin to gradually improve due to the eco friendly ships.
In the second quarter, Fjord1 secured a three-year contract to operate a ferry service on the Festvag-Misten route from next January.
