annual report 2006 - molslinjen · management’s review ... municipality of registration:...
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Annual Report
2006Your shortcut in Denmark
Ebeltoft
Odden
Aalborg
Frederikshavn
Hirtshals
Hjørring
Thisted
Hobro
Kalundborg
Køge
Roskilde
Helsingør
KøbenhavnHorsens
Skive
HolstebroViborg
Randers
Herning Silkeborg
Skanderborg
We sail directly to and from the Jutland motorway system!
Dat
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f, 04
.200
7, 500
Odden-Ebeltoft approx. 45 min. Odden-Aarhus approx. 65 min.Kalundborg-Aarhus approx. 2 h. 40 min.Motorway
Table of contents
Page
Board of Directors and Board of Executives ........................................................................... 4
Company information and addresses ..................................................................................... 4
2006 in brief ................................................................................................................................... 5
Business philosophy and targets .............................................................................................. 6
Financial highlights ...................................................................................................................... 8
Management’s review ..............................................................................................................10
Shareholder information .........................................................................................................14
Mols-Linien builds on strong values ....................................................................................18
Human resources .......................................................................................................................20
Mols-Linien Service Academy ................................................................................................23
Mols-Linien and the environment ........................................................................................24
New service improvements based on IT ............................................................................27
Mols-Linien’s ferries in 2006 ..................................................................................................30
Routes, customers and traffic trends ....................................................................................32
Financial review ..........................................................................................................................35
Income statement ......................................................................................................................37
Balance sheet ...............................................................................................................................38
Statement of changes in equity for 2006 .............................................................................40
Cash flow statement ...................................................................................................................41
This publication is a summary of the Annual Report for 2006 for Mols-Linien A/S.
In the event of any discrepancies, the content of the Annual Report for 2006 takes precedence.
The complete Annual Report for 2006 – including the financial review and the complete financial statements with notes
– can be found at www.mols-linien.dk.
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Board of Directors and Board of Executives Board of DirectorsAnker Christoffersen, former chairman of FTF (Chairman)Thorleif Blok, Manager (Vice-chairman)Erik Østergaard, CEOMichael Steen-Knudsen, Assistant Manager John Steen-Mikkelsen, Head of Division Kaj Birk Jensen, Chief Engineer (employee representative)Annelise Lund, Team Manager (employee representative)Bent Mand Jørgensen, Chief Engineer (employee representative)
Board of ExecutivesPreben Wolff, CEO, MSc (Economics)
Company details
Mols-Linien A/S FærgehavnenDK-8400 EbeltoftCVR no. 17 88 12 48
Municipality of registration: Ebeltoft, DenmarkTelephone +45 89 52 52 00Fax +45 89 52 52 90Internet www.mols-linien.dkEmail [email protected]
SubsidiariesGrenaa-Hundested Linien af 1988 A/S, Ebeltoft, Denmark (100%) (non-trading company)Kattegatruternes Reparationsselskab ApS, Ebeltoft, Denmark (100%)
AuditorsDeloitte Statsautoriseret RevisionsaktieselskabPricewaterhouseCoopers Statsautoriseret Revisionsinteressentskab
Preben WolffCEO, MSc (Economics)
Board of Directors of Mols-Linien A/SBack row from left: Anker Christoffersen Michael Steen-Knudsen Erik Østergaard John Steen-Mikkelsen
Front row: Annelise Lund Thorleif Blok Kaj Birk Jensen Bent Mand Jørgensen
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• In 2006, Mols-Linien posted total revenue of DKK 761.2 million against DKK 716.5 million in 2005, up 6.2%.
• The net profit amounted to DKK 53.2 million, which is an improvement on the announced outlook for 2006 of DKK 40-50 million – and at the same time the best-ever results in the company’s history.
• Mols-Linien realised a positive cash flow from ordinary activities in 2006 of DKK 104.8 million, which is on a par with the announced outlook for the year of DKK 100-110 million.
• In 2006, the ferry line again saw an increase in the number of motorcars and lorries carried.
• The Kalundborg-Aarhus combi-ferry route carried a record 360,100 lorry units, representing a 1.7% increase on the record from 2005.
• The high-speed ferry concept on the Kattegat introduced more departures with hourly services at certain times and the ongoing launch of a number of new services for professional business travellers, which has attracted an increasing number of frequent commuters.
• Mols-Linien’s continued growth and success is conditional upon the management’s and the employees’ constant focus on developing and implementing improved services and rationalisations throughout the company. To ensure the future development of Mols-Linien’s service concepts and products
within all internal and external areas, the ferry line set up the Mols-Linien Service Academy in 2006.
• The estimated market value of the Mols-Linien ferries currently totals approx. EUR 76-86 million, corresponding to approx. DKK 570-645 million. As at 31 December 2006, the book value of the ferries is DKK 416.9 million.
• The satisfactory results were achieved despite the continued political fixing of the rates for crossing the Great Belt Link, which leads to fierce competition on travel and transport between eastern and western Denmark – and despite the fact that fuel prices remained very high in 2006.
• Against the background of the satisfactory results for the year and Mols-Linien’s favourable capital structure, the Board of Directors recommends to the general meeting that dividend of DKK 10 per share be paid, corresponding to a total of approx. DKK 28 million. The dividend corresponds to a pay-out ratio of 53% of the net profit for the year.
Outlook 2007
• Provided that fuel prices remain stable, Mols-Linien A/S expects to post a total profit after tonnage tax for 2007 in the region of DKK 50-60 million and a positive cash flow from operating activities of DKK 100-110 million.
Best results in the history of Mols-Linien
The objective and vision of Mols-Linien is to continue to live up to the original political intentions of creating and fur-ther developing a well-balanced traffic infrastructure in Denmark.
Thus, the company is a significant and important player in Danish society as it ensures highly stable ferry connections between eastern and western Denmark. Mols-Linien will continue its current strategy of further optimising the high-speed ferry concept from Sjællands Odde to both Aarhus and Ebeltoft. This will be realised providing a very high level of service where the future development of positive travelling experiences is of vital importance.
In addition, Mols-Linien will take an active and involved approach to other domestic ferry routes which may support the company’s primary routes. This may take the form of collaboration, alliances, partnerships and direct ownership.
It is also Mols-Linien’s ambition to strengthen its collaboration with Sund & Bælt and to engage in technical collab-oration with a view to offering a better service to all types of travellers between eastern and western Denmark.
At the same time, Mols-Linien will take a more targeted approach and in-tensively seize any opportunities for sell-
ing know-how and a range of manage-ment services within the high-speed ferry segment to ferry lines around the world.
Shareholding policyThe company wishes to safeguard the interests of its shareholders. In general and subsequent to the financing of any new tonnage, other new investments and any potential company acquisitions, Mols-Linien will repay excess capital to the investors in the form of share buy-back schemes and/or dividends. The Board of Directors estimates that a con-siderable amount of cash should be set aside for future business development.
In the coming years, the company will attempt to optimise the capital struc-ture. The repayment of the resulting pro-ceeds to the shareholders will take place in consideration of the company’s devel-opment plans and the necessary consoli-dation of the equity, thereby creating a basis for the continued expansion of the company.
Incentive scheme for company employeesThe Board of Directors of Mols-Linien has decided to follow a recommenda-tion from a work group consisting of rep-
resentatives of the employees and the management concerning a programme which involves the granting of shares of up to DKK 20,900 per employee in return for a corresponding pay cut.
If adopted, the programme will be offered to all employees. However, a number of general criteria will be laid down, entailing for example that partici-pants must have a certain seniority.
The programme will be implement-ed in pursuance of Section 7A, Subsec-tion 1(2) of the Danish Tax Assessments Act (Ligningsloven). The maximum allo-cation of shares per employee will be de-termined in consideration of the maxi-mum tax-free allocation to employees stipulated by the Danish tax authorities (Skat). In 2006 the limit was DKK 20,900. The shares received must be held for a period of 7 years.
If all eligible employees decide to join the programme, Mols-Linien will need approx. 16,000 shares which will be al-located in the form of bonus shares. At a price of 480, the total maximum value of the programme is DKK 7.7 million. The value of the programme will be fully off-set by the pay cuts which will be agreed with the employees, for which reason the programme involves no additional costs for Mols-Linien A/S.
Business philosophy and targets
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Mols-Linien’s five ferries sail across the Kattegat just under 16,000 times a year. This corresponds to approx. 561,000 nautical miles or approx. 1,038,000 kilometres, the equivalent of approx. 26 times around the equator.
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2006 2005 2004* 2003* 2002*
DKKM DKKM DKKM DKKM DKKM
Income statement
Revenue 761.2 716.5 694.4 633.6 606.8
Expenses 698.8 673.7 627.7 568.6 546.6
Other operating income - 21.8 - - -
Operating profit (EBIT) 61.0 64.6 66.7 65.0 60.2
Net financials -9.9 -19.1 -23.4 -27.9 -32.0
Profit/loss from ordinary activities before tax 52.5 45.5 43.3 37.1 28.2
Net profit/loss, laid-up/chartered-out ferry - - - -97.4 -0.5
Profit/loss before tax 52.5 45.5 43.3 -60.3 27.7
Profit/loss for the year 53.2 41.4 43.2 -60.5 6.0
Balance sheet as at 31 December
Non-current assets 503.5 516.0 736.3 809.0 879.3
Receivables and inventories 84.1 86.6 84.6 81.1 71.0
Financial assets available for sale 198.5 - - - -
Cash and cash equivalents 50.2 234.5 1.0 1.2 1.6
Assets 836.3 837.1 821.9 891.3 951.9
Equity 419.9 385.8 361.2 317.9 378.4
Provisions - - 22.5 48.0 0.0
Long-term liabilities other than provisions 249.0 276.1 253.5 309.4 361.7
Short-term liabilities other than provisions 167.3 175.3 184.7 216.0 211.8
Liabilities and equity 836.3 837.1 821.9 891.3 951.9
Cash flow statement
Cash flows from operating activities 104.8 110.3 122.8 97.2 83.8
Cash flows from investing activities -241.2 180.5 -36.4 -35.4 -39.8
Cash flows from financing activities -47.9 -40.2 -51.4 -51.1 -33.0
Change in cash and cash equivalents -184.3 250.6 35.0 10.7 11.0
Cash and cash equivalents, net as at 31 Dec. 50.2 234.5 -16.1 -51.1 -61.8
Other financial highlights
Net working capital (NWC) -54.8 -55.3 -29.5 -30.6 -25.7
Invested capital 428.1 439.0 707.1 778.7 854.0
Investments in property, plant and equipment 41.3 57.3 36.7 37.4 42.9
Net interest-bearing debt 8.7 53.8 326.2 412.8 475.6
Average number of full-time employees 492 509 524 507 516
Average number of shares (in thousands) 2,796 2,799 2,799 2,799 2,799
Average number of shares, diluted (in thousands) 2,830 2,799 2,799 2,799 2,799
Financial highlights
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2006 2005 2004* 2003* 2002*
Share-related highlights
Earnings per share (DKK) 19.0 14.8 15.4 -21.6 2.1
Earnings per share, diluted (DKK) 18.8 14.8 15.4 -21.6 2.1
Cash flow per share (DKK) 37.5 39.4 43.9 34.7 29.9
Dividend per share (DKK) 10 5 5 - -
Pay-out ratio (%) 53.2 34.2 32.8 - -
Book value per share (DKK) 148 136 127 112 134
Share price, year-end (DKK) 480 256 237 94 113
Operating highlights
Return on equity (%) 13.2 11.1 12.8 - 1.6
EBIT margin (%) 8.2 9.0 9.6 10.3 9.9
Return on invested capital (ROIC) (%) 14.6 10.6 8.9 7.8 4.8
Solvency ratio (%) 50.2 46.0 43.9 35.7 39.8
*) Financial highlights for 2005 and 2006 have been prepared in accordance with IFRS, cf. the description in note 1. The comparative figures for 2004, 2003 and
2002 have not been restated in accordance with the changes in the accounting policies following the transition to presenting the financial statements in accord-
ance with IFRS, but have been calculated in accordance with the accounting policies which have been applied so far, based on the provisions of the Danish Fi-
nancial Statements Act and Danish accounting standards.
Definitions and calculations The financial highlights are presented in accordance with the “Recommendations & Ratios 2005” prepared by the Danish Soci-ety of Financial Analysts (Den Danske Finansanalytikerforening).
Net working capital (NWC) is defined as inventories, receivables and other current operating assets less trade payables and oth-er liabilities and current operating liabilities.
Invested capital is defined as net working capital plus the book value of non-current property, plant and equipment and less other provisions and non-current operating liabilities. Net in-terest-bearing debt is defined as interest-bearing liabilities, in-cluding taxes payable, less interest-bearing assets, including cash and cash equivalents, financial assets available for sale and taxes receivable.
The solvency ratio is not defined by the Danish Society of Fi-nancial Analysts’ “Recommendations & Ratios 2005”. In this an-nual report, the solvency ratio is defined as:
Profit margin (%)Operating profit/loss x 100
Revenue
Return on invested capital (%) EBITA x 100Average invested capital
excluding goodwill
Return on equity (%) Profit/loss x 100Average equity
Average number of shares: The average number of shares in circulation in a given period, excluding the company’s own shares.
Solvency ratio (%) Equity year-end x 100
Balance sheet total year-end
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On board the ferries, passengers can take a break and enjoy a wide selection of food and drinks. Each year, Mols-Linien’s own catering department prepares and serves approx. 1 million meals. The ferries offer a wide variety of both light and more substantial meals, including interesting gourmet menus.
Growth in revenue and profit in 2006 as a result of continued streamlining and service improvements
In 2006, Mols-Linien posted total rev-enue of DKK 761.2 million against DKK 716.5 million in 2005, up 6.2%.
The net profit for the year totalled DKK 53.2 million against DKK 35.0 million in 2005, representing an increase of DKK 18.2 million, thus exceeding the outlook announced in the most recent interim financial statements of a net profit for 2006 of DKK 40-50 million.
The net profit for the year represents the best results in the company’s history so far.
For Mols-Linien, 2006 was again char-acterised by competition from the Great Belt Link and the politically determined rates for crossing the bridge, but also by very high prices on fuel for the com- pany’s ferries and by several periods of unfavourable weather conditions.
The negative impacts of these factors were, however, countered by the growth of the Danish economy and increasing levels of economic activity across Den-mark. This led to growth in the number of business travellers, in the number of
road trains and in the cargo volumes fer-ried by the company across the Kattegat.
In the course of the year Mols-Linien concentrated on maintaining and opti-mising a number of the initiatives and streamlining measures already imple-mented and planned throughout the company. These measures and initiatives also had a positive effect in 2006.
Consequently, the Mols-Linien man-agement would like again to thank all employees for their positive and com-mitted efforts in the face of what has at
Management’s review
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2002 2003 2004 2005 2006
times been very difficult working and market conditions. The results for the year clearly reflect the fact that they have been achieved in a spirit of positive col-laboration across traditional occupational boundaries within the shipping industry. Thanks to this team spirit, Mols-Linien is staying on course and together we will be heading for new growth and new horizons.
Continued growth for the Kattegat routesIn 2006, Mols-Linien again saw an in-crease in the number of motorcars and lorries carried. There has been a particu-larly positive increase in the number of business travellers on the high-speed ferries; both the new timetable with more departures and several other service im-provements have been well received by customers.
On the Kalundborg-Aarhus route, the number of motorcars was up 9.0% relative to 2005, while the number of lorries increased by 1.7%. Improve-ments in service levels were introduced throughout the year for both private travellers and lorry drivers.
Cash flow Cash flow from operating activities con-tributed DKK 105.8 million in 2006,
which is on a par with the expected cash flow in the region of DKK 100-110 mil-lion announced in the company’s interim financial statements.
The marked cash flow from operating activities is, among other things, the re-sult of Mols-Linien’s continued strategy of ensuring maximum flexibility in view of the current market conditions.
This flexibility has thus made it pos-sible to optimise the number of transfers with individual ferries, thereby increasing average prices without increasing costs. In combination with the streamlining measures implemented and planned, Mols-Linien is thus still able to control and manage operations and costs opti-mally with the existing resources.
Satisfactory 2006All in all, the Board of Directors of Mols-Linien is satisfied with the financial results for 2006.
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Outlook 2007
In its assessment of the outlook for 2007, the management of Mols-Linien is as-suming that the net prices of fuel for the ferries will average approx. USD 600 per ton of oil for the high-speed ferries and approx. USD 300 per ton of oil for the combi-ferries.
The following risk factors should also be taken into account:• Deviations in the number of motor-
cars ferried or average prices of +/-5% will translate into DKK +/-25 million in results.
• Deviations in the volume of heavy traf-fic ferried or average prices of +/-5%
will translate into DKK +/-9 million in results.
• Deviations in the price of oil for the high-speed ferries of 10% in the second half of the year will have an impact on results of DKK +/-11 million.
• Deviations in the price of oil for the high-speed ferries of 10% in the second half of the year will have an impact on results of DKK +/-2 million.
Based on these assumptions, Mols-Linien expects:• To ferry approx. 1,000,000 motorcars
and approx. 370,000 lorries on the Kat-tegat ferries.
• A profit for 2007 after tonnage tax in the region of DKK 50-60 million.
• A positive cash flow from operating ac-tivities in the region of DKK 100-110 million.
Mols-Linien presents annual report in accordance with IFRS/IAS
This annual report has been prepared in accordance with the International Finan-cial Reporting Standards (IFRS/IAS) and therefore also contains current assess-ments of the scrap values and useful lives of the Mols-Linien ferries.
The management has taken this step to meet demands from investors and also in view of international develop-ments in accounting procedures and fi-nancial reporting. However, the decision has also been made so as to facilitate the benchmarking of the company against other ferry lines with which Mols-Linien is compared internationally.
Mols-Linien does not present consol-idated financial statements as the com-pany’s two subsidiaries are immateri-al to the overall picture, for which rea-son there would be no real difference between the financial statements of the parent company and such consolidated financial statements.
The parent company is not required to comply with the International Finan-cial Reporting Standards (IFRS) until the
2009 financial year, but has decided to start applying these standards voluntar-ily as from the 2006 financial year.
The Annual Report for 2006 has thus been presented in accordance with the International Financial Reporting Stand-ards (IFRS) as approved by the Europe-an Union and also with Danish report-ing standards applicable to the annual reports of reporting class D (listed) com-panies. The Annual Report also complies with the International Financial Report-ing Standards (IFRS) issued by IASB.
The transition to IFRS has necessitat-ed a number of changes in the parent company’s accounting policies and esti-mates. The most important changes are as follows:• Recognition of residual values of
property, plant and equipment pur-suant to IAS 16, which has not been the case under the former accounting policies.
• Recognition of share-based remuner-ation.
• Recognition of long-term termination
benefits and jubilee obligations pursu-ant to IAS 19.
• Measurement of investments in sub-sidiaries at cost.
The changes have resulted in a reduc-tion in equity as at 1 January 2005 of DKK 2.818 million and an increase in the prof-it for 2005 of DKK 6.393 million.
For further details about the chang-es and their effect on the Annual Report, please refer to note 1 of the Annual Re-port.
The transition to IFRS has not result-ed in any other changes to the account-ing policies.
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n Stock exchange: ....................... Copenhagen Stock ExchangeShare capital ............................. DKK 283,333,000Nominal value per share ....... DKK 100No. of shares ............................. 2,833,333 sharesShare classes ............................ OneNo. of votes per share ............ OneBearer security ......................... YesLimited voting rights .............. NoLimited negotiability .............. NoID code ....................................... DK0010207067
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Mols-Linien A/S’s shares are listed on the Copenhagen Stock Exchange. On 31 December 2006 the share price was 480. This corresponds to a price increase in the course of the financial year of 87.5%.
As at 31 December 2006, the mar-ket value of the company’s shares was DKK 1,356,8 million, whereas the market value as at 31 December 2005 was DKK 725.3 million.
Mols-Linien A/S shares for a total of DKK 1,907.1 million were traded on the Copenhagen Stock Exchange during the financial year, representing a 695% in-crease on last year.
The company’s shares are followed by a number of analysts, including:
Phillip Christensen, Danske EquitiesSteven Brooker, SEB Enskilda
During most of 2006, the price of Mols-Linien’s shares developed very positively despite the fact that no decision has as yet been made by the Danish government concerning the fu-ture of Scandlines and thereby important parts of the Danish infrastructure.
Share-related highlights
DKK 2006 2005 2004* 2003* 2002*
Earnings per share (DKK) 19.0 14.8 15.4 -21.6 2.1
Earnings per share, diluted (DKK) 18.8 14.8 15.4 -21.6 2.1
Cash flow per share (DKK) 37.5 39.4 43.9 34.7 29.9
Book value per share (DKK) 148 136 127 112 134
Share price, year-end (DKK) 480 256 237 94 113
Shareholder information
*) Financial highlights for 2005 and 2006 have been prepared in accordance with IFRS, cf. the description in note 1. The comparative figures for 2004, 2003 and
2002 have not been restated in accordance with the changes in the accounting policies following the transition to presenting the financial statements in ac-
cordance with IFRS, but have been calculated in accordance with the accounting policies which have been applied so far, based on the provisions of the Danish
Financial Statements Act and Danish accounting standards.
The company’s purchase of treasury sharesIn accordance with the resolution adopted by the annual general meet-ing, Mols-Linien A/S was authorised to acquire treasury shares with a nominal value of up to DKK 28,333,000, corre-sponding to 10% of the share capital, in the period up until 30 June 2007.
On 7 November 2006 the company initiated a share buy-back scheme, but the liquidity of the share proved to be limited. In the period up until 12 Janu-ary 2007, the company has thus acquired shares for a total of DKK 3.5 million.
Against this background, the Board of Directors decided to abandon the pro-gramme and to review the current divi-dend policy.
The shares have been bought back at a weighted average price of approx. DKK
487 each. The company currently holds 40,178 treasury shares, corresponding to 1.42% of the company’s share capi-tal. Up to 34,350 of these treasury shares are expected to be used for the above- mentioned share option programme.
Dividend policyIt is Mols-Linien’s policy that sharehold-ers should receive a return on their in-vestment in the form of price increases and dividend which exceeds a risk-free investment in government bonds. The distribution of dividend should allow the necessary consolidation of equity as a basis for the company’s continued growth.
Against the background of the satis-factory results for the year and Mols-Linien’s favourable capital structure, the Board of Directors recommends to the
general meeting that dividend of DKK 10 per share be paid, corresponding to a to-tal of approx. DKK 28 million. The divid-end corresponds to a pay-out ratio of 53% of the net profit for the year.
Investor relationsMols-Linien A/S’s investor relations pol-icy aims to ensure a high level of infor-mation and a continuing active and open dialogue with investors and analysts – and to provide information about the stock market and the company’s financial situation, operations and strategies.
The company aims to hold investor relations events with a high degree of openness – among other things by invit-ing analysts and investors to information meetings.
Mols-Linien A/S has registered the fol-lowing shareholders holding more than 5% of the company’s share capital and voting rights, stating the time of registra-tion of the information:
Scandlines Danmark A/S, Copenhagen (as at 13.10.2006) (30%) - Rudersda A/S, Birkerød (as at 7.11.2006) (15.25%) - Ejen-domsselskabet Sandgården, Hellerup (as at 11.12.2006) (9%)
Ejendomsselskabet Øresundshøj A/S, Hellerup (as at 03.05.2006) (5.18%) - Clas-sen Holding A/S, Copenhagen K (as at 14.12.2006) (5.01%)
Shareholders
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Stock Exchange Notifications in 2006/2007
No. Date Subject112 09.03.2006 Financial Statements of Mols-Linien A/S113 10.03.2006 Senior employees’ trading in Mols-Linien A/S shares114 13.03.2006 Senior employees’ trading in Mols-Linien A/S shares115 20.04.2006 Information on the proceedings at the annual general meeting 116 20.04.2006 Update on developments during Q1 2006117 20.04.2006 Information on the proceedings at the annual general meeting 118 23.08.2006 Press release from the Danish Ministry of Transport and Energy119 25.08.2006 Interim financial statements 2006120 07.11.2006 Update on developments in Q1-Q3 2006121 07.11.2006 Financial calendar 2007122 12.01.2007 Status and plans for Mols-Linien’s share buy-back scheme123 12.01.2007 General incentive programme for Mols-Linien employees
Financial calendar for 2007
Date Subject08.03.2007 Financial statements 200603.04.2007 Submission of the printed annual report for 2006 to the Copenhagen Stock Exchange19.04.2007 General meeting at Hotel Ebeltoft Strand, Ebeltoft, at 2.15 pm19.04.2007 Update on developments in Q1 200719.04.2007 Information on the proceedings at the annual general meeting23.08.2007 Publication of interim financial statements 200722.11.2007 Update on developments in Q1-Q3 2007. Financial calendar 2008
Annual general meetingThe annual general meeting of Mols-Linien A/S will be held on 19 April 2007 at 2.15 pm at Hotel Ebeltoft Strand.
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Mols-Linien builds on strong values
The development of Mols-Linien to date has always been borne by strong values in respect of the company, its manage-ment, employees, customers and society at large. In some cases based on formal-ised sets of values – in other cases in a more informal form.
As part of the continued development of the company, the Mols-Linien man-agement and employees work close-ly together to translate the Mols-Linien values into words, action and specific tar-gets within all relevant areas of activity.
This has so far resulted in a framework description of the Mols-Linien values in the form of a so-called value circle, which describes the company’s values and tar-gets for the creation of value and prof-itability, while also describing the com-pany’s values and targets in relation to internal and external processes and re-lations.
The value circle consists of two main elements – i.e. focus on “profitability and creation of value” and focus on “service and customer satisfaction”.
“Profitability and creation of value”Mols-Linien is working in a targeted way to create financial results and values which live up to shareholder require-ments concerning profitability, thereby
ensuring the continued operation, devel-opment and growth of the ferry line. At the same time, Mols-Linien aims to con-tinue to be a healthy and viable work-place for its employees.
“Service and customer satisfaction”Mols-Linien aims to safeguard its finan-cial position by offering the best possi-ble and safest transport solutions to its customers, based on modern ferries con-necting eastern and western Denmark, and by always providing a high level of quality, the best service in the market and positive travel experiences.
This in turn is based on Mols-Linien’s unique service concept which is fun-damental to the company’s activities at all levels of the organisation and which aims to attract and provide all types of customers with positive travel experi-ences, at the same time creating direct and indirect value for Mols-Linien and its customers.
The following factors, among others, are central to safeguarding these main elements of the value circle:
TeamworkThe management and employees of Mols-Linien rank teamwork and team spirit very highly, acknowledging that the
targets set can only be met through the focused and efficient efforts of all em-ployees in the organisation, across pro-fessional boundaries.
Ability and will to change Mols-Linien is always ready to change and adapt to new situations – driven by its own innovation, by changing custom-er requirements, by political decisions and by changes in society. The market is undergoing constant development and change. Mols-Linien wants to play an active role in this development. Conse-quently, old habits, customs, traditions and views must not stand in the way of the company’s ability and will to imple-ment changes.
Shared responsibility and loyalty Mols-Linien’s employees must always be ready and willing to assume their per-sonal share of responsibility for the com-pany’s activities, for the future develop-ment of the service concept and for the financial results of day-to-day opera-tions. All employees must demonstrate ownership and take independent ini-tiatives to optimise and streamline the company and to strengthen cross-func-tional collaboration in connection with all types of activities and challenges.
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This requires personal integrity, loyal-ty and respect for the ferry line and its owners, management and other col-leagues in the organisation who are all dependent on the positive teamwork of committed people.
InnovationMols-Linien’s management and employ-ees must be creative and able to identi-fy new and innovative solutions which create value for the company and for the
individual by always looking for new op-portunities – rather than obstacles, and by supporting cross-functional collabor-ation to ensure the continued dynam-ic development of the company – both nationally and internationally.
Attention to detail and conscientiousness It is the aim of the entire manage-ment team and all employees in the Mols-Linien organisation to carry out
their jobs conscientiously and with the attention to detail required to achieve the defined performance targets, but also with a view to ensuring compliance with the quality and overall safety standards which apply throughout the organisa-tion. This is of decisive importance when it comes to ensuring that the organisa-tion can act as a team in dynamic proc-esses and also in critical situations.
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As a specialist transport and service pro-vider, Mols-Linien is under constant pres-sure to develop new concepts and serv-ices to both attract and retain customers and concepts and services which are com-petitive in comparison with alternative transport solutions between Jutland and Zealand and other service offers.
It is not and will not be possible for Mols-Linien to take part in the political-ly determined price competition with the Great Belt Link for transport and travel solutions between Jutland and Zealand.
The Mols-Linien service concept is therefore the strongest card in the com-petition for travellers between eastern and western Denmark. The continued development and success of the ferry
line very much depends on the contin-ued innovative development and im-provement of its service concepts. Such initiatives also involve the company’s employees and depend on their educa-tion and training, professionalism, moti-vation – and unique service-mindedness and customer focus.
Service focusing on qualityWhen the Mols-Linien management and employees talk about “service”, “service concepts”, “quality”, “positive experien-ces” etc., what is meant is the sum of all the ideas, initiatives, special offers and specific measures which the ferry line is able to develop and offer to attract and retain a growing customer base.
Happy and satisfied customers will ensure the long-term business founda-tion for Mols-Linien, while at the same time being the best ambassadors when it comes to spreading the message that the ferry line is actually in a class of its own with its quality, service and safety standards.
Stable and loyal organisationIn 2006, Mols-Linien had an average of 492 employees who had been employed with the company for an average of ap-prox. 11 years. The stable workforce is at the heart of the organisation – and helps to ensure the presence of the necessary experience and know-how within all areas of activity.
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Company based on people, service, safety and quality
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In the course of the year, the perma-nent members of staff were supplement-ed by a number of temporary workers, primarily in the catering and ticket sales/
booking departments, to assist during holiday periods, on bank holidays etc. All temporary workers attend a carefully planned course to ensure that they live
up to Mols-Linien’s high safety and ser-vice standards.
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Mols-Linien Service Academy
As a natural part of the company’s inno-vative measures, Mols-Linien has estab-lished its own Service Academy which was in operation throughout 2006.
In the course of the first year, more than 200 employees have already at-tended the Mols-Linien Service Acad-emy’s newly developed courses. In line with the aims of the Service Academy, participants have represented a wide range of job categories, including ship’s assistants, captains, officers, service and cleaning staff and other job functions.
The Service Academy has got off to a flying start, as clearly evidenced by the results achieved. Both customers and everybody in the Mols-Linien organisa-tion have from day one clearly sensed the
inspiration, dynamics and specific service skills which the course participants have brought back to their job functions.
The results of the Mols-Linien Serv-ice Academy’s first year have had certain repercussions as several competing ferry lines in Denmark and abroad and various service companies within other lines of business have enquired about the pos-sibility of buying training places at the academy.
Initially, first priority is given to Mols-Linien’s own managers and employees when allocating places and resources. However, the positive feedback from par-ticipants and from external stakeholders has already paved the way for an as-sessment aimed at ascertaining whether
Mols-Linien will be able to increase ca-pacity and resources at the Mols-Linien Service Academy and perhaps even de-velop it as an independent business activity.
It is primarily the ferry line’s own em-ployees who undertake to educate, coach and train their own colleagues. Later on, external specialists may well be called in who can contribute other competences which are or are set to become neces-sary in a service organisation with high levels of ambition and aggressive growth targets.
In spring 2007, the Mols-Linien Ser-vice Academy will be moving into newly refurbished course and teaching facilities at Odden Havn.
Mols-Linien has established its own service school, the Mols-Linien Service Academy. The academy offers training programmes for the ferry line’s staff within the fields of service, teamwork etc. In 2006, approx. 200 employees from a number of different staff groups attended the academy’s courses.
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Mols-Linien and the environment
Mols-Linien endeavours to act as a re-sponsible and well-run company at all times. This also applies within the field of the environment, and the ferry line attaches the utmost importance to or-ganising the operation of its ferries and terminals to ensure that all its activities have the least possible impact on the environment and the surroundings as possible. The concern for the environ-ment has always been given a very high priority by the ferry line, which will also be the case in future.
Tests with biofuelsIn 2006, Mols-Linien initiated a devel-opment and trial project which involves adding a certain amount of soya oil to the fuel used by the high-speed ferries. If the trials go according to plan, this could lead to a number of environmental im-provements and perhaps even a reduc-tion in costs.
This initiative is yet another exam-ple of how Mols-Linien gives a high pri-ority to participating actively in innova-tive projects and processes which are in accordance with the political and social agendas.
At seaThe Mols-Linien ferry services on the Kattegat represent a natural shortcut in Denmark, saving travellers between the Greater Copenhagen Area and eastern/central and/or northern Jutland approx. 200 kilometres of driving – each way, in comparison with driving all the way, by car.
So as to reduce the fuel consumption of the Mols-Linien ferries as much as possible, the ferry line is constantly ad-justing and optimising its timetables for both the high-speed and combi-ferries. The operating economy improves, the more passengers there are on the indi-
vidual departures, which also results in reduced environmental impacts.
Moreover, the ferry line monitors the engines and other items of machinery to ensure the lowest possible oil consump-tion. Ongoing monitoring and optimum maintenance thus helps to improve the operating economy while at the same time reducing environmental impacts.
The Danish environmental require-ments governing noise and wave height are some of the most restrictive in the world. The high-speed ferries are fitted with noise reduction technology, and both routes are environmentally ap-proved and comply with all current stat-utory requirements, including the Danish rules on wave height.
The high-speed ferries sailing on the crossings between Odden and Aarhus/Ebeltoft do not sail on routes which pass through areas designated as important bird areas or other preservation areas.
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On landEnergy consumption at port facilities and land terminals will be reduced as much as possible. This is being achieved by keeping employees informed about ex-pedient behaviour and use of energy-consuming equipment. Moreover, new routines are being introduced and new technology installed, including mod-ernised electricity and IT installations, a wood pellet boiler at the port in Ebeltoft and electronic management and control of heating and water consumption etc.
In collaboration with the Danish Maritime Occupational Health Service, Mols-Linien checks all cleaning agents and chemicals used on land and on board the ferries. Thus, the ferry line only ever uses products included on the positive list, constantly working to re-place the products used with products which are more gentle and more en-vironmentally sound. This process in-volves both employees and members of the safety committees.
At Odden Færgehavn, Mols-Linien has its own water purification plant with a capacity of 1,000 person equivalents. The purification plant cleans waste water and oily water from the ferries.
Waste from the ferries is sorted for recycling in accordance with a special waste plan. Mols-Linien’s employees sort the waste into factions such as pa-per packaging, iron, batteries, spray cans, fluorescent lights, oil waste, oil filers and food items.
Energy consumption and emissionsIn 2006 the Mols-Linien high-speed ferries and combi-ferries used approx. 2.8 million GJ on the Kattegat, which corresponds to consumption in 2005.
Sulphur oxide (SOx), which gives rise to increased acidification of, for exam-ple, waterways and lakes, largely de-pends on the sulphur content of the fuel. The sulphur content of the fuel used by Mols-Linien’s ferries is very low com-pared with that used by other vessels.
The sulphur content of fuel oil contin-ues to fall as a result of technological ad-vances at the refineries.
Mols-Linien is aware that nitrogen oxide (NOx), which also causes acidifica-tion, is the primary source of emissions from its ferries. A group of specialists is therefore seeking to reduce NOx emis-sions through technical modifications to the ferry engines.
The ferry line finds that emissions of hydrocarbon (HC) and carbon oxide (CO) from the ferries are at an acceptable level. These emissions are typically caused by incomplete combustion.
In 2006, total emissions per passen-ger on Mols-Linien’s ferries are all on a par with previous years.
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Mols-Linien continues to give a high pri-ority to the development and use of IT within all areas which may help to op-timise internal business procedures and processes – and result in service im-provements for customers. Mols-Linien is therefore always ready to invest in IT which may pave the way for strength-ening the company’s technological and competitive edge in the market.
New initiatives worth mentioning include:
• Self-service and fast check-in for Busi-ness BlueClass travellers
• Order and pay for your ticket online
• Order and pay for your ticket online and use your cash or credit card as an elec-tronic ticket
• Wireless Internet via Hotspot for all customers on board the ferries and in BlueClass Business Lounges on land
• Electronic travel updates• Current travel information via email,
text message and WAP telephones via www.mols-linien.dk/WAP
• Constant news and special offer up-dates at www.mols-linien.dk
New service improvements based on IT
Passengers can now book car tickets via the Internet and print their own tickets at the same time. This option is becoming increasingly popular.
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High-speed ferry Max MolsIn 2006, the depreciation and impairment of the Incat ferry amounted to approx. DKK 9.0 million, the carrying amount as at 31 December 2006 being approx. DKK 111.0 million. The ferry will be fully depreciated in 2018.
In 2006, approx. DKK 12.8 million was paid off on the Ship Credit Fund loans, the outstanding debt as at 31 December 2006 being approx. DKK 115,5 million. The loan in the Incat ferry will be fully repaid in 2016.
Mols-Linien estimates that, with ongoing refurbishment of the catering facilities and passenger areas as well as technical maintenance at the present high level, the Incat ferry will have a technical lifespan of another 15-20 years.
High-speed ferries Mai and Mie MolsIn 2006, the depreciation and impairment of the two Seajet high-speed ferries amounted to approx. DKK 21.3 million, the carrying amount as at 31 December 2006 being approx. DKK 148.2 million. The ferries will be fully depreciated in 2016.
In 2006, approx. DKK 8.8 million was paid off on the Ship Credit Fund loans, the outstanding debt as at 31 December 2006 being approx. DKK 79,3 million. The loan in the Seajet ferries will be fully repaid in 2016.
Mols-Linien estimates that, with ongoing refurbishment of, for example, the catering facilities and passenger areas as well as technical maintenance at a very high level, the Seajet high-speed ferries will have a technical lifespan of another 10-15 years.
Mols-Linien’s ferries in 2006
Combi-ferries Maren and Mette MolsIn 2006, the depreciation and impairment of the two combi- ferries amounted to approx. DKK 14.9 million, the carrying amount as at 31 December 2006 being approx. DKK 157.6 mil-lion. The ferries will be fully depreciated in 2021.
In 2006, approx. DKK 8.4 million was paid off on the Ship Credit Fund loans, the outstanding debt as at 31 December 2006 being approx. DKK 75,2 million. The loan in the combi-ferries will be fully repaid in 2016.
The company estimates that, with ongoing refurbishment of the catering facilities and passenger areas as well as technical maintenance at the present high level, the combi-ferries will have a technical lifespan of another 20-25 years.
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Built: ........................... 1998, Yard No. 048Type: ........................... Incat 91 m Wave Piercing CatamaranDead weight: .......... 509 tonnesCapacity: ................... 220 motorcars / 780 passengerslength: ..................... 91.3 metres · Beam: 26 metresTop speed: ............... 45 knots (84 km/h)Crossing time: ........ 65 minutesEngine power: ........ 38,480 HPMain engines: ........ 4 x Ruston 20RK270 - 4 x 7,080 kWShipyard: .................. Incat Tasmania Pty., Australia
Max Mols has a restaurant, separate VIP lounge, café with kiosk, reclining seats and several outdoor decks. There is a children’s playroom with video and games. The ferry has exciting and cosmopolitan interiors. It has two levels so there is plenty of space throughout.
Built: ......................... 1996, Yard No. 740/741Type: ......................... 76 m Seajet 250 CatamaranDead weight: .......... 250 tonnesCapacity: ................... 120 motorcars / 450 passengerslength: ..................... 76 metres · Beam: 23 metresTop speed: ............... 45 knots (84 km/h)Crossing time: ........ 45 minutesEngine power: ........ 33,000 HPMain engines: ........ 2 x General Electric gas turbines
Type LM 1600 – 2 x 12,400 kWShipyard: .................. DANYARD, Aalborg, Denmark
Mai and Mie Mols each have a restaurant, separate VIP lounge, café with kiosk, reclining seats, video cinema, computer games for children and an open sun deck. The ferries are smartly and newly designed with light, airy interiors and wide, customer-friendly aisles.
Built: ......................... 1996, Yard No. 191/192Type: ......................... Passenger Ferry CSA/STB DeepseaDead weight: .......... 3,800 tonnesCapacity: ................... 1,200 lane metres / 600 passengerslength: ..................... 136 metres · Beam: 24 metresTop speed: ............... 20 knots (37 km/h)Crossing time: ........ Approx. 2 h. 30 min.Engine power: ........ 15,800 HPMain engines: ........ 2 x Man B&W 9L35MC, Alpha Diesel
– 2 x 5850 kWShipyard: .................. Ørskov Staalskibsværft, Frederikshavn, Denmark
Maren and Mette Mols each have a kiosk/cafeteria with TV and children’s play area. The large, comfortable fer-ries are suitable for foot passengers, motorcars, cara-vans, buses, lorries and the transport of semi-trailers.
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2006 saw a 2-3% increased in total car traffic in Denmark relative to 2005 – the greatest increases being on the motorway network and slightly lower increases on other main roads and highways (Source: Danish Road Directorate).
The increasing traffic volume repre-sents a considerable load on the road network with more frequent and seri-ous congestion problems along many stretches of highway, especially around the larger towns and cities.
At the same time, the preliminary fig-ures for 2006 indicate that the political-ly determined reductions in the rates for crossing the Great Belt Link and the Øre-sund Link have contributed to increasing motorcar and lorry volumes – despite the high fuel prices for most of 2006.
Most of this growth comes from pri-vate motorcars and holidaymakers who go for the reduced bridge toll rates.
More commutersHowever, the growing numbers of com-muters who elect to live further and fur-ther away from their places of work in order to reduce their housing costs ac-count for the largest share of the increase in traffic load on the state-controlled fixed links.
Modest combined growth in number of customers carriedDespite the unfair competition for travel-lers between eastern and western Den-mark, Mols-Linien in 2006 succeeded in attracting more customers who con-
sciously select a more comfortable and secure mode of travelling – rather than spending unproductive time and money travelling by road.
In 2006, the ferry line realised a com-bined growth in the number of motor-cars ferried of 0.8%, which is satisfactory given the current market conditions.
High-speed ferry routesMols-Linien regularly optimises and adapts the overall timetables of the high-speed ferries for services and departure times to meet market requirements and demands, both in relation to business travellers and private passengers. The company’s two high-speed ferry routes have started offering more frequent de-partures at peak hours and are thus in-
Modest growth in number of travellers
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Numbers ferried by Mols-Linien
01.01.–31.12. 2006 2005 Change
Motorcars 992,500 984,727 +0.8%
Lorries 360,100 354,080 +1.7%
Passengers 2,631,599 2,674,341 -1.6%
creasingly being perceived as one com-bined and efficient service and transport function across the Kattegat.
The high-speed ferries Odden-Aarhus and Odden-Ebeltoft transported roughly the same number of motorcars in 2006 as in 2005, which Mols-Linien consid-ers to be satisfactory given the politically determined rate reductions on the Great Belt Link which continue to expose the ferry line to completely unfair competi-tion.
The synergies created between the two routes from Odden to Aarhus and Ebeltoft, respectively, are becoming ever more apparent, where travellers espe-cially perceive the many departures from Odden to Jutland as one combined effi-cient service.
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DS Mols-Linien has a total of three high-speed ferries on these routes, and in 2006 more departures were added to the timetable – especially in the afternoons – to cater for business travellers needing to get home after a long day at work in either eastern or western Denmark.
The route between Odden and Aarhus continues to account for the highest number of motorcars carried – primari-ly business travellers – to and from the business areas in eastern and central Jutland, while the route between Odden and Ebeltoft is particularly popular with private travellers at weekends, around bank holidays and during the peak holi-day periods.
Kalundborg-AarhusIn recent years, the company’s low-price concept on the Kalundborg-Aarhus route has become a well-known offer in the most price-sensitive market segment. Above all, the route is being marketed on its price and attracts growing numbers of motorcar passengers and increasingly also drivers of small vans, trailers, cara-vans etc.
Freight marketThe combi-ferries on the Kalundborg-Aarhus route primarily serve the freight market between eastern and western Denmark. The number of freight units in-creased by 1.7% in 2006 relative to 2005, thus reaching a record level of 360,100 units.
The ferry line has also changed the timetable for the combi-ferries so as to optimise departure times for freight customers and for the many people travelling by car who choose to use this competitive ferry route because crossing time is not such an issue for them.
Throughout 2006, Mols-Linien has had sign-on crews on board the com-bi-ferries, which has contributed signif-icantly to optimising operations and re-sults.
The positive trends which have char-acterised the freight market in recent years continued. Developments are also the result of changed rules in the trans-port area concerning driving and rest-ing rules for the drivers, the working hours regulations etc. In addition to the hauliers saving many kilometres on the road as well as costly fuel, transport with
Mols-Linien’s ferries provides a nice break during working hours in good keeping with the new driving and resting rules. On board the ferries, the drivers can relax, rest or have a healthy meal – all without wasting precious transport time.
Moreover, Mols-Linien still experi-ences strong growth in the ferrying of semi-trailers, where the company natu-rally has a strong foothold in the market compared to the Great Belt Link.
Stable operations2006 saw the continuation of the posi-tive and stable developments which the company as a whole has experienced in recent years.
In 2006, Mols-Linien revised its time-tables, capacity utilisation and costs to match the current market conditions, and the ferry line continued its endeav-ours to optimise and streamline oper-ations within all areas of activity.
Technically speaking, operations have not been affected by serious accidents or interruptions, and internationally Mols-Linien continues to be known as one of the world’s most punctual and reliable ferry lines.
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The annual report for 2006 of Mols-Linien A/S has been presented in accordance with the International Financial Reporting Standards (IFRS) as approved by the European Union and also with Danish reporting standards applicable to the annual reports of listed companies.
Income statementRevenueIn 2006, the company’s revenue increased by DKK 44.7 million to a total of DKK 761.2 million, corresponding to a 6.2 per cent increase relative to 2005.
Traffic revenue from the high-speed ferries on the Kattegat totalled DKK 469.7 million in 2006, DKK 30.2 million more than in 2005.
Traffic revenues on the Kalundborg-Aarhus route increased by DKK 9.9 million to DKK 199.7 million in 2006 as a result of a combination of a 1.7 per cent increase in the number of lorries and a 9.0 per cent growth in the number of motorcars.
In 2006, revenue from catering activ-ities was DKK 91.9 million, up DKK 4.6 million on 2005.
ExpensesThe company’s expenses including de-preciation totalled DKK 698.8 million in 2006, up DKK 25.2 million on the year be-fore. The increase in net oil prices resulted in an increase in oil costs of DKK 46.1 mil-lion relative to last year.
The ferry line has continued its rationalisation and cost reduction efforts in all possible areas.
EmployeesStaff expenses totalled DKK 209.1 million in 2006, down DKK 7.8 million
relative to 2005, which is attributable, among other things, to job cuts. The av-erage number of employees thus fell to 492 in 2006 against 509 in 2005. The fall is attributable, among other things, to the transition to using sign-on crews on the Kalundborg-Aarhus route as well as other initiatives.
In the course of the year, the permanent members of staff were supplemented by a number of temporary workers, prima-rily in the catering and ticket sales/book-ing departments, to assist during holiday periods, on bank holidays etc. All tempo-rary workers attend a carefully planned course to ensure that they live up to Mols-Linien’s high safety and service standards.
In 2006, the permanent staff had an av-erage seniority of approx. 11 years (2005: 11). This helps ensuring the necessary experience and know-how in all areas.
DepreciationDepreciation on property, plant and equipment totalled DKK 52.4 million in 2006, a fall of DKK 27.5 million relative to 2005, mainly due to the impairment losses on the high-speed ferry concept in connection with the reduction in rates for crossing the Great Belt Link in 2005 and changed estimates of the economic lives of the ferries. The changed estimates re-sulted in a reduction in depreciation in 2006 of DKK 8 million.
Net financialsNet financial expenses of DKK 9.9 million are DKK 9.2 million lower than in 2005. Interest payable on ship loans etc. fell by DKK 1.8 million, one contributing factor being loan repayments. As a result of income – among other things in con-
nection with the sale of port facilities in 2005 – interest receivable increased by DKK 6.2 million relative to 2005.
TaxThe company recognised tax of DKK 0.7 million as income in 2006. 2006 saw a positive adjustment of tax for previous years of DKK 0.8 million. Additionally, the company made provisions for taxes of DKK 0.1 million under the tonnage tax scheme. From 2002 and the next nine years, Mols-Linien elected to enter into the new tonnage tax scheme. Shipping lines covered by this tonnage tax scheme are taxed in accordance with the ship-ping line’s total net tonnage. With its present number of ferries, Mols-Linien will see annual tax of approx. DKK 0.1 million.
Financial review
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Balance sheet
AssetsAt the end of 2006, assets totalled DKK 836.3 million against DKK 837.1 million at the end of 2005.
Thus, property, plant and equipment were reduced from DKK 496.9 million in 2005 to DKK 485.6 million in 2006. Addi-tions in the year totalled DKK 29.3 million in respect of ships, of which DKK 22.6 million related to the capitalisation of regular maintenance during docking and turbine overhauls on the Seajet ferries. This item will be depreciated in the period up to the next maintenance docking or turbine overhaul.
Investments in terminals and port in-stallations and in tools and equipment, fixtures and fittings amounted to DKK 1.1 million and DKK 11.0 million, respectively.
Property, plant and equipment were reduced by depreciation for the period of DKK 52.5 million, of which DKK 22.1 million relate to depreciation made in re-spect of regular maintenance.
Fixed asset investments amount-ed to DKK 18.0 million and included in-vestments in two subsidiaries and receiv-ables from one subsidiary.
Current assets totalled DKK 332.7 mil-lion, consisting of inventories of DKK 39.4 million, receivables of DKK 44.7 million and financial assets available for sale and cash of DKK 248.6 million.
Inventories were up DKK 5.7 million relative to 2005, which is attributable to the fact that the ferry line’s oil inventories and spare part inventories were more highly valued at the time of recognition. Receivables in respect of freight and pas-senger debtors were on a par with 2005. The financial assets available for sale are bonds with short terms to maturity.
Liabilities and equityAt the end of 2006, the company’s equity totalled DKK 419.9 million, thus increased by the profit for the year of DKK 53.2 mil-lion and reduced by dividend to share-holders for 2005 of DKK 14.2 million.
Moreover, the company’s acquisition of treasury shares in 2006 of DKK 3.1 million and the value of an oil hedge of DKK 2.8 million have been deducted from equity. Other negative adjustments amount to net DKK 0.3 million.
The outstanding debt on the company’s loan in Danmarks Skibskredit A/S, the resid-ual value of the borrowing costs and bond losses in connection with the arrangement of the loan and other long-term liabilities other than provisions totalled DKK 249.0 million, down DKK 27.1 million on last year. As at 31 December 2006, DKK 229.5 million were recognised as long-term liabil-ities other than provisions, while the por-tion falling due in the year 2007, amount-ing to DKK 27.2 million, was recognised as short-term liabilities other than provisions. The loan in Danmarks Skibskredit A/S will be repaid in instalments of DKK 30 million a year up until 2016.
Trade payables of DKK 46.7 million were down DKK 2.4 million on 2005. The liabil-ity in respect of the sale of Business Blue-Class 10-trip commuter cards increased to DKK 47.1 million from DKK 40.4 million in 2005 due to the growth in sales.
Cash flow and liquidityMols-Linien’s primary activities contrib-uted positively to the cash flow by DKK 104.8 million in 2006.
In 2006, Mols-Linien placed DKK 198.2 million of the company’s cash and cash equivalents in short-term bonds, recog-nised under investments in the cash flow statement. Other investments are de-scribed in the section on assets.
Repayment of the loan in Danmarks Skibskredit A/S as well as other long-term liabilities other than provisions amounted to DKK 30.8 million in 2006, while a dividend for 2005 of DKK 14.0 million was distributed.
Total cash flow was negative at DKK 184.3 million as a result of the acquisition of bonds totalling DKK 198.2 million.
At the end of the year, the ship-
ping line’s financial assets available for sale and cash and cash equivalents to-talled DKK 248.6 million. In addition, Mols-Linien has an unutilised credit line of DKK 100 million.
In 2007, Mols-Linien is due to repay ship credit fund loans totalling DKK 30 million.
For 2007, Mols-Linien expects an over-all positive cash flow from operating activi-ties of between DKK 100-110 million.
Against the background of the above and considering the existing credit facil-ities, the management of the company is of the opinion that the company has ar-ranged the necessary liquidity for it to be able to ensure and conduct its operations as planned as well as the development of the company.
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2006 2005
DKK ‘000 DKK ‘000
Revenue 761,244 716,530
Expenses:
Ship operating expenses 304,381 263,940
Other operating expenses 66,770 50,066
Cost of sales, catering etc. 29,677 28,353
Other external expenses 36,473 34,494
Staff expenses 209,137 216,898
Depreciation, property, plant and equipment 52,395 79,930
Expenses 698,833 673,681
profit/loss before other operating income, net financials and tax 62,411 42,849
Other operating income, net 0 21,755
Operating profit (EBIT) 62,411 64,604
Financial income 6,969 744
Financial expenses -16,844 -19,838
profit/loss before tax 52,536 45,510
Tax on profit for the year (tonnage tax) 675 -4,100
net profit/loss for the year 53,211 41,410
Earnings per share (EPS) 19,0 14,8
Earnings per share, diluted 18,8 14,8
proposed appropriation of profit
Dividend for the financial year 28,334 14,167
Retained earnings 24,877 27,243
53,211 41,410
Income statement
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AS A
T 31
DEC
EMBE
R
2006 2005
DKK ‘000 DKK ‘000
Assets
Ships 416,859 432,829
Terminals and port installations 50,700 53,341
Tools and equipment, fixtures and fittings 18,002 10,732
property, plant and equipment 485,561 496,902
Investments in subsidiaries 634 634
Receivables from subsidiaries 17,337 18,500
Financial assets 17,971 19,134
Non-current assets 503,532 516,036
Inventories 39,362 33,613
Trade receivables 36,416 37,053
Receivables from subsidiaries - 4,625
Other receivables etc. 8,318 11,292
Receivables 44,734 52,970
Financial assets available for sale 198,449 -
Cash and cash equivalents 50,173 234,472
Current assets 332,718 321,055
Assets 836,250 837,091
Balance sheet as at 31 December
3�
2006 2005
DKK ‘000 DKK ‘000
Liabilities and equity
Share capital 283,333 283,333
Retained earnings 110,189 88,251
Reserves -1,921 -
Dividend for the financial year 28,334 14,167
Equity 419,935 385,751
Ship Credit Fund loans 229,504 255,740
Liabilities relating to finance leases 16,812 17,673
Provisions for termination benefits and jubilee obligations 2,660 2,639
non-current liabilities 248,976 276,052
Ship Credit Fund loans 27,174 28,028
Liabilities relating to finance leases 861 827
Provisions for termination benefits and jubilee obligations 117 138
Accrual of commuter cards 47,097 40,416
Trade payables 46,731 49,171
Income tax 0 3,900
Other payables 45,359 52,808
Current liabilities 167,339 175,288
liabilities 416,315 451,340
Liabilities and equity 836,250 837,091
Balance sheet as at 31 December
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2006 2005
note TDKK TDKK
Skibe 416.859 432.829
Terminaler og havneanlæg 50.700 53.341
Driftsmidler og inventar 18.002 10.732
Materielle aktiver 14 485.561 496.902
Kapitalandele i dattervirksomheder 15 634 634
Tilgodehavender hos dattervirksomheder 17.337 18.500
Finansielle aktiver 17.971 19.134
langfristede aktiver 503.532 516.036
varebeholdninger 16 39.362 33.613
Tilgodehavender fra salg 17 36.416 37.053
Tilgodehavender hos dattervirksomheder - 4.625
Andre tilgodehavender mv. 18 8.318 11.292
Tilgodehavender 44.734 52.970
Finansielle aktiver disponible for salg 19 198.449 -
likvide beholdninger 20 50.173 234.472
Kortfristede aktiver 332.718 321.055
Aktiver 836.250 837.091
Balance pr. 31. december 2006
STAT
EMEn
T OF
ChA
ngES
In E
qUIT
y FO
R 20
06
Sharecapital
DKK ‘000ReservesDKK ‘000
RetainedearningsDKK ‘000
proposeddividendDKK ‘000
Total equity
DKK ‘000
Equity as at 1 January 2005, cf. Annual Report 2005 283,333 - 63,655 14,167 361,155
Effect of changes to accounting policies, cf. note 1 - - -2,818 - -2,818
Adjusted equity as at 1 January 2005 283,333 - 60,837 14,167 358,337
profit/loss for the year - - 20,850 14,167 35,017
Effect of changes to accounting policies, cf. note 1 - - 6,393 6,393
Total income - - 27,243 14,167 41,410
Dividend paid, cf. note 13 - - - -14,167 -14,167
Dividend on treasury shares - - 171 - 171
Changes in equity in 2005 - - 27,414 - 27,414
Equity as at 31 December 2005 283,333 - 88,251 14,167 385,751
Adjustment to fair value of financial
instruments - -2,831 - - -2,831
Adjustment to fair value of financial assets
available for sale - 210 - - 210
net gains/losses recognised
directly in equity - -2,621 - - -2,621
Net profit/loss for the year - 24,877 28,334 53,211
Total income - -2,621 24,877 28,334 50,590
Dividend paid, cf. note 13 - - - -14,167 -14,167
Dividend on treasury shares - - 171 - 171
Purchase of treasury shares, cf. note 21 - - -3,110 - -3,110
Recognition of share-based remuneration, equity scheme - 700 - - 700
Changes in equity in 2006 - -1,921 21,938 14,167 34,184
Equity as at 31 December 2006 283,333 -1,921 110,189 28,334 419,935
Statement of changes in equity for 2006
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CASh
FlO
w S
TATE
MEn
T
2006 2005
DKK ‘000 DKK ‘000
Profit/loss before other operating income, net financials and tax 62,411 42,849
Payments, laid-up/chartered-out ferry - -22,466
Depreciation 52,395 79,930
Share-based remuneration recognised in income statement 700 0
Change in working capital -3,574 30,047
Interest received etc. 6,969 748
Interest paid etc. -13,934 -20,848
Income taxes paid (tonnage tax) -161 0
Cash flows from operating activities 104,806 110,260
Purchase of financial assets available for sale -198,242 -
Investments in periodic inspections on ships -22,646 -16,767
Investments in ships -6,631 -25,191
Investments in terminals and port installations -1,055 -10,930
Investments in tools and equipment, fixtures and fittings -10,976 -4,376
Sale of property, plant and equipment 256 237,830
Tax concerning sale of property, plant and equipment -3,062 -
Change in long-term receivables from subsidiaries 1,163 -
Cash flows from investing activities -241,193 180,566
Dividend paid to shareholders -13,996 -13,996
Repayment of long-term debt -30,806 -26,235
Purchase of treasury shares -3,110 -
Cash flows from financing activities -47,912 -40,231
Change in cash and cash equivalents -184,299 250,595
Cash and cash equivalent as at 1 January 234,472 -16,123
Change in cash and cash equivalents for the year -184,299 250,595
Cash and cash equivalents as at 31 December 50,173 234,472
Cash flow statement
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