Scandlines Maintains Service in a Dramatic Year 2020

Scandlines has maintained operations even after the outbreak of COVID-19 and ensured satisfactory profitability despite a dramatic decline in traffic volume and revenue due to travel restrictions and border closures. The two ferry routes solidified their status as critical infrastructure, while Scandlines continued its course in 2020 to improve competitiveness and invest in green initiatives.

(Hamburg) The COVID-19 outbreak, with its severe consequences for Scandlines’ traffic operations and BorderShops, led to a significant decline in revenue to EUR 273 million in 2020 (2019: EUR 475 million). As restrictions were temporarily eased after the lockdown in spring during the summer, shopping traffic quickly recovered. Leisure traffic also saw a slight increase before new regional and national travel restrictions in the autumn led to another downturn.

Revenue from the two ferry routes fell to EUR 216 million (2019: EUR 352 million), as travel restrictions and border closures had a very negative impact on car and passenger traffic, which dropped by more than 50 percent following the COVID-19 outbreak. The freight business delivered relatively stable traffic figures with a decrease of six percent; this is because Scandlines maintained operations and continued to offer frequent departures as well as high reliability and flexibility to meet customer demand and ensure critical deliveries of medicines, food, and other necessities. Revenue from BorderShops saw a significant decline due to the travel restrictions and border closures introduced in March 2020, falling to EUR 57 million (2019: EUR 124 million).

Cost Control and Efficiency Improvement

Through targeted cost control and the continuation of measures to improve efficiency, Scandlines was able to cushion the effect of lower revenue on profitability, resulting in an operating profit without special influences (recurring EBITDA) of EUR 84 million (2019: EUR 188 million), corresponding to an EBITDA margin of 31 percent (2019: 40 percent). Scandlines met the conditions for COVID-19 aid from the German and Danish governments; this allowed the company to retain employees and cover fixed costs in a situation characterized by significant uncertainty. Some of the German employees were registered for short-time work, and the shipping company topped up the short-time work allowance by 100 percent. Despite the turbulent circumstances in 2020, Scandlines achieved a positive result and decided to repay the Danish aid of EUR 9 million to cover fixed costs.

“The dramatic developments during the Corona pandemic underscore the position of our sustainable traffic operation as part of critical infrastructure. While passenger traffic and shopping in our BorderShops drastically declined due to travel restrictions, border closures, and other infection protection measures, we maintained operations to be there for our freight customers and ensure critical deliveries across borders even in a time of many challenges. We continued ferry operations throughout the year, even though car traffic plummeted by more than 96 percent in April, and during the toughest lockdown in spring, we transported less than 200 cars a day on our two routes,” said CEO Søren Poulsgaard Jensen.

Pioneers in Green Ferry Operations

Scandlines continued its investments in the fleet – with the installation of a rotor sail on the “Copenhagen” and new thrusters on the “Deutschland” – to maintain and expand its position as a pioneer in green ferry operations, to reduce the company’s footprint and make a positive contribution to the environment.

“While COVID-19 caused a very strong decline in revenue and profits in 2020, we are extremely grateful for the extraordinary commitment that all employees have shown and continue to show to protect Scandlines. Based on the overall global efforts to deal with the impacts of the Corona pandemic, the outstanding dedication of our employees, and the long-term investments in our sustainable traffic operation, we are confident that we will gradually see improvements in 2021,” says CEO Søren Poulsgaard Jensen.

Stable Freight Traffic Expected in 2021

Scandlines expects that COVID-19 will continue to negatively impact car and passenger traffic as well as shopping and bus travel, and it will take some time before travel is enabled again. It is expected that freight traffic will remain relatively stable at a high level in 2021; moreover, Scandlines will continue to focus on effectiveness and cost control in a time still marked by uncertainty to fend off negative effects. Due to the significant uncertainty and low predictability, management cannot formulate precise financial expectations for 2021.

Photo: © Scandlines/Lars Sørensen