There will also be employee dismissals and layoffs.
“The year 2019 was a record year for us in terms of both revenue and profit, and we were very optimistic about 2020. Unfortunately, however, everything changed with the release of the COVID-19. Bookings are now a mere fraction of what that would normally be. So, we are now preparing for the fact that it may take a long time before we can return to normal operations,” says Rickard Ternblom, CEO of Fjord Line.
The outcome of the measures taken before the summer (cash support, refinancing, internal restructuring and equity) is an estimated positive cash flow of NOK 700 million for 2020, which secures operations for the rest of this year. The company believes that this outcome demonstrates how much faith the owners, banks, lenders, other suppliers and partners all have in the company’s business model and long-term goals.
“Though we have secured our liquidity, we believe it will take time to return to normal operations. While the summer season went well, we are now entering the fall and winter seasons with even more limited traffic than what is normal for this time of year due to governmental recommendations to limit travel. Consequently, we must implement new cost-cutting measures in order to maintain the vital route that goes to and from the continent and is used for the transport of goods and passengers,” says Ternblom.
This means a strong streamlining of operations.
“In the last few years, we have spent a significant amount of resources on streamlining and automating all aspects of our business. We will now have an even greater focus on this task, as we expect it to result in significant savings. However, because of how difficult it is to predict how long this crisis will last, we must institute further measures. Even with the government plans for extended layoffs, compensation and loan guarantees, we cannot avoid the fact that employees will be affected. Up to 200 people will be dismissed or laid off. Cutting costs is the only thing that helps when revenues fall as drastically as they have in the last few months,” continues Ternblom.
Faith in the future
“So far, everyone at Fjord Line has contributed to volunteer work. I am humbled by the efforts our employees have made in these extraordinary circumstances. This crisis is not over and no one knows how long its effects will last. In order to secure jobs and emerge from this crisis even stronger, it is absolutely crucial that we reduce our operating costs to a minimum.
Our future is bright and, thanks to the extensive volunteer work and refinancing process this spring, Fjord Line will be primed and ready to receive our guests when the pandemic eventually lifts,” concludes Rickard Ternblom.
Flemming Hofmann Tveitan
Phone: +47 901 67 309
CEO Rickard Ternblom
Phone: +47 901 67 309
About Fjord Line
Fjord Line was founded in 1993. With a 22% market share, we are Norway’s second largest shipping company in international passenger traffic and freight transportation between Norway, Sweden and Denmark. Fjord Line has four ships, operates on five routes, employs around 700 people and ferries more than 1.5 million passengers annually. In addition to passenger traffic, we also transport commercial goods and vehicles.