GROUP ANNUAL REPORT 2024
The original and digitally signed Group’s annual report has been submitted in the machine-readable XHTML format to the Nasdaq Tallinn Stock Exchange (link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100021635/reports). Commercial Registry no. 10137319 VAT registration no. EE100068489 Registered office Sadama 25, 15051 Tallinn, Estonia Country of incorporation
Republic of Estonia
Limited company (AS)
AS Tallinna Sadam
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL Table of Contents 3 MANAGEMENT REPORT 5 6 BUSINESS REVIEW 38 1 TALLINNA SADAM AT A GLANCE 6 6.1 Key performance indicators 38 1.1 Business model 6 6.2 Economic environment 39 1.2 Key performance indicators for 2024 8 6.3 Effects of the Russia-Ukraine war and main economic risks 40 1.3 Highlights of the year 2024 9 6.4 Overview of the market: passengers 41 1.4 Letter from the CEO 11 6.5 Overview of the market: cargo 43 1.5 Vision, mission, values 12 6.6 Operating results 45 1.6 Strategy 2023–2027 13 6.6.1 Number of passengers 47 1.7 Tallinna Sadam’s stakeholder groups and value chains 16 6.6.2 Cargo volume 48 2 SERVICE RESPONSIBILITY 18 6.6.3 Ferry service 49 2.1 Safety and security 18 6.6.4 Icebreaker Botnica 49 2.2 Quality management and risks 20 6.7 Income and expenses 50 2.3 Customers and suppliers 21 6.8 Profit 53 3 ENVIRONMENT 23 6.9 Segment reporting 54 3.1 Energy efficiency and sustainable consumption 24 6.10 Investments and development prospects 56 3.2 Clean Baltic Sea and circular economy 25 6.11 Dividends 58 3.3 Clean air 27 6.12 Share and shareholders 59 4 OUR PEOPLE 30 7 CORPORATE GOVERNANCE 61 4.1 Employees 30 7.1 General meeting 62 4.2 Human resource strategy 32 7.2 Supervisory board 63 4.3 Occupational safety 33 7.3 Audit committee and internal audit department 67 5 GIVING BACK TO SOCIETY 34 7.4 Remuneration committee 67 5.1 Participation in organisations 34 7.5 Nomination committee 68 5.2 Cooperation for sustainable development and volunteering 35 7.6 Management board 68 7.7 Supervisory and management boards of subsidiaries and associates 70 7.8 Cooperation of the management and supervisory boards 70 7.9 Disclosure of information and communication 70 7.10 Financial reporting 71 7.11 Statement of compliance with the CGR 71 Table of Contents
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL Table of Contents 4 REMUNERATION REPORT 72 Note 15. Trade and other payables 119 Note 16. Taxes payable 120 CONSOLIDATED FINANCIAL STATEMENTS 76 Note 17. Loans and borrowings 121 Consolidated statement of financial position 77 Note 18. Government grants 125 Consolidated statement of comprehensive income 78 Note 19. Equity 131 Consolidated statement of cash flows 79 Note 20. Revenue 136 Consolidated statement of changes in equity 80 Note 21. Operating expenses 138 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 81 Note 22. Other income 140 Note 1. Reporting entity 81 Note 23. Finance costs 140 Note 2. Material accounting policies 82 Note 24. Related party transactions 141 Note 3. Operating segments 92 Note 25. Commitments 143 Note 4. Financial risk management 96 Note 26. Investing activities in the statement of cash flows 143 Note 5. Significant accounting estimates and judgements 102 Note 27. Contingent liabilities 144 Note 6. Financial instruments 104 Note 28. Investigations concerning the group 145 Note 7. Cash and cash equivalents and term deposits with maturities of more than 3 months 106 Note 29. Additional information on the parent 146 Note 8. Trade and other receivables 107 Note 30. Unbundling of activities under the electricity market act 151 Note 9. Investments in an associate 108 Note 10. Investment properties 110 Note 11. Property, plant and equipment 111 MANAGEMENT’S CONFIRMATION 155 Note 12. Intangible assets 114 INDEPENDENT AUDITOR’S REPORT 156 Note 13. Leases 115 STATEMENT OF THE SUPERVISORY BOARD 161 Note 14. Provisions 118 PROFIT ALLOCATION PROPOSAL 162
MANAGEMENT REPORT
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL 1. Tallinna Sadam at a Glance 6 The original and digitally signed Group’s annual report has been submitted in the machine-readable XHTML format to the Nasdaq Tallinn Stock Exchange (link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100021635/reports). The business model of AS Tallinna Sadam (the owner and operator of the Port of Tallinn) and its subsidiaries (together: ‘Tallinna Sadam’ or ‘the Group’) is based on four well-balanced business lines: passengers, cargo, shipping and real estate, which ensure the Group’s profitability even in the most challenging times. Tallinna Sadam owns the largest cargo and passenger harbour complex in Estonia. Our harbours are navigable and easily accessible throughout the year, and deep enough to receive all vessels passing through the Danish Straits. Tallinna Sadam owns two passenger harbours (Old City Harbour and Saaremaa Harbour) and two cargo harbours (Muuga Harbour and Paldiski South Harbour). 1 Tallinna Sadam at a Glance 1.1 Business model TS Laevad OÜ • Operation of ferries on two domestic routes: Rohuküla– Heltermaa and Virtsu–Kuivastu • 2024: 2.5 million passengers and 1.2 million vehicles carried, 23,179 trips • 5 ferries: Leiger, Tiiu, Tõll, Piret and Regula TS Shipping OÜ (MPSV Botnica) • Icebreaking in northern Estonian harbours • Offshore work and international projects in the summer and autumn SHIPPING: • Old City Harbour property development 16 ha • Muuga Industrial Park 76 ha • Paldiski South Harbour Industrial Park 34 ha • Saaremaa Harbour Logistics Park 10 ha • Vacant land and rental premises in the harbours REAL ESTATE: • TOP 2 Baltic Sea passenger port in 2024: 8 million passengers, 5,692 ferry calls • Passenger harbours: Old City Harbour and Saaremaa Harbour • Reception of ferries and cruise ships, provision and development of port infrastructure, provision of services for passengers and vehicles • Ferry routes: Tallinn–Helsinki, Tallinn–Stockholm, Muuga–Vuosaari, Paldiski–Kapellskär, cruise ships PASSENGERS: • 2024: 13 million tonnes of cargo, 1,435 cargo ship calls • Cargo harbours: Muuga Harbour, Paldiski South Harbour. Ro-ro cargo at Old City Harbour • Reception of cargo traffic, provision and development of port infrastructure for cargo handling and transport • Cargo types: dry bulk, container, ro-ro, liquid bulk, general cargo CARGO:
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL 1. Tallinna Sadam at a Glance 7 The original and digitally signed Group’s annual report has been submitted in the machine-readable XHTML format to the Nasdaq Tallinn Stock Exchange (link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100021635/reports). Tallinn Old City Harbour is the second largest passenger harbour in the northern Baltic Sea region (aſter Helsinki). Muuga Harbour is the largest cargo harbour in Estonia. Tallinna Sadam provides port services as a landlord port, i.e. it owns, manages and develops quays, port basins and the surrounding areas, leases land to cargo operators, organises vessel traffic in the port basins and ensures safe navigation in the port waters. Tallinna Sadam owns passenger terminals and other facilities necessary for passenger services. The superstructure of the cargo harbours belongs to cargo operators. Waste management in the harbours is provided by AS Green Marine (Green Marine), an associate of Tallinna Sadam that offers innovative waste management solutions. Through its subsidiary OÜ TS Laevad (TS Laevad), Tallinna Sadam operates ferries and provides passenger transport service between Estonia’s mainland and two largest islands — Saaremaa and Hiiumaa. The Group has five ferries and the routes served are the busiest domestic ferry routes in Estonia. The other subsidiary, OÜ TS Shipping (TS Shipping), is also involved in shipping. It owns the multifunctional icebreaker Botnica, which provides icebreaking services in the northern Estonian coastal waters during the winter season and icebreaking, ice management and escort services in offshore projects in the Arctic waters of northern Canada and elsewhere during the summer season. The real estate business is largely in the preparation phase. Detailed plans for the real estate development areas of Old City Harbour have been initiated and submitted to the Tallinn City Planning Department. In order to increase the overall attractiveness and value of the area, several new passenger-related developments were completed in 2020–2023: Terminal D with a multi- storey car park and a square in front of the terminal building, the pedestrian Admiral Bridge connecting the passenger terminals, and an environmentally friendly modern cruise terminal with a promenade. In 2023, we also organised an architectural design competition for the development of the area around the new Terminal A and in 2024 the preliminary design was completed. A tram line with a stop in Old City Harbour was completed in December, which is an important milestone in the development of environmentally friendly infrastructure. The Group’s operating segments for financial accounting purposes differ slightly from its business lines. The operating segments are Passenger harbours, Cargo harbours, Ferry, and Other. The Passenger harbours segment comprises the provision of port services at the harbours mainly involved in passenger service — Old City Harbour and Saaremaa Harbour — and real estate development activities in Old City Harbour. The Cargo harbours segment comprises the provision of port services at the harbours mainly involved in cargo handling — Muuga Harbour and Paldiski South Harbour — and activities related to the industrial parks located in those harbours. The Ferry segment comprises the operations of the subsidiary TS Laevad, which provides ferry services between the Estonian mainland and the two largest islands. The segment Other includes mainly the operations of the subsidiary TS Shipping, which operates the multifunctional icebreaker Botnica, and the Group’s share of the profit or loss of the associate Green Marine, which is accounted for using the equity method. Segment results are presented in section 6.9 of the management report and note 3 to the consolidated financial statements. Structure of Tallinna Sadam Group Port services for passengers and cargo Ferry service to Saaremaa and Hiiumaa Tallinna Sadam’s share 100% Icebreaker Botnica charter Tallinna Sadam’s share 100% Waste management Tallinna Sadam’s share 51%
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL 1. Tallinna Sadam at a Glance 8 The original and digitally signed Group’s annual report has been submitted in the machine-readable XHTML format to the Nasdaq Tallinn Stock Exchange (link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100021635/reports). 1.2 Key performance indicators for 2024 Revenue EUR 119.6m (+2.5%) 1 Cargo volume 13.1m tonnes (+4.4%) Utilisation rate for icebreaker Botnica 60% (–5%) Adjusted EBITDA EUR 53.1m (+8.1%) Number of passengers 8.2m (+3.6%) Traffic between Estonia’s mainland and largest islands 23,179 trips (+0,6%), 2.5m passengers (+2.1%) and 1.2m vehicles (+3.6%) EBITDA margin 44.4%, profit EUR 19.2m (+20.6%) Number of vessel calls 7,127 (+1.4%) Share of vessel calls with ESI 2 discounts 38% (+3%) Capital investments EUR 38.8m (+87.3%) Dividends paid EUR 19.199m (EUR 0.073 per share) GHG 3 emissions 21,656 tonnes of CO 2 equivalent (–9%) 1 All changes on this page are presented compared to 2023. 2 ESI — Environmental Ship Index. 3 GHG — greenhouse gases CO 2 , N 2 O and CH 4 converted into CO 2 equivalent
GROUP ANNUAL REPORT 2024 • TRANSLATION OF THE ESTONIAN ORIGINAL 1. Tallinna Sadam at a Glance 9 The original and digitally signed Group’s annual report has been submitted in the machine-readable XHTML format to the Nasdaq Tallinn Stock Exchange (link: https://nasdaqbaltic.com/statistics/et/instrument/EE3100021635/reports). CARGO VOLUMES AND PASSENGER NUMBERS INCREASED WINTER CRUISES VISITED OLD CITY HARBOUR FIN-EST GREEN CORRIDOR JOINT PROJECTS WERE LAUNCHED NEW CONTAINER LINES STARTED CALLING 1.3 Highlights of the year 2024 CONSTRUCTION OF AN OFFSHORE WIND FARM QUAY AT PALDISKI SOUTH HARBOUR CONTINUED