2015, revenues were up nine percent at DKK 1.891 billion, while profits before tax also grew nine percent to reach DKK 200.5 million. The impressive results were achieved despite difficult market conditions, and CEO Henrik Uhd Christensen is predicting 2016 and 2017 to be even more challenging.
“We performed well during 2015, and we’re aiming for continued growth in revenue and profits as our next strategic phase culminates in 2020,” he states. “That said, we’re operating in markets that have entered a decisive phase, particularly when it comes to the offshore and cargo segments. So in the short term, we expect lower growth rates but, as 2017 draws to a close, growth will accelerate, driven both by stronger economies and new regulations for maritime safety equipment.”
Cargo and offshore under pressure
VIKING operates in three key market segments: Cargo, passenger and offshore. The company has managed to capture market share in each by expanding its product portfolio, both in terms of physical products and business concepts, and by staying close to its customers. At the same time, new footholds in Australia and, more recently, in South Korea, have seen VIKING’s global network grow – compounded by the acquisition of companies whose technologies and know-how complement what is already the industry’s broadest range of products and services.
“Over the past few years, we’ve introduced a number of very competitive, flexible concepts, the most well known of which is the VIKING Shipowner Agreement, answering the needs of our customers for initiatives that can help them withstand challenging market conditions,” says Henrik Uhd Christensen. “That applies to the cargo market, which is still feeling the effects of low freight rates, and the oil and gas industry, which is under pressure from low oil prices. In 2014, after years of strong growth in the offshore market, the tide turned and we have learned to expect lower levels due to a drop off in the number of rigs and platforms being built.”
Passenger market shines
The maritime safety market for passenger ships has been hard hit during the financial crisis. Now, however, Ro-Ro companies, which transport both passengers and trucks, appear to be recovering. Cruise operators, too, having shown themselves to be the maritime industry’s most seaworthy participants during the crisis, are picking up speed. And the same applies to passenger shipowners in VIKING’s key market, Europe, where lower oil prices are having a positive effect.
“We have always been a company that spreads its risks,” explains Henrik Uhd Christensen. ”Now that’s helping us to weather today’s tough market conditions. Safety products are our core business, and we cover safety very broadly – across geographies, segments and products – to support the safety needs of our customers.”
“In a newbuilding market that varies from year to year, our safety service business has a stabilizing effect, and it comprises a growing proportion of our total revenues. Our aim is to be the leading service partner for ship and offshore owners, based on a combination of global presence and well-functioning product and service concepts.”
Funding for global thrust
Year-end equity for the company amounted to DKK 805 million, strengthening VIKING’s capital reserves for new ventures into the market. For 2016, the company expects similar activity levels to the previous year, along with satisfactory financial results.
Henrik Uhd Christensen is confident about the future: “In relation to the cargo and offshore markets, we’re very well positioned to support customers heading for better times, and the passenger market is already well underway. Inside the company, we’re continuing the work carried out during recent years to optimize process efficiency across the board, and that’s going to benefit both our customers and VIKING itself.”
In 2015, VIKING was awarded the Member of the Year prize from among more than 570 leading export firms by the Danish Export Association, as well as a local business award, The Golden Anvil.