Royal Arctic Line completes route and port transformation in 2022
With the completion of the route and port reorganization, 2022 was the last year with the old service and thus double operation in Denmark. The financial result is a loss before tax of 96 million against an originally expected loss of 56-66 million.
Royal Arctic Line brought forward the move to the Port of Aarhus from December 31 to mid-June to protect security of supply during the final steps of the transition. The double operation in the last half of the year contributed to additional costs of an estimated 30-35 million. Considering that the supply was unaffected by the switch, the overall result for 2022 is considered satisfactory.
The future-proofing of sailings and investments of more than 1.2 billion in new vessels have been made without price changes to the shipping company in the period 2015 to 2022. Thus, the company has financed the transition itself, although well helped by the volume increases observed over the last 7 years.
“Our result should be seen in light of the fact that the supply had to be protected under all circumstances during the biggest transition of navigation since 1972. The transition is now well over, and we can focus on our daily operations and core mission again” says Verner Hammeken, CEO of Royal Arctic Line. “We are owned by the Greenlandic people and it is the people we work for. The cost to the population has a major impact on society as a whole. Therefore, it has also been important for us to be able to implement the transition without introducing price increases. In our case, this means that we have had to find the money ourselves, and we have done so.” .
CFO Jørgen Aqe Møller says: “With a tough 2022 behind us, it’s good to see that we’re off to a good start in 2023. After the first quarter, we have good signs that we are moving towards the expected result for 2023. It is our clear goal that we can present a positive result in 2023. This is despite rising costs in many areas and continued uncertainty about how the global turmoil and price developments will affect Greenland” .
Royal Arctic Line employs 731 employees including 33 trainees after 87 employees were terminated in connection with the discontinuation of port activities in Denmark. Royal Arctic Line has a concession for Greenland shipping. This provides a monopoly for transportation to, from and throughout Greenland of common types of goods in exchange for the frequency of sailings and prices being determined politically. Prices northbound and within Greenland have not been adjusted for 8 years, contributing to the stability of economic conditions for construction and consumption. A discount for southbound prices was reduced in February 2023. The criteria for the company’s success is to ensure the supply of transport to, from and within Greenland in a way that continuously strengthens Greenland’s ability to trade with the outside world. The task must be solved in such a way that the requirement for financial obligations and, to an increasing extent, sustainable solutions are met, including sound contributions to environmental, social and governance development.
