The activity level has increased in the first half of the year due to the large infrastructure investments in Greenland. However, due to the capacity increase with larger Atlantic vessels in connection with CSR and the fixed weekly departures, Royal Arctic Line has not experienced capacity constraints as a result. Our ability to support the societal activities is thus greatly improved compared to previously, where it has been necessary to charter extra vessels to meet the demand, with the resulting additional costs.
This means that Royal Arctic Line has been able to maintain freight rates, which have remained unchanged since spring 2015 despite massive investments in new ships and inflation on world markets.
Capacity utilization commercially between Iceland and Scandinavia has not yet developed as we wanted. Uncertainties and restrictions due to COVID-19 have led to a slower start-up than expected, and although the market is now starting to move, a lower than expected profit contribution is expected for this activity in 2021.
COVID-19 restrictions have also led to significantly higher costs related to crew changes due to quarantine periods and sometimes limited travel opportunities. The costs associated with Corona restrictions will be finalized at the end of the financial year, and there is therefore an increased uncertainty associated with the estimate given at the half-year.
Trade with Iceland has increased by 60% in the first half of the year, indicating the beginning of changing trade patterns, which Royal Arctic Line wants to support as much as possible through its collaboration with DHL Liner Agency in Iceland.
The half-year result is below where we want to be, but is considered satisfactory. We seek to correct the COVID-19 effect through technical and organizational actions, and a special focus remains on the new markets that can bring previously unseen earnings to the company and thus Greenland, thereby supporting our desire, as far as possible, to avoid negative changes in freight rates.
