Esbjerg, Denmark, 9 March 2023
VIKING Life-Saving Equipment A/S overcame geopolitical and inflationary turbulence in the global market to deliver historically high results on the top and bottom lines in 2022. The annual accounts show that VIKING surpassed two financial milestones, as net sales value surpassed DKK 3 billion and profit before tax exceeded DKK 300 million.
Net sales value totaled DKK 3.14 billion against 2.74 billion in the previous year, representing growth of 14.6%. Profit before tax amounted to DKK 330.8 million against 276.6 million in 2021.
“We have benefited from high activity in certain product areas and in most of our service business, resulting in a higher contribution margin and thus increased earnings. Our segments have been impacted differently by fluctuations in the global economy. However, the net sum of these impacts is predominantly positive, and we are satisfied with the development of the business in 2022,” says CEO Henrik Uhd Christensen.
Most arrows are pointing upwards
The sale of new products continues to be an important part of the business. Key drivers of revenue growth in 2022 highlighted by the VIKING CEO include HydroPen (a product for extinguishing fires on container vessels), self-manufactured lifeboats and fire suits.
“Overall, the transport market (cargo) has been in a very strong period of extraordinarily high earnings and a willingness to invest – including in safety equipment. This is especially true in the container market. And although the other areas of the cargo market – bulk, tank and general cargo – have seen more varied market situations, shipping as a whole has had very good business conditions in 2022,” says Henrik Uhd Christensen.
The offshore sector, where the oil and gas industry is the major player, has under-invested for a number of years, accumulating a backlog that must be alleviated in the coming years just to maintain the current levels of production. Although they have been slow to materialize, investments by the industry increased in 2022 – along with the prospect of additional investments in the coming years to ensure stable energy supply in parallel with the green transition.
The third main segment, the cruise industry, continues to feel the impacts of the Covid-19 pandemic, which is especially affecting activity in North America. However, there are now signs that this historically popular vacation form is regaining its footing and appeal to the sailing public.
Worrying developments in conflict areas
As a leading global supplier of maritime safety equipment for shipping companies and energy companies, VIKING operates in a climate of fierce international competition. These conditions are exacerbated by conflicts and political unrest in various regions, especially the war in Ukraine. The daily reports of horrors and the loss of human life in Ukraine are felt by everyone in the organization on a personal and human level, and the overarching geopolitical turmoil is making its mark on our business.
“As a supplier to the global shipping industry, we are dependent on open economies rather than the closed nature of the increasing number of authoritarian regimes around the world. The developments in a number of conflict areas are deeply concerning – also because we do not know when and how these tensions will end,” says Henrik Uhd Christensen.
Inflation has been at its highest level in decades, but VIKING has been able to partially offset the increasing costs of materials through optimized purchasing and price adjustments.
The successful Shipowner Agreement (SOA) service concept, where shipowners rent instead of purchase liferafts and other safety equipment, comprises a significant portion of company revenue. VIKING has successfully navigated the transformation from selling products to primarily renting out equipment – and has not lost momentum in the process.
Continued growth despite recession fears
VIKING expects to at least match the key figures from the latest annual accounts in 2023. Alongside this confidence in continued progress, VIKING also expects that the largest single market, cargo, will face more challenging times after a period of extremely high earnings.
“Every day the media are talking about fears of a recession in the global economy. And although we cannot predict the severity of this potential slowdown, it will impact the transport of goods and developments in economic key figures, and it will alter the market conditions in which we operate. However, the new year began on a positive note with an order book that provides a good foundation, and we see opportunities in a number of segments that we will pursue to create further growth,” says Henrik Uhd Christensen.
Never before has VIKING employed so many
The year 2022 also brought another milestone, as VIKING for the first time surpassed an average of 3,000 employees for a full financial year. The average ticked in at 3,070 employees against 2,858 the previous year. At year-end, the Group’s operations included 37 foreign subsidiaries at 71 locations, as well as 264 authorized servicing stations.
After distribution of dividends, equity amounts to DKK 1.35 billion, corresponding to a solvency ratio of 47.56%, while liquidity is at a level that ensures continued agility and the power to take action in the market.