Growth prospects are foreseen

Global economic prospects brightened in the latter half of the year. In the euro area, growth has been virtually static in 2023 and 2024. Sweden and Germany are the two most important trade partners of Finland and the trade between Finland and Sweden grew slightly, while the German economy continued to suffer from low industrial activity and weak consumer spending. However, the forecasts for 2025 indicate some upturn in the European economy. The improved economic outlook is supported by the European Central Bank’s (ECB) interest rate cuts, which finally started to accelerate, and consequently the ECB should continue to cut interest rates to boost industrial activity, private consumption and as a result, EU’s growth prospects. EU’s GDP is expected to rise moderately from 1.0 per cent in 2025 to 1.4 per cent in 2026.

Uneven business environment

The financial year 2024 was demanding, yet it fostered resilience and adaptability. At the beginning of the year cargo volumes suffered from long-lasting strikes and sluggish exports and imports. Also high Euribor rates kept private consumption and economic activity low. Furthermore, start-up costs of new vessels and routes affected our financial performance. Consequently, due to the fact that the growth did not take place, and due to the fact that more stringent EU environmental regulations took place, Finnlines had to adjust its fleet and therefore we decided to sell older vessels. Efforts have been made to improve cost-efficiency and to find new growth.

The EUR 500-million Green Newbuilding Programme reached its completion in mid-February with the introduction of the second Superstar-class vessel, M/S Finncanopus, on the Finland–Sweden route. The new vessels have been highly popular among customers and have contributed to a 115 per cent increase in the number of passengers. The increased cargo and passenger capacity, along with enhanced passenger comfort, strengthened the service and reinforced Finnlines’ position as the leading service provider between the two countries.

New routes and services

The size of Finland’s economy is small and our turnover and business have been highly dependent on our domestic market and on its economic fluctuations, which is why the company has explored other markets and analysed new potential routes in order to reduce our dependency on Finnish market.

Although the Southern Baltic is a highly competitive region, Finnlines opened a new freight and passenger connection between Malmö, Sweden, and Świnoujście, Poland, in April 2024. The new link has created unique opportunities for trade and tourism. Furthermore, each new route enhances the security of supply for countries and connects them with other vibrant regions of Europe, both economically and in terms of supply security.

A new direct shipping service was launched from Finland to the Port of London Medway in Sheerness, a port located in the southeastern part of UK and in close proximity of the Greater London area. Finnlines’ weekly freight service provides a streamlined connection from Finland to Sheerness with further connections to Belgium, Spain and Ireland, as well as to the extensive Grimaldi network.

Earlier on, we started Belgium–Ireland route, and while all these new routes are gradually developing and gaining increased volumes, Finnlines’ cash flow is now, and will further be, more diversified reducing our concentration and dependency solely on Finland’s trade and economy. All our routes and services provide seamless connections for import and export industries across Europe. Today, Finnlines connects 20 ports across Europe and manages a fleet of 20 vessels.

Lower emissions

The green transition within shipping is driven by stringent regulatory demands, which may raise transport costs, even significantly, but also provide an opportunity to decarbonise.

Over the years, Finnlines has taken many operational measures to reduce fuel consumption and to cut emissions. Tools have included cleaning of the underwater hull, slow-steaming, sailing in the optimal trim, and planning optimal schedules.

When technical investments were made in reducing harmful emission already in 2014 and all operational measures taken to reduce emissions, we further invested to benefit from economies of scale. In recent years, Finnlines has invested over EUR 0.5 billion in its fleet and has adopted a hybrid model for its latest newbuilds, that is a mix of applications, like solar panels, air lubrication systems, high-powered battery banks and onshore power.

The green transition is not an overnight change, and what is not discussed in public at all is that it will be the biggest re-allocation of capital in the coming years. The investments which are needed to achieve the green targets are enormous, bigger than we have understood. Therefore, we will most likely have a long transition period ahead of us. Investments in adaptation of new technology and use of new fuels is huge, highly uncertain and capital intensive. Renewable fuels should be clean, reasonably priced and available in each port.

Towards green transition and improved outlook

Finnlines will invest in three new ro-pax vessels which will be powered with methanol and multi-fuel engines i.e. methanol and other green fuels and also marine diesel can be used, which would give flexibility.
In conclusion, I would like to take this opportunity to thank our customers, suppliers and other stakeholders all over Europe for their unwavering cooperation and trust. I would also like to express my appreciation to all our dedicated employees for their hard work throughout the year.

With the world’s largest ro-ro and ro-pax operator as our owner, the Grimaldi Group, Finnlines is well-positioned and financially strong to make investments that drive operational excellence and sustainable shipping, which will help us and our customers to continue to succeed in 2025.

Tom Pippingsköld, President and CEO

“The green transition will be the biggest re-allocation of capital in the coming years.”