Annual report 2013

In April 2014, Destination Gotland concluded an agreement with the Swedish Transport Administration regarding the continuation of Destination Gotland’s services to and from Gotland for a further 10 years, from 1 February 2017 to 31 Jan- uary 2027. This pleasing news also comes during the company’s 150th year of operations and means we have some considerable challenges ahead, in terms of both operations and investment in light of our intention to undertake a comprehensive environmental investment in LNG vessels. The upcoming agreement involves greater operational risks for Destination Gotland than the current agreement, and also imposes greater adaptation requirements.

The company’s annual financial statements for 2013 show a slight improvement in the product tanker market, while de- mand for services to and from Gotland remains strong.

The Group reduced the average age of the tanker fleet through the sale of its fifty per cent ownership share in both M/T Wisby Verity and M/T Tarantella, while the newbuilding M/T Alice was delivered in January 2013.

There was a better level of earnings in the product tanker mar- ket during the first eight months of the year before then falling back slightly, a trend which has also continued into 2014.

The Gotland service also saw an increase in travel in 2013 during the summer season that is so important to the tourist industry. Over the year as a whole, total passenger numbers decreased by 0.5 per cent to 1,582,618. During the year, an at- tention-grabbing campaign was launched to further emphasise the pulling power of Gotland, called “Gotland – around the world on one island”. Even ahead of 2014’s peak season, the campaign is generating increased interest in Gotland not only as a destination and attraction, but also as a place to live and work.

During the year, the Group completed an investment in a new hotel complex in Visby, stage two of Visby HamnHotell. The hotel was ready by summer 2013 with a total of 214 rooms, making it the biggest hotel on Gotland. In conjunction with the opening of the hotel, the business concluded a franchise agreement with Scandic and changed its name to Scandic Visby. Other major investments have been made in Visby in recent years to increase the number of hotel rooms. Current demand, meanwhile, has not experienced the same trend. In light of this, the company has made a write-down adjustment of hotel assets.

Financial performance in the past year has been positive de- spite the write-downs of vessels and hotels. This provides a stable foundation from which to take on the new challenges we will face in light of our newly acquired agreement on the Gotland service.

Many thanks to all our employees for your hard work.