The Steam Packet has reported a £10.5m loss for the year ended December 31 2020 as the cancellation of the TT and border regulations hit the taxpayer-owned operator.
While the loss is not unexpected, it represents a major change in fortunes from the near £10m profit of the Steam Packet which saw its revenue fall from £61.25m in 2019 to £28.4m in 2020.
The company’s report said that the 35 weeks of Covid-19 related travel restrictions ‘resulted in the loss of circa £25m passenger revenues including the cancellation of both the 2020 TT and Festival of Motorcycling’.
It added: ‘The closure of Isle of Man borders to non-residents, and the requirement for remaining passengers to self-isolate on return to the Island, resulted in the loss of 90-95% of traffic. With the agreement of the DoI, the Company reduced sailings by 618 to minimise operational costs whilst still maintaining a daily lifeline service. Uneconomical sailings were and continue to be operated at IOMG’s request. A Deed of Variation between the Company and the DoI is being finalised, which documents the agreed changes to the SSA which arose from Island’s response to the pandemic.’
The restrictions between March 27 and June 1 ultimately cost the Steam Packet £1.6m in freight revenues, but the company’s report said that once restrictions were lifted, strong on-island spending saw freight spending resulting in just £0.9m (4%) below the usual trading levels. However, passenger figures were down by between 90% and 95%. The report added that the reduced number of sailings ‘combined with other management initiatives delivered cost savings of £10.8m during the year’.
It isn’t all bad news for the Steam Packet however as the Treasury has ‘provided assurances that it will provide financial support to the Group for a period of at least 12 months from the date that the audit report is signed’.
The report also gives a brief update on the new vessel Manxman III which is being built in South Korea. The new vessel is due to cost about £78m and is expected to enter service in 2023, replacing the Ben-my-Chree as the company’s flagship vessel. The notes also point again to the company being required to purchase a new fast craft by December 31 2026 and while it doesn’t need to be new, the replacement for the Manannan (which was launched in 1998) will need to be less than 10 years old.