Traffic Management Company Fintraffic Ltd’s half-year report January–June 2021

January–June 2021

• The Group’s revenue totalled EUR 94.6 (92.9) million
• The Group’s operating margin was EUR 14.6 (11.8) million
• The operating profit/loss was EUR -3.5 (-2.6) million
• The operating result was burdened by the impact of the coronavirus pandemic on income from air navigation services
• The pandemic has had only a minor impact on earnings from road, rail and vessel traffic management
• Both high safety standards and a good service level have been maintained for traffic management in spite of the pandemic and the efficiency of service provision has improved
• The building of a transport ecosystem to create new transport service markets is progressing: more than 100 organisations are already involved in building the ecosystem
• Demand for traffic information produced by the company has remained strong in the Digitraffic service

The Fintraffic Group’s revenue for the January–June period totalled EUR 94.6 (92.9) million. This revenue consists primarily of road, rail and vessel traffic management services provided to the Finnish Transport Infrastructure Agency, and air navigation services for airlines and Finavia. The Group also provides services to parties such as Traficom, cities, ports and international customers.

The operating profit/loss was EUR -3.5 (-2.6) million. Operating profit as a percentage of revenue was -3.7% (-2.8%).

The Group’s operating result was loss-making due to travel restrictions arising from the coronavirus pandemic and the still-low number of flights, which weakens income from air navigation services. On the other hand, the profitability of road, rail and vessel traffic management remained stable.

It is forecast that air traffic volumes will increase gradually in the second half of the year, which will also increase income from air navigation services. In addition, due to the EU’s traffic risk-sharing mechanism, the company expects to make accounting entries that will significantly improve the operating result of air navigation services in the latter part of the year. However, the result of operations in air navigation services will remain in the red. The Fintraffic Group’s full-year operating result is forecast to be positive thanks to the earnings improvement in air navigation services and stable profitability in road, rail and vessel traffic management.

The costs of air navigation services have been considerably reduced due to the fall in traffic volumes. Efficiency-boosting measures have also continued in other modes of transport. In accordance with the government target set for the Fintraffic Group, the company seeks to improve efficiency in service provision for road, rail and vessel traffic by a cumulative total of EUR 30 million over 2019-2022. The company expects to achieve this objective by the deadline. The company is boosting its operational efficiency especially by stepping up service provision while keeping the relative increase in costs in check.

Fintraffic Group’s key figures

	H1 2021	H1 2020	H1 2019	2019
Revenue	94,6	92,9	110,6	221,9
Operating margin	14,6	11,8	30,6	52,1
Operating profit	-3,5	-2,6	16,4	21,3
Operating profit/revenue, %	-3,7 %	-2,8 %	14,9 %	9,6 %
Number of employees	1125	1124	1088	1103

Major events H1/2021

The pandemic and related restrictions have still been felt in traffic volumes in all modes of transport. Compared to pre-pandemic levels, traffic volumes are still at their lowest in air transport, but road, rail and vessel traffic were also quieter than usual in the second quarter (4-6/2021). However, growth can be seen in road traffic, long-distance and goods transport by rail and the number of overflights, for instance.

Development of services provided to the transport market and ecosystem actors

During the review period, Fintraffic continued to build a transport ecosystem to accelerate the Finnish transport market. At the end of the review period, 111 actors were already involved in work on the transport ecosystem. The objective is for transport sector actors to work together in order to find means of promoting the data economy in developing transport solutions. Ecosystem working groups define shared operating models in concrete terms, focusing on matters such as the development of a rulebook, situational awareness data, overall architecture for traffic data as well as logistics data and interfaces. During the review period, the ecosystem actors defined the shared vision and objectives for the work, started drafting a rulebook for the sector, and initiated the development of data on logistics, public transport and situational awareness, for example. The work being done on the ecosystem lays a foundation that will make it even easier to more comprehensively utilise data generated by different actors to develop new travel and transport chain solutions, for instance.

Fintraffic provides the ecosystem actors with data it generates, collects and refines via the Digitraffic service, which had an average of 10 million interface calls per day during the review period. The company produces a real-time situational picture of traffic that is utilised not only in the company’s own services, but also in navigators, map services and other traffic services.

The portfolio of traffic and mobility data produced by Fintraffic was expanded during the review period, as mobility information services, finap.fi, matka.fi and some Digitransit services were transferred to Fintraffic. Thanks to this, Fintraffic can provide an internationally unique portfolio of traffic and mobility data to service developers in this sector. This is a major step in building an even more effective transport system and introducing new transport solutions. For instance, it is now even easier to access public transport routes and schedules with other situational awareness data.  This is expected to add further momentum to the utilisation of data in the creation of new services.

In April, Fintraffic launched a new practical service for actors in the logistics sector – the Port Activity app, an open digitalisation platform for ports and port operators. The service will boost ship port call-related functions, especially by improving information flow. More than 10 ports are using the app in Finland. It has also been deployed in Sweden.

Fintraffic stepped up its cooperation with Bauer Media to disseminate traffic information via Bauer Media’s radio channels, such as Radio Nova.

Development of traffic management services                

The volume of flight operations served by Fintraffic’s air navigation services has been about 40 per cent of the 2019 level at the Area Control Centre and around 30 per cent at Helsinki Airport. Even under the exceptional circumstances, ANS has continued to carry out goal-oriented development efforts. A remote air traffic control project with Finavia would enable flexible, high-quality service provision when there is demand for air navigation services. The FINEST project, which is being implemented in collaboration with Estonian Air Navigation Services (EANS), seeks to ensure safe airspace, reduce climate emissions, and offer even more competitive air route fees for airspace users. During the spring, ANS started up technical maintenance work at five airports in Sweden and launched a registration service for drone users. The development of this service has continued.

In the first part of the year, Fintraffic’s rail traffic management forged ahead with its spearhead projects in line with plans. A railway passenger information system that provides passengers with more diverse information has been launched at stations in southern and central Finland. The aim is to deploy this system during the autumn at all Finnish stations with digitally controlled information equipment and passenger traffic. In cooperation with VR, Fintraffic’s rail traffic management has developed the DAS system, which uses artificial intelligence to assist train drivers by providing them with predictive information about the rails and terrain, for instance. The Digirail project has progressed and negotiations on the related alliance agreement are on the final stretch.

In the first part of the year, Fintraffic’s road traffic management has, among other measures, improved operational reliability by transferring its key operational systems onto its own platforms and developed the architecture of operational systems, thereby improving operational reliability with respect to variable speed limit signs and signposts. In May, Fintraffic deployed a new traffic control system in Mestarintunneli tunnel on Ring Road I. This infrastructure project modernised the traffic control and safety systems in the entire tunnel at system level.

Fintraffic’s vessel traffic services has agreed with Traficom to implement a vessel traffic notification service in Finland. It will be launched in 2025. This notification service will be compliant with EU practices. It will boost information exchange between actors in the vessel traffic logistics chain and thereby improve both services and the efficiency of the logistics chain.

CEO Pertti Korhonen:

Traffic digitalisation and even closer cooperation between actors in the sector offer excellent opportunities for promoting the Finnish transport services market. Our goal is to accelerate the creation of new kinds of services to facilitate the smoother flow of people and goods as well as reduce emissions. For this reason, we are particularly excited about the number of partners that have come on board to work on the transport ecosystem. This clearly shows that there is a need for the ecosystem. We believe that shared rules for the sector will speed up service development – as has been seen in many other sectors earlier.

Although Fintraffic has had to adjust its operations in line with demand due to the coronavirus situation, the company has not compromised on its most important objective: ensuring traffic safety. In spite of the pandemic, both high safety standards and a good service level have been maintained in traffic management for customers, authorities and other stakeholders. Our employees have worked responsibly during the pandemic and done an excellent job.

Due to the pandemic, air traffic volumes and especially income from air navigation services were at a low level throughout the first part of the year, and for this reason the consolidated result remains negative. That said, we believe that demand for air navigation services will increase towards the end of the year and, thanks to the EU’s traffic risk-sharing mechanism, ANS is expected to be able to recognise accounting entries that will improve the operating result of its business. That said, its result of operations will remain negative. The Group’s full-year operating result is expected to be positive thanks to the earnings improvement in air navigation services as well as the continued stability of profitability in road, rail and vessel traffic management.

Due to the pandemic, air traffic volumes and especially income from air navigation services were at a low level throughout the first part of the year, and thus the result is still in the red. However, we believe that demand for air navigation services will grow substantially towards the end of the year, improving the operating result of ANS. 

In the Group, we worked on the strategy and values of the entire company during the spring and summer. We want to ensure that our traffic management and ecosystem services provide maximum value for our different customer groups and Finnish society. To ensure that the Group’s shared values will meaningfully build our corporate culture in support of the implementation of the strategy, we have worked on them together with all our employees. I am delighted that so many have enthusiastically joined us in this important work. As an even more cohesive team, Fintraffic employees will make an even greater contribution to creating the world’s safest, smoothest and environmentally friendliest transport system in Finland.