Traffic Management Company Fintraffic Ltd’s half-year report, January–June 2023
January-June 2023
- The Group’s turnover totalled EUR 120.1 million (EUR 113.2 million 1-6/2022)
- The consolidated EBITDA was EUR 24.0 (25.5) million
- The operating profit/loss amounted to EUR 5.1 (5.1) million.
- Both the service and safety level of traffic management has remained good
- The implementation of both the strategy and the cyber security development programme have progressed as planned.
- Developing the efficiency of traffic control service provision is central to the Group. The Group achieved a cumulative improvement of EUR 30 million between 2019 and 2022.
- Traffic data produced by the Group was distributed through Digitraffic 250.65 TB (16% growth vs. H1/2022).
- During the period under review, there were 12.8 million interface calls per day (a 9% increase compared to H1/2022).
- There are already 170 organisations involved in the traffic data ecosystem.
The Fintraffic Group’s revenue for January–June totalled EUR 120.1 (113.2) million. This revenue mainly consists of road, rail and maritime traffic management services provided to the Finnish Transport Infrastructure Agency, and air navigation services that are provided to airlines and airports. The Group also provides services for Traficom, cities, ports and international customers.
Operating profit totalled EUR 5.1 (5.1) million. The operating margin was 4.2% (4.5 %).
The cumulative efficiency target of EUR 30 million set for 2019–2022 was exceeded. The Group is determined to continue developing its operations and is committed to a new efficiency programme for 2023–2028, during which the aim will be to achieve the next EUR 30 million efficiency improvement. Operational efficiency will be boosted by stepping up service provision while keeping the relative increase in costs in check.
Key indicators for the Fintraffic Group
|
|
H1/2023 |
H1/2022 |
H1/2021 |
H1/2020 |
H1/2019 |
2022 |
|
Turnover |
120.1 |
113.2 |
94.6 |
92.9 |
110.6 |
228.9 |
|
EBITDA |
24.0 |
25.5 |
14.6 |
11.8 |
30.6 |
47.1 |
|
Operating result |
5.1 |
5.1 |
-3.5 |
-2.6 |
16.4 |
7.6 |
|
Operating margin, % |
4.2 % |
4.5 % |
-3.7 % |
-2.8 % |
14.9 % |
3.3 % |
|
Number of personnel |
1157 |
1146 |
1125 |
1124 |
1088 |
1133 |
Key events 1–6/2023
The CEO of Fintraffic changed in June. Pia Julin (eMBA, MSc (Tech)) was appointed CEO of the company. Julin succeeds Pertti Kohonen who held the position of Fintraffic CEO from 2019.
Developing traffic markets and services for ecosystem operators
Fintraffic continued its work to build a future transport system with its partners. The traffic data ecosystem already includes 170 organisations motivated by the development of the transport system. The rulebook promoting the utilisation of data in the transport and logistics sector has been signed by 22 partners.
A total of 250.65 TB of traffic data was distributed through Digitraffic, data use increased by 16 per cent during the period under review. A total of 12.8 million interface calls were made per day, which means an increase of 9% compared to the same period last year.
Progress was made in the EFTI project that aims to produce electronic consignment notes. Fintraffic will become the operator for electronic consignment notes in Finland. Fintraffic also promotes the data hub project that will improve the processing of air cargo data.
The journey planner opas.matka.fi was updated. The reform will make it possible to publish more comprehensive real-time public transport information nationally. At the same time, journey planner services for public transport service providers improved. Timetable information for road ferries and other ferry traffic was added to Fintraffic's Traffic Situation service and to the national journey planner.
Fintraffic engages in Nordic cooperation to promote the internationalisation of travel data sharing in order to improve the possibilities of service providers to provide intact, start-to-end transport and logistics services. Progress has also been made in building uniform travel chains with Estonia, and Estonia's public transport data is available in the Fintraffic service.
Traffic control services
Air navigation
International air traffic picked up at the beginning of the year, and the profitability of air navigation is gradually recovering. At the same time, the need for lay-offs in the company has decreased as the year progresses. The number of overflights is increasing and airlines flying in international waters have, as a rule, paid their air navigation service fees.
However, the total volume of traffic in Finland has remained nearly a third lower than it was in 2019, which is not only due to changes in Asian traffic but also due to there being fewer domestic flights than in 2022.
The remote air traffic control project, carried out in cooperation with Finavia, progressed to the pre-invitation to tender phase, which was why change negotiations were launched. According to the plan, the possible implementation of the project would mean that the air traffic control at the Ivalo, Kittilä, Kuusamo, Mariehamn, Oulu, Turku and Vaasa airports could be implemented in the form of remote air traffic control. It is estimated that the commissioning of the system would take place between 2025 and 2027.
Road traffic
The sluggish development of the Finnish economy has been reflected in the volume of heavy traffic: heavy vehicle traffic has decreased by about five and a half per cent between January and June compared to the same period the previous year. The economic situation has not been reflected in passenger car traffic, as the volume of car traffic on main roads has increased by more than four per cent compared to the previous year.
Of current infrastructure projects, the extensive renovation of the Revontuli tunnel in Rovaniemi that lasted over a year was successfully completed. The renewed tunnel will also have a control system backup interface for fault situations implemented with completely new and highly cost-effective EDGE technology for the first time ever in Finland.
Other larger infrastructure projects have already been the replacement investment for the Ring III information sign system, which will be introduced for joint testing in the autumn. Integration with Waze in the spring will also enable Fintraffic to utilise Waze data in the provision of information on driving times and congestion situations on Ring Road III.
Maritime traffic
The reliability of our vessel traffic service centres has been at a good level, and basic traffic control remained high-quality and in line with agreements throughout the first half of the year. In January–June, vessel traffic services prevented five possible groundings.
Maritime DataSpace a development project aimed at developing a data intermediation service for the transmission of information related to port calls was launched at the beginning of the year. New tools for achieving maritime emissions targets were also published in the Port Activity app, where the new emissions calculation function is part of the application's growing responsibility entity.
A development project for setting and supervising passing areas and passing prohibition areas for vessel traffic has continued. Vessel traffic is staggered to improve the safe and smooth navigation of vessels. The aim of the project is to prevent traffic congestion as well as hazardous situations arising from vessels meeting or overtaking each other. The work will be completed by the end of the year.
The project for the digitalisation of the Master's Guide continued well within its schedule. The aim is to offer ships arriving in Finnish ports and shipping companies a completely new digital service in coming years, through which all instructions for vessel traffic can be found. The new digital service will be gradually introduced in 2024, when vessels will be able to use the service.
Fintraffic's Vessel Traffic Services also continued to build the national maritime information management system, Nemo.
After change negotiations at the Saimaa VTS, its operations were transferred to Turku on 1 June 2023.
Rail traffic control service provision has been of high quality and punctual at the beginning of the year. Safety has also been at a normal, good level.
In January–July, approximately 8.6 million long-distance train journeys have been made and 13.6 million tonnes of cargo have been transported by rail, which is about 22% less than in 2022.
Punctuality on the railways has improved compared to last year. Train punctuality is 94.1 per cent (92.7 %) in commuter rail traffic, 88 per cent (86.1 %) in long-distance rail traffic and 93.6 per cent (90.9 %) in rail freight services. A large amount of rail maintenance work is carried out in spring and summer. Between April and the end of June, a total of 27.1 per cent more rail maintenance work was carried out than in 2022.
Rail traffic remote control capability has been developed systematically. By developing remote control systems, Fintraffic is building a safer, more modern and more reliable system that will reinforce the attractiveness of rail transport. The multi-year-long and extensive Southeast Finland remote control system project (KAKO) was completed. The completion of the project will enable more secure and reliable traffic control. In addition, it will be possible to control rail traffic in Western Finland from other control centres, which will improve service provision's resilience to disruptions. At the beginning of the year, capacity management has expanded as planned to cover also the Kouvola traffic operating point.
In late 2022, the Finnish Transport Infrastructure Agency and Fintraffic Railway Ltd signed an alliance agreement for the development and verification phase of the Digirail project, which will last until the end of 2027. The development and verification phase has started as agreed with planning and procurement during the first six months.
Rail traffic management has developed a new technology strategy that will create uniform policies for technological development throughout the company.
In the spring, Fintraffic, together with the Häme University of Applied Sciences (HAMK), launched a new study module focusing on the railway sector. The module is intended for students in the final stages of their degrees, such as engineering students in the transport sector and electrical and automation engineering.
Sanna Järvenpää, M.Sc. (Tech.), stepped into her position as the new CEO of Fintraffic Railway on 29 June 2023. Järvenpää succeeds Pia Julin, who has been appointed CEO of the Group.
Responsibility
Fintraffic has included responsibility in its strategy, business operations and the management remuneration system. The company's business operations contribute substantially to traffic safety, to the efficient running of traffic and to reducing emissions. The company is committed to Global Compact corporate responsibility network and reports on its responsibility in connection with the annual review in accordance with the latest GRI requirements. Preparations for the reporting of future legislative sustainability data (CSRD) have begun.
CEO Pia Julin:
Fintraffic's journey as a company linking transport modes began almost five years ago. Every year we have worked to weld our operations together more closely, focusing on adopting best business practices and maximising our expertise across business boundaries in the best interest of our clients.
The core of Fintraffic’s strategy is to provide the safest, most reliable and most efficient traffic management services in the world. Thanks to our high-quality traffic management services and world-class experts, we have excellent potential to promote the utilisation of information throughout the transport sector and to promote increasingly functional travel and transport chains. We implement our strategy through three programmes. These programmes include the development of traffic control, productised digital ecosystem services and a unified Fintraffic.
Our ownership strategy requires us to build a transport data ecosystem and to enable and develop market-based products and services. We see significant opportunities here. Open transport data can be utilised to prevent congestion and to make the transport system more efficient. According to EU calculations, by ensuring better utilisation of traffic data in the mobility of people and goods and in the procurement of transport services, Finland could achieve annual benefits of up to hundreds of millions of euros.
The company plays an important role in building the effectiveness of the transport ecosystem. According to a study completed in the summer, Fintraffic is expected to produce an impact of EUR 10-40 million per year with the help of traffic data, but our impact potential is estimated to be significantly higher. The development of digital ecosystem services aims at maximising the potential of data.
The Helsinki Metropolitan Area’s premises project progressed to the construction phase. Fintraffic’s operations in Pasila will move into new premises in 2024- 2025.
Fintraffic carried out the TyöOptimi resource survey. The survey examined the well-being and workload of our personnel. The results were good when compared to reference data provided by Terveystalo.
Fintraffic's employee bicycle benefit has proven to be very popular among its personnel. More than 225 employees have already acquired use of bicycles, so approximately one in five Fintraffic employees is cyclist as an employee benefit.
Our journey to being a world-class transport company continues. I want to thank every Fintraffic employee for their excellent work and for their smooth cooperation with our partners.
Outlook for the future
The ownership strategy defined for Fintraffic in conjunction with its incorporation provides a strong backbone for the company’s service provision. The utilisation of its unique position as a unified Group that seamlessly combines four modes of transport continues to be at the centre of the activities, in which, in addition to traffic control services, the ambitious promotion of the digitalisation of transport continues. Building the opportunities for utilising digitalisation and data analytics will continue together with stakeholders who utilise traffic data.
Russia’s war of aggression against Ukraine continues to have an impact on the company's operations, especially in the air navigation business environment. Now that Finland has joined NATO, the company will be able to increase international cooperation, especially with NATO countries. All of the Group’s companies will continue to invest in continuity management, preparedness, and information and cybersecurity.
The profitability of road, rail and vessel traffic management is expected to remain stable. The company still sees opportunities for improving the efficiency of its service provision, and has set a new efficiency target of EUR 30 million for 2023–2028. An EU-level performance development plan has been set for air navigation service provision.
Fintraffic will continue to invest in the modernisation and automation of service production systems. In the near future, major projects will include technology upgrade work on road tunnels and open-road sections, as well as a major upgrade to train control in the Finnish railway network through Digirail and automation projects.
Although investments in the near future will be partially funded by loans, indebtedness will remain moderate and the balance sheet strong. Digirail investments will increase significantly in the years ahead and, depending on the project financing model, may require the company to strengthen its capital structure in the coming years.
