Shares in Finnish shipping company Finnlines plunged on Wednesday after it said 2000 profit would be worse than expected due to tough competition, higher oil prices and strikes hindering business. On Wednesday shares were trading down 12.5 percent at 23.99 euros, under-performing already soft Helsinki shares.
In February Finnlines posted a 1999 profit before extraordinary items of 67.3 million euros ($64.46 million) and said the outlook for 2000 was uncertain due to factors such as tighter competition and a drop in import volumes. Finnline’s released statement, reads in part as follows:
A strong imbalance exists between exports and imports of unitized cargo in Finland. Since the company has wished to maintain its export service at the level requested by its customers, no measures have so far been taken to reduce cargo capacity. Competition for imported freight has led to unhealthy price levels. The volume of Russian transit traffic has remained low.
The continuing high price of oil has raised operating costs significantly and it has been possible to transfer only a small proportion of these costs to freight prices owing to the intense competition.
Ongoing industrial actions in Finland have caused substantial harm to the maritime industry and port operations. Sympathy strikes have been held at Finnish ports since March 14, 2000 to expedite negotiations in a dispute involving bus drivers in Tampere. This has severely curtailed material flow and hampered port and shipping operations. A strike by truck drivers on March 29, 2000, a consequent lock-out by employers, and a sympathy strike by seamen and stevedore workers called by the truck and trans
port workers union have effectively brought the entire sea transport business to a halt.