The Steam Packet reduced its losses from £10.5m to £3.2m as it emerged from the impact of Covid.

The state-owned ferry operator will pay a dividend – of £1m – to the Treasury for the first time this year as it now turning a profit again after making significant losses during the pandemic.

The size of those losses are revealed in the accounts for the year ending December 31, 2021, which will be laid before Tynwald next month.

They show that the Steam Packet Group Ltd made a loss of £3,206,675 in 2021, a marked improvement of the £10,561,803 posted the year before.

Separate accounts for Steam Packet Company Ltd show losses for continuing operations fell from £7,539,984 in 2020 to £461,393 in 2021.

The accounts confirm that the Covid-19 pandemic continued to have unprecedented consequences for the Steam Packet Group throughout 2021.

Travel restrictions and the decision to cancel that TT for a second year had a significant effect on passenger revenues and cashflows.

Services were reduced to cut operational costs but uneconomic sailings continued to operate, at the government’s request, to maintain the island’s vital, daily lifeline routes.

Relaxation of certain measures for fully vaccinated travellers from June 28 that year provided a welcome lift but annual revenues remained £17.2m below pre-pandemic levels.

Lock-downs initially depressed freight performance but, subsequently, increased on-line and on-island spending led to annual revenues being £0.6m ahead of normal trading.

The reduced sailing schedule and other measures helped to secure cost savings of £7.1m during the year. Non-essential capital expenditure was also suspended to protect cash reserves.

In May of 2021, the group issued shares to its parent company, the Treasury, raising £5m of new capital to support liquidity.

Post year-end, the group agreed two loan facilities with Treasury to refinance the existing £76m shareholder loan and to provide £84m finance for the construction of the new passenger ferry Manxman.

The Manx government signed a deal in 2018 to buy the Steam Packet Company for £124m, in a move that promised to bring stability to the ownership of the island’s lifeline ferry operations.

Treasury Minister Dr Alex Allinson told a pre-Budget briefing that the reason the ferry operator was bought in the first place was that it had been making about £20m profits a year.

After making significant losses during the Covid years, it was starting to make a profit again even with increased fuel prices and so it was ‘only right’ that it should now pay a dividend, he said.