LONDON, March 25, 2005 (PRIMEZONE) -- Virgin Express (Euronext:VIRE) (OTCBB:VIRGY) Full Year Results for 2004 Highlights
-- Highly competitive market -- fares and revenues down from last
year.
-- Operating losses cut by 75% to EUR 3.9 million.
-- Unit costs at 5.0 eurocents -- lowest ever in our history.
-- Industry leading on-time performance -- over 90% for the third
consecutive year.
-- Progress on the structuring of the EUR 1.0 per share exit for all
shareholders following the transaction with SN Airholding II.
Chairman's Statement
2004 was another tough year for Virgin Express, as we faced growing competition from full service, low fare and charter operators. However, we reduced our operating losses from EUR 16 million in 2003 to EUR 3.9 million in 2004 by delivering industry leading on-time performance levels and by carefully managing our costs.
During 2003, the airline experienced unprecedented competition across its entire route network, particularly on flights to Rome and Milan; a position currently being investigated by the European Commission. Such competition was sustained during 2004, particularly on the Barcelona route, where fares have declined significantly. In response, we reduced the number of rotations on loss-making routes, closed down our Bordeaux route and started operating flights to Valencia. In the first quarter of 2004, aircraft numbers were reduced from 13 to 11 with a further reduction planned for 2005. Revenues fell by 13% in 2004 to EUR 180 million with bookings over the Internet increasing by almost 50% from 47% at the beginning of the year to 70% by December 2004. Load factors were in line with other European low fare carriers at 76%.
During the year costs have been controlled exceptionally well. Unit costs reached an all time low at 5.0 eurocents per available seat kilometre (ASK) and are lower than all our competitors operating from major airports. This level has been achieved despite unit fuel costs rising by 9%, partially offset by the strength of the euro.
Service continues to be of the highest priority for all of us at Virgin Express. For the third year running we delivered on-time performance of better than 90% on both departures and arrivals. Comparing our on-time performance with that published in the AEA Quarterly statistics shows that Virgin Express had the best on-time record of all airlines to eight out of nine major European airports. We are proud to offer our customers not only value for money pricing but also industry leading on-time performance.
Good progress is being made towards completion of the common ownership of Virgin Express NV/SA and SN Brussels Airlines announced to the market on 6th October 2004 and the company is on target to satisfy the conditions well in advance of the backstop date of 30th June 2005. In addition, progress continues to be made in structuring the proposed EUR 1.00 a share exit strategy for all equity shareholders. It is the company's intention that on completion of the proposed exit it will apply for a delisting from Euronext and termination of the Exchange Act registration and reporting requirements in the United States.
David Hoare Executive Chairman
4th Quarter Results
For the 4th quarter of 2004 the company reported a net loss of EUR 4.5 million versus a net loss of EUR 9.6 million in the 3rd quarter of 2003.
Net income per IDS and ADS for the 4th quarter are shown in the table below.
Revenues
Total revenues for the 4th quarter decreased by 18% to EUR 37.1 million from EUR 45.2 million last year. This reduction in revenues is mainly due to the lower number of aircraft operated.
The focus on new services and the ancillary revenue such as extra legroom seats, lounges, catering services on board and pre-ordered meals, overweight luggage, special service fees and fuel surcharge continued to deliver additional revenues.
Expenses
The total operating expenses decreased by 27% to EUR 41.0 million for the 4th quarter 2004 from EUR 56.2 million in the same quarter of 2003.
The reduction in the variable expenses and the continued focus on cost control have enabled a further improvement of the unit costs in the 4th quarter to 5.08 eurocents per ASK, coming from 6.08 eurocents in 2003.
Excluding the negative impact of fuel price increases, the operating expenses for the 4th quarter were 33% lower than in the same period last year.
Results for the Year 2004
For the year 2004, the company reported a net loss of EUR 7.3 million versus a net loss of EUR 19.6 million in 2003.
Net income per IDS and ADS for the full year are shown in the table below.
Revenues
Total revenues for the full year decreased by 13% to EUR 179.8 million from EUR 207.1 million in 2003. This reduction in revenues is mainly due to the lower number of aircraft operated.
The focus on new services and the ancillary revenue such as extra legroom seats, lounges, catering services on board and pre-ordered meals, overweight luggage, special service fees and fuel surcharge delivered additional revenues.
Expenses
The total operating expenses decreased by 18% to EUR 183.8 million in 2004 from EUR 223.1 million in 2003.
The reduction in the variable expenses and the continued focus on cost control have enabled a further improvement of the unit costs in 2004 to 5.03 eurocents per ASK, coming from 5.41 eurocents in 2003.
Excluding the negative impact of fuel price increases, the operating expenses in 2004 were 22% lower than in 2003.
-- Aircraft leasing costs were reduced by 31% due to reduction of
the aircraft fleet from 13 to 11 during the first quarter of 2004.
-- Maintenance, passenger service expenses decreased by 27% due the
reduction in fleet and careful cost management.
-- The non-operating loss of EUR 2.7 million was mainly due to
interest paid on the loans from VSIL.
Earnings per IDS
and ADS 4Q 2003 4Q 2004 Year 2003 Year 2004
EUR per IDS -0.24 -0.11 -0.86 -0.18
USD per ADS -0.29 -0.14 -0.97 -0.23
Average Shares 39,950,625 39,950,625 22,878,817 39,950,625
USD / EUR (Average)
Exchange Rate 1.189 1.298 1.131 1.235
A table of quarterly and full year results is attached.
With the exception of the historical factual information, the statements made in this press release constitute forward-looking statements under the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations and involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included or contemplated by the statements. The company disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of the press release.
Virgin Express Holdings PLC
Unaudited Results for the Three Months Ended 31 December 2003 and
2004.
Three Months Ended
(EUR Thousands) 31 December
2003 2004 var
Revenue
Scheduled 41,09 38,265 -7%
Charter 403 161 -60%
Other 3,665 -1,36 -137%
Total Revenue 45,158 37,066 -18%
Operating Expenses
Flight Operations 4,267 3,057 -28%
Aircraft Fuel 7,121 8,232 16%
Navigation Fees 4,931 4,376 -11%
Maintenance 4,182 2,284 -45%
Aircraft Ownership 9,907 5,767 -42%
Station Operations 7,35 6,789 -8%
Passenger Services 4,61 2,354 -49%
Sales & Marketing 6,058 3,328 -45%
Depreciation & Amort. 445 321 -28%
General & Administrative 7,323 4,511 -38%
Total Operating Expenses 56,193 41,019 -27%
Operating Profit / (Loss) -11,036 -3,953 64%
Non Operating Income /
(Loss) 1,575 -496 131%
Profit / (Loss) before
taxation and -9,461 -4,449 53%
Tax and Minority
interests -165 -5 97%
Profit / (Loss) after
taxation and
Minority interests -9,626 -4,454 54%
Operating Data
RPKs (000) 670,949 591,072 -12%
ASKs (000) 917,619 800,414 -13%
Revenue per RPK 6.73 6.27 -7%
Revenue per ASK 4.92 4.63 -6%
Fleet Size 13.00 11.00 -15%
Flights Flown 4,845 4,12 -15%
Ave. Flight Length 1,256 1,267 1%
Passengers Flown 536,751 442,451 -18%
Load Factor 73.1% 73.8% 1%
Block Hours Flown 10,168 8,721 -14%
Fuel Gallons (000) 7,546 6,489 -14%
Operating Cost/ASK 6.08 5.08 -16%
Ave Fuel Price (US cents
per gallon) 92.58 130.82 41%
Ave Exchange Rate $/EUR 1.189 1.298 9%
Ending Exchange rate
$/EUR 1.263 1.362 8%
Virgin Express Holdings PLC
Unaudited Results for the Three Months Ended 31 December 2003 and
2004.
Twelve Months Ended
(EUR Thousands) 31 December
2003 2004 var
Revenue
Scheduled 195,682 169,184 -14%
Charter 3,797 2,311 -39%
Other 7,587 8,33 10%
Total Revenue 207,066 179,826 -13%
Operating Expenses
Flight Operations 17,564 15,44 -12%
Aircraft Fuel 28,167 30,704 9%
Navigation Fees 20,87 18,119 -13%
Maintenance 24,237 17,71 -27%
Aircraft Ownership 36,675 25,44 -31%
Station Operations 36,445 31,871 -13%
Passenger Services 15,364 11,177 -27%
Sales & Marketing 21,698 15,799 -27%
Depreciation & Amort. 2,135 1,418 -34%
General &
Administrative 19,917 16,087 -19%
Total Operating
Expenses 223,072 183,765 -18%
Operating Profit /
(Loss) -16,006 -3,939 75%
Non Operating
Income / (Loss) -3,074 -2,691 12%
Profit / (Loss) before
taxation and -19,08 -6,63 65%
Tax and Minority
interests -498 -677 -36%
Profit / (Loss) after
taxation and
Minority interests -19,578 -7,307 63%
Operating Data
RPKs (000) 3,302,471 2,736,800 -17%
ASKs (000) 4,080,802 3,626,118 -11%
Revenue per RPK 6.27 6.57 5%
Revenue per ASK 5.07 4.96 -2%
Fleet Size 13.0 11.3 -13%
Flights Flown 20,908 18,33 -12%
Ave. Flight Length 1,286 1,31 2%
Passengers Flown 2,532,931 2,051,059 -19%
Load Factor 80.9% 75.5% -7%
Block Hours Flown 44,511 39,76 -11%
Fuel Gallons (000) 33,051 29,175 -12%
Operating Cost/ASK 5.41 5.03 -7%
Ave Fuel Price (US
cents per gallon) 95.54 121.7 27%
Ave Exchange Rate $/EUR 1.131 1.235 9%
Ending Exchange rate
$/EUR 1.263 1.362 8%