Third-quarter operational result declined to 26.7 million euros - product
upgrades announced and savings agreements negotiated during the period will have
an effect on the result from 2015 onwards
Finnair Plc. Interim report 31 October 2014 at 09:30 EET
1 July - 30 September 2014
· Turnover declined by 2.2 per cent year-on-year to 622.7 million euros
(636.9).
· The operational result was 26.7 million euros (43.0).
· Net cash flow from operating activities stood at -8.9 million euros (38.7),
and cash flow from investments totalled -15.1 million euros (-85.3).
· Unit cost per available seat kilometre excluding fuel (CASK excl. fuel)
decreased by 0.4 per cent from the previous year’s level.
· Unit revenue per available seat kilometre (RASK) fell by 1.6 per cent.
1 January – 30 September 2014
· Turnover declined by 5.9 per cent year-on-year to 1,731.8 million euros
(1,839.8).
· The operational result was -27.1 million euros (33.0).
· Net cash flow from operating activities stood at 39.8 million euros (128.4),
and cash flow from investments totalled 126.3 million euros (-141.0).
· Unit cost per available seat kilometre excluding fuel (CASK excl. fuel)
decreased by 1.0 per cent from the previous year’s level.
· Unit revenue per available seat kilometre (RASK) fell by 3.7 per cent.
· Guidance remains unchanged: Finnair estimates its turnover in 2014 to be
significantly lower than in 2013 and its 2014 operating result to show a
significant loss.
CEO Pekka Vauramo:
“Finnair’s passenger and cargo revenue for July–September declined year-on-year,
causing our turnover to decrease to 622.7 million euros. The decline in unit
revenue, caused primarily by the strengthening of the euro against key Asian
currencies, continued in the third quarter, although at a slower rate than
earlier in the year. Growth in passenger volume and the progress of cost
reduction measures were not sufficient to compensate for the weak revenue
development, as our operational result fell to 26.7 million euros.
In order for Finnair’s profitability to improve, it is essential that we
increase unit revenues and maintain tight control over costs. By the end of
September, we had nearly achieved the overall target for our 200-million-euro
cost reduction program. The program will be completed by the end of the year.
The savings agreements we concluded with pilots and cabin crew in September and
October will contribute to our cost competitiveness from 2015 onwards. I am very
pleased with the outcome of the negotiations, as they not only produce cost
savings, but also enable us to continue to develop our operations together with
our personnel.
In August, we announced a number of product upgrades with which we pursue
additional revenue. We expect our first A350 aircraft, which join our fleet in
late 2015, to show an impact on our profitability from 2016 onwards. A
significant improvement in revenue before that, however, would require a
substantial recovery in domestic market demand and a substantial decrease in the
world market price of fuel.”
Outlook unchanged
The ongoing uncertain economic outlook in Europe and Asia is contributing to
weak consumer demand in our main markets. Air traffic is expected to grow
moderately in 2014. Finnair, however, will not be able to benefit from that
growth without progress in its cost reduction program and its target cost
structure in place.
Finnair estimates its turnover in 2014 to be significantly lower than in 2013.
Fuel costs are expected to remain high. Due to delays in the personnel cost
reduction negotiations and the unfavourable market conditions driving the
decline in unit revenue, Finnair estimates that its 2014 operational result will
show a significant loss.
Financial reporting
Finnair’s financial statements bulletin for 2014 will be published on Wednesday
11 February 2015.
FINNAIR PLC
Board of Directors
Briefings
Finnair will hold a press conference on 31 October 2014 at 11:00 a.m. and an
analyst briefing at 12:30 p.m. at its office at Tietotie 9. An English-language
telephone conference for analysts will begin at 3:30 p.m. Finnish time. The
conference may be attended by dialling your local access number +358 800 770 306
and using the PIN code 255856#
For further information, please contact:
Chief Financial Officer Erno Hilden, tel. +358 9 818 8550,
erno.hilden@finnair.com
Financial Communications and Investor Relations Director Mari Reponen, tel. +358
9 818 4054, mari.reponen@finnair.com
IRO Kati Kaksonen, tel. +358 9 818 2780, kati.kaksonen@finnair.com,
FINNAIR PLC
Further information:
Finnair communications, 358 9 818 4020, comms(a)finnair.com
Distribution:
NASDAQ OMX Helsinki
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