Revenues on a par with the 2014 corresponding period, profitability improved but
the result was still loss-making
Finnair Plc. Interim report 7 May 2015 at 09:00 EET
January–March 2014
· Revenue was on a par with the first quarter of 2014 at 540.4 million euros
(543.3).
· The operational result was -28.4 million euros (-34.2).
· Operational EBITDAR was 19.2 million euros (17.4).
· Net cash flow from operating activities stood at 13.0 million euros (-20.5),
and cash flow from investments totalled 142.8 million euros (233.6).
· Unit cost at constant currency excluding fuel (CASK excl. fuel) increased by
1.1% from the comparison period.
· Unit revenue at constant currency (RASK) decreased by 0.4% year-on-year.
· Earnings per share amounted to -0.09 cents (-0.24).
· Outlook: Finnair estimates that its 2015 unit costs excluding fuel at
constant currency, calculated by applying the changed calculation method, will
decrease from the 2014 level.
As of 1 January 2015, Finnair has adjusted calculation methods of unit revenue
(RASK) and unit cost (CASK) to better reflect the recent changes in the Group
structure. RASK and CASK at constant currency exclude the impact of exchange
rates. The changes are described in more detail in the table section of the
interim report in note 16. Restatement of key ratios, and note 18.Calculation of
key ratios. Comparison figures for 2014 have been restated accordingly.
CEO Pekka Vauramo:
Finnair’s revenue in the first quarter of 2015 was on a par with the
corresponding period in 2014 at 540.4 million euros. Revenue was increased by
higher passenger traffic revenue and negatively affected by lower revenue from
Aurinkomatkat Suntours and cargo traffic, as well as the elimination of revenue
from businesses sold after the comparison period. Our profitability improved
substantially, although our operational result showed a loss of 28.4 million
euros.
The factors contributing to the improved result in addition to the increased
revenue included further progress in cost savings as well as lower fuel prices.
Unfortunately, the substantial appreciation of the dollar against the euro
diluted the benefit gained from the fall in the price of jet fuel and
significantly increased other dollar-denominated costs. The operational result
also reflects the weak financial performance of Aurinkomatkat Suntours.
During the reporting period and in the preceding years, Finnair result has been
affected by strong changes in the yen and / or changes in the dollar exchange
rate. Therefore we started to report unit revenue and unit cost excluding fuel
at constant currency during the review period. This change will show the actual
development of our Airline Business more clearly. At the same time we adjusted
the calculation method to reflect the structural changes that have taken place
within the Group – the transfer of Flybe Finland’s own risk flying to Finnair’s
purchased traffic, for example. On this basis, unit revenue at constant currency
fell by 0.4 per cent and unit cost excluding fuel at constant currency rose by
1.1 percent on the comparison period. The increase in unit cost excluding fuel
at constant currency is largely explained by changes in our traffic structure.
We are moving in the right direction, despite the fact that our result is still
not at the level we are striving to reach. Our long-haul fleet renewal, which
will start this coming autumn, will significantly improve the cost
-competitiveness and customer experience of our long-haul traffic. At the same
time, we will continue to focus on increasing our revenue through, for example,
ancillary revenue. The positive effect of increased ancillary sales was visible
already in our first quarter figures, although its share is still small.
Finnair’s strategic targets are discussed in more detail in a separate stock
exchange release that was issued this morning.
Outlook
Outlook published on 11 February 2015
The demand outlook for passenger and cargo traffic in Finnair’s main markets
still involves uncertainty. Finnair estimates that, in 2015, its capacity
measured in Available Seat Kilometres will grow by approximately 3 per cent and
that its revenue will remain at the 2014 level. Finnair further estimates that,
in 2015, its unit costs excluding fuel will decrease from the 2014 level.
The lower price of jet fuel and the full impact from the completed savings
program are supporting the financial performance of Finnair 2015.
Outlook on 7 May 2015:
The demand outlook for passenger and cargo traffic in Finnair’s main markets
still involves uncertainty. Finnair estimates that, in 2015, its capacity
measured in Available Seat Kilometres will grow by approximately 3 per cent and
that its revenue will remain at the 2014 level. Finnair further estimates, as a
change to its previous guidance, and when calculated with the same accounting
principles as earlier, that its unit costs excluding fuel will increase from the
2014 level due to the structural changes in the company’s business and the
strong appreciation of the US dollar. By applying the changed calculation
method, that neutralizes the effect of these changes as defined in notes 16. and
18. to the interim financial statements, Finnair estimates that its 2015 unit
costs excluding fuel at constant currency will decrease from the 2014 level.
The lower price of jet fuel and the full impact from the completed savings
program are supporting the financial performance of Finnair 2015.
According to its disclosure policy, Finnair will issue guidance on the expected
development of its operational result in connection with the January-June
interim report. As a separate guidance Finnair estimates, that when calculated
using the exchange rates effective at the end of the review period, the non
-recurring items associated with the long haul fleet renewal in 2015 will have a
substantial positive impact on Finnair’s operating result due to the
strengthened US dollar. Finnair has previously estimated that the long haul
fleet renewal would not have a significant effect on its operating result in
2014 and 2015. The non-recurring items related to the long haul fleet renewal
react substantially to changes in the euro-dollar exchange rate.
Financial reporting
Finnair’s interim report for 1 January – 30 June 2015 will be published on
Friday, 14 August 2015.
This is a summary of Finnair Group interim report 1 January – 31 March 2015. The
Finnair Group interim report 1 January – 31 March 2015 is attached to this
release in pdf format and is also available on the company’s website at
www.finnairgroup.com.
FINNAIR PLC
Board of Directors
Briefings
Finnair will hold a press conference on 7 May 2015 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 2:30 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:
Acting Chief Financial Officer Mika Stirkkinen, tel. +358 9 818 4960,
mika.stirkkinen@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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