Number of passengers and passenger yields increasing, profitability improved;
result still negative
Finnair Plc. Interim report 14 August 2015 at 09:00 EET
April-June 2015
· Revenue on a par with second quarter of 2014, at 561.0 million euros
(565.7).
· Operational result improved to -12.9 million euros (-19.6).
· Operational EBITDAR was 37.4 million euros (35.5).
· Net cash flow from operating activities stood at 88.4 million euros (69.2),
and cash flow from investments totalled -53.7 million euros (-92.3).
· Unit cost at constant currency excluding fuel (CASK excl. fuel) increased by
0.7% year-on-year.
· Unit revenue at constant currency (RASK) decreased by 1.9% year-on-year.
· Earnings per share amounted to -0.06 cents (-0.20).
January-June 2015
· Revenue on a par with first half of 2014, at 1,101.4 million euros
(1,109.0).
· Operational result improved to -41.3 million euros (-53.9).
· Operational EBITDAR was 56.6 million euros (53.0).
· Net cash flow from operating activities stood at 101.4 million euros (48.7),
and cash flow from investments totalled 89.2 million euros (141.4).
· Unit cost at constant currency excluding fuel (CASK excl. fuel) increased by
0.9% year-on-year.
· Unit revenue at constant currency (RASK) decreased by 1.2% year-on-year.
· Earnings per share amounted to -0.16 cents (-0.44).
· Finnair updates its guidance and estimates that, in 2015, its operational
result is around break-even or slightly positive.
CEO Pekka Vauramo:
Our passenger traffic revenue from tickets and ancillary services saw strong
growth in the second quarter of 2015, and we achieved a new record in June by
carrying more than 37,500 passengers in one day. At the same time, ancillary
sales grew by one third from the previous year. Our customers have heartily
welcomed the Chicago route as well as our new seasonal summer routes, with
demand exceeding our expectations. Furthermore, business travel has picked up
noticeably.
Profitability improved significantly, although the operational result still
showed a loss of 12.9 million euros. The result improvement is attributed to
revenue growth in our core business operations, the progress of cost
reduction measures and the decline in fuel prices, which is reflected in our
costs gradually due to our hedging policy. The appreciation of the dollar
diluted the benefit from fallen jet fuel price and significantly increased our
other dollar-denominated costs, but at the same time, the appreciation of our
income currencies boosted our revenues particularly in Asia. In addition, our
positive performance was supported by the result improvement at Aurinkomatkat
Suntours.
While we cannot be satisfied with our loss-making result, our financial position
and liquidity are very strong. Our long-haul fleet renewal, which will start
this 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 services and product
improvements in intercontinental traffic.
We are moving in the right direction and our strategy, which was updated in the
spring, is clear. Our goal is profitable growth, which we will be better
equipped to achieve once the Airbus 350 aircraft start joining our fleet later
this year. They will enable the gradual growth of capacity and substantially
reduce our fuel costs on long-haul flights. In addition, we have begun to
recruit cabin crew with a view to future growth. Our whole team is
enthusiastically preparing for Finnair’s next phase.
Outlook
Outlook published 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 neutralises 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.
Outlook on 14 August 2015
Finnair estimates that, in 2015, its operational result is around break-even or
slightly positive.
Finnair reiterates its previous estimate that its capacity measured in Available
Seat Kilometres will grow by approximately 3 per cent and that its revenue will
remain approximately at the 2014 level. As a change to its previous estimate,
the company now estimates that its 2015 unit costs excluding fuel at constant
currency will remain at the 2014 level.
Finnair also reiterates as a separate guidance 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.
Financial reporting
Finnair’s interim report for 1 January - 30 September 2015 will be published on
Friday, 30 October 2015.
This is a summary of Finnair Group interim report 1 January - 30 June 2015. The
Finnair Group interim report 1 January - 30 June 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 14 August 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 and webcast will begin at 2:30 p.m. Finnish time. The
conference may be attended by dialling your local access number +358 (0)9 2319
3041(Finland) or +44 (0) 1452 553430 (International) and using the PIN code
2419797#. To join the live webcast, please register
at: https://engage.vevent.com/rt/finnair~20150814
For further information, please contact:
Acting Chief Financial Officer Mika Stirkkinen, tel. +358 9 818 4960,
mika.stirkkinen@finnair.com
Financial Communications Manager Ilkka Korhonen, tel. +358 9 818 4705,
ilkka.korhonen@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
Principal media
Finnair is a network airline specialising in passenger and cargo traffic between
Asia and Europe. Helsinki’s geographical location gives Finnair a competitive
advantage, since the fastest connections between many European destinations and
Asian megacities fly over Finland. Finnair’s vision is to offer its passengers a
unique Nordic experience, and its mission is to offer the smoothest, fastest
connections in the northern hemisphere via Helsinki and the best network to the
world from its home markets. Finnair is the only Nordic carrier with a 4-star
Skytrax ranking and a member of the oneworld alliance. In 2014, Finnair’s
revenues amounted to EUR 2,400 million and it had a personnel of almost 4,500 at
the year-end. Finnair Plc’s shares are quoted on Nasdaq Helsinki.
