Finnair Plc Stock Exchange Release 17
August 2016 at 9:00 am EET
Comparable operating result for Q2 showed a year-on-year improvement for the
seventh consecutive quarter and was positive at 3.2 million euros
April–June 2016
· Revenue grew by 4.7% year-on-year to 569.6 million euros (543.9)*.
· Comparable operating result was 3.2 million euros (-12.9).
· Operating result was 0.2 million euros (-5.7)
· Comparable EBITDAR was 56.3 million euros (37.4).
· Net cash flow from operating activities totalled 119.6 million euros (88.4),
and net cash flow from investing activities amounted to -149.0 million euros (
-53.7).
· Unit revenue (RASK) decreased by 3.8% year-on-year.
· Unit cost (CASK) decreased by 6.5% and unit cost at constant currency
excluding fuel increased by 0.1% year-on-year.
· Ancillary and retail revenue per passenger grew by 17.3% year-on-year to
10.89 euros.
· Earnings per share were -0.04 euros (-0.06).
January–June 2016
· Revenue grew by 3.8% year-on-year to 1,106.0 million euros (1,065.2).
· Comparable operating result was -12.2 million euros (-41.3).
· Operating result was -17.4 million euros (-13.9).
· Comparable EBITDAR was 92.7 million euros (56.5).
· Net cash flow from operating activities stood at 130.0 million euros
(101.4), and net cash flow from investing activities totalled -396.3 million
euros (89.2).
· Unit revenue (RASK) decreased by 3.0% year-on-year.
· Unit cost (CASK) decreased by 5.6% and unit cost excluding fuel at constant
currency increased by 1.0% year-on-year.
· Ancillary and retail revenue per passenger grew by 17.3% year-on-year to
11.35 euros.
· Earnings per share were -0.19 euros (-0.16).
* Unless otherwise stated, figures in brackets refer to the comparison period,
i.e. the same period last year.
Outlook
Outlook published on 12 May 2016
The demand outlook for passenger and cargo traffic in Finnair’s main markets
involves renewed uncertainty. Finnair estimates that, in 2016, its capacity
measured in available seat kilometres will grow by approximately 8 per cent and
that its revenue will grow at a slightly slower rate. The lower price of jet
fuel supports Finnair’s financial performance in 2016. Finnair will issue a
forecast for the development of its full-year comparable operating result in
conjunction with its interim report for January–June.
Outlook on 17 August 2016
Finnair’s new estimate of capacity growth is approximately 7 per cent, while the
previous estimate was a growth of 8 per cent compared to 2015. The revision is
due to delays in the deliveries of A350 aircraft. The rate of revenue growth is
estimated to be slower than the rate of capacity growth. Uncertainty regarding
the demand and yield prospects of the airline industry has increased during
recent months. Finnair estimates that its comparable operating result for 2016
will increase from the previous year (2015: 23.7 million euros).
CEO Pekka Vauramo:
Our comparable result for the second quarter was a good three million euros in
the black, representing an improvement of some 16 million euros compared to the
previous year, roughly equal to the year-on-year increase of our result in the
first quarter. The past quarter was already the seventh consecutive quarter in
which we achieved a year-on-year improvement.
Due to reasons such as lower fuel costs, higher capacity and growing ancillary
and retail revenue, our updated outlook is that our full-year result for 2016
will show an improvement on the previous year. Nevertheless, it should be noted
that last year’s third quarter saw several factors contribute to a strong result
that was an all-time record for Finnair, so the comparison period sets the bar
high. With that in mind – and provided that the market situation remains
unchanged – we expect that our performance developments will moderate somewhat
in the second half of 2016.
In the second quarter, our organisation continued to prepare for accelerated
growth in the longer term in accordance with our strategy. The training and
supplementary recruitment of flight personnel progressed as planned. After
taking delivery of two new A350 aircraft during the second quarter, we now have
six of the new aircraft in our fleet. However, the deliveries of the new
aircraft took place a little later than planned, which forced us to adjust our
flight program. This meant that our capacity growth fell slightly short of our
previous estimate.
Our capacity measured in Available Seat Kilometres grew during the quarter by
approximately 9 per cent year-on-year, while traffic growth measured in Revenue
Passenger Kilometres was slightly below 7 per cent. We achieved growth
particularly in long-haul traffic, where we launched two new routes for the
summer season, to Fukuoka and Guangzhou, and we also added more flights to Miami
and Chicago. Filling aircraft on new routes and frequencies typically requires a
breaking-in period, and the review period on these routes was largely in line
with our expectations. In the second quarter of this year, long-haul traffic
accounted for about 56 per cent of our capacity, while the corresponding figure
for the comparison period was about 53 per cent. Since unit revenues are
typically lower in long-haul traffic than in short haul, this change in our
traffic structure was also reflected in our unit revenue.
Our unit costs excluding fuel increased slightly in the first half of the year,
which is something we cannot be satisfied with. On the other hand, it is
important to keep in mind that we are currently preparing for accelerated
growth, which has a front-loaded impact on our cost structure. During the first
half, we recruited over 500 employees. The training of our new crew, the roll
-out of the new aircraft, launch of new routes and other preparations for growth
burdened our results by some 6–8 million euros in each quarter. We must maintain
tight control over costs even as we prepare for growth. We are also looking for
new ways to improve efficiency; for example, through digitalisation.
Financial reporting
The publication dates for Finnair’s interim reports in 2016 are as follows:
Interim report 1 January – 30 September 2016: 26
October 2016
Financial Statements Bulletin 1 January – 31 December 2016: 15 February
2017
FINNAIR PLC
Board of Directors
Briefings
Finnair will hold a press conference related to the announcement of its result
on 17 August 2016 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 9 2310 1618 and using the PIN code 4146988. To join the
live webcast, please register at: https://finnairgroup.videosync.fi/2016-08-17
-q2
For further information, please contact:
Chief Financial Officer Pekka Vähähyyppä, tel. +358 9 818 8550,
pekka.vahahyyppa@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 H1 2016 half year
report (http://mbpublicbinaryproxy/Public/3718/2060188/adbdca4dce714b69.pdf)
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 2015, Finnair’s
revenues amounted to EUR 2,255 million and it had a personnel of 4,800 at the
year-end. Finnair Plc’s shares are quoted on Nasdaq Helsinki.
