STOCKHOLM, Sweden, Feb. 12, 2002 (PRIMEZONE) -- SAS Group today announced financial results for the year-end, January-December 2001
On October 8, flight SK686 crashed in Milan and 118 people lost their lives in the worst air disaster in SAS's history.
-- Continued weak demand due to the events of September 11, the subsequent acts of war, and substantially reduced Business Class traffic, are the main reasons for the weak result in the fourth quarter.
-- Operating revenue for the full year amounted to MSEK 51,433 (47,540).
-- Earnings before depreciation and leasing costs for aircraft (EBITDAR) decreased during the period January-December to MSEK 3,168 (5,608).
-- Income before capital gains for the full year amounted to MSEK - 1,790 (1,291).
-- Income before taxes amounted to MSEK -1,140 (2,829). Income for the fourth quarter was MSEK -1,147 (1,721).
-- SAS strengthened its market position in a weak market.
-- Earnings per share for the full year 2001 for the SAS Group amounted to SEK -6.58 (12.98) and equity per share was SEK 96.06 (106.50).
-- SAS's assessment is that the weak demand will continue in the first half of 2002 and that there will be some improvement in the second half of the year.
-- Towards the end of 2001 a number of action programs were initiated within the Group, designed to enhance efficiency and productivity as well as reduce capacity. These measures are expected to be completed with the intended impact on earnings in 2002.
-- In view of the present situation in the market and SAS Airline's precarious situation as described above, the SAS Group's income before taxes, excluding capital gains, is expected to be negative for the full year 2002 but better than in 2001. Cash flow for the full year 2002 is expected to be positive.
The SAS Group's annual report will be available on March 13, 2002.
The complete report can be accessed on www.scandinavian.net
PRESIDENT'S COMMENTS
2001 turned out to be the most difficult year the airline industry has ever experienced. A progressively deeper recession became more and more apparent in the second quarter. The terrorist attacks in the U.S. and the subsequent acts of war dramatically strengthened the decline in demand for air travel. It was not until December that some signs of recovery could be detected. For SAS Airline, which for the industry has a high proportion of business class, the loss of revenue was particularly large and the earnings trend was highly negative. Income before capital gains for the full year 2001 amounted to MSEK -1,790 and is in line with the forecast published on November 6, 2001.
Efforts to adapt operations to this lower demand affected SAS during the autumn. It was decided to implement measures to reduce capacity in SAS Airline, resulting in a total redundancy of approximately 3,500 positions. Reduction of aircraft capacity and suspension of certain routes has an annual effect of MSEK 500 and other measures are expected to have an earnings improvement effect on an annual basis. of MSEK 2,400. Action has been taken to raise revenues by MSEK 2,200 on an annual basis.
The action program in SAS Airline is going according to plan and cost reductions corresponding to MSEK 1,700 will be realized successively in 2002. In addition, cost-reducing measures with an earnings impact of MSEK 1,300 are planned in subsidiaries and affiliated companies.
Apart from the negative earnings trend, SAS also suffered other major setbacks during the year. Most serious was the crash of SK686 in Milan where 118 people lost their lives. This event is the biggest disaster in SAS's history and the company will be saddened for a long time.
Also the illegal market cooperation with the Danish carrier Maersk Air, which resulted in the EU Commission imposing a high fine and in the wake of which SAS's Board chose to resign, subjected SAS to obvious strain. The extraordinary general meeting appointed a new Board in November who took up their posts in what is perhaps the most difficult period in the history of the company.
Among business events of a strategic nature, the acquisition of the Norwegian airline Braathens was the most important. Incorporating Braathens into the SAS Group will raise opportunities to work together to create an effective traffic network in Norway. SAS's agreement to increase its shareholding in Spanair to 74% will increase control and influence in Spain's second largest airline. This agreement is being examined by the EU Commission.
A major program of change was implemented during the year, designed to create a better management structure with a decentralized and business- oriented organization. The SAS Group now comprises four business areas, the largest of which is SAS Airline. In the new structure and according to control and corporate governance policies now in place, there will be greater scrutiny and follow-up of every unit and its competitiveness in an industry perspective.
From a shareholder perspective, the transfer during the year to a single share is an important event. Ahead of the consolidation of the industry which will come in the wake of the current crisis, the ability to compare airlines' performance and prospects will be increasingly important. Following a difficult, and from an investment return viewpoint unacceptable, 2001, all efforts in 2002 will focus on achieving a competitive business.
SUMMARY STATEMENT OF INCOME
OCTOBER-DECEMBER JANUARY-DECEMBER
Pro Pro
forma forma
(MSEK) 2001 2000 2001 2000
Operating revenue 12,810 12,809 51,433 47,540
Payroll expenses -4,825 -3,701 -17,792 -14,932
Other operating expenses -8,765 -7,803 -32,898 -28,898
Earnings before
depreciation, EBITDA -780 1,305 743 3,710
Depreciation -711 -749 -2,443 -2,192
Share of income in
affiliated companies -98 -49 -70 -1
Income from the sale of
shares in subsidiaries
and affiliated companies 1 1,016 -24 1,033
Income from the
sale of aircraft
and buildings 440 228 673 490
Operating income -1,148 1,751 -1,121 3,040
Income from other
shares and
participations 0 4 1 15
Net financial items 1 -34 -20 -226
Income before taxes -1,147 1,721 -1,140 2,829
Taxes 155 -383 103 -699
Minority interests -5 10 -27 5
Income after taxes -997 1,348 -1,064 2,135
Earnings per share (SEK)(A) -6.16 8.19 -6.58 12.98
(A) Earnings per share is calculated on 161,816,396 shares for 2001 and on 164,500,000 shares for 2000.
The full content of this release including the financial tables can be found at the following links:
http://www.waymaker.net/bitonline/2002/02/12/20020212BIT00860/bit0002.doc
http://www.waymaker.net/bitonline/2002/02/12/20020212BIT00860/bit0002.pdf The full report
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