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2016-05-12

Finnair: Finnair Group interim report 1 January - 31 March 2016

Finnair Plc Stock Exchange Release 12 May 2016 at 9:00 am EET

Comparable operating result improved by 13 million euros in the
seasonally weakest quarter

January-March 2016

· Revenue grew by 2.9% year-on-year to 536.4 million euros (521.3).
· Comparable operating result was -15.3 million euros (-28.4).
· Comparable EBITDAR was 36.4 million euros (19.2).
· Net cash flow from operating activities stood at 10.4 million
euros (13.0), and net cash flow from investing activities totalled
-247.3 million euros (142.8).

· Unit cost at constant currency excluding fuel (CASK excl. fuel)
increased by 2.0% year-on-year.

· Unit revenue at constant currency (RASK) decreased by 1.9%
year-on-year.

· Ancillary and retail revenue per passenger grew by 17%
year-on-year to 11.87 euros.

· Earnings per share were -0.15 euros (-0.09).
· Outlook unchanged: In spite of the demand outlook for passenger
and cargo traffic in Finnair's main markets involving renewed
uncertainty, Finnair estimates that, in 2016, its capacity and
revenue will grow. The lower price of jet fuel supports Finnair's
financial performance in 2016.

On 1 January 2016, Finnair revised its calculation methods for unit
revenue (RASK) and unit cost (CASK) to correspond with changes in the
group's structure. The changes are described in more detail in Note
16 "Restatement of operating income and key ratios" and Note 18
"Calculation of key ratios". The comparison figures have been
adjusted accordingly.

CEO Pekka Vauramo:

We achieved a substantial improvement in our result for the first
quarter, which is typically the weakest season of the year. While the
result still shows a loss, the past quarter was the sixth consecutive
quarter in which we achieved a year-on-year improvement in
performance. Our comparable operating result was -15.3 million euros,
which represents an improvement of a good 13 million euros compared
to the previous year.

One positive aspect of the result was that ticket revenue relative to
available seat kilometres held up well in spite of a significant
increase in supply. Ancillary and retail revenue continued to see
strong growth and totalled approximately 30 million euros in the
first quarter. Per passenger, ancillary and retail revenue grew by
17%, amounting to 11.87 euros.

At the same time, the situation in the cargo market remained difficult
due to overcapacity, with revenues declining in spite of increased
volume. The negative impact of the Chinese New Year on cargo demand
was also exceptionally protracted this year.

We had three new A350 aircraft in operation for practically the entire
first quarter. While their roll-out has involved some of the typical
growing pains, our overall experiences of the new aircraft type are
unreservedly positive. We have seen a substantial improvement in
profitability on the routes we have operated with the new aircraft.

The market price of jet fuel was very low during the period under
review. Nevertheless, its impact is not yet fully reflected in our
result due to our hedging. For this reason, our fuel costs will
decline further in spite of increasing traffic volume, which will
support our profit during the remainder of the year.

In March, we revised our organisational structure to better support
our growth strategy. We also continued to focus on our core business
of air traffic and revised the reporting of our financial performance
indicators accordingly.

Our long-haul fleet renewal program reaches its peak this year. We
already have five new A350 aircraft in operation, and two more will
be delivered during the summer season. We have financed our latest
aircraft deliveries on favourable terms, and we have the flexibility
required to finance investments using cash funds, with our liquid
funds amounting to more than 730 million euros at the end of the
quarter.

Outlook

Outlook published on 10 February 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 operational result in conjunction with
its interim report for January-June.

Outlook on 12 May 2016 (unchanged)

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.

Financial reporting and Capital Markets Day

The publication dates for Finnair's interim reports in 2016 are as
follows:

Interim report 1 January - 30 June 2016: 17 August 2016
Interim report 1 January - 30 September 2016: 26 October 2016
Financial Statements Bulletin 1 January - 31 December 2016: 15 February 2017

Finnair will also arrange a Capital Markets Day in Vantaa on 25 May
2016.

FINNAIR PLC
Board of Directors

Briefings

Finnair will hold a press conference on 12 May 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 2319 3041 and using the PIN code 2419797#.
To join the live webcast, please register at:
https://engage.vevent.com/rt/finnair~20160512

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 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.

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http://news.cision.com/finnair/r/finnair-group-interim-report-1-january-...
http://mb.cision.com/Public/3718/2007450/b79132a3f78ebc7b.pdf

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