Finnair Group reports half year financial results

Juliette O'Neill
By Juliette O'Neill August 17, 2016 16:38

Finnair Group reports half year financial results

In the three months to June 2016, Finnair’s revenue grew by 4.7% year-on-year to €569.6 million compared to €543.9 million in the year-ago period. The comparable operating result was €3.2 million opposed to the €12.9 million loss posted in the last year’s quarter. The operating result was €0.2 million euros compared to a loss of €5.7 million last year. The comparable EBITDAR was €56.3 million compared to €37.4million in the prior year period. Unit revenue (RASK) decreased by 3.8% year-on-year, while 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. Earnings per share were €-0.04 euros compared to €-0.06 for the prior year period.

For the six months to June 2016, Finnair’s revenue grew by 3.8% year-on-year to €1,106.0 million compared to €1,065.2 million in the prior-year period. The comparable operating result was a loss of €12.2 million, which narrowed over the loss of €41.3 million reported last year. The operating result was a loss of €17.4 million, again narrowing last year’s result of a loss of €13.9 million. The comparable EBITDAR was €92.7 million, which was €56.5 million last year. Net cash flow from operating activities stood at €130.0 million up from €101.4 million over the past year period, while net cash flow from investing activities totalled a loss of €396.3 million compared to €89.2 million in H1 2015. During the first half of 2016, RASK decreased by 3.0% year-on-year, with 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. Earnings per share were €-0.19 euros compares to €-0.16 for the prior-year period.

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% 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.

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).

Juliette O'Neill
By Juliette O'Neill August 17, 2016 16:38