International Consolidated Airlines Group (LON:IAG) today presented Group consolidated results for the six months to June 30, 2018.
IAG period highlights on results:
· Second quarter operating profit €835 million before exceptional items (2017 restated(1): €790 million)
· Net foreign exchange operating profit impact for the quarter adverse €66 million
· Passenger unit revenue for the quarter down 1.9 per cent, up 2.3 per cent at constant currency
· Non-fuel unit costs before exceptional items for the quarter down 4.5 per cent, down 2.0 per cent at constant currency
· Fuel unit costs for the quarter up 6.7 per cent, up 15.0 per cent at constant currency
· Operating profit before exceptional items for the half year €1,115 million (2017 restated(1): €950 million), up 17.4 per cent
· Cash of €8,146 million at June 30, 2018 was up €202 million on June 30, 2017 and adjusted net debt to EBITDAR improved by 0.3 to 1.2 times
Performance summary:
|
|
Six months to June 30 |
|
|
|
Highlights € million |
2018 |
2017 (restated)(1) |
Higher / (lower) |
|
|
|
|
|
|
Passenger revenue |
9,938 |
9,591 |
3.6 % |
|
Total revenue |
11,206 |
10,867 |
3.1 % |
|
Operating profit before exceptional items |
1,115 |
950 |
17.4 % |
|
Exceptional items |
620 |
(77) |
nm |
|
Operating profit after exceptional items |
1,735 |
873 |
98.7% |
|
|
|
|
|
|
Available seat kilometres (ASK million) |
154,570 |
147,210 |
5.0 % |
|
Passenger revenue per ASK (€ cents) |
6.43 |
6.52 |
(1.3)% |
|
Non-fuel costs per ASK (€ cents) |
4.95 |
5.22 |
(5.1)% |
|
|
|
|
|
|
Alternative performance measures |
2018 |
2017 (restated)(1) |
Higher / (lower) |
|
|
|
|
|
|
Profit after tax before exceptional items (€ million) |
835 |
669 |
24.8 % |
|
Adjusted earnings per share (€ cents) |
39.1 |
30.3 |
28.7 % |
|
Adjusted net debt (€ million) |
6,198 |
7,024 |
(11.8)% |
|
Adjusted net debt to EBITDAR |
1.2 |
1.5 |
(0.3x) |
|
|
|
|
|
|
|
|
|
|
|
Statutory results € million |
2018 |
2017 (restated)(1) |
Higher / (lower) |
|
|
|
|
|
|
Profit after tax and exceptional items |
1,408 |
607 |
132.0 % |
|
Basic earnings per share (€ cents) |
68.3 |
28.3 |
141.6 % |
|
Cash and interest-bearing deposits |
8,146 |
7,944 |
2.5 % |
|
Interest-bearing long-term borrowings |
7,432 |
8,024 |
(7.4)% |
|
Definitions included in the Alternative performance measures section. |
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(1)Restated for new accounting standards IFRS 15 ‘Revenue from contracts with customers’ and IFRS 9 ‘Financial instruments’; refer to note 2. |
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International Consolidated Airlines, Willie Walsh, IAG Chief Executive Officer, said:
“We’re reporting another good set of results in quarter 2 with an operating profit of €835 million before exceptional items, up from €790 million last year.
“There was a strong performance in both unit revenue and costs. At constant currency, our passenger unit revenue increased by 2.3 per cent while non-fuel unit costs went down 2.0 per cent.
“Unfortunately, French Air Traffic Control strikes continued to challenge our airlines’ operations causing disruption to our customers. Vueling was particularly affected and incurred an additional €20 million of disruption costs in the quarter. These strikes are also having a significant negative impact on the Spanish economy and tourism.
“In July, LEVEL started flights from Paris Orly to Montreal and Guadeloupe. We are committed to accelerating LEVEL’s growth and its fleet will increase to a total of seven A330-200 aircraft in Paris and Barcelona next year. Also, we launched LEVEL shorthaul operations from Vienna where it will have four A321 aircraft that will operate to 14 European destinations.”
Trading outlook
At current fuel prices and exchange rates, IAG still expects its operating profit for 2018 to show an increase year-on-year. Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.
