International Consolidated Airlines Group (LON:IAG) today announced Group consolidated results for the three months to March 31, 2019.
IAG period highlights on results:
· First quarter operating profit €135 million before exceptional items (2018 pro forma1: €340 million)
· Passenger unit revenue for the quarter down 0.8 per cent, down 1.4 per cent at constant currency
· Non-fuel unit costs before exceptional items for the quarter up 0.8 per cent, down 0.6 per cent at constant currency on a pro forma1 basis
· Fuel unit costs for the quarter up 15.8 per cent, up 11.1 per cent at constant currency
· Net foreign exchange operating profit impact for the quarter adverse €61 million
· Cash of €7,481 million at March 31, 2019 was up €1,207 million on December 31, 2018 and net debt to EBITDA improved by 0.2 to 1.0 times
· Profit after tax before exceptional items €70 million down 62.6 per cent, and adjusted earnings per share down 57.5 per cent on a pro forma1 basis
Performance summary:
|
Three months to March 31 |
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|
|
Statutory |
|
Pro forma |
|
Statutory |
|
|
Highlights € million |
2019 |
|
20181 |
Higher / (lower) |
2019 |
20182 |
|
Passenger revenue |
4,646 |
|
4,415 |
5.2 % |
4,646 |
4,415 |
|
Total revenue |
5,318 |
|
5,022 |
5.9 % |
5,318 |
5,022 |
|
Operating profit before exceptional items |
135 |
|
340 |
(60.3)% |
135 |
280 |
|
Exceptional items |
– |
|
639 |
(100.0)% |
– |
639 |
|
Operating profit after exceptional items |
135 |
|
979 |
(86.2)% |
135 |
919 |
|
|
|
|
|
|
|
|
|
Available seat kilometres (ASK million) |
75,423 |
|
71,093 |
6.1 % |
|
|
|
Passenger revenue per ASK (€ cents) |
6.16 |
|
6.21 |
(0.8)% |
|
|
|
Non-fuel costs per ASK (€ cents) |
5.06 |
|
5.02 |
0.8 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alternative performance measures |
2019 |
|
20181 |
Higher / (lower) |
|
|
|
Profit after tax before exceptional items (€ million) |
70 |
|
187 |
(62.6)% |
|
|
|
Adjusted earnings per share (€ cents) |
3.7 |
|
8.7 |
(57.5)% |
|
|
|
Net debt (€ million)3,4 |
5,225 |
|
6,430 |
(18.7)% |
|
|
|
Net debt to EBITDA3,4 |
1.0 |
|
1.2 |
(0.2x) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory results € million |
2019 |
|
2018 |
Higher / (lower) |
|
|
|
Profit after tax and exceptional items |
70 |
|
794 |
(91.2)% |
|
|
|
Basic earnings per share (€ cents) |
3.7 |
|
38.5 |
(90.4)% |
|
|
|
Cash and interest-bearing deposits |
7,481 |
|
7,442 |
0.5 % |
|
|
|
Interest-bearing long-term borrowings |
12,706 |
|
6,953 |
82.7 % |
|
|
|
For definitions refer to the IAG Annual report and accounts 2018. |
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1 Pro forma financial information is based on the Group’s statutory results with an adjustment for IFRS 16 ‘Leases’ from January 1, 2018. A reconciliation of the pro forma financial information to the Group’s statutory results is available on the Company’s website.
2 March 31, 2018 comparatives are the Group’s statutory results as reported.
3 Net debt is long-term borrowings less cash and cash equivalents and other interest-bearing deposits. EBITDA is operating profit before exceptional items and depreciation, amortisation and impairment.
4 The prior year comparative is pro forma December 31, 2018. The December 31, 2018 as reported was adjusted net debt of €8,355 million, and adjusted net debt to EBITDAR of 1.6 times.
Willie Walsh, IAG Chief Executive Officer, said:
“In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of €135 million.
“At constant currency, non-fuel unit costs were down 0.6 per cent while passenger unit revenue decreased by 1.4 per cent.”
Trading outlook
At current fuel prices and exchange rates, IAG expects its 2019 operating profit before exceptional items to be in line with 2018 pro forma. Passenger unit revenue is expected to be flat at constant currency and non-fuel unit cost is expected to improve at constant currency. We expect passenger unit revenue at constant currency to improve for the remainder of the year.
