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Intl Con Airline Grp IAG 3rd Quarter Results



  Intl Con Airline Grp (IAG) - 3rd Quarter Results

RNS Number : 7194Q
International Cons Airlines Group
09 November 2012
 



NINE MONTHS RESULTS ANNOUNCEMENT

 

International Consolidated Airlines Group (IAG) today (November 9, 2012)
presented Group consolidated results for the nine months ended September 30,
2012 and 2011. In addition, IAG presented combined results for the nine months
comparative period ended September 30, 2011, including Iberia's first 21 days
of January 2011.

 

IAG period highlights:

§  Third quarter operating profit of €270 million, before exceptional items,
€301 million excluding bmi (2011: operating profit €363 million, before
exceptional items)

§  Passenger unit revenue up 9.1 per cent for the quarter, flat at constant
currency

§  Fuel unit costs up 15.4 per cent for the quarter, up 1.6 per cent at
constant currency

§  Non fuel unit costs before exceptional items up 8.5 per cent for the
quarter, up 1.6 per cent at constant currency

§  IAG made an operating profit in the nine months of €17 million, British
Airways an operating profit of €286 million, and Iberia an operating loss of
€262 million

§  Passenger revenue in the nine months up 12.7 per cent, passenger unit
revenue up 9.1 per cent, on top of volume increases of 3.3 per cent

§  Fuel costs up 23.5 per cent to €4,633 million (2011: €3,751 million before
exceptional items)

§  Non fuel costs before exceptional items, up 10.9 per cent. Non fuel unit
costs up 7.4 per cent, or 2.6 per cent at constant currency

§  Cash for the nine months down €170 million to €3,565 million, net debt up
€360 million to €1,508 million, adjusted gearing up 1pt to 45 per cent

 

Performance summary:

                     Nine months to September              Nine months to
 ^                            30 ^                          September 30

 ^                    Consolidated   Combined              Consolidated ^ 
Financial data €              2012   2011^(1) Higher /     2012       2011^(2)
million (unaudited)
                                               (lower)  ^         (excludes 21
 ^                                                                 days Iberia
                                                                 pre-merger) ^
Passenger revenue        11,560  ^    10,261    12.7 %  11,560         10,082 
                                                              ^
Total revenue              13,588     12,263    10.8 %  13,588         12,027 
                                                              ^
Operating profit
before exceptional             17        451              17  ^           488 
items
Exceptional items              (8)       (68)             (8) ^           (68)
Operating profit
after exceptional               9        383               9  ^           420 
items
(Loss)/profit before         (169)       355            (169) ^           394 
tax
Profit after tax                6        338               6  ^           365 
Basic
(loss)/earnings per             ^          ^            (2.9) ^          18.9 
share (€ cents)
Operating figures ^           2012   2011^(1) Higher /       ^              ^ 

 ^                                             (lower)       ^              ^ 
Available seat                      160,204  
kilometres (ASK        165,536   ^          ^    3.3 %       ^              ^ 
million)
Revenue passenger                   127,425  
kilometres (RPK        133,904   ^          ^    5.1 %       ^              ^ 
million)
Seat factor (per          80.9   ^   79.5   ^   1.4pts       ^              ^ 
cent)
Passenger yield per       8.63   ^   8.05   ^    7.2 %       ^              ^ 
RPK (€ cents)
Passenger unit
revenue per ASK (€        6.98   ^   6.40   ^    9.1 %       ^              ^ 
cents)
Non-fuel unit costs       5.40   ^   5.03   ^    7.4 %       ^              ^ 
per ASK (€ cents)
€ million             At September         At Higher /
(unaudited)                    30,   December                ^              ^ 
                                          31,  (lower)
 ^                            2012   2011^(1)                ^              ^ 
Cash and interest         3,565  ^   3,735  ^   (4.6)%       ^              ^ 
bearing deposits
Net debt                  1,508  ^   1,148  ^   31.4 %       ^              ^ 
Equity                    6,036  ^   5,686  ^    6.2 %       ^              ^ 
Adjusted gearing^(3)         45% ^      44% ^      1pt       ^              ^ 

 

(1)    This financial data is based  on the combined results of operations  of 
British Airways Plc ('BA'), Iberia Líneas Aéreas de España S.A. ('Iberia') and
IAG the Company  for the  nine month period  ended September  30, 2012.  These 
combined financial  statements  eliminate  cross holdings  and  related  party 
transactions. Financial ratios are before exceptional items.

(2)    The IAG September 30, 2011  comparative is the consolidated results  of 
BA and IAG the Company for the nine month period ended September 30, 2011  and 
Iberia from January 22, 2011 to September 30, 2011.

(3)    Adjusted gearing is net debt plus capitalised operating aircraft  lease 
costs, divided by net debt plus capitalised operating aircraft lease costs and
equity.

 

Willie Walsh, IAG chief executive, said:

IAG chief executive Willie Walsh said: "In this quarter we made an operating
profit of €270 million before exceptional items. Total revenue at constant
currency was up 3.7 per cent. Fuel costs were up 20.9 per cent and underlying
non fuel unit costs down 1.0 per cent.

"The group performance is coming back to the levels seen in 2011 and this is
particularly true if you strip out the bmi losses of €31 million in the
quarter. However, there remains a strong difference between the performances
of British Airways and Iberia. 

"British Airways' sponsorship  of the London  Olympics received many  plaudits 
and the airline successfully stimulated premium leisure demand by  encouraging 
holidaymakers to trade up to  premium cabins. However, as predicted,  business 
demand was reduced  leading to a  one-off negative impact  on underlying  unit 
revenue this quarter.

 

"The full integration of bmi into British Airways was completed last month and
has been achieved smoothly and efficiently.

"Iberia continues to cause concern and we are announcing today a restructuring
plan to introduce permanent structural change across the airline. Iberia is in
a fight for survival and we will transform it to reduce its cost base so it
can grow profitably in the future." 

Financial review:

Basis of presentation

The consolidated results include Iberia from the acquisition date January  21, 
2011. The combined results for 2011  include Iberia's results from January  1, 
2011.

The nine month performance to September  30, 2012 includes bmi's results  from 
April 20, 2012.  bmi represented 1.9 per cent of the capacity growth, 2.2  per 
cent of the revenue growth and 2.9 per cent of the operating expenses growth.

Exchange rates

Translation of British Airways'  operating results from  sterling to euro  for 
the nine months to September 30 resulted in a €646 million benefit to revenues
and increased operating expenses  by €607 million, reflecting  a 6.6 per  cent 
weakening of the euro. The Group realised transactional exchange gains of  €31 
million on revenues and exchange losses of €136 million on operating expenses.

The net adverse impact of translation and transactional exchange rates on  the 
nine month results was €66 million.

Results - 2012 consolidated results compared to 2011 combined results

Revenue for the nine months  to September 2012 increased  by 10.8 per cent  to 
€13,588 million, 5.3  per cent  at constant exchange  rates and  3.3 per  cent 
excluding bmi.  Passenger revenue  was up  12.7  per cent  on an  increase  in 
capacity of 3.3 per cent; passenger  unit revenues improved 9.1 per cent,  3.4 
per cent at constant exchange rates.

Cargo revenue was up 0.9  per cent though decreased  3.4 per cent at  constant 
exchange rates on capacity increase of 3.6 per cent.

Operating costs before exceptional items for the nine months were up 14.9  per 
cent to €13,571  million; at  constant currency  up 8.6  per cent,  reflecting 
increased capacity and significant fuel price increases.

Fuel costs for  the nine  months increased 23.5  per cent  to €4,633  million, 
reflecting price increases, decreased hedging benefits, additional volume  and 
emissions trading credits.

Non fuel costs for the nine months increased 10.9 per cent, before exceptional
items, and  6.0 per  cent at  constant  exchange rates;  non fuel  unit  costs 
(€cents/ASK) were up 7.4  per cent and  up 2.6 per  cent at constant  exchange 
rates. Non  fuel  unit  costs  have been  adversely  impacted  by  bmi,  Avios 
accounting and industrial  action, net of  these impacts non  fuel unit  costs 
were up 0.4 per cent.

IAG operating profit, before exceptional items, for the nine months was €17
million compared to a profit of €451 million for the nine months of 2011.

Non-operating costs, before exceptional items,  for the nine months were  €178 
million compared to €107 million in 2011.

The loss before tax  for the nine months  was €169 million, after  exceptional 
items, compared to a profit of €355 million in 2011.

The tax credit for the nine months reflects the deferred tax benefit from  the 
reduction in the UK corporation tax rates and the losses incurred in Spain  at 
a higher tax rate versus the profits earned in the UK at a lower tax rate.

The Group's cash balance of €3,565 million at September 30, 2012 was down €170
million from  December  31, 2011.  The  cash  balance at  September  30,  2012 
comprised €2,485  million held  by  British Airways,  €1,054 million  held  by 
Iberia and €26 million held by IAG. 

Trading outlook:

The revenue  trend in  quarter 3  was restrained  somewhat due  to the  London 
Olympics, but  we  are  so  far observing  that  underlying  unit  revenue  is 
returning to its positive trend in quarter 4.

Including the impact of Hurricane Sandy  and continued weakness in Iberia,  we 
now expect to make an operating loss  for 2012 in the region of €120  million, 
after bmi trading losses and exceptional items. The expectation does not  take 
into account any impact of the Iberia restructuring plans.

 

 

 

 

 

Forward-looking statements:

Certain information  included  in  these  statements  is  forward-looking  and 
involves risks and  uncertainties that  could cause actual  results to  differ 
materially from those expressed or implied by the forward-looking statements.

Forward-looking statements include,  without limitation, projections  relating 
to  results  of   operations  and  financial   conditions  and   International 
Consolidated Airlines Group S.A. (the 'Group') plans and objectives for future
operations,  including,  without  limitation,  discussions  of  the  Company's 
Business  Plan,  expected  future  revenues,  financing  plans  and   expected 
expenditures and divestments.  All forward-looking statements  in this  report 
are based upon information known  to the Company on  the date of this  report. 
The Company  undertakes  no  obligation  to  publicly  update  or  revise  any 
forward-looking statement,  whether as  a result  of new  information,  future 
events or otherwise.

It is not reasonably possible to itemise all of the many factors and  specific 
events that  could  cause  the  Company's  forward-looking  statements  to  be 
incorrect or that could otherwise have a material adverse effect on the future
operations or results of an airline operating in the global economy.   Further 
information on  the primary  risks of  the business  and the  risk  management 
process of the Group is  given in the Annual  Report and Accounts 2011;  these 
documents are available on www.iagshares.com.

IAG Investor Relations

2 World Business Centre Heathrow

Newall Road, London Heathrow Airport

HOUNSLOW TW6 2SF

 

Tel: +44 (0)208 564 2900

Investor.relations@iairgroup.com

 

^ COMBINED       ^                       ^                ^                  ^       ^ 
INCOME
STATEMENT
^                                              ^                                     ^ 
^                Nine months to September 30,     Nine months to September 30,       ^ 

                             2012                             2011
^                ^                       ^                ^                  ^       ^ 
^ € million          Before Exceptional   Total       Before Exceptional  Total  Higher
(unaudited)     exceptional       items    ^(1)  exceptional       items   ^(1)       /
                      items                            items                    (lower)
^                                                                                  ^(1)
                                                          ^ 
^ Passenger        11,560               11,560      10,261               10,261  12.7 %
revenue                                       ^                                
^ Cargo revenue       888               888   ^        880                880     0.9 %
^ Other revenue     1,140               1,140        1,122                1,122   1.6 %
                                              ^                                
^ Total revenue    13,588               13,588      12,263               12,263  10.8 %
                                        ^                                      
^ Employee          3,158          34   3,192        2,856                2,856  10.6 %
costs                                         ^                                
^ Fuel, oil         4,633               4,633        3,751          76    3,827  23.5 %
costs and                                     ^                                
emissions
charges
^ Handling,         1,348               1,348        1,159                1,159  16.3 %
catering and                                  ^                                
other operating
costs
^ Landing fees        974               974   ^        899                899     8.3 %
and en-route
charges
^ Engineering         979               979   ^        840                840    16.5 %
and other
aircraft costs
^ Property, IT        738          (25) 713   ^        677                677     9.0 %
and other costs
^ Selling costs       640           5   645   ^        567                567    12.9 %
^ Depreciation,       786               786   ^        735                735     6.9 %
amortisation
and impairment
^ Aircraft            322           (6) 316   ^        298           (8)  290     8.1 %
operating lease
costs
^ Currency              (7)               (7) ^         30                 30        ^ 
differences
^ Total                                  13,579                          11,880
expenditure on     13,571           8        ^      11,812          68           14.9 %
operations
^ Operating            17           (8)   9   ^         451         (68)  383        ^ 
profit
^ Net                 (178)             (178) ^        (107)         79    (28)    66 %
non-operating
costs
^ (Loss)/profit       (161)         (8) (169) ^        344           11   355        ^ 
before tax from
continuing
operations
^ Tax                 165          10   175   ^         (17)               (17)      ^ 
^ Profit after          4           2     6   ^        327           11   338        ^ 
tax from
continuing
operations
^ Loss after             -         (45)  (45) ^           -                  -       ^ 
tax from
discontinued
operations
^ (Loss)/profit         4          (43)  (39) ^        327          11    338        ^ 
after tax for
the period
^                ^                       ^        ^                          ^       ^ 
^                ^                       ^                ^                  ^       ^ 
^ Operating       2012 ^(1)                  ^     2011 ^(1)                     Higher
figures                                                                               /
                                                                                (lower)
                                                                           ^       ^(1)
^                ^                           ^            ^                ^         ^ 
^ Available     165,536   ^                  ^     160,204                   ^    3.3 %
seat kilometres
(ASK million)
^ Revenue       133,904   ^                  ^     127,425                        5.1 %
passenger
kilometres (RPK
million)                                                                     ^ 
^ Seat factor      80.9   ^                  ^        79.5                   ^   1.4pts
(per cent)
^ Passenger      41,491   ^                  ^      39,362                   ^    5.4 %
numbers
(thousands)
^ Cargo tonne     4,521   ^                  ^       4,560                   ^   (0.9)%
kilometres (CTK
million)
^ Passenger        8.63   ^                  ^        8.05                   ^    7.2 %
yield per RPK
^ Passenger        6.98   ^                  ^        6.40                   ^    9.1 %
unit revenue
per ASK
^ Cargo yield     19.64   ^                  ^       19.30                   ^    1.8 %
per CTK
^ Total cost       8.20   ^                  ^        7.37                   ^   11.3 %
per ASK
^ Fuel cost per    2.80   ^                  ^        2.34                   ^   19.7 %
ASK
^ Total cost       5.40   ^                  ^        5.03                   ^    7.4 %
excluding fuel
per ASK
^ Aircraft in       383   ^                  ^         347                   ^   10.4 %
service
^ Average        59,430   ^                  ^      56,798                   ^    4.6 %
employee number

 

(1)    This financial data is based  on the combined results of operations  of 
British Airways Plc ('BA'), Iberia Líneas Aéreas de España S.A. ('Iberia') and
IAG the Company for the nine month  period ended September 30, 2012 and  2011. 
These combined financial statements eliminate cross holdings and related party
transactions. Financial ratios are before exceptional items.

See consolidated results for the nine month period ended September 30, 2012
overleaf.

 

^ CONSOLIDATED   ^                       ^               ^                  ^       ^ 
INCOME
STATEMENT
^                                             ^                                     ^ 
^                Nine months to September 30,    Nine months to September 30,       ^ 

                             2012                            2011
^                ^                       ^               ^                  ^       ^ 
^ € million          Before Exceptional  Total       Before Exceptional  Total  Higher
(unaudited)     exceptional       items   ^(1)  exceptional       items   ^(1)       /
                      items                           items                    (lower)
^                                                                                 ^(1)
                                                         ^ 
^ Passenger        11,560            ^  11,560   10,082   ^          ^  10,082  14.7 %
revenue                                      ^                               ^
^ Cargo revenue       888            ^   888        866   ^          ^   866     2.5 %
                                             ^                               ^
^ Other revenue     1,140            ^   1,140    1,079   ^          ^   1,079   5.7 %
                                             ^                               ^
^ Total revenue    13,588            ^  13,588   12,027   ^          ^  12,027  13.0 %
                                             ^                               ^
^ Employee          3,158          34    3,192    2,785   ^          ^   2,785  13.4 %
costs                                        ^                               ^
^ Fuel, oil         4,633            ^   4,633    3,682   ^        76    3,758  25.8 %
costs and                                    ^                               ^
emissions
charges
^ Handling,         1,348            ^   1,348    1,136   ^          ^   1,136  18.7 %
catering and                                 ^                               ^
other operating
costs
^ Landing fees        974            ^   974        874   ^          ^   874    11.4 %
and en-route                                 ^                               ^
charges
^ Engineering         979            ^   979        815   ^          ^   815    20.1 %
and other                                    ^                               ^
aircraft costs
^ Property, IT        738          (25)  713        662   ^          ^   662    11.5 %
and other costs                              ^                               ^
^ Selling costs       640           5    645        551   ^          ^   551    16.2 %
                                             ^                               ^
^ Depreciation,       786            ^   786        725   ^          ^   725     8.4 %
amortisation                                 ^                               ^
and impairment
^ Aircraft            322           (6)  316        281   ^         (8)  273    14.6 %
operating lease                              ^                               ^
costs
^ Currency              (7)          ^   (7) ^       28   ^             28   ^      ^ 
differences
^ Total                                 13,579                          11,607
expenditure on     13,571           8        ^   11,539   ^        68        ^  17.6 %
operations
^ Operating            17           (8)  9   ^      488   ^        (68)  420        ^ 
profit                                                                       ^
^ Net                 (178)              (178)      (105) ^        79   (26) ^    70 %
non-operating                                ^
costs
^ (Loss)/profit       (161)         (8)  (169)      383   ^        11    394        ^ 
before tax from                              ^                               ^
continuing
operations
^ Tax                 165          10    175         (29) ^          ^  (29) ^      ^ 
                                             ^
^ Profit after          4           2    6   ^      354   ^        11    365        ^ 
tax from                                                                     ^
continuing
operations
^ Loss after             -         (45) (45) ^         -  ^               -  ^      ^ 
tax from
discontinued
operations
^ (Loss)/profit                                                          365        ^ 
after tax for           4          (43) (39) ^      354   ^        11        ^
the period
^                ^                       ^       ^                       ^          ^ 
                 ^                       ^       ^                          ^       ^ 
^ Basic (loss)/earnings per              (2.9)   ^                       18.9       ^ 
share (€ cents)                              ^                               ^
^ Diluted (loss)/earnings                (2.9)                           17.0 
per share (€ cents)                          ^   ^                           ^      ^ 

 

(1)    The IAG September 30, 2012 Income statement is the consolidated results
of BA, Iberia and IAG  the Company for the  nine month period ended  September 
30, 2012. The IAG September 30,  2011 comparative is the consolidated  results 
of BA and IAG the Company for  the nine month period ended September 30,  2011 
and Iberia from January 22, 2011 to September 30, 2011.

 

^ CONSOLIDATED INCOME STATEMENT          ^      ^                         ^       ^ 
^                                            ^                                    ^ 
^               Three months to September 30,  Three months to September 30,      ^ 

                            2012                           2011
^                ^                       ^      ^                         ^       ^ 
^ € million          Before Exceptional Total       Before Exceptional Total  Higher
(unaudited)     exceptional       items    ^   exceptional       items    ^        /
                      items                          items                   (lower)
^                                                                                 ^ 
                                                        ^ 
^ Passenger         4,350               4,350    3,813   ^             3,813  14.1 %
revenue                                     ^                              ^
^ Cargo revenue       298            ^  298        288   ^             288     3.5 %
                                            ^                              ^
^ Other revenue       408            ^  408        389   ^             389     4.9 %
                                            ^                              ^
^ Total revenue     5,056            ^  5,056    4,490   ^             4,490  12.6 %
                                            ^                              ^
^ Employee          1,088           2   1,090      947   ^             947    14.9 %
costs                                       ^                              ^
^ Fuel, oil         1,660            ^  1,660    1,373   ^        15   1,388  20.9 %
costs and                                   ^                              ^
emissions
charges
^ Handling,           497            ^  497        400   ^             400    24.3 %
catering and                                ^                              ^
other operating
costs
^ Landing fees        346            ^  346        310   ^             310    11.6 %
and en-route                                ^                              ^
charges
^ Engineering         344            ^  344        287   ^             287    19.9 %
and other                                   ^                              ^
aircraft costs
^ Property, IT        268           5   273        232   ^             232    15.5 %
and other costs                             ^                              ^
^ Selling costs       217           2   219        208   ^             208     4.3 %
                                            ^                              ^
^ Depreciation,       274            ^  274        244   ^             244    12.3 %
amortisation                                ^                              ^
and impairment
^ Aircraft            113           (2) 111         98   ^         (3)  95    15.3 %
operating lease                             ^                              ^
costs
^ Currency             (21)          ^   (21)       28   ^              28        ^ 
differences                                 ^                              ^
^ Total                                 4,793                          4,139
expenditure on      4,786           7       ^    4,127   ^        12       ^  16.0 %
operations
^ Operating           270           (7) 263        363   ^        (12) 351        ^ 
profit                                      ^                              ^
^ Net                  (42)              (42)       (31) ^         (4)  (35)    35 %
non-operating                               ^                              ^
costs
^ Profit before       228           (7) 221        332   ^        (16) 316        ^ 
tax from                                    ^                              ^
continuing
operations
^ Tax                  15           1    16         (49) ^              (49)      ^ 
                                            ^                              ^
^ Profit after        243           (6) 237        283   ^        (16) 267        ^ 
tax from                                    ^                              ^
continuing
operations
^ Loss after
tax from                 -         (35)  (35)           -                 -       ^ 
discontinued
operations
^ Profit after                          202                            267  
tax for the           243          (41)     ^      283   ^        (16)     ^      ^ 
period
^                ^                       ^      ^                         ^       ^ 
^                ^                       ^      ^                         ^       ^ 
^ Operating         2012  ^                ^       2011  ^                    Higher
figures                                                                            /
                                                                             (lower)
                                                                         ^        ^ 
^                ^                         ^    ^                        ^        ^ 
^ Available      58,260   ^                ^    55,661   ^                ^    4.7 %
seat kilometres
(ASK million)
^ Revenue        49,343   ^                ^    47,022   ^                     4.9 %
passenger
kilometres (RPK
million)                                                                  ^ 
^ Seat factor      84.7   ^                ^      84.5   ^                ^   0.2pts
(per cent)
^ Passenger      15,760   ^                ^    14,553   ^                ^    8.3 %
numbers
(thousands)
^ Cargo tonne     1,511   ^                ^     1,494   ^                ^    1.1 %
kilometres (CTK
million)
^ Passenger        8.82   ^                ^      8.11   ^                ^    8.8 %
yield per RPK
^ Passenger        7.47   ^                ^      6.85   ^                ^    9.1 %
unit revenue
per ASK
^ Cargo yield     19.72   ^                ^     19.28   ^                ^    2.3 %
per CTK
^ Total cost       8.21   ^                ^      7.41   ^                ^   10.8 %
per ASK
^ Fuel cost per    2.85   ^                ^      2.47   ^                ^   15.4 %
ASK
^ Total cost       5.37   ^                ^      4.95   ^                ^    8.5 %
excluding fuel
per ASK
^ Average        61,340   ^                ^    57,575   ^                ^    6.5 %
employee number

 

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
QRTEAEFPEAAAFAF -0- Nov/09/2012 07:00 GMT
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