Thursday, March 2, 2017

Aeroflot reports $640 million net profit for 2016

Russia’s Aeroflot Group reported a 2016 net income of RUB38.8 billion ($640 million), reversing a RUB6.5 billion net loss in 2015. The results are published according to International Financial Reporting Standards.

Full-year revenue rose 19.4% to RUB496 billion year-over-year (YOY), producing an operating profit of RUB63.3 billion, up 43.4% YOY. Total operating costs for the year grew 16.6% to RUB432.6 billion.

Aeroflot deputy CEO Shamil Kurmashov said the results were “due to growth and development of the business, a net positive foreign exchange effect on revenues and costs while maintaining tight control of operating expenses, thanks to a high level of digitalization, and also the effect of operating leverage due to higher passenger load factors.”

Group passenger traffic grew 10.3% to 43.4 million passengers as a result of sustained high demand for domestic flights and the launch of new international routes and increased frequency of flights amidst a gradual recovery in demand in the international segment.

Kurmashov added, “In addition to scheduled passenger traffic, which rose by RUB60.3 billion YOY, the charter segment returned to growth during the reporting period in connection with the launch of a charter program. As a result, overall revenue from passenger traffic grew by RUB11.5 billion YOY.”

According to Kurmashov, the addition of new widebody aircraft to the group’s fleet “enabled growth of cargo revenues by RUB3 billion. As a result of the currency factor, the net positive effect on operating profit amounted to RUB14 billion, which was made possible, thanks to efficient revenue management and tight control of operating costs. In the fourth quarter, the Russian rouble strengthened against international currencies, which became an additional factor affecting operating expense dynamics,” he said.

Aircraft fuel costs increased 7.6% YOY to RUB101.6 billion. Staff costs rose 16.3% year-on-year to RUB65 billion, mostly as a result of salary indexation for certain categories of employees from the beginning of 2016, as well as the hiring of more than 4,000 former staff of Transaero Airlines, which ceased operations in October 2015.

Aircraft maintenance costs rose 19.3% year-on-year to RUB 38.2 billion, primarily because of exchange-rate fluctuations. Excluding foreign exchange effects, these expenses rose 13.6% in the context of higher flight hours and additional expenses related to preparing aircraft for decommissioning from the fleet, Aeroflot said.

As of Dec. 31, 2016, Aeroflot’s total debt was RUB144 billion, down 38.4% compared to 2015. The reduction was the result of repayment of loans and borrowings both as they came due and ahead of schedule, adjustments in the valuation of financial leases because of changes in the RUB-US dollar exchange rate and disposal of nine aircraft (15.8%) on financial leases versus Dec. 31, 2015.

(Polina Montag-Girmes - ATWOnline News)

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