Moscow - Aeroflot Group (“the Group”, Moscow Exchange ticker: AFLT) today publishes its condensed consolidated interim financial statements for the nine months ended 30 September 2017, in accordance with International Financial Reporting Standards.
9M 2017 Financial Highlights for Aeroflot Group
- Revenue increased to RUB 404,773 million, up 6.2% year-on-year;
- EBITDAR reached RUB 101,016 million. The EBITDAR margin was 25.0%;
- EBITDA reached RUB 53,306 million. The EBITDA margin was 13.2%;
- Net income totalled RUB 27,149 million.
Shamil Kurmashov, PJSC Aeroflot Deputy CEO for Commerce and Finance, commented “Aeroflot Group completed the high season successfully. Passenger numbers grew strongly in the third quarter of 2017 as we increased available seats while keeping passenger load factors stable. In the first nine months of the year we carried 38.3 million passengers. Operational indicators grew due to both a revival of the international segment and the continued development of domestic flights. International transit traffic continues to increase apace as we increase flight frequencies on key routes, thus improving the quality of our network and the Company’s product.
“Our financial results for the first nine months and the third quarter of 2017 reflect a normalisation of profitability and the effect of a number of market factors that also affected our results for the first half of the year. Increased capacity supply across the market and exchange rate fluctuations led to a decrease in yields compared to the year-ago period, when we saw a significant dislocation between supply and demand. On the other hand, rising fuel costs, which normalised only in the third quarter, as well as cost pressures from staff costs and investments in the quality of our product, were the main contributors to the rise in operating costs, in addition to growth attributable to increased operating volumes and the growth of the Company.
“Here we should note a positive trend seen in the third quarter compared with the first half of the year. Yields decreased at a slower pace on scheduled flights (4% vs 8% in the first half), while the cost of fuel, which in the first six months had increased by 10%, in the third quarter remained at a comparable level to the previous year.
“Exchange rates also supported operating costs. Whereas rates in 2016 put pressure on line items including operational leasing, technical maintenance costs and airport fees outside Russia, in nine months of 2017 the strengthening of the ruble had a positive effect on operating costs. Savings from this amounted to 24 kopecks at a cost per seat-kilometre of RUB 3.06, representing approximately 8% of unit costs (CASK).
“Given the effects of exchange rate fluctuations, growth of fuel costs, and the lack of material currency differences on refunds of pre-payments for aircraft – which had an effect in the third quarter of 2016 – the financial result for the accounting period decreased. However, net profit was supported by a significant reduction in our debt burden due to pre-term repayment of credit lines during the year, as well as savings on other non-operating costs, and amounted to RUB 27.1 billion.
“The financial results for this accounting period confirm the favourable conclusion to the third quarter, which traditionally forms the major part of Aeroflot’s full-year results.”