Aeroflot Group, pax up by 16.8% in January-September 2017
On November 30, 2017, Aeroflot Group announced its condensed consolidated interim financial statements for the nine months ended on September 30, 2017, revealing passenger carriage grew 16.8% year-on-year. Aeroflot Group's passenger carriage (measured in revenue passenger kilometers) increased 18.0% year-on-year, outpacing capacity (measured in available seat kilometers) went up by 16.2%. The Group's passenger load factor (PLF) improved 1.3 percentage points to 83.7%.
In 9 months in 2017, Aeroflot Group's revenue increased by 6.2% year-on-year. Revenue from scheduled passenger flights increased by 4.6% year-on-year, boosted by an increase in passenger traffic. According to the official report, revenue growth was affected by a decrease in yields, primarily on international routes, due to the strengthening of the ruble and the consequent effect of this on FX-denominated revenue.
Revenue from charter flights increased by 74.0%, due “to the growth of Rossiya's airline charter programme.” Cargo revenue rose by 37.2% year-on-year as the Group added new wide-body aircraft to its fleet and cargo and mail volumes grew by 38.9%. Other revenue decreased by 8.1% year-on-year, due mainly to a decrease in the ruble equivalent of FX-denominated revenues from airline agreements following changes in the exchange rate.
In 9 months in 2017, aircraft fuel costs increased by 21.7% year-on-year. This was due to an increase in the average price of aircraft fuel in rubles in the context of changes to the price of oil and exchange rates, as well as an increase in flight numbers and flying time, Aeroflot Group stated. The strengthening of the ruble mitigated the increase in expenses due to the growth of the business. Operating costs less aircraft fuel increased by 13.5% year-on-year.
Staff costs rose 25.8% year-on-year, as a result of salary indexation in accordance with the collective bargaining agreement, an increase in the number of staff to support operational growth, a growth of the variable component of salaries linked to the achievement of corporate KPIs, and an increase in unused vacation accrual.
Operating lease expenses grew by 10.5% year-on-year, due to expansion of the fleet (net increase of 26 aircraft, or 11.0%, on operating leases compared with September 30, 2016), as well as an increase in the average three-month LIBOR rate in the first nine months of 2017 compared to the same period last year.
Aircraft maintenance costs fell by 2.9% year-on-year, largely due to the strengthening of the ruble.
Selling, general and administrative expenses grew by 18.7% year-on-year, due to the development of IT infrastructure and an increase in investments in marketing campaigns. Amortisation and customs tariffs increased by 11.8% year-on-year, due to Aurora taking ownership of two new aircraft and the introduction of IT equipment over the past 12 months. Other expenses increased by 5.4% year-on-year, mainly due to increased expenses related to the accrual of provisions for periodic maintenance of aircraft.
Finance income decreased by 66.3% year-on-year, mainly due to lower earnings from exchange-rate differences lower earnings from exchange-rate differences. Finance costs declined by 14.3% year-on-year as debt levels fell, leading to a reduction in the cost of debt servicing.
Aeroflot Group’s net profit for the first nine months of 2017 amounted to RUB 27,149 million.
Total debt as for September 30, 2017, decreased by 23.4% compared to December 31, 2016.The reduction was due to repayment of loans and borrowings both as they came due and ahead of schedule, as well as adjustments to the valuation of financial leases due to changes in the RUB-USD exchange rate as for September 30, 2017, compared to December 31, 2016. Despite significant repayments, cash and short-term investments increased by more than 50% versus December 31, 2016, and totaled RUB 61,336 million.
As for September 30, 2017, undrawn lines available to Aeroflot Group from major Russian and international banks amounted to RUB 103.4 billion.
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