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Air France – KLM Posts Fourth Quarter Results

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Air France – KLM (AFLYY) recently reported their financial results for the fourth quarter of FY 2016. Thus, the company showed a profit of EUR 316 million for the quarter, which was quite an improvement over the loss of EUR 1.18 billion they generated during the same quarter of the previous year.

The company’s EBITDA declined by 17 percent, reaching EUR 316 million, compared to the same quarter of the previous year, when earnings before interest, taxes, depreciation and amortization came in at EUR 382 billion. It should be noted that the company also posted an adjusted EBITDA of EUR 411 million, which didn’t take into account the pilot strike at Air France. This would indicate EBITDA has actually risen by EUR 29 million.

Air France – KLM also saw their revenues grow from EUR 6.12 billion to EUR 6.21 billion, indicating an increase of approximately 1.5 percent. Passenger revenues grew to EUR 4.86 billion, signifying a 0.3 percent increase over the same quarter of the previous year, while capacity increased by 0.5 percent, reaching 81.57 billion Equivalent Available Seat Kilometers (EASKs).

The company stated they had plans to reduce their investments over a two-year period. They also reinforced their cost reduction efforts, and revised their targets upwards to achieve a 1.5 percent reduction of unit costs per year between 2016 and 2018. Air France – KLM stated they intend to reduce costs between 1 and 1.3 percent in 2016.

At the end of 2016, Air France – KLM had a net debt of EUR 5.4 billion. They plan to reduce this figure to EUR 5 billion by the end of 2017.

For the entire 2016 financial year, Air France – KLM reported the company lost EUR 198 million while revenues came in at EUR 24.9 billion. In 2013, the company achieved revenues of EUR 25.52 billion, which indicates a decline of 1.2 percent for FY 2016. However, the company posted a loss of EUR 1.827 billion in 2013, indicating a solid improvement of EUR 1.629 billion.

Alexandre de Juniac, Air France – KLM’s Chief Executive Officer and Chairman, stated that the company completed their strategic plan dubbed Transform 2016 at the end of 2015. The plan apparently was implemented effectively and all the objectives were fulfilled. The main goal was to turn the company around and make it more competitive. He further stated that the company’s FY 2016 results obviously showed that they had manage to achieve this, even with the fact that the economy was quite challenging and the competition strong. Thus, once EBITDA was adjusted for the pilot strike, it showed improvement of more than 50 percent over a three year-period. Operating cash flow has reached EUR 1.5 billion, indicating an almost 150 percent growth.

Air France – KLM saw their shares decline by 0.81 percent on the 18th of February, with the stock price closing at $8.58. The company’s market capitalization is $2.59 billion. For FY 2016, Air France – KLM posted a loss per share of EUR 0.67, which was an improvement over the previous year’s loss of EUR 6.17.

 


About

Justin Cohen covers large and mid-cap healthcare stocks. Justin joined Micro Cap Mag in 2013 to work as an associate on the Biotechnology team. He quickly moved into his current Senior Analyst role earlier this year.


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