NET PROFIT INCREASED FROM EUR 86 MILLION TO EUR 90 MILLION
The operating environment in the second quarter remained challenging. The aftermath of SARS continued to have its impact on the Group’s operating revenues (EUR 1,619 million; minus 12 percent on last year), although less pronounced than in the first quarter of the fiscal year (minus 16 percent). Yields continued to be under pressure, albeit that manageable yields started to improve year-on-year towards the end of the quarter. At the same time, traffic volumes gradually recovered through July and August, with less robust volumes in the month of September.
Group operating expenses declined by 13 percent, as a result of lower capacity levels, as well as the initial effects of the implementation of the Group’s structural cost savings program.
The Group's operating margin and EBITDAR margin in the second quarter improved year-on-year to 8.1 percent and 18.2 percent respectively.
Leo van Wijk, President and CEO of KLM, said: ‘Our second quarter results confirm that the Group takes the necessary steps to implement the structural cost saving measures. Against the background of a difficult operating environment, we continued to focus on our costs, and were successful in limiting the effects of lower revenues on our operating income, while at the same time improving our margins. As the industry outlook is still fragile, we will remain committed to deliver on our cost savings program to improve our financial performance.’
Operating profit for the six-months period ended September 30, 2003 was EUR 65 million, which compares to an operating profit of EUR 182 million last year. Net profit for this period amounts to EUR 36 million, or EUR 0.80 per common share, and compares to a net profit of EUR 97 million, or EUR 2.12 per common share last year.
We expect the uncertain economic environment to continue for the remainder of this fiscal year. However we are confident that the structural cost saving measures, identified to be realized this fiscal year, will be successfully implemented. We reconfirm the expectation that the operating income for fiscal year 2003/04 will be approximately break even.