FINANCIAL YEAR 2005-06
EXCELLENT RESULTS IN THE THIRD QUARTER OF 2005-06
* Turnover up 12.4% to 5.43 billion euros
* Operating profit of 190 million euros (versus 20 million euros at 31st December 2004)
* Net profit of 77 million euros (versus 23 million euros at 31st December 2004)
NINE MONTH RESULTS AT 31st DECEMBER 2005
* 2.2 point improvement in the operating margin to 5.8%
* Net profit up 24% to 906 million euros
Third quarter to 31st December 2005: Operating profit of 190 million euros
(versus 20 million euros at 31st December 2004)
Passenger transport remained dynamic, with record load factors and strong unit revenues. The Cargo activity saw an encouraging recovery.
Turnover rose 12.4% to 5.43 billion euros. Operating charges were up by 8.9%. Excluding fuel charges, the rise would have been reduced to 5.3%. The main changes in operating costs were as follows:
- Fuel costs rose 27.4% to 1 billion euros (versus 785 million euros at 31st December 2004)
reflecting a rise in volumes of 5%, a rise in jet fuel prices of 30%, an unfavourable currency effect of 5% and a hedging impact of 14%.
- Commercial and distribution charges fell by 17.3% to 291 million euros, mainly as a result of the transition to zero commission.
- Employee costs rose 4.3% to 1.59 billion euros, with a stable headcount of 102,291 employees.
Unit costs measured in available seat kilometers (EASK) were flat at + 0.5% compared with production measured on the same basis up 7.7%. They were down 4.2% on a constant currency and fuel cost basis.
Operating income for the quarter to 31st December 2005 amounted to 190 million euros compared with 20 million euros for the quarter ended 31st December 2004, which had been negatively impacted by a shift in favour of the fourth quarter in the efficiency of fuel hedging.
Income from operating activities amounted to 179 million euros, versus 77 million euros at 31st December 2004, after booking the disposal of Amadeus France.
Net interest charges fell from 66 million euros at 31st December 2004 to 57 million euros at 31st December 2005, thanks to a strong increase in income from cash and cash equivalents. Exchange losses at 31st December 2005 amounted to 9 million euros versus a gain of 21 million euros a year earlier.
Pre-tax income of consolidated companies amounted to 108 million euros (versus 35 million euros at 31st December 2004). The tax charge was 36 million euros (versus 29 million euros at 31st December 2004). The contribution from equity affiliates amounted to 7 million euros versus 14 million euros at 31st
December 2004. Net income, Group share amounted to 77 million euros compared with 23 million euros at 31st December 2004.
Nine months to 31st December 2005: Operating profit of 940 million euros,
operating margin up 2.2 points to 5.8% Turnover rose 9.4% during the first nine months of 2005-06 to 16.25 billion euros. Operating charges rose 6.9% to 15.3 billion euros. Excluding fuel charges they rose only 3.0%.
The main changes in costs over the period remained the fuel bill and commercial and distribution charges. The fuel bill rose by 615 million euros (+29,3%) to 2.72 billion euros, reflecting a volume effect of 4%, a price impact of 42%, a stable currency effect and an impact from hedging of 17%. Commercial and distribution costs continued to reflect the impact of the transition to zero commission, falling by 17.0% to 927 million euros.
Unit costs measured in equivalent available seat kilometers (EASK) rose 1.0%, for production measured on the same basis up by 6.0%. On a constant currency and fuel price basis they declined by 3.2%.
Operating profit amounted to 940 million euros, up 76.5% (compared with 532 million euros at 31st December 2004). The operating margin (operating profit over turnover) improved by 2.2 points to 5.8%.
After taking account of the Amadeus operation (504 million euros), income from operating activities amounted to 1.47 billion euros, against a level of 1.05 billion euros at 31st December 2004, which included the write-back of negative goodwill arising on the KLM acquisition of 424 million euros.
Pre-tax income of consolidated companies was up 44.6% to 1.27 billion euros against 879 million euros at 31st December 2004.
After a tax charge of 328 million euros (versus 210 million euros a year earlier) and a negative contribution from equity affiliates of 23 million euros (versus a positive 53 million euros at 31st December 2004), net income, Group share amounted to 906 million euros, up 23.9%, compared with
731 million euros at 31st December 2004. Earnings per share amounted to 3.45 euros versus 2.84 euros at 31st December 2004.
The information herein contains forward-looking statements about Air France-KLM and its business. These forward-looking statements, which include, but are not limited to, statements concerning the financial condition, results of operations and business of Air France-KLM are based on management’s current expectations and estimates.
These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of Air France-KLM’s control and are difficult to predict, that may cause actual results to differ materially from any future results expressed or implied from the forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties including, among others: the expected synergies and cost savings between Air France and KLM may not be achieved; unanticipated expenditures; changing relationships with customers, suppliers and strategic partners; increases in aircraft fuel prices; and other economic,
business, competitive and/or regulatory factors affecting the businesses of Air France and KLM generally. Additional information regarding the factors and events that could cause differences between forward-looking statements and actual results in the future is contained in Air France-KLM’s Securities and Exchange Commission filings, including its Annual Reports on Form 20-F for the year ended March 31, 2005. Air France-KLM undertakes no obligation to update or revise any forwardlooking statement, whether as a result of new information, future events or otherwise